Bombay High Court
Ratanlal Chandiprasad Jalan And Ors. vs Raniram Darkhan And Ors. on 18 October, 1985
Equivalent citations: AIR1986BOM184, 1986(1)BOMCR1, (1985)87BOMLR534, AIR 1986 BOMBAY 184, 1985 BOMRC 408, I.L.R 1986 BOM 432, 1986 SCFBRC 55, (1986) ILR BOM 432, (1986) MAH LJ 1, (1986) MAHLR 270, (1986) 1 RENCJ 276, (1986) 1 RENCJ 591, (1986) 1 RENCR 449, (1986) 1 RENTLR 262, (1986) 1 BOM CR 1, 1985 (87) BOM LR 334, 1985 BOM LR 87 334
JUDGMENT K. Madhava Reddy, C.J.
1. This Writ Petition along with Writ Petition No. 3575 of 1982 has been referred to the Full Bench. The revelant facts in this petition are few. On 18-6-1977 a decree for possession was passed in Suit No. 5536 of 1970. It was a decree under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as "the Bombay Rent Act"). Its execution was obstructed by the respondents Pabbar Madhu and others. Their case was that the defendant-tenant had put them in possession of the rented property under a leave and licensee agreement dt. 16-2-1968 and that this agreement was subsisting on 1-2-973. By the amending Act of 1973 such licensees have been protected and they become tenants. The executing Court accepted this contention. The appeal against this decision was dismissed on 19-3-1979. The decree-holders have filed Writ Petitio No. 76 of 1980 against it.
2. In Writ Petition No. 3575 of 1982 an expert decree for possession was passed on 17-12-1978 under the Bombay Rent Act. The execution of that decree was obstructed. The decree-holders took out obstructionist notice. The contention of the obstructionists (the petitioners in the writ petition) was that they had been in possession of the rented premises since October 1968 as licensees and that they were protected under S. 15A of the Bombay Rent Act as the said licence was subsisting on 1-2-1973. The Small Cause Court found that the defendant in the eviction suit was a statutory tenant and that he could not have created any valid licence in favour of the obstructionists. The obstruction was, therefore, ordered to be removed. the petitioners' appeal to the Appellate Bench was dismissed. The petitioners filed Suit No. 6220 of 1975 for declaration that they were the tenants on the basis of their erstwhile rights under the licence deed. that suit was dismissed. Appeal No. 334 of 1982 was also dismissed. Hence, the petitioners filed Writ Petition No. 3575 of 1982. When this writ petition was initially heard by the learned single Judge, he referred the matter to the Division Bench. On 26-4-1984 the Division Bench of Kurdukar and Jamdar, JJ. passed an order that certain question should be referred to the Full Bench as the Division Bench was not able to agree with the earlier decisions of this Court in First Appeal No. 754 of 1978 (reported in 1980 Bom RC 122) and Writ Petn. No. 2447 of 1974 reported in Vasant v. Dikkaya, . The Division Bench, therefore, referred the relevant questions to the Full Bench.
3. When both these matters were placed before us for hearing, we found that Writ Petition No. 3575 can be decided without considering the questions referred to us. Accoundingly, that petition was disposed of. However, the learned Advocated appearing in both the petitions submitted that the questions referred to the Full Bench should be decided by us with a view to settle the controversy once for all. Taking into account, the importance of these questions. We have heard the learned Advocates on behalf of both the sides. We felt that the formation of the questions that have been referred to us should be modified a little and accordingly we have formulated the following questions.
(1) Whether a statutory tenant governed by the Bombay Rent Act retains heritable interest in the premises?
(2) Whether a statutory tenant governed by the Bombay Rent Act retains transferable interest in the premises?
(3) Whether a statutory tenant governed by the Bombay Rent Act could have created a valid licence before 1973?
(4) Whether Vasant Tatoba Hargude v. Dikkaya Muttaya Pujari, and Chandrakant Jasinath Thakur v. Narayan Lakhanna Shetty & others (First Appeal No. 754 of 1978) (reported in 1980 Bom RC 122) were correctly decided?
