Case: Associated Hotels Of India Ltd., Delhi Vs. S. B. Sardar Ranjit Singh

2. The respondent constructed the building known as the Hotel Imperial, New Delhi on land leased to him by the Secretary of State for India in Council under a perpetual lease deed dated July 9, 1937. By a deed dated August 18, 1939, he leased to the appellant the hotel premises together with fittings and furniture for a term of 20 years commencing on September 15, 1939. On January 28, 1958, the respondent instituted the present suit alleging that in breach of the express conditions of the lease dated August 18, 1939, the appellant sub-let portions of the premises and made unauthorised additions and alterations in the premises, that on such breaches he was entitled to determine the lease and he did so by notice in writing dated January 6, 1958. He claimed eviction of the appellant on the grounds mentioned in Clauses (b), (c) and (k) of the proviso to Section 13 (1) of the Act. The appellant filed its written statement on April 3, 1958 denying most of the material allegations in the plaint. The appellant also pleaded that the respondents had waived the breaches, if any, of the conditions of the lease by accepting rents with knowledge of such breaches and particularly by accepting rent on or about January 3, 1958. On April 24, 1958, Sri P. L. Vohra, counsel for the appellant, made the following statement before the trialplaintiff can seek ejectment of the defendant only under Section 13 of Act 38 of 1952. In case the plaintiff succeeds in establishing the liability of the defendant for ejectment on any of the grounds given in Section 13 of the Rent Act, the defendant would not seek any protection under the terms of the lease deed dated 18th August, 1939 executed between the parties, as regards the period of lease fixed therein ......"Whether the defendant had sub-let, assigned or otherwise parted with possession of any part of the suit premises before the commencement of Act 38 of 1952?2. If so, was the same done with express or implied consent of the plaintiff?3. Whether the defendant had sub-let, assigned or otherwise parted with possession. of any part of the suit premises after the commencement of Act 38 of 1952?4. If so, was the same done with the prior consent in writing of the plaintiff?5. Whether the defendant has used the tenancy premises for a purpose other than that for which they were let?6. Whether the defendant has caused substantial damage to the tenancy premises?7. Whether the defendant notwithstanding previous notice has been using and dealing with the tenancy premises in a manner contrary to the conditions imposed on the plaintiff by the Government while giving him lease of the site of the tenancy premises?8. Is the defendant entitled to special costs ?.9. Whether the plaintiff is estopped or has waived his right to seek ejectment of the defendant on any of the grounds mentioned above? If so, what and to what effect?10. Whether the defendant is entitled to sub-let any part of the hotel premises even when there was a clause to the contra in the lease dated the 18th August, 1939, and in face of statutory provisions under the Rent Control Act (for reasons given in para 16 of the amended written statement)?".A tenant holding premises under a subsisting lease is protected by the lease and needs no protection under the Rent Act. It was open to the appellant to contend that it was protected by the terms of the lease dated August 18, 1939, that the breaches, if any, of the conditions of the lease had been waived by the respondent and that the lease had not determined. But the appellant deliberately elected to seek protection under S. 13 of the Act only. The appellants counsel made a formal statement in the trial Court that the appellant would not seek any protection under the terms of the lease deed as regards the period of the lease fixed therein. The Court accordingly settled the ten issues. Issue No. 8 was not pressed. All the other issues relate to the grounds of eviction mentioned in Cls. (b), (c) and (k) of the proviso to S. 13 (1) of the Act. Issue No. 9 raises the question of waiver of the respondents right to seek ejectment on those grounds. Thus, the only question in issue between the parties was whether the appellant was entitled to protection from eviction under S. 13 and whether any ground for eviction under the Act was made out. The case was tried and decided on this footing. We have come to this conclusion after a close examination of the pleadings, particulars, statement of counsel, issues and the judgment of the trial Court. No issue was raised on the question whether the breaches of the express conditions of the lease had been waived by the respondent, and whether the lease was still subsisting. The appellant sought to raise this plea in the High Court and also in this Court. Having regard to the deliberate stand taken by the appellant in the trial Court, the appellant cannot be allowed to raise the plea at a later stage. The lease determined by effect of time on September 15, 1959. Had the appellant taken the plea that the lease had not determined by forfeiture on the date of the institution of the suit, it is possible that the respondent might have filed another suit for ejectment of the appellant immediately after September 15, 1959. Because of the stand taken by the appellant, it was not necessary for the respondent to file another suit. This appeal must be decided on the footing that the lease had determined by forfeiture on the date of the institution of the present suit. The respondent is entitled to a decree for eviction if any of the grounds mentioned in Cls. (b), (c) and (k) of the proviso to S. 13 (1) is made out.4. The trial Court answered issue No. 5 in the negative. With regard to all the other issues, the trial Court found in favour of the respondent, and held that the grounds of eviction mentioned in Cls. (b) (i), (c).(i) and (k) were proved. With regard to the ground of eviction mentioned in Cl. (k), the trial Court held that the appellant was entitled to relief on certain conditions. The trial Court, however, held that the respondent was entitled to an unconditional decree for eviction on the ground of sub-letting mentioned in Cls. (b) (i) and (c) (i). The appellant preferred an- appeal to the High Court. The High Court agreed with all the findings of the trial Court, and dismissed the appeal.

