As per case facts, the original owner mortgaged a property and then leased it to Shankar Godaji Gore, who was permitted to sub-lease. Gore then sub-leased the land to defendants ...
A
SMT. SHANTI BAI AND OTHERS
V.
DINKAR BALKRISHNA VAIDYA AND ORS.
MARCH 2, 1994
[S. MOHAN AND M.K. MUKHERJEE,
Tenancy laws:
Bombay Rents, Hotel and Lodging House Rates Control.Act, 1947—Sec-
• tions 14 and 15—Held protection for available to assignees of sub-lessees--
Protection available only to lawful sub-lessees—Sub-lessee cannot create fur-
ther sub-lease—Transfer of Property Act, 1882—Section 108(j).
The suit property, an extent of 11,000 sq.ft. of land which was owned
by one T was mortgaged by him to D in 1947 and subsequently leased out
D
by T in favour of S in 1948. Under the lease deed the purpose was
mentioned as for residence and shops and the lessee was authorised to
sub- lease. There was also no prohibition against assignment. In 1949 the
lessee sub-leased the property by a registered deed to defendants 2 and 3,
who constructed fourteen shops on a portion of the land sub-let to them
E and let them out to several persons, who in turn assigned their interest to
different persons. An extent of 4000 sq, ft. was sub-let by defendants 2 &
3 to S B, and seven shops were also sold by them to SB. On 6.12.1952
defendants 2 &3 assigned their rights, title and interest in respect of the
land in favour of Defendants 6, 7 & 8.
In 1952 the mortgagee D filed a suit for enforcement of the mortgage
which was decreed. The mortgagee himself purchased the suit land in the
auction. The sale was confirmed and symbolical possession was delivered
to him.
In the meantime the Nazir of the Court was appointed as guardian
• under the Court of Wards Act since the mortgagee was declared a lunatic.
The Nazir filed a suit for recovery of a possession and arrears of rent (Civil
Suit No. 1142 of 1965) since his demand for rent from the original lessee
was not complied with. A ground of sub letting was also added. The suit
was decreed but the decree of the trial court was revised in appeal. The
H it petition filed by the mortgagee-purchaser D under Article 227 of the
296
SMT. SHANTI v. D.B. VAIDYA 297
Constitution of India was allowed by the Bombay High Court. The assig-
nees from the original sub lessee appealed to this Court by special leave,
claiming the protection of the Bombay Rents, Hotel and Lodging House
Rates Control Act, 1947 as sub lessees.
Dismissing the appeal, this Court
HELD: 1. The appellants who are assignees from the sub- lessees
cannot claim protection as sub-lessees. The original lessee and sub-lessees
are not before the court. It is well settled that in such circumstances that
a sub-tenant cannot create further sub-tenancy. [301-F]
Jai Singh Morarji & Ors. v. Mir. Sovani Pvt. Ltd. & Ors.,
[1973] 2 SCR
603, applied.
2. There is no scope for application of section 15 of the Bombay Rent
Control Act. Though the parties are afforded liberty to contact out of the
section, it is only a lawful sub tenant who could claim protection. If in law
they are not sub-tenants of the original lessor, this sections totally in-
applicable. [301-G]
3. Section 14 is also inapplicable. For the application of section 14,
there must be a lawful sub-tenacy. This is not so here. The occupants were
not lawfully inducted as sub-tenants either prior to 1959 or 1973 (the
relevant years for the applicability of sections 14 and IS). [301-H, 302-A]
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2006 of
'A
• From the Judgment and
Order dated 15.7.80 of the Bombay High F
Court in S.C. Application No.242 of 1973.
U.R. Lalit, V.N. Ganpule and B. Sangal for the Appellants.
S.K. Dholakia, U.Bhagat and V.B. Joshi for the Respondent No. 10-
G
V.A. Bobde, V.D. Khanna, A.M. IChanwilkar, P.H.
Parelch and J.S.
Wad for the Respondents.
The Judgment of the Court was delivered by
A
1981.
15.