4. Before proceeding with the discussion we would like to state that the term 'statutory tenant' does not appear either in the Bombay Rent Act or in the T. P. Act. However, that phrase is more convenient to describe a tenant whose contractual tenancy has been terminated. We propose to use that phrase whenever we would be referring to a tenant whose contractual tenancy has been terminated.
5. The question as to whether a statutory tenant has heritable interest and/or transferable interest in the premises has arisen before the Supreme Court in a number of cases. In some cases the point was as to whether such a tenancy was heritable while in other matters the question about the transferability of such tenancy was heritable while in other matters the question about the transferability of such tenancy rights was involved. Initially we propose to note these various decision and the principles laid down therein. The first case is of Anand Nivas Pvt. Ltd. v. Anandji Kalyaniji's Pedhi, . It was a case umder the Bombay Rent Act. A lease dt. Mar. 5, 1950 for a period of five years was created in favour of Maniklal. After the expiry of the lease a suit was filed by the landlord for possession. That suit was decreed on June 22, 1960. The decree was put in execution. Andad Nivas Pvt. Ltd. (hereinafter referred to as 'the Company') claimed sub- tenancy from Maniklal after 1955, i.e. after Maniklal's tenancy was terminated by efflux of time. The Company filed a suit for declaration of its rights as a sub-tenant. An application was made in that suit for an injunction restraining the landlord-decree-holder from executing the decree. the trial court dismissed the application. The matter went up to the Supreme Court. The question before the Supreme Court was as to whether the Sub-tenancy created by Maniklal was of any consequence. The decision depended upon the point whether Maniklal as a statutory tenant had any estate in the leasehold property which he could convey by a sub-leasehold property majority of the judgment of the Supreme Court held that Maniklal had no estate or interest in personal protection from eviction. the relevant observations in para 27 of the judgment are as follows:
"A person remaining in occupation of the premises let to him after the determination of or expiry of the period of the tenancy is commonly though in law not accurately, called "a statutory tenant". Such a person is not a tenant at all : he has no estate or interest in the premises occupied by him. He has merely the protection of the statute in that he cannot be turned out so long as he pays the standard rent and permitted increases, if any, and performs the other conditions of the tenancy. His right to remain in possession after the determination of the contractual after the determination of the contractual tenancy is personal : it is not capable of being transferred or assigned, and devolves on his death only in the manner provided by the statute. The right of a landlord on the other hand is an estate or interest in the premises and in the absence of a contract to the contrary is transferable and the premises may be sublet by him. But with the determination of the lease, unless the tenant acquires the right of a tenant holding over, by acceptance of rent or by assent to his continuing in possession by the landlord, the terms and conditions of the lease are extinguished, and the rights of such a person remaining in possession are governed by the statute along. Section 12(1) of the Act merely recognises his right to remain in possession so long as he pays or is ready and willing to pay the standard rent and permitted increases and performs the other conditions of the tenancy, but not the right to enforce the terms and conditions of the original tenancy after it is determined".
The relevant portion from para 30 reads as follows:
"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 subled, because a lawful subletting postulates a right to enjoy the property and a right to transfer the same to another".
The term 'tenant' had been defined under S. 5(11) of the Bombay Rent Act. It is an inclusive definition. In addition, to the contractual tenant, the definition also provided in sub-cl. (b) that a person remaining, after the determination of the lease, in possession with or without the assent of the landlord would be a tenant. Thus, the definition coveys a plurality of meaning, so as to include a contractual tenant as well as a statutory tenant. Unlawful subletting by the tenant gives a ground to the landlord for eviction. This is provided by S. 13(1)(c). Section 15 had made a provision that tenant (subject to any contract to the contrary) would not be able to sublet, transfer or assign his interest in the rented premises. The Supreme Court considered these and other provisions and held that they deal with contractual tenants and not with statutory tenants. It is with this reasoning that the Supreme Court held that a statutory tenant has no interest in the land and that he has mere right to possess which is incapable of being transferred.