Reasoning:
The fact that the apartment is a room in a hotel may lead to the inference that the hotel-keeper retains the general dominion of the entire hotel including the apartment and that the occupier is in the position of a lodger or inmate. But the inference is not a necessary inference of law. Where, as in this case, the best evidence of the grant was withheld from the scrutiny of the Court, the inference was rightly drawn that the occupiers were tenants.The Courts below concurrently found that the sub-lettings after the commencement of the Act were made without obtaining the consent of the landlord in writing, and the sub-lettings before the commencement of the Act were made without obtaining the consent of the landlord either orally or in writing.. We are not inclined to interfere with this concurrentis impossible to accept the contention. A hotel-keeper may run a first class hotel without sub-letting any part of it. Clause 21 clearly provided that the lessee shall not sub-lease the hotel premises or any part thereof. In the teeth of Cl. 21, it is impossible to read in Cl. 22 an implied consent toletters do not amount to a consent in writing to sub-lettings of portions of the hotel to the persons mentioned therein. Moreover, the consent, if any, was to the sub-lettings made before 1949 and not to the sub-lettings made thereafter. It is not possible to infer from these letters a general consent to allsub-letting in breach of the provisions of Cl. (b) of the proviso to S. 13 (1) is an offence punishable under S. 44. Assuming that the landlord can waive the requirement as to consent, it is not shown that the respondent-waived it.A waiver is an intentional relinquishment of a known right. There can be no waiver unless the person against whom the waiver is claimed had full knowledge of his rights and of facts enabling him to take effectual action for the enforcement of such rights.It is said that the respondent knew of the sub-lettings as he frequently visited the hotel. It appears that he visited the hotel up to 1953 and he must have known of the occupation of R. N. Kapoor, Indian Art Emporium and Pan American World Airways. But he came to know of the other lettings in January 1958 only. Moreover, the precise nature of the grant was never communicated to the respondent. The Courts below rightly held that the respondent did not waive his right to evict the appellant on the grounds mentioned in Cls. (b) and (c) of the proviso to S. 13 (1).15. We are therefore satisfied that the respondent is entitled to evict the appellant on the ground of sub-letting of the rooms. The Courts below held that the appellant had also sub-let several counters, show-cases and garages to various persons. We express no opinion on the question whether there was any sub-letting of the counters, show-cases and garages. The sub-lettings of the rooms are sufficient grounds of eviction under Cls. (b) and (c) of the proviso to S. 13 (1).16. Clause 2 (v) of the head lease granted by the Government to the respondent provided that the respondent would not, without the previous consent in writing of the Chief Commissioner, Delhi or a duly authorised officer, erect or suffer to be erected on any part of the demised premises any building other than the building erected there on the date of the lease. The appellant had due notice of the conditions of the had lease. Notwithstanding such previous notice, the appellant dealt with the premises in a manner contrary to the conditions imposed by Cl. 2 (v). The Courts below found that contrary to this condition, the appellant made several unauthorised constructions without obtaining the requisite consent. To give one illustration, the appellant admittedly constructed a room 166" x 196" with R. C.C. slab and brick masonry walls. This newly constructed room was let to Shanti Vijay and Co.On the ground of unauthorised construction of this room alone it must be held that the appellant in contravention of Cl. (k) of the proviso to S. 13 (1), notwithstanding previous notice, dealt with the premises in a manner contrary to a condition imposed on the respondent by the Government while giving him a lease of the land on which the premises are situated.The notice of the conditions imposed by the head lease was sufficient notice for the purposes of Cl. (k). The ground of eviction under Cl (k) was thus made out. The Courts below also held that the appellant caused substantial damage to the premises. We express no opinion on it, and this question is left open.17. It follows that the respondent is entitled to evict the appellant on the grounds mentioned in Cls. (b) (i), (c) (i) and (k) of the proviso to S. 13 (1).A tenant holding premises under a subsisting lease is protected by the lease and needs no protection under the Rent Act. It was open to the appellant to contend that it was protected by the terms of the lease dated August 18, 1939, that the