Case ID: 1265

Judgment:
Appeal No. 356 of 1959. Appeal by special leave from the judgment and order dated the November 18	 1957	 of the Punjab 18 High Court at Chandigarh in Civil Miscellaneous Application No. 712 of 1956. B. D. Sharma	 for appellant. Hardev Singh and A. G. Ratnaparkhi	 for respondent No. 1. Y. Kumar	 for respondent No. 2. 1961. April 17. The Judgment of the Court was delivered by SHAH	 J. The Singer Sewing Machine Company hereinafter referred to as the company was	 since the year 1934	 the tenant for business purposes of a shop situate at Gurgaon in the State of Punjab and belonging to Pandit Kishan Lal hereinafter called the appellant. One Ganpat Ram Khosla hereinafter referred to as Khosla was the Sales Manager of the company. The Legislature of the State of East Punjab enacted Act III of 1949 called the East Punjab Urban Rent Restriction Act	 1949	 to restrict the increase of rent of certain premises situated within the limits of urban areas and the eviction of tenants therefrom. The Act granted protection to tenants of premises used for residential and non residential purposes. By section 2	 el. (1)	 the expression "tenant" was defined	 in so far as the definition is material	 as meaning any person by whom or on whose account rent was payable for a building or rented land and included a tenant continuing in possession after the termination of the tenancy in his favour	 but did not include a person placed in occupation of a building or rented land by its tenant	 unless with the consent of the landlord. By section 13	 the right of the landlord to evict a tenant even in execution of a decree was restricted and the landlord could seek to evict his tenant by an application to the Controller in certain specified circumstances set out in that section. On August 30	 1954	 the company addressed a letter to the appellant intimating that it desired to close down its office in Gurgaon with effect from September 1	 1954. The relevant part of the letter ran as follows: 19 "Now the Company has closed its agency busi ness at Gurgaon and Mr. Khosla will be carrying on Sewing Machine business in Gurgaon in your shop in his personal capacity and not as a Manager of Singer Company. In order that there may not be any misunderstanding about the payment of rent in future	 you are informed that from September	 1954 onwards Mr. Khosla will be personally responsible for the payment of rent of your shop. " The appellant informed the company that unless vacant possession was delivered to him tenancy could not be validly determined	 and that the company will be held responsible till such delivery for liability to pay rent and that in the event of possession being transferred to any other person	 legal action will be taken against the company. But the company delivered possession of the shop to Khosla and allowed him to occupy the shop in his personal capacity from September 1	 1954. Thereafter	 on October 31	 1954	 the appellant applied under section 13 of the Act to the Controller for an order against Khosla and the company on three grounds	 (1) that the company did not require the premises any longer while the appellant required the same for his own use	 (2) that the company had neglected to pay rent since September 1	 1954	 and (3) that the company had assigned or sublet the shop to Khosla without the written consent of the appellant. Khosla and the company resisted the application contending that Khosla was the tenant of the appellant and that in any event	 on August 28	 1954	 the company through its local Supervisor had delivered possession of the shop to the appellant and that the latter agreed to treat Khosla as his tenant with effect from September 1	 1954. The Controller rejected the pleas raised by Khosla and the company and ordered that possession be delivered by the com pany to the appellant. In appeal to the District Court at Rohtak	 the order passed by the Controller was confirmed. In a petition under article 227 of the Constitution filed by Khosla in the High Court of Judicature for. Punjab at Chandigarh	 the order passed by the District Court was quashed. The High Court was of the view that after August 31	 1954	 the 20 company had no interest left in the tenancy and the tenancy being from month to month terminable at the will of the appellant	 such tenancy could not be the subject matter of transfer or of sub letting. The High Court therefore held that the order passed was without jurisdiction. In the course of the judgment	 the High Court observed that full rent had been paid even after September 1	 1954	 and therefore the ground of non payment of rent "was not open to" the appellant. It is accepted at the bar that in making this observation	 the High Court was under a mis apprehension. The rent accruing due was not paid to the appellant	 but was deposited in court. Against the order passed by the High Court	 this appeal is preferred with special leave. The Controller and the District Court found that the tenant of the shop in dispute was not Khosla but the company. These two tribunals also found