Case: South Asia Industries Private Ltd Vs. S. Sarup Singh And Others

1. The respondents are the owners of the certain premises in Connaught Circus in New Delhi, which were let out to Allen Berry and Co. (Calcutta) Ltd. Sometime in 1959 Allen Berry and Co. transferred the lease to the appellant and put the latter in possession. Alleging that the transfer had been made without their consent, the respondents made an application under Cl. (b) of the proviso to sub-s. (1) of S. 14 ofthe Delhi Rent Control Act, 1958 to the Controller appointed under it against Allen Berry and Co. and the appellant for an order for recovery of possession of the premises from them. While the application was pending, Allen Berry and Co. went into liquidation and was in due course dissolved and its name was, thereupon, struck off from the records of the proceedings. The Controller later heard the application and made an order in favour of the respondents for recovery of possession of the premises from the appellant also. An appeal by the appellant to the Rent Control Tribunal under the Act against this order was dismissed. The appellant then moved the High Court of Punjab for setting aside the order of the Tribunal, but there also it was unsuccessful. It has now come to this Court in further appeal.2. It was contended that the order for recovery of possession made against the appellant after Allen Berry and Co. had ceased to be a party to the proceedings, was incompetent. This contention was based on an interpretation of the terms of sub-s. (1) of S. 14, material part of which is set out below :Section 14. - (1) Notwithstanding anything to the contrary in any other law or contract, no order or decree for the recovery of possession of any premises shall be made by any Court or Controller in favour of the landlord against a tenant :Provided that the Controller may, on an application made to him in the prescribed manner, make an order for the recovery of possession of the premises on one or more of the following grounds only, namely :-(a) .......................(b) that the tenant has, on or after the 9th day of June, 1952, sub-let, assigned or otherwise parted with the possession of the whole or any part of the premises without obtaining the consent in writing of theone Amar Sarup owned the land and building at plot No. 5, Block M, Connaught Circus, New Delhi. By a lease, dated March 1, 1956, Amar Sarup leased the property to Allen Berry and Co. (Calcutta) Ltd. (hereinafter referred to as the tenant) for a period of five years on a monthly rent of Rs. 297. Sometime thereafter, Amar Sarup transferred the property to the respondents. In or about May, 1959, the tenant assigned the tenancy rights, and parted with possession of the whole of the premises to the appellant. On October 6, 1959, the respondents filed an application before the Rent Controller, Delhi praying for eviction of the tenant and the appellant. The tenant, a limited company, had gone into voluntary liquidation on September 26, 1959, and it was finally wound up and dissolved on October 29, 1960. On its dissolution, the tenant ceased to exist, and by order of the Rent Controller, its name was struck off from the array of parties in the pending application. By an order, dated October 10, 1962, the Rent Controller passed an order of eviction against the appellant. An appeal by the appellant to the Rent Control Tribunal, Delhi, was dismissed on January 23, 1963, and a second appeal to the Punjab High Court was dismissed on May 10, 1963. A Letters Patent Appeal from the order, dated May 10, 1963 was dismissed on December 11, 1963 on the ground that the appeal was not maintainable, and an appeal to this Court from the last order was dismissed on January 18, 1963. The appellant has now preferred this appeal from the order dated May 10, 1963 by special leave granted by this Court.

