Case: SHABBIR MOHAMMAD SAYED Vs. MRS. NOOR JEHAN MUSHTER SHAIKH &amp; ORS

The first respondent filed a civil suit against respondent Nos.2-4. Respondent Nos.2-4 are, in other words, defendants 1, 2 and 3 in the suit. The claim of the first respondent in the suit was that defendant Nos. 1 and 2 were tenants of the property in question who were ready to transfer their tenancy rights on the agreed consideration of Rs. 85,000/- which was paid to them by the first respondent. The parties are referred to by their status in the Trial Court. The matter was being delayed on the basis of the property being illegally sublet to two persons. The plaintiff is alleged to have contacted the landlord namely defendant No.3. The 3rd defendant transferred tenancy rights by rent receipt dated 01.12.2006. Possession was not handed over. PW2, the 3rd defendant, was examined where he admitted the letters dated 03.1.2004 and 19.05.2007. The Trial Court dismissed the suit by Judgment dated 09.04.2013. The plaintiff appealed the judgment by filing Appeal No.23 of 2013. The Appellate Court decreed the suit. Following are the terms of the decree:1. Appeal is allowed with costs.2. The Judgment and decree dated 09.04.2013 is set aside and following order is substituted.i) The suit is party decreed with costs.ii) It is declared that the plaintiff is tenant in respect of the suit premises being Room No.3, Ground Floor, 98/A, Visheshwar Bhuvan @ Rajkotwala Compound, Pipe Road, Kurla (West), Mumbai 400 070.iii) Defendant No.3/landlord/co-owner is directed to hand over possession of the suit premises to the plaintiff within a month and directed to issue rent receipt regularly to the plaintiff after accepting the monthly rent.iv) The relief sought vide prayer clause (b) is rejected.3. The plaintiff levied execution by filing Execution Application No.386 of 2016.4. It is the case of the appellant that the tenant who was actually in possession of the property assigned his rights in favour of the appellant by an agreement dated 24th January 2014. The appellant claims ignorance of the litigation.5. In other words, one Akhtar Habibullah Shaikh claiming to be the lawful tenant of the premises transferred his rights in favour of the appellant upon receiving of total cost and consideration of Rs.9,40,000. What is more important is the 3rd defendant (landlord) by agreement of the same date i.e. 24th January 2014 assigned leasehold right in favour of the appellant. The appellant came by possession of the premises. When he came to know of the decree obtained by the plaintiff and it being put to execution, he filed application purporting to be under Order 21 Rule 97 of the Code of Civil Procedure. It was this application which was dismissed by the Execution Court, the Appellate Court and the High Court.

Reasoning:
10. We have already noticed the facts. Originally the Trial Court dismissed the suit filed by the plaintiff. It is after she filed the appeal and during the pendency of the appeal that the two transactions relied upon by the appellant allegedly came to be entered into. The transactions are said to be entered into on 24.01.2014.12. Thus, the law giver has provided that, notwithstanding, the aforesaid provision it will not be lawful for a tenant to sublet or to give on license the whole or any part of the premises let to him or to assign or transfer in any other manner his interest therein. This in turn is, however, made subject to any contract to the contrary. In other words, while under the general law, subject to there being no contract to the contrary, a tenant can assign, sublease or mortgage his rights as lessee, on the other hand, in regard to a tenancy governed by the Act, the ordinary rule is that a tenant cannot sublet, give on licence or assign or transfer in any other manner. This is made subject to a contract to the contrary. The assignment relied upon by the appellant namely by alleged lessee on 24.01.2014 would be illegal on the face of it unless a contract to the contrary is established.Adverting to the said provision, a division bench of the High Court of Bombay has held as follows interalia in the Judgment reported in (2016) Vol.6 Bombay CR 262:58. Section 2 of the Bombay Amendment Act XIV of 1939 provides that the Amendment Act shall apply to properties situated wholly or partly in the City of Bombay (now Mumbai) from the date of notification in the official gazette (which has been issued) and provides for similar notification extending applicability of the Amending Act to other areas to be issued (which is not shown to have been issued). Thus, the amended provisions apply to properties in Mumbai and the unamended section applies to rest of the State.16. The appellant has not raised any contention based on the amended Section 52 before the Execution Court. Even in the appeal before the Appellate Court, the appellant has not contended that a Notice was required under Section 52, as applicable. Before the High Court in the Revision, it is not seen expressly contended. It is in the recall application that an effort is made in this direction. The amended provisions of Section 