298 SUPREME COURT REPORTS [1994] 2 S.C.R.
A MOIHAN, J. The short facts leading to this civil appeal are as under:
The suit property was originally owned by Trimbak Han Awate. He
executed a simple mortgage on 28.4.1947 to an extent of 11,000 square feet
which represent the entire property for a sum of Rs.20,000 in favour of
Dinkar S. Vaidya. On or about 7.7.1948, Awate executed a lease-deed in
favour of Shankar Godaji Gore. The purpose mentioned in the lease-deed
was residence and shops. Under the lease-deed, the lessee was authorised
to sub-lesase. The period of lease was 25 years. The annual rent was
Rs.1,500 payable monthly at the rate of Rs.125. There was no prohibition
from the assignment in the said lease.
On 17.2.1949, Shankar Godaji Gore,the lessee excuted a registered
sub-lease in respect of entire land in favour of two persons Sulochanabai
Thakur and KrishnabaiSarde, original defendants No.2 & 3. The sub-lease
was for a period of 99 years and 9 months. The monthly rent was fixed at
Rs. 50. Defendants 2 & 3, the sub-lessees constructed fourteen shops on a
portion of the land sub let to them. These shops were let out for rent to
several persons. They in their turn assigned their interest to different
persons. On 7.11.1949, an area of 4,00 sq. ft. was sub-let by defendants nos.
2 & 3 in favour of Sardar Biwalkar on a rent of Rs. 135 p.m. for a period
of 67 years. On the same day of the lease, defendants 2 & 3 sold seven out
of fourteen shops, to Biwalkar. On 6.12.1952, defendants 2 & 3 assigned all
their rights, title and interest in respect of the suit land in favour of
Bayajabai Ganpat Gore, Sundarabai Babasaheb Gore and Yashodabai
Balasaheb Gore, defendants 6, 7 and 8 respectively.
In 1952, Dinkar Balkrishna Vaidya, the mortgagee filed a suit being
Special Civil Suit No. 89 of 1952 for enforcement of mortgage. In that suit,
mortgagor Awate and defendant No.1 to 4 were made party-defendants.
That suit was decreed. In execution of the final decree in the auction the
mortgagee Dinkar Balkrishna Vaidya himself came to purchase the suit
land measuring about 1.000 sq. ft. The sale was confirmed on 19.12.57.
G Symbolical possession was granted on 2.3.1960. It appears that during the
pendency of the suit, mortgagee was declared a lunatic. Therefore, Nazir
of the Court was appointed as guardian and the property was taken
possession of by the Nazir under the provisions of Court of Wards Act.
The Nazir filed Regular Civil Suit No. 1142 of 1965 in the Small
H Causes Court, Poona for recovery of possession and arrears of rent since
SMT. SHANTI v. D.B. VAIDYA [MOHAN, J.]
299
his demand for rent from Shankar Godaji Gore was not complied with. A
Shankar Godaji Gore assigned his right, title and interest in the shop
premises to defendant Nos. 19 and 20. Likewise, on 27.8.63 defendant No.
5 assigned his right, title and interest in the shop in favour of defendant
No. 21. Therefore, another ground of sub-letting was also added. That suit
was decreed on 27.11.68. Aggrieved by the said jugdment, Civil Appeal
Nos. 279, 354 and 265 of 1969 were preferred against the same. Civil
Appeal Nos. 279 and 354 of 1969 came to be allowed while Civil Appeal
No. 265 of 1969 was dismissed for non-prosecution. Thereupon, the first
respondent moved the High Court under Article 227 of the Constitution
of India. That was numbered as Special Civil Application No. 242 of 1973.
By the impugned order dated 15.7.1980, that came to be allowed. Hence, C
the present civil appeal.
The learned counsel for the appellants Shri U. R. Lalit after taking
us through the relevant provisions of the Bombay Rents, Hotel and Lodg-
ing House Rates Control Act, 1947 (hereinafter referred to as 'the Act')
submitts that the lease-deed in favour of Shankar Godai Gore specially
enabled him to sub-let. Under the lease-deed dated 7.7.1948, Awate the
original owner permitted the lessee Shankar Godaji Gore to construct
therein and give the said building or any portion thereof to any person on
lease rent and he could take the income derived therefrom. Therefore,
there was clear enablement to sub-lease.
D •
Under the Transfer of Property Act, there is no bar for a lessee to
sub-lease. In such a case that right or interest could be assigned in favour
of third party. That was what was done by the lease-deed dated 17.2.1949.