that possession of the shop was handed over by the company to Khosla without the consent of the appellant. These findings were binding upon the High Court. The only question which fell to be determined by the High Court was whether by unilateral action on its part	 the company could require the appellant to treat Khosla as his tenant. In our view	 the High Court misconceived the nature of the tenancy. A tenancy except where it is at will	 may be terminated only on the expiry of the period of notice of a specified duration under the contract	 custom or statute governing the premises in question. A tenant does not absolve himself from the obligations of his tenancy by intimating that as from a particular date be will cease to be in occupation under the landlord and that some one else whom the landlord is not willing to accept will be the tenant. It is one of the obligations of a contract of tenancy that the tenant will	 on determination of the tenancy	 put the landlord in possession of the property demised (see section 108(q) of the Transfer of Property Act). Unless possession is delivered to the landlord before the expiry of the period of the requisite notice	 the tenant continues to hold the premises during the period as tenant. Therefore	 by merely assigning the rights	 the tenancy of the 21 company did not come to an end. It was observed by this court in W. H. King vs Republic of India (1): "There is a clear distinction between an assignment of a tenancy on the one hand and a relinquishment or surrender on the other. In the case of an assignment	 the assignor continues to be liable to the landlord for the performance of his obligations under the tenancy and this liability is contractual	 while the assignee becomes liable by reason of privily of estate. The consent of the landlord to an assignment is not necessary	 in the absence of a contract or local usage to the contrary. But in the case of relinquishment it cannot be a unilateral transaction; it can only be in favour of the lessor by mutual agreement between them. Relinquishment of possession must be to the lessor or one who holds his interest: and surrender or relinquishment terminates the lessee 's rights and lets in the lessor. " In the present case	 the company did not surrender its rights to the appellant; it sought to transfer its rights to Khosla. The company admittedly did not serve the notice as required by law	 nor did the appellant agree to accept the unilateral determination of the tenancy by the company. The true position was therefore that the company did not immediately on the service of the notice cease to be a tenant; and Khosla	 because he was let into possession became an assignee of the rights of the company as a tenant	 and he could not be regarded as a trespasser. The High Court was therefore in our view in error in holding that the proceedings were not maintainable in the court of the Controller for possession. Khosla being an assignee of the tenancy rights of the company was as much liable to be sued in the court of the Controller as the company for an order in ejectment. We therefore allow the appeal	 set aside the order passed by the High Court and restore the order passed by the District Court	 Rohtak. The appellant will be entitled to his costs in this court as well as in the High Court from Khosla. Appeal allowed.

Summary:
The Singer Sewing Machine Company	 respondent 2 in the appeal	 was the tenant in respect of a shop under the appellant and informed him that the company had closed its premises	 that respondent I will conduct his business in the shop	 and that he will be personally responsible for payment of rent	 and in spite of the appellant 's protest and without his consent delivered possession of the said shop room to respondent 1. Thereupon the appellant applied to the Controller under section 13 of the East Punjab Urban Rent Restriction Act	 1949	 for eviction of the respondents and the Controller directed the company to deliver possession to the appellant. The District Court confirmed the Controller 's order but the High Court set aside the order	 in a petition under article 227 of the Constitution	 as having been made without jurisdiction	 holding that the company had no interest in the tenancy after August 31	 1954	 and nothing had passed to the respondent 1. Held	 that the High Court was in error on both the points and its order must be set aside. One of the obligations of a tenant under section 108(q) of Transfer of Property Act	 on the determination of the tenancy	 is to put the landlord in possession. If the tenant fails to do so before the expiry of the period of notice	 his tenancy continues and cannot be terminated by an assignment in favour of another. W. H. King vs Republic of India	 	 referred C.to. In the instant case	 the company had not admittedly served the notice as required by law and	 therefore	 did not cease to be the tenant and since the respondent I was let into possession as assignee he was not a trespasser and	 consequently	 the proceeding before the Controller was maintainable against both.