52 of the Transfer of Property Act are inapplicable for the whole of Maharashtra, as found by the High Court itself in the decision relied upon by the appellant, it is applicable to certain area. The applicability of the amended provisions of Section 52, thus, became a question of fact.17. As far as the alleged assignment by the so-called tenant in favour of the appellant is concerned, it is prohibited under Section 26. There is no express contract to the contrary to rescue the appellant. The full bench of the High Court of Bombay in the decision relied upon by the appellant was actually dealing with the question whether the interest of the tenant could be attached and sold. No doubt, it has also held that there could be ratification by the landlord even after the transfer by the tenant.23. Therefore, the core principle of ratification is one by which a person approves of the act of another knowing about the act.24. Thus, an assignment by the tenant can be ratified by the landlord. In this case however there is no ratification in the alleged agreement executed by the 3rd defendant landlord. He does not even refer to the alleged agreement executed by the tenant in favour of the appellant. Ratification is an act which presupposes knowledge of the act of the person whose act is sought to be ratified. A perusal of the alleged agreement executed by the landlord would reveal that it makes no reference to the alleged agreement executed by the tenant in favour of the appellant. The third defendant had proceeded to allegedly execute the agreement purporting to create interest in his own right. Therefore, we are of the view that even proceeding on the basis of the principle laid down by the full bench of the High Court of Bombay, in the facts of this case, there is no ratification. Sans any ratification and in the absence of any contract to the contrary within the meaning of Section 26, the alleged transfer by the lawful tenant cannot pass muster.25. As far as the case based on the alleged Tenancy Agreement dated 24.01.2014 between the third respondent and the appellant, we may notice certain features. As already noticed, agreement by the so-called tenant in favour of the appellant was also executed on the same day. In the Agreement executed by the tenant on 24.01.2014, the tenant states that he is the lawful tenant and that he is staying in the said premises and the tenancy is created in consideration of Rs.9,40,000/- being paid. In Clause (3) of the Agreement, the tenant has purported to hand over vacant possession of the premises to the appellant. In fact, it is stated that the assignment will be forever. In the alleged tenancy agreement between the third respondent and the appellant executed allegedly on the same day it is recited that the premises is in the actual physical possession of the landlord and on a consideration of Rs.175/- per month, tenancy was created in his favour. The case of the appellant which is based essentially on the appellant having paid Rs.9,40,000/- to the lawful tenant having found to be untenable being illegal as violative of Section 26 of the Act is in direct conflict with the case set up by the appellant regarding the tenancy with the third respondent. We have already found that the case of the landlord having ratified the tenancy of the appellant with the tenant cannot stand scrutiny of the Court. The acceptance of the case by the appellant involves harmonizing of an irreconcilable contradiction as regards the principal recital, namely, the case as to the emanation of possession. If the case of the appellant is accepted it is the tenant who was in possession and who handed it over having received a sum of Rs.9,40,000/- which is essentially the case set up in the Execution Court. Noticing no doubt, that the documents have not yet been proved and taking the documents on their face value, yet the conclusion is inevitable that the case set up by the appellant on the basis that the landlord was in possession is in the teeth of agreement of the same day with the tenant who claims that he was in possession and it does not appeal to us as anything but incongruous to say the least. In fact, in his application, before the Execution Court the specific case set up by the appellant is that he was put in possession by the alleged lawful monthly tenant. The case set up by the appellant based on the tenancy agreement by the landlord cannot be acted upon.26. The matter can be looked at from a different perspective as well. The appellant lays store by a tenancy or assignment by the lawful tenant on 24.01.2014. This involves the assumption that the tenancy in favour of the lawful tenant was intact. If so, how can the landlord create a tenancy in favour of the appellant without extinguishing the existing tenancy with the lawful tenant? The case of the appellant defies both logic and is legally untenable. It becomes unnecessary to even explore the argument of the appellant that the suit being collusive, the courts query as to the impact of the transfer in favour of the appellant being later in point of time must stand overwhelmed would stand answered.