6. Similar view has been taken by the Supreme Court in the case of J. C. Chatterjee v. S. K. Tandon, . It was case under the Rajasthan Premises (Control of Rent and Eviction) Act. the landlord terminated the tenancy on June 26, 1962. A suit was filed. It was decreed on Jan. 17, 1964. The tenant succeeded in appeal. The landlord, therefore, filed Second Appeal No. 39 of 1965. During the pendency of this appeal the tenant died and his legal representatives were brought on record. However, at the time of the decision of the appeal, ht high Court held that the defendant-tenant being a statutory tenant had a mere right to possess and that, therefore, his legal representatives cannot claim any interest in the lease so as to successfully object the passing of the decree. The legal representatives of the statutory tenant took the matter to the Supreme Court. The Supreme Court relying upon the decision in the case of Anand Nivas Pvt. Ltd. (supra) held that after the termination of the contractual tenancy the statutory tenant has only a personal right to continue in possession and that such personal protection comes to an end as soon as the statutory tenant dies.
7. The third decision which has taken a somewhat similar view is in the case of Ganpat v. Sashikant, . It was a case under the Bombay Rent Act with respect to the shop premises. The landlord filed suit for eviction on Nov. 6, 1960 on the ground of arrears of rent. The suit was decreed. The tenant's appeal was ultimately dismissed after some intervening proceedings. The High Court set aside this decree in writ petition and the matter went to the Supreme Court at the instance of the landlord. It seems that during the pendency of the matter in the High Court, the original tenant died. Under S. 5(11)(c) a member of the tenant's family residing with him at the time of his death would be tenant. the legal representatives were brought on record as they were residing with the tenant at the time of the tenant's death. A contention was raised before the High Court that such legal representatives (who were residing with the tenant) have a status as tenant even with respect to shop premises. This contention was accepted and the landlord filed an appeal to the Supreme Court. The Supreme Court held that the provisions of S. 5(11)(c) were meant to protect the rights of the legal representatives so far as the residential premises are concerned and that such legal representatives (staying with the tenant) could not get any tenancy rights in respect of the shop premises cannot claim any tenancy right. A decree for possession was, therefore, confirmed. thus, the above decisions have taken a view that the statutory tenant has no estate or interest in the leasehold property and that the personal right to possession is neither heritable nor transferable.
8. However, another set of the Supreme Court cases has taken a somewhat different view. The first case of this category is that of damadilal v. Parashram, reported in AIR 1976 Dv 2229. It was a case under Madhya Pradesh Accommodation Control Act. Under S. 12 no suit can be filed against the tenant except on the grounds mentioned therein, such as default in payment of rent, bona fide requirement etc. The landlord filed a suit. It was dismissed. The appeal was allowed and thus there was a decree for possession. the tenant filed second appeal in the High Court. He died during the pendency of the appeal. His legal representatives were brought on record. the High Court allowed this second appeal. In this way the plaintiff's suit stood dismisses. The plaintiff, therefore, filed an appeal in the Supreme Court. One of the main contentions raised before the Supreme Court was that the tenant against whom the suit was filed was a statutory tenant and that he has no heritable interest in the leasehold property and that, therefore, on his death the legal representatives had no right to prosecute the appeal. Some English decisions were cited before the Supreme Court. However, it was found that these decisions would not be applicable in India as they were based upon different provisions of English statutes. In para 11 of the judgment relevant observations read as follows:
"We find it difficult to appreciate how in this country we can proceed on the basis that a tenant whose contractual tenancy has determined but who is protected against eviction by the statute, has no right of property but only a personal right to remain in occupation, without ascertaining what his righted are under the stature. the concept of a statutory tenant having no estate or property in the premises which he occupies is derived from the provisions of the English Rent Acts. But it is not clear how it can be assumed that the position is the same in this country without any reference to the provision of the relevant statute. Tenancy has its origin in contract. There is no dispute that a contractual tenant has an estate or property in the subject-matter of the tenancy, and heritabe is an incident of the tenancy. It cannot be assumed, however, that with the determination of the tenancy the estate must necessarily disppear and the statute can only preserve his status of irremovability and not preserve his status of irremovability and not the estate he had in the premises in his occupation. It is not possible to claim that the "sanctity" of contract cannot be touched by legislation. It is, therefore. necessary to examine the provisions of the Madhya Pradesh Accommodation Control Act, 1961, to find out whether the respondents' predecessors-in-interest retained a heritable interest in the disputed premises even after the termination of their tenancy."