breaches, if any, of the conditions of the lease had been waived by the respondent and that the lease had not determined. But the appellant deliberately elected to seek protection under S. 13 of the Actappellants counsel made a formal statement in the trial Court that the appellant would not seek any protection under the terms of the lease deed as regards the period of the lease fixed therein. The Court accordingly settled the ten issues. Issue No. 8 was not pressed. All the other issues relate to the grounds of eviction mentioned in Cls. (b), (c) and (k) of the proviso to S. 13 (1) of the Act. Issue No. 9 raises the question of waiver of the respondents right to seek ejectment on thosecase was tried and decided on this footing. We have come to this conclusion after a close examination of the pleadings, particulars, statement of counsel, issues and the judgment of the trial Court. No issue was raised on the question whether the breaches of the express conditions of the lease had been waived by the respondent, and whether the lease was still subsisting. The appellant sought to raise this plea in the High Court and also in this Court. Having regard to the deliberate stand taken by the appellant in the trial Court, the appellant cannot be allowed to raise the plea at a later stage. The lease determined by effect of time on September 15, 1959. Had the appellant taken the plea that the lease had not determined by forfeiture on the date of the institution of the suit, it is possible that the respondent might have filed another suit for ejectment of the appellant immediately after September 15, 1959. Because of the stand taken by the appellant, it was not necessary for the respondent to file another suit. This appeal must be decided on the footing that the lease had determined by forfeiture on the date of the institution of the present suit. The respondent is entitled to a decree for eviction if any of the grounds mentioned in Cls. (b), (c) and (k) of the proviso to S. 13 (1) is made out.The two Courts concurrently found that the appellant hadseveral rooms, counters, showcases and garages. The two Courts found that the appellant hadrooms to (1) Pan American. World Airways, (2) Mercury Travels, India (Private) Ltd., travel agents (3) Indian Art Emporium, dealers in curios and jewellery, (4) Shanti Vijay and Co.; dealers in Jewellery, (5) Roy and James, hairdressers, (6) Sita World Travels, travel agents and (7) Ranee Silk Shop, dealers in saris and curios. The businesses of thewere not confined to the residents of the hotel. The letting to Pan American World Airways and Indian Art Emporium were before the commencement of the Act and the lettings to Mercury Travels, Shanti Vijay and Co., and Roy and James were after the commencement of the Act. Sita Travels and Ranee Silk Shop were inducted as tenants after the institution of the suit. The entrances to the rooms were in the main corridor of the hotel on the ground floor. The concurrent finding is that the occupants were given exclusive possession of the rooms occupied by them. The appellant did not retain any control and dominion over the rooms. It is possible that the keys of the apartments were sometimes left at the reception counter, but the evidence on this point was not convincing. It was not a condition of the grants that the keys would be left at the reception counter, or that the duplicate keys would be retained by the appellant. The occupants were at liberty to take away the keys if they liked. The occupants availed themselves of the services of the hotel sweeper for their own convenience. The appellant retained control of the corridor, but it is common case before us that the entrance to the corridor was open day and night. The occupants paid monthly sums to the appellant as the consideration of theThe consideration though described as license fee was in reality rent. The portion occupied by Roy and James has an interesting history. It was formerlyto R. N. Kapoor. In Associated Hotels of India Ltd. v. R. N. Kapoor, 1960 (1) SCR 368   = (AIR 1959 SC 1262  ) this Court held by a majority on a construction of the grant to R. N. Kapoor that he was a lessee and not a licensee. Roy and James began to occupy this portion of the premises from February, 1955. According to the appellant, the agreements with Roy and James, Mercury Travels and Shanti Vijay and Co., were in writing. The appellant produced several documents in Court at an early stage of the suit. The appellants case was that these documents were the relevent agreements.According to the respondent, the documents were not genuine and the real agreements were being withheld. The stamp auditor noted on the documents the deficiency in stamps and penalty leviable on them on the footing that they were lease deeds. The appellant did not contest this note nor paid the penalty and deficiency as directed by the trial Court. The surprising feature of the