Case: Isha Valimohamad &amp; Anr Vs. Haji Gulam Mohamad &amp; Haji Dada Trust

2. The suit premises consisted of a building known as Abdul Rahman Manzil and it belonged to one Haji Mohamad, Haji Dada Wakf (Trust). The building was leased to Osman Jamal and Company under a rent note dated January 15, 1947. In or about the year 1951, the firm of Osman Jamal and Company was wound up and the appellants took the premises on rent on a monthly rent of Rs.320/-. The respondent, the landlord, purported to terminate this tenancy by a notice dated February 12, 1964 on the ground that the appellants (tenants) had defaulted in the payment of rent and had sub-let the premises. At the trial of the suit, the plea that the appellants committed default in payment of rent was given up and, therefore, the sole issue before the Court was whether the appellants had sub-let the premises. The contention of the appellants was that under the contract of lease, they had the right to sub-let the premises and, therefore, the respondent was not entitled to recover possession of the premises.3. The trial Court held that the contract of tenancy contained no prohibition against the tenant sub-letting the premises and so, the respondent was not entitled to recover possession of the premises for the reason that the appellants had sub-let the premises and dismissed the suit.4. The respondent filed an appeal against this decree before the District Judge. He held that S.15 of the Saurashtra Rent Control Act, 1951 (hereinafter referred to as "the Saurashtra Act") which prohibited a tenant from sub-letting the premises superseded the contract of tenancy between the parties as that section was not subject to any contract to the contrary and, therefore, the landlord obtained the right to recover possession of the premises by virtue of S.13 (1) (e) of the Saurashtra Act. He further held that the repeal of the Saurashtra Act by the Bombay Rents, Hotel and Lodging House Rates Control Act,1947 (hereinafter referred to as "The Bombay Act") on December 31, 1963, did not affect the rights, privileges, obligations or liability acquired accrued or incurred under the former Act and, therefore, the liability of the appellants to ejectment under Section 13(1)(e) of the Saurashtra Act on the ground of sub-letting could be enforced by a suit, notwithstanding the repeal of that Act. The District Judge, therefore, allowed the appeal and decreed the suit.5. Against the judgment, the appellants filed a revision before the High Court of Gujarat. When the application for revision came up for hearing before a learned single judge of the High Court, he referred it to a Division Bench. The question before the Division Benchthe landlord is entitled to maintain a suit for recovery of possession from the tenant, on the ground of sub-letting under Section 13(1)(e) of the Bombay Rent Act (No.57 of 1947), as applied to Gujarat State on 31 December, 1963), where the sub-letting was made during the pendency of the Saurashtra Rent Control Act and neither the notice to terminate the contract was given nor the suit was filed before the date on which the Saurashtra Rent Control Act was repealed?" The Division Bench; by its judgment, held that the suit to recover possession of the premises was competent under Section 13 (1)(e) of the Saurashtra Act notwithstanding the repeal of that Act as the respondent had an accured right within the meaning of S.51, proviso (2) of the Bombay Act and confirmed the decree for ejectment. It is from this judgment that the present appeal has been filed.

Court's reasoning:
10. If a notice under the provisions of the Transfer of Property Act was necessary to determine the tenancy on the ground of sub-letting, we do not think that the High Court was right in its view that a right accrued to the landlord to recover possession of the premises under Section 13(1)(e) of the Saurashtra Act merely because the tenant sub-let the premises and that was prohibited by Section 15 of that Act.In other words, if the assumption of the High Court that a notice terminating the tenancy on the ground of sub-letting was necessary for filling a suit under Section 13(1) (e) of the Saurashtra Act was correct, then we do not think that the respondent-landlord had an accrued right which would survive the repeal of that Act unless the notice was issued determining the tenancy during the currency of that Act. We do not think that the right of a landlord to recover possession on the ground that the tenant has sub-let the premises is an accrued right before the issue of a notice, if under any law it was necessary for the landlord to issue the notice to determine the tenancy on the ground of sub-letting.We think that the respondent-landlord had the legal freedom as against the appellants to terminate the tenancy or not. The appellants had no right or claim that the respondent should not terminate the tenancy and the respondent had, therefore, the privilege of terminating it on the ground that appellants had sub-let the premises. This privilege would survive the repeal. But the problem would still remain whether the respondent had an accrued right or privilege to recover possession of the premises under S.13 (1) of the Saurashtra Act on the ground of the sub-letting before the repeal of that Act. The fact that the privilege to terminate the tenancy on the ground of sub-letting survived the repeal does not mean that the landlord had an accrued right or privilege to recover possession under S.13(1) of that Act as that right or privilege could arise only if the tenancy had been validly terminated before the repeal of the Saurashtra Act.16. Be that as it may, we do not, however, think that the High Court was right in its assumption that a notice under the Transfer of Property Act was necessary to terminate the tenancy on the ground that the appellants had sub-let the premises; or, for that matter, the landlord could legally have terminated the tenancy by giving a notice, unless the contract of tenancy prohibited the tenant from sub-letting the premises.17. Under the Transfer of Property Act, mere sub-letting by a tenant, unless the contract of tenancy so provides, is no ground for terminating the tenancy. Under that Act a landlord cannot terminate a tenancy on the ground that the tenant had sub-let the premises unless the contract of tenancy prohibits him from doing so. The respondent-landlord therefore could not have issued a notice under any of the provisions of the Transfer of Property Act to determine the tenancy, as the contract of tenancy did not prohibit sub-letting by the tenant. To put it, differently, under the Transfer of Property Act, it is only if the contract of tenancy prohibits sub-letting by tenant that a landlord can forfeit the tenancy on the ground that the tenant has sublet the premises and recover possession of the same after issuing a notice. Section 111 of the Transfer of Property Act provides that a lease may be determined by forfeiture if the tenant commits breach of any of the conditions of the contract of tenancy which entails a forfeiture of the tenancy. If sub-letting is not prohibited under the contract of tenancy, sub-letting would not be a breach of any condition in the contract of tenancy which would enable the landlord to forfeit the tenancy on that score by issuing a notice. If that be so, there was no question of the respondent landlord terminating the tenancy under the Transfer of Property Act on the ground that the tenant had sub-let the premises. It is only under Section13 (1) (e) of the Saurashtra Act that a landlord was entitled to recover possession of the property on the basis that the tenant had sub-let the premises; and, that is because, Section 15 of that Act unconditionally prohibited a tenant from sub-letting. The Saurashtra Act nowhere insists that the landlord should issue a notice and terminate the tenancy before instituting a suit for recovery of possession under S.13 (1) (e) on the ground that the tenant had sub-let the premises. The position, therefore, was that the landlord was entitled to recovery possession of the premises under Section 13(1) of the Saurashtra Act on the ground that the tenant sub-let the premises. It would follow that a right accrued to the landlord to recover possession under Section 13(1) of the Saurashtra Act when the tenant sub-let the premises during the currency of that Act and the right survived the repeal of that Act under proviso (2) to Section 51 of the Bombay Act and, therefore, the suit for recovery of possession of the premises under S.13(1) read with clause (e) of the Saurashtra Act after the repeal of that Act on the basis of the sub-letting during the currency of the Saurashtra Act was maintainable. In this view, we think that the judgment of the High Court must be upheld and we dothere can be no doubt that the respondent could have filed a suit to recover possession under S.13(1) of the Saurashtra Act on the ground that the appellants hadsublet the premiseswhile that Act was indo not, however, think that the right of the landlord to terminate the tenancy by giving a notice on the ground that the tenant hassublet the premiseswas an accrued right within the meaning of Section 51 of the Bombay Act which would survive the repeal of the Saurashtra Act.