The Supreme Court then considered the various provisions of the Madhya Pradesh Accommodation Control Act. For example, the term 'tenant' is defined to include, amongst other persons, any person continuing in possession after the determination of his tenancy. this definition has been considered to equate statutory tenant with contractual tenant. In para 12 the Supreme Court has observed as follows :
"The definition makes a person continuing in possession after the determination of his tenancy a tenant unless a decree or order for eviction has been made against him, thus putting him on par with a person whose contractual tenancy still subsists. The incidents of such tenancy and a contractual tenancy must, therefore, be the same unless any provisions of the Act conveyed a contrary intention."
Thereafter, S. 14 of the Madhya Pradesh Accommodation Control Act was considered. It provides that the tenant shall not sublet, assign without the previous assent of the landlord. It was then held as follows :
"There is nothig to suggest that this section does not apply to all tenants as defined in S. 2(I). A contractual tenant has an estate or interest in premises from which he caves on what he gives to tghe sub-tenant. Section 14 read with S. 2(I) makes it clear that the so-called statutory tenant has the right to sublet in common with a contractual tenant and this is because he also has an interest in the premises occupied by him."
In the same para 12 the Supreme Court has further held as follows :
"The concept of statutory tenancy under the English Rent Acts and under the Indian statutes like the one we are concerned with in this appeal rests on different doundation. It must, therefore, be held that the predecession-in-interest of the present respondents had a heritable interest in the premises and consequently the respondents had the right to prosecute the appeal in the High Court. Mr. Gupte's first submission thus fails."
This decision shows that it would not be possible to claim any sanctity of contract and the consequential results on termination of that contract if the legislature has made contrary provisions.
8A. Another decision which has taken a similar view is in the case of V. Dhanapal Chettiar v. Yesodai Ammal, . It was a case under the Tamil Nadu Buildings (Lease and Rent Control) Act and the main question was as to whether a notice terminating the tenancy was a condition precedent for filing a suit for eviction. While deciding this question the Supreme Court considered the provisions of this and similar Acts with a view a to find out as to whether the issuing of such notice has any relevant purpose to achieve. the Supreme Court held as follows in para 6 :
"Once the liability to be evicted is incurred by the tenant, he cannot turn round and say that the contractual lease has not been determined. the action of the landlord in instituting a suit for eviction on the ground mentioned in any State Rent Act will be tantamount to an expression of his intention that he does not want the tenant to continue as his lessee and the jural relationship of lessor and lessee will come to an end on the passing of an order or a decree for eviction. Until then, under the extended definition of the word 'tenant' under the various State rent Acts, the tenant continues to be a tenant even though the contractual tenancy has been determined by giving of a valid notice under S. 106 of the T. P. Act. In many cases the distinction between a contractual tenant and a statutory tenant was alluded to for the purpose of elucidating some particular aspects which cropped up in a particular case. That led to the criticism of that expression in some of the criticism of that expression in some of the decision. Without detaining ourselves on this aspect of the matter by any elaborate discussion, in our opinion, it will suffice to say that the various State Rent Control Acts make a serious encroachment in the field of freedom of contract. It does not permit the landlord to snap his relationship with the tenant merely by his act of serving a notice to quit on him. In spite of the notice, the law says that he continues to be a tenant and he does so enjoying all the rights of a lessee and is at the same time deemed to be under all the liabilities such as payment of rent etc. in accordance with the law."
It is material to note that in the above decision of the Supreme court it was held that in view of the extended definition of the word 'tenant' it would not be permissible for the landlord to snap the relationship with the tenant merely by terminating the tenancy. This would be more so when none of the provisions of the rent legislation has prescribed any contrary position.