The sub-lessees constructed the building and let out a few and assigned
their rights in favour of other defendants. It the sub-lessees continued in
possession prior to 21.5.1959, they would been entitled to the statutory
protection because prior to 1959, if there was sub-letting, the landlord
could not proceed to evict. Section 15 of the Act barring sub-lesseescame
into force only by amendment Act 49 of 1959, that too, subject to the
contract to the contrary. Here is a case of a contrary contract. Under these
circumstance the ruling reported in Sardar Total Singh v. Mls Gold Field
Leather Works, Bombay, 11985] 2 SCR 563 would squarely apply. No
eviction was possible under Section 13(1)(e) of the Act because it must be
an unlawful sub-letting. Therefore, there is total protection both under
1959 Act and 1973 Act.
300
SUPREME COURT REPORTS [1994i 2 S.C.R.
A
There is no warrant to hold that first defendant has unlawfully
sub-let. In any event, if defendant Nos. 2 and 3 are sub-tenants in accord-
ance with Section 14 of the Act, unless special sub- tenancy is determined,
no eviction is. possible.
Mr. S.K. Dholalcia, learned counsel for the respondent Nos. 24, 26
and 27 supporting this argument submits that there is privity of contract
between the original lessor and the occupant. The predecessor of the
original lessor had authorised the defendant No. 1 to build the superstruc-
ture. Defendant No. 1 had absolute right to transfer his interest and having
transferred his right of construction to defendant Nos. 2 and 3, the
C
construction was made by defendant Nos. 2 and 3 lawfully and binding on
the original lessee as he had not made any cotract to the contrary. The
occupants were inducted lawfully as tenants of the superstructure before
1959 or 1973 and therefore are eligible to the protection available
under
Sections 14 and 15 of the Act. Even on equity, they are entitled to a
decision in their favour. It has been noted by the High Court that some of
the occupants are tailors, laundrymen etc. and their livelihood is dependant
on these premises. The eviction will entail severe hardship.
Mr. V.A. Bobde, learned counsel for the respondents submits, no
doubt under the original lease date 7.7.1948, a permission had been given
E
to Gore to construct but he never constructed. He created a sub-lease in
favour of defendant Nos. 2 and 3. It was the sub-lessees who had put up
this building. In relation to the demised property there was no privity of
contract between the original lessor and the contesting defendents. Defen-
dants 2 and 3 constructed 14 shops and assigned their right in favour of
defendant Nos. 6, 7 and 8. How can these occupants claim the right as
F sub-tenancy ?
Jai Singh Morali and Ors. v. M/s Sovani At. Ltd and Ors.,
'1973] 2 SCR 603 clearly lays down that no further sub-lease is possible.
That would squarely apply to the facts of the present case. The reliance
placed on Tota Singh's
case (supra) is not correct. In any event, Section 14
does not take within it assignments and transfers.
Tha short question that arises for our consideration in this case is,
whether the occupants, the present appellants who are the assignees from
defendant Nos. 2 and 3 can claim the protection of the Act as sub-lessees.
The original lease-deed date 7.7.1948, between Awate and Gore
H
states in clause 2 sub-clause (1) and (3) as follows:
SMT. SHANTI v. D.B. VAIDYA [MOHAN, II
301
"2(1)1 have taken the said land on rent for the period of 25 years A
from the date 7.7.1948 and have taken the same in my possession
this day.
MOM X1000: MODCX MOM(
2(3) The land is vacant and I shall construct buildings therein as
per my wishes and I shall give the said building on any portion
thereof to any person on lease rent and I shall take the income
derived therefrom."
Admittedly Gore did not put up any construction. However, reliance
is placed on Clause 2 sub-clause (3) extracted above to urge that he had a
right of sub-lease because he could build and let it out in favour of any one
he liked. In our considered opinion the permission to construct means
nothing more than an emphasis of the manner of enjoyment of the proper-
ty. Even then as stated above, Gore never constructed. He leased-out the
D -
property in favour of defendant Nos. 2 and 3 by lease-deed dated 17.2.1949.
Under clause 2 sub-clause (d), it is stated as follows:
"The said land is vacant. We shall construct structures thereon as
per our wishes and we shall give the said building or any portion
thereof on sub-lease to any person and we shall take the income
derived therefrom. We shall obtain the permission required for the
said construction. In case your signature or consent is required in
that matter, you are to give the same."