case is that the appellant did not attempt to prove any of the documents. Where the agreement is in writing, it is a question of construction of the agreement whether the grant is a lease or a license. It was for the appellant to prove the written agreements, and the Court could then construe them. The appellant has not brought before the Court the best and the primary evidence of the terms on which the apartments were being occupied. The onus to provewas on the respondent. The respondent discharged the onus by leading evidence showing that the occupants were in exclusive possession of the apartments for valuable consideration. The appellant chose not to rebut this prima facie evidence by proving and exhibiting the relevant agreements. The documents formed part of the appellants case. The appellant had no right to withhold them from the scrutiny of the Court. In the absence of the best evidence of the grants, the Courts below properly inferredfrom the other materials and theThe test of exclusive possession, though not conclusive, is a very important indication in favour of tenancy, seen Estates Ltd. v. Crabbe, 19581 QB 513 at p.e argument is that as the landlord is living in the premises, that fact raises the presumption that he intends to retain the control of the whole of the premises and that the occupation of the other parts is that of a lodger or inmate and not that of a tenant, and reliance was placed on Helmanv. Horsham and Worthing Commit tee,35 and the cases referred to therein.Those cases consider what constitute rateable occupation. In the case last cited, Denning, L. J. said that a person who is regarded as a lodger for rating purposes need not necessarily be a lodger for the purposes of the Rent Restriction Acts, while Evershed, L. J. seems to have expressed a contrary opinion. Normally, an occupier of an apartment in a hotel is in the position of a licensee as theretains the general control of the hotel including the apartment. But it is not a necessary inference of law that the occupier of an apartment in a hotel is not a tenant. Where, as in this case, theretains no control over the apartment, the occupier is in the position of a tenant. In Halsburys Laws of England, Vol. 23, Art. 1028, p. 433 , the law is accurately summarisedlodger who has no separate apartment is only a licensee, and, even though he has a separate apartment, he has not in law an exclusive occupation, and is therefore in the position of a licensee, if the landlord retains the general control and dominion of the house, including the part occupied by the lodger; but, if in fact the landlord exercises no control over that part, the occupier is a tenant. The occupier does not, however, become a lodger merely by reason of the fact that the landlord resides on the premises and retains control of the passages and staircases and other parts used infact that the apartment is a room in a hotel may lead to the inference that theretains the general dominion of the entire hotel including the apartment and that the occupier is in the position of a lodger or inmate. But the inference is not a necessary inference of law. Where, as in this case, the best evidence of the grant was withheld from the scrutiny of the Court, the inference was rightly drawn that the occupiers were tenants.At the hearings of this appeal the appellant moved an application for reception of the documents as additional evidence. The genuineness of the documents was disputed by the respondent. In the Courts below, the appellant made no attempt to prove these documents. We found no ground for directing a new trial. Having regard to all these facts, we dismissed the application.9. The hotel building constitutes premises within the meaning of S. 2 (g) of the Act. It is because the hotel building constitutes premises that the appellant can claim protection from eviction under the Act. A room in a hotel is a part of the hotel premises. Aof a room in a hotel in contravention of Cls. (b) and (c) of the proviso to S. 13 (1) is a ground for eviction under the Act. Section 2 (g) provides that premises does not include a room in a hotel or lodging house". Theof a room in a hotel is, therefore, not a tenant and cannot claim protection under S.13 from eviction, nor can he ask for fixation of standard rent. SeeSCR 368 = (AIR 1959 SC 1262  ).If the interest of the tenant of the hotel premises is determined, theto whom a room in the hotel has been lawfullybecomes under S. 20 a direct tenant of the landlord. It may be that whenof a room in a hotel becomes a direct tenant under S. 20 he enjoys the protection of the Act because the room is no longer a room in a hotel. But that point does not arise and need not be decided.Because a room in a hotel is not premises, it does not follow that the room is not a part of the hotel premises or that aof the room is not a contravention of Cls. (b) and (c) of the proviso to S. 13 (1).