9. In our opinion, the matter has now been set at rest by the recent decision of the larger Bench of the Supreme Court in the case of Gian Devi v. Jeevan Kumar, . It was a case under the Delhi Rent Control Act. Wasti Ram was a tenant of the shop. His tenancy was terminated in April 1970. The landlord filed an application under S. 14 on various grounds such as (a) arrears of rent, (b) bona fide requirement, (c) change of user, (d) damage to property, (e) subletting etc. The proceeding was against Wasti Ram and defendant 2 - Ashok Kumar. the trial Court rejected the claim on all counts except arrears. However, a direction was given that decree for possession would not be passes if the arrears were deposited within one month. The landlord filed appeal. there were cross-objections by the tenant. During the pendency of the appeal, the tenant - Wasti Ram died. His widow Gian Devi was brought on record as his legal representative. The appeal was then heard. Cross-objections were allowed by holding that there was no default. the major contentions of the landlord were rejected. However, he succeeded on the ground of subletting. But the matter was remanded to the trial Court for further enquiry. Gian Devi filed an appeal in the High Court and the landlord filed cross-objections. A contention was raised on behalf of the landlord that on the death of Wasti Ram who was a statutory tenant after termination of his tenancy, his widow and other legal representatives were not entitled to remain in possession and consequently, they have to right to continue the proceeding. The High Court accepted this contention and a decree was passed. Gian Devi filed an appeal in the Supreme Court. The Supreme Court decisions referred to in the previous paras of this judgment were cited on behalf of the rival parties. After referring to these decisions the Supreme Court in para 22 observed as follows :
"The aforesaid decisions indicate that there is a divergence of opinion in this Court on the question whether the heirs of a deceased tenant whose contractual tenancy in respect of commercial premises has been determined, can inherit the tenancy rights of the deceased tenant and can claim the benefit and protection to which the deceased tenant was entitled under the Act."
In para. 23 the Supreme Court found that it was necessary to understand the kind of protection that is sought to be afforded to a tenant under the Rent Acts and his status after the termination of the contractual tenancy under the Rent Act. the Supreme Court took into account that Rent legislation was passed in all the States and Union territories with a view to avoid hardships to the tenants as the landlords were in a position to exploit the situation arising due to scarcity of accommodation. The very purpose of all the Rent Acts has been discussed in para 24 in the following words :
"Though provisions of all the Rent Control Acts are not uniform, the common feature of all Rent Control Legislations is that a contractual tenant on the termination of the contractual tenancy is by virtue of the provisions of the Rent Acts not liable to be evicted as a matter of course..........."
Para 25 of the judgment clearly shows that the larger Bench accepted the principles laid down in Damadilal's case (supra). Section 2(i) of the Madhya Pradesh Accommodation Control Act and S. 2(1) of the Delhi Rent Control Act have both defined the term 'tenant' to mean, amongst other persons, a tenant continuing in possession after the termination of the tenancy. After taking into account such and similar provisions of the Rent legislation this larger Bench has observed in para 25 as follows :
".................it cannot be assumed that with the determination of the tenancy, the estate must necessarily disappear and the statute can only preserve the status of irremovability and not the estate he has in the premises in his occupation; and it is not possible to claim that the sanctity of contract cannot be touched by legislation............"
In this case of Gian Devi the Surpeme Court again considered the provisions of S. 14 of the Delhi Rent Control Act which provided that no order or decree for possession shall be made unless certain grounds are proved. It was held that this protection is available to all types of tenants including tenant who is an possession after the termination of the tenancy and in para 28 of the judgment after considering the definition of the tenant in the Delhi Rent Control Act the Supreme Court held as follows :
"This section clearly establishes that determination of a contractual tenancy does not disqualify him from continuing to be a tenant within the meaning of this Act and the tenant whose contractual tenancy had been determined enjoys the same position and is entitled to protection against eviction."
The larger Bench in para 29 of the judgment has quoted with approval the observations in Dhanapal's case, (supra) (reproduced in para 8 above). this is clear from the observations in para 30 of the judgment in Gian Devi's case, . As a matter of fact poara 35 of the judgment in Gian Devi's case specifically states that Damadilal's case and Dhanapal's case laid down that the termination of the contractual tenancy does not bring about change in the status of a tenant. The conclusion of the larger Bench is mentioned in para 36 of the judgment. The relevant portion reads as follows :
"Accordingly, we hold that if the Rent Act in question defines a tenant in substance to mean a tenant who continues to remain in possession even after the termination of the contractual tenancy till a decree for eviction against his is passed, the tenant even after the determination of the tenancy continues to have an estate or interest in the tenanted premises and the tenancy rights both in respect of residential premises and commercial premises are heritable. The heirs of the decreases tenant in absence of any provision in the Rent Act to the contrary will step into the position of the deceased tenant and all the rights and obligations of the deceased tenant including the protection afforded to the deceased tenant under the Act will devolve on the heirs of the deceased tenant."
