Case: Anand Nivas (Private) Ltd Vs. Anandji Kalyanji Pedhi &amp; Ors

24. A lease of the ground and the first floors of a building named Anand Bhavan in the town of Ahmedabad was granted by the trustees of the trust named "Anand ji Kalyan ji Pedhi" to one Maneklal, for five years commencing from March 5, 1950 at a monthly rental of Rs.A suit instituted by the trustees in the Court of small Causes (which is the Court competent under S. 28 of Bombay Rents, Hotel and Lodging House Rates Control Act 57 of 1947hereinafter called the Actto entertain the suit) against Maneklal after the expiration of the period of the lease for a decree in ejectment and for arrears of rent was decreed on June 22, 1960. In execution of the decree the trustees obtained possession of the first floor but were obstructed as to the rest by a private limited company called"Anand Nivas private Ltd."and two others who claimed to befrom Maneklal and thereby to have acquired rights of tenancy of the ground floor upon the determination of the tenancy of Maneklal.25. Anand Nivas Private Ltd.which will hereinafter be called the Company, filed Suit No. 2814 in the Court of Small Causes at Ahmedabad for a declaration that it was not bound to deliver possession of the premises in its occupation in execution of the decree in the suit filed by the trustees against Maneklal and for an injunction restraining the trustees from enforcing the decree. The Companys application for an injunction restraining the trustees from obtaining possession in enforcement of the decree obtained by them against the tenant was dismissed by the Court of First Instance. In appeal against that order the District Judge, Ahmedabad refused an interim injunction restraining the trustees from executing the decree pending the hearing and disposal of the appeal. The High Court of Gujarat was then moved against that order by a petition invoking its revisional jurisdiction. At the hearing, the petition was, by order of the Court, converted into an appeal from order refusing to grant an injunction. The High Court dismissed the appeal holding that a "statutory tenant" remaining in possession after determination of his contractual tenancy was in law not competent tosublet the premises inwhole or in part and a person claiming to be afrom a statutory tenant could not effectively plead the protection of S. 14 of the Act as amended by Ordinance III of 1959 or Bombay Act 49 of 1959. With special leave, the company has appealed to this court.

Court's reasoning:
Whereas a tenant who retains possession, and is protected by virtue of the provisions of the English Rent Act is entitled, so long as he retains possession, to the benefit of all the terms and conditions of the original contract of tenancy so far as they are consistent with the provisions of the Act, the Bombay Act merely grants conditional protection to a statutory tenant and does not invest him with the right to enforce the benefit of any of the terms and conditions of the original tenancy. This difference in the phraseology of the two enactments is vital to the matter under discussion, andwe are unable to hold - assuming that the tenant was entitled to sublet the premises under the terms of the lease that he could, relying upon S. 12 (1), exercise the right to sublet granted under the lease after he became a statutory tenant. The first ground on which the claim was founded by the Company must therefore fail.30. The second ground on which the company claimed to be a lawful tenant of the trustees cannot also be sustained. In the High Court it was common ground between the parties that the tenant continued to remain" in possession after March 5, 1955 of the premises leased to him not because of any renewal or grant of a fresh tenancy, but in virtue of the protection afforded to him by the Act as a statutory tenant. As a statutory tenant he had no estate or interest capable of being assigned or transferred, and his statutory right to occupy could not in law be sublet, because a lawful subletting postulates a right to enjoy the property and a right to transfer the same to another. There can be no subletting when there is no right in the premises especially when the statutory tenancy ceases when the tenant parts with possession. The decision of the Calcutta High Court in Krishna Prosad Bose v. Sm. Sarajubala Dassi, AIR 1961 Cal 505   on which reliance was placed by the Company in support of its plea that a statutory tenant is entitled tosublet the premises inhis occupation does not assist the argument. The West Bengal Premises Rent Control (Temporary Provisions) Act, 1950, recognises the right of a statutory tenant to sublet. Section 12(1) of the West Bengal Act provides that notwithstanding anything to the contrary in any other Act or law, no order or decree for the recovery of possession of any premises shall be made by any court in favour of the landlord against a tenant, including a tenant whose lease has expired. By the proviso it is enacted that nothing in the sub-section shall apply to any suit for a decree for such recovery of possession against a tenant who