Court's reasoning:
7. It is trite saying that the object of interpreting a statute is to ascertain the intention of the legislature enacting it. When I enquire about the intention behind this statute. I find that far from lending any support to the appellants contention it tends quite the other way. First, I observe that the object of the first part of sub-s. (1) of S. 14 is to ban all recovery of possession of tenanted premises by a landlord and that of the proviso is to lift that ban in specified cases. The object of the proviso is then to enable the landlord to recover possession in any of the specified cases. Assume that the present is a case where the landlord became entitled to recover possession under Cl. (b) of the proviso; clearly then the statute intended the landlord to recover possession. It would be our duty to give effect to that intention unless the language used made it plainly impossible. I have earlier said that the language used does not compel the view that the only person against whom an order for recovery of possession can be made is the tenant assigning or sub-letting without the landlords consent. That being so, orders against all "persons in occupation" must have been contemplated so that the landlord might without further trouble recover possession. Further I find it impossible to hold that the language used indicates an intention that when a right has accrued to a landlord to recover possession, that right would be taken away from him when the tenant assigning has become extinct without leaving a successor, an event which is only accidental and certainly rare. A Court would be fully justified in holding that in such a case it was intended that an order for recovery of possession can be made against the assignee alone for that would enable the object of the statute which was to enable the landlord to recover possession, to be achieved. An interpretation which defeats the object of a statute is, of course, not permissible.8. Then, looking at S. 18 of the Act I find that it clearly contemplates an order for recovery of possession under S. 14 against a sub-tenant. It says. "Where an order for eviction in respect of any premises is made under S. 14 against a tenant but not against a sub-tenant referred to in S. 17", then in the circumstances mentioned the sub-tenant shall be deemed to become a direct tenant under the landlord. This Section plainly implies that an order for recovery of possession against a sub-tenant is contemplated by Cl. (b) of the proviso to sub-s. (1) of S. 14. The appellants argument to the contrary cannot be sustained against the clear implication of the Act. If S. 14 contemplates an eviction order against a sub-tenant, it must equally contemplate such an order against assignees of tenants, for the Section makes no distinction between sub-tenants and assignees for the purpose of making such order.9. I am not unmindful of the fact that where an order for recovery of possession of any premises is made under S. 14 against a tenant assigning or sub-letting without the landlords consent, that order would under S. 25 of the Act be binding on all persons in occupation of the premises except those who have independent title to them. This Section does not however say that an order for recovery of possession against an assignee of a lessee cannot be made. It would not, therefore, support an argument that it was not intended that an order for recovery of possession could be made under S. 14 against an assignee or a sub-tenant. On the other hand, it seems to me that to an application under Cl. (b) of the proviso to sub-s. (1) of S. 14 an assignee or sub-tenant, as the case may be, should be a proper party. Under this provision an ejectment order can be made only when the assignment or sub-letting was without the consent of the landlord. If it was with such consent, the assignee or the sub-tenant would be protected by the Act. An assignee or a sub-tenant is, therefore, interested in showing that there was the requisite consent. They should hence be entitled to be made parties to the proceedings. Otherwise, if under S. 25 an eviction order obtained against the direct tenant is binding on them, they would be liable to be condemned without a hearing. It is no argument against this view that the direct tenant would protect them, for they cannot be made to depend on him for the protection of their rights. The direct tenant may be negligent or incompetent in his defence; he may even collude with the landlord or he may just not bother. If the assignee or the sub-tenant is thus entitled to be heard to oppose the order for eviction, that would be another reason for saying that an order for eviction could be made against them also; if they could oppose the making of the order, it would be unnatural to say that the order could not be made against them. In what I have said in this paragraph, I do not wish to be understood as holding that in view of S. 25 an order for eviction against a tenant is in fact binding on his assignee or sub-tenant. Such a decision is not necessary for this case. I wish, however, to point out that if S. 25 does not make the ejectment order so binding, the appellant cannot resort to it for any assistance.10. I have now dealt with the first argument in support of the appeal and I find it unacceptable. The other argument was that the order for recovery of possession was unwarranted as in fact there had been a consent of the respondents to the assignment in favour of the appellant. It is said that the consent was given by a clause in the lease under which Allen Berry and Co. held which reads aswhenever such an interpretation would be necessary in order to give the fullest scope and effect legally possible to any covenant or contract herein contained, the expression "The Lessor" hereinbefore used shall include his heirs, executors, administrators and assigns and the expression "The Lessee" hereinbefore used shall include their representatives and assigns."I am unable to accept this contention also.11. I notice that the lease gave no express right to the lessee to assign with or without the consent of the lessor. The lessee no doubt had that right under the Transfer of Property Act. It may be that under the clause the lessees assignee would be included in the expression "lessee" as used in the lease; that is the entire effect of the clause. But this would be so whether the lessor had consented to the assignment or not. Therefore, this clause does not lead to the conclusion that the lessor had consented to the assignment. It is of no assistance in the present case. I am also inclined to the view that the consent contemplated by S. 14 (1) proviso (b) is a direct consent to a contemplated assignment to a particular assignee, seeRegional Properties, Ltd. v. Frankenschwerth, (1951) 1 All ER 178.Clearly the clause in the case relie upon could not be a consent of this kind. This point, therefore, also fails.