Accordingly, it would be clear that the tenancy rights of a contractual tenant are not evaporated by mere termination of such tenancy.
10. Consequently, a statutory tenant would continue to possess the same, rights and would be under the same obligations which were available during the subsistence of the contractual tenancy. Of course, the extent of such rights and obligations would depend upon the various provisions of the Rent legislation. the Bombay Rent Act contain some provisions similar to those that are available in the Madhya Pradesh Accommodation Control Act and Delhi Rent Control Act. We are not shown any provision from the Bombay Rent Act which would suggest that a statutory tenant has no heritable interest. As a matter of fact, S. 5(11)(c) has specifically provided the extent of such heritable interest and consequently the interest of the statutory tenant would be so heritable.
11. The question whether a statutory tenant has a transferable interest or not would depend upon the terms of the contractual tenancy. Such terms would continue to the operative even after the contractual tenancy comes to an end and the tenancy comes to an end and the tenant becomes a statutory tenant. But this again would be subject to contrary provision in the Bombay Rent Act. It would, therefore, be necessary to discuss in detail this aspect of transferability of contractual tenancy and/ or statutory tenancy.
12. Under S. 108(j) of the T. P. Act in the absence of a contract to the contrary the lessee has a right to transfer his tenancy rights absolutely or by way of sub-lease etc. this right would continue to exist in favour of a statutory tenant but all this would be subject to the provisions of the Bombay Rent Act. Section 15 of the Bombay Rent Act provides that notwithstanding anything contained in any law but subject to a contract to the contrary is shall not be lawful for the tenant to sublet his interest. Thus, it would be necessary to read this provision and S. 108(j) of the T. P. Act together, So read, it would be clear that a tenant, under the T. P.Act, can sublet his interest if there is no contract to the contrary. However, S. 15 (now S. 15(1) of the Rent Act prohibits any sub-lease, assignment or transfer by a tenant of his interest if there is no contract to the country; a breach thereof renders the tenant liable to eviction under S. 13(1)(e). Thus, under the Rent Act, sub-tenancy will be permissible not when the contract is silent but when the contract specifically permits a sub-lease. The net result is that the contractual tenants will be divided into two categories :-
(A) a tenant who, under the tenancy agreement is specifically entitled to sub-lease his interest (for short, "category 'A' tenant") (B) a tenant who under the tenancy agreement is not so specifically entitled to aub-lease or whose tenancy agreement is silent about it (for short, "category 'B' tenant").
Category 'A' tenant, even after the termination of his tenancy, would continue to have a right to sub-lease. That right under the original contractual lease has not been taken away by the Bombay Rent Act. In fact that right has been kept intact. Howerver, the tenant of category 'B' would not either before or after the termination of his contractual tenancy be able to sublet his interest in view of the specific bar under S. 15.
13. The addition of sub-sec. (2) to S. 15 of the Bombay Rent Act does not affect the above position. Under S. 15, a transfer including a subletting has been prohibited from the beginning. However, by adding sub-sec. (2). the Legislature has provided that sub-sec. (1) would not have any effect on sub-leases, assignments or transfers by a tenant before the commencement of the amending Ordinance oc 1959. the amendment, therefore, validates only such sub-leases, assignments or transfers as are effected prior to that Ordinance. Thus, this provision would not be relevant for finding out as to whether a contractual tenant or a statutory tenant can transfer his leasehold interest if the tenancy agreement specifically permits such transfer.