has sublet the whole or a major portion of the premises for more than seven consecutive months provided that if a tenant who has sublet the major portion of the premises agrees to possess as a tenant the portion of the premises not sublet on payment of rent fixed by the Court, the Court shall pass a decree for ejectment from only a portion of the premises sublet and fix proportionately fair rent for the portion kept in possession of such tenant. By sub-s. (2) of S. 13 it is provided, in so far as it is material, that where any premises or any part thereof have been or has been sublet by a tenant of the first degree, if the tenancy of such tenant is lawfully determined otherwise than by virtue of a decree in a suit obtained by the landlord by reason of any of the ground specified in clause (h) of the proviso to subsection (1) of Section 12, the sub-lessee shall be deemed to be a tenant in respect of such premises or part, as the case may be holding directly under the landlord for the tenant whose tenancy has beenWe are not concerned in this case to decide whether the provisions of the Act were correctly interpreted by the Court: it may be sufficient to observe in this case that the Court in Krishna Prosads case, AIR 1961 Cal 505   held that the right of a statutory tenant to sublet was recognised by the statute which afforded hisis common ground that the tenant purported to sublet a part of the premises in his occupation after the trustees instituted a suit in ejectment against him, and before Ordinance III of 1959 was promulgated. The Company has claimed the right of a sub-tenant on the second ground relying upon the ordinance, and it would be necessary to consider the material statutory provisions as amended by theregard to the plurality of its meaning, the sense in which the expression is used in different sections, and even clauses, must be ascertained from the context of the scheme of the Act the language of the provision and the object intended to be served thereby.The argument that by restricting the operation of S. 13 (1) (e) to contractual tenants subletting by statutory tenants would be protected, is without force. Sections 12 and 13 (1) have to be read together. Clause (e) of S. 13 (1) entitles a landlord to obtain possession, where a contractual tenant has during the subsistence of the tenancy sublet the premises or assigned or transferred his interest therein. Where a statutory tenant has purported to sublet the premises, or has purported to assign or transfer his interest therein, and in pursuance of such a transaction parted with possession, he would forthwith forfeit the protection which the statute accords to him by S. 12 (1).35. In the light of that legal position the claim of the Company founded on S. 14 may beis abundant indication in the section that it applies to contractual tenancies alone. In the first instance it speaks of the interest of the tenant and determination of that interest. It then invests a sub-tenant to whom the premises have been lawfully sub-let before the date of the Ordinance, with the rights of a tenant of the landlord on the same terms and conditions as he would have held from the tenant if the tenancy had continued. The sub-letting to be lawful must be (i) permitted by contract, or (ii) validated by sub-s. (2) of S. 15. The object of S. 14 is to protect sub-tenants. By that section forfeiture of the rights of the tenant in any of the contingencies set out in S. 13 does not in all cases destroy the protection to the sub-tenants. The protection which a sub-tenant is entitled to claim against his own landlord (that is the head tenant) becomes on determination of the head tenancy available to him against the head landlord, but the condition on which such claim may be sustained is that there is a lawful sub-letting. A statutory tenant is, as we have already observed, a person who on determination of his contractual right, is permitted to remain in occupation so long as he observes and performs the conditions of the tenancy and pays the standard rent and permitted increases. His personal right of occupation is incapable of being transferred or assigned, and he having no interest in the property there is no estate on which subletting may operate. If it be assumed that a statutory tenant has the right of sub-letting, some very surprising consequences may ensue. A statutory tenant by parting with possession of the premises would forfeit all rights in the premises occupied by him, but he would still if S. 14 is construed as suggested by the Company be able to create an interest in the person inducted in the premises not derivatively but independently, for the statutory tenant had no interest in the premises not derivatively but independently, for the statutory tenant had no interest in the premises and the protection granted by the statute is by the very act of transfer of possession extinguished. Again even though the sub-tenant of a statutory tenant may not be protected, because the bar against such subletting is not effectively removed by S. 15(2), he would still be entitled to claim the rights of