These sub-lessees (defendant Nos. 2 and 3) assigned their rights in
favour of defendant Nos. 6, 7 and 8 and others who are the appellants.
How can they claim protection as sub-lessees? The important point to note
here is that the original lessee Gore, defendant Nos. 2 and 3 sub-lessees
are no longer before us. They have not filed the appeal. In these cir7
cumstances, the principle applicable to this case is as stated in Jai Singh
Morarji & Ors. case (supra) that a sub-tenant cannot create further sub-
tenancy. Therefore, we are totally unable to see any scope for application
of Section 15 of the Act. The parties are afforded liberty to contract out
of the Section. Even then it is only a sub-tenant who could claim protection.
If in law, they are not sub-tenants of the original lessor, this Section is
totally inapplicable.
302 SUPREME COURT REPORTS 11994] 2 S.C.R.
A Again for the application of Section 14, there must be a lawful
sub-tenancy. That is not so here. The occuants were not lawfully inducted
into possession as sub-tenants either prior to 1959 or 1973. Therefore, we
are unable to accept the contention urged by Mr. U.R. Lalit and Mr.S.K.
Dholakia, learned counsels. Hence, that Section is also inapplicable
Weighing the equitable considerations, the Civil Appeal was ad-
journed or effecting a compromise. But the parties have not done so.
Therefore, we are unable to grant any relief on that score. The Civil Appeal
will stand dismissed. However, there shall be no order as to costs.
R.R. Appeal dismissed.
In the landmark case of Smt. Shanti Bai & Others v. Dinkar Balkrishna Vaidya & Ors., the Supreme Court of India delivered a crucial judgment clarifying the extent of Sub-Lessee Rights under the Bombay Rent Control Act, 1947. This definitive ruling, available for review on CaseOn, addresses whether individuals who derive their interest from a sub-lessee can claim the same statutory protections as a lawful sub-lessee. The court’s decision untangles a complex web of transactions, including a mortgage, a primary lease, a sub-lease, and subsequent assignments, ultimately defining the limits of tenancy protection in such multi-layered arrangements.
The dispute originated from a property of 11,000 sq. ft. owned by one Trimbak Hari Awate (T). The sequence of events that led to the Supreme Court appeal is as follows:
After a series of appeals, the matter reached the Bombay High Court, which ruled in favor of the mortgagee-purchaser. The current appellants, who were assignees from the original sub-lessees, appealed this decision to the Supreme Court, claiming they were lawful sub-lessees and thus protected from eviction under the Bombay Rent Control Act.
The central legal question before the Supreme Court was: Can the assignees of a sub-lessee be considered 'lawful sub-tenants' entitled to protection against eviction under the Bombay Rent Control Act, 1947?
The Court's decision hinged on the interpretation of key legal principles and statutes:
The Supreme Court meticulously analyzed the legal relationship between the parties. It held that the appellants, being assignees from the sub-lessees, could not step into the shoes of lawful sub-tenants vis-à-vis the original landlord.
The Court's reasoning was threefold:
Understanding the nuances between a lawful sub-tenancy and an assignment can be complex. For legal professionals on the go, CaseOn.in offers 2-minute audio briefs that break down the core reasoning of critical rulings like this one, ensuring you stay informed efficiently.
The Supreme Court concluded that the appellants could not claim protection as sub-lessees. Their status as assignees from a sub-lessee placed them outside the protective umbrella of the Bombay Rent Control Act. The chain of lawful tenancy was broken when the sub-lessees attempted to create further interests in the property. Consequently, the appeal was dismissed.
The Supreme Court held that individuals who acquire their rights from a sub-lessee (i.e., assignees of a sub-lessee) are not entitled to protection as 'sub-lessees' under the Bombay Rent Control Act, 1947. The Court affirmed the established legal doctrine that a sub-tenant cannot create a further sub-tenancy. As the appellants were not 'lawfully' inducted sub-tenants in relation to the original landlord, the protections against eviction under Sections 14 and 15 of the Act were inapplicable to them. The appeal was dismissed, and the High Court's order for eviction was upheld.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. For any legal issues, please consult with a qualified legal professional.
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