a tenant under S.14 on determination of the tenancy of the head tenant. Having regard to these considerations there can be little doubt that a sub-lessee from a statutory tenant under the Act acquires no right of a tenant in the premises occupied by him.36. Even under the Increase of Rent and Mortgage Interest (Restriction) Act, 1920 protection was accorded to the sub-tenant of a part of the premises occupied by a statutory tenant: when the statutory tenant parted with possession of the entirety of the premises occupied by him either by one sub-letting or more or by sub-letting of part and surrender of the rest of the premises, the persons claiming a right of occupation derivatively from the statutory tenant had notherefore hold that before the data of the institution of the suit, Maneklal as a statutory tenant had no right to sublet the premises and the company acquired no right of a tenant on the determination of the tenants right by virtue of S. 14 of thethis Act the rule of Lis Pendents applies only when a notice of the pendency of the suit in which any right to immovable property is directly and specifically in question, is registered under S. 18 of the Registration Act.The Act is somewhat clumsily worded: it applies not to proceedings in court but to notices in respect of suits or proceedings. But the reason for the method of drafting adopted is not far to seek. Condition of registration of notice relating to the suit is only to apply where the suit is in respect of property situate in the area to which the Act is extended.A suit relating to immovable property may, in certain circumstances, lie in a Court other than the Court within the territorial jurisdiction whereof it is situate (e. g. under Cl. 12 of the Letters Patent and S. 17 Code of Civil Procedure) and it appears that the Legislature intended to make the Act applicable only to transfers of title to immovables only in areas where the litigants were sufficiently sophisticated to understand the importance of registration. As Bombay Act XIV of 1939 is intended to apply to the situs of immovable property and not the Court proceeding, application of the rule of Lis Pendens is, in respect of proceedings relatings to immovable properties situate in certain areas, notice conditional upon the registration of the notice of the pendency of the suit.38. But this Act did not apply to the suit filed by the trustees. The Act by S. 2 applies only to notices in respect of suits or proceedings which relate to immovable property situate wholly or partly in Greater Bombay. By the proviso to S. 2 it may be extended by the Provincial Government by notification to notices relating to immovable properties situate wholly or partly in such other areas as may be specified. The suit was filed by the trustees in the Court of Small Causes at Ahmedabad and our attention has not been invited to any notification, issued by the appropriate Provincial Government extending the Act to notices relating to immovable properties in areas outside Greater Bombay. Whereas the rule of Lis Pendens under the Transfer of Property Act applies to all suits and proceedings which are not collusive in which the right to immovable property is directly and specifically in question, by virtue of the amended Act the rule applies in proceedings relating to immovable property in the areas notified, only if a notice of suit is registered, and from the date of registration. The section in terms applies only to notices in respect of suits or proceedings which relate to immovable property in the Greater Bombay Area - it does not apply to any suits in which property in Greater Bombay is not the subject-matter in dispute.39. The Transfer of Property (Bombay Provision for Uniformity and Amendment) Act, 57 of 1959, does not also assist the Company. By that Act, amongst other things, uniformity in the provisions of the Transfer of Property Act as amended in its application to the State of Bombay as it existed after the enactment of the States Reorganisation Act, 1956, was sought to be achieved. Section 3 of the Act enacted that the provisions of Bombay Act XIV of 1939 which amended the Transfer of Property Act in its application to the pre-reorganized State of Bombay, were extended to and shall apply to that part of the State to which they did not apply immediately before the commencement of that Act. Enactment of this Act was necessitated because of S. 119 of the States Reorganization Act, 1956, which continued, notwithstanding the formation of the new States, the territorial extent of the laws previously in operation. It was found expedient to secure uniformity of the laws in the State, and therefore it was enacted by the State Legislature that one of the conditions of the applicability of the rule of Lis Pendens was that notice of a suit or proceeding in which any right to immovable property within the area notified under S. 2 of Act XIV of 1939, is directly and specifically in question, is registered under S. 18 of the Registration Act. The decree in the suit filed by the trustees against Maneklal was therefore enforceable against the