14. In view of the legal position enunciated in Gian Devi's case , it would not be necessary to discuss in detail the various decisions of this Court taking different view, Similary, the referring judgment of the division Bench also does not require detailed discussion. Howerver, we would briefly mention them. A learned single Judge of this Court in the case of Hargovind Dharamsey & Co. v. Ruby & Co., , held that a statutory tenant can assign his interest under S. 15(1) read with the Government notification issued thereunder. As against this, Kanade, J., before whom another matter viz., Specil Civil Application No. 2447 of 1974, was argued, came to the conclusion that such an assignment by a statutory tenant is not permissible. Kanade, J. therefore, referred this matter to a division Bench. The reference was heard and decided by Deshpande and Lentin, JJ. The decision is reported in Vasant v. Dikkaya, . Briefly stated, the facts in this case were that only Gopalkrishna who was a statutory tenant assigned his tenancy rights along with the running hotel concern. the question arose as to make such transfer. The Division Bench considered both Anand Nivas (supra) and Damadilal (supra) and observed in para, 12 that these two decision are irreconcilable. In Anand Nivas the Supreme Court has observed that the provisions of Ss. 12, 13, 14 and 15 show that the Legislature intended that the statutory tenant would not be able to transfer his interest. the Division Bench held that this aspect of the decision in Anand Nivas still holds good even after Damadilal. In first Appeal No. 754 of 1978 (reported in 1980 Bom RC 122) decided by another Division Bench, a similar view has been taken, A similar question arose before another Bench In writ Petition No. 3575 of 1982 and that Bench found it difficult to agree with the above mentioned two decisions of the Division Bench. the matter has; therefore, been referred to the Full Bench . The referring judgment observes that in Anand Nivas the Supreme Court concluded that Ss. 13, 14 and 15 are applicable to contractual tenants alone on a presumption that statutory tenant has no transferable interest. It is for this reason that the reference has been made. In our opinion, the larger Bench of the Supreme Court in Gian Devi has now settled the controversy. The provisions of the Madhya Pradesh Accommodation Control Act and the Delhi Rent Control Act are practically similar to those of the Bombay Rent Act. there after certain minor differences in these legislation's, but they are not relevant while deciding the controversy. The larger Bench in paras 25 and 28 of the judgment considered the provisions of the Madhya pradesh Act and the Delhi Act and thereafter has held that the tenant whose contractual tenancy has been determined enjoys the same position and is entitled to protection against eviction. We have already reproduced the relevant portions from the other paragraphs as also the contentions mentioned in para 36. It is thus clear that the distinction between contractual tenant and statutory tenant made by the Division Bench in Vasant Tatoba would not be entirely correct and to that extent the law laid down in that decision would not be correct. A statutory tenant can transfer his interest but only if he is category 'A' tenant as mentioned in para 12 above.
15. Uptill now we have discussed the question as to whether a statutory tenant can transfer his interest. The point that remains to be decided is as to whether such a tenant can grant a license of the rented premises in favour of another person. this aspect has now become important after the amending Act of 1973, By this amendment is S. 5 sub-sec. (4A) is added whereby the terms "lincensee" and "licensor" have been defined. Licensee means a person who is in occupation of the premises under a subsisting agreement of lince given for a licence fee (emphasis is ours). The definition further states as to which specific licences are said to be included by this definition and which are not so included. Section 15A is added by this very amending Act. It provides that notwithstanding anything contained elsewhere in the Rent Act and notwithstanding any other law or contract, a lincensee (as defined in S. 5(4A)) in occuption on 1st Feb. 1973 shall become a tenant if his occupation is of not less than a room. Thus only such a licensee will get the status of a tenant. It would be necessary to find out as to whether the statutory tenant can grant a licence.
16. The definition in S. 5(4A) has used the above mentioned words "subsisting agreement of licence". The distinction between lease and licence has been considered by the Supreme Court in the case of B. M. Lall v. Dunlop Rubber Co. (India) Ltd., in the following words :
"A lease is the transfer of a right to enjoy the premises; whereas a licence is a privilege to do something on the premises which otherwise would be unlawful."
Similarly in the case of Ludhichem Agencies v. Ahmed R. V. Peer Mohd., , the Supreme Court has observed as follows :
"An agreement for licence can subsist and continue to take effect only so long as the licensor continues to enjoy a right, title or interest in the premises. On the termination of his right, title or interest in the premises, the agreement for licence comes to an end. If the licensor is a tenant the agreement for licence terminates with the tenancy. No tenant is ordinarily competent to grant a licence enduring beyond his tenancy. On the termination of the licensor's tenancy the licensee ceases to be a licensee."
Of course, the termination of tenancy mentioned in the above decision will now have to be viewed in the background of the legal position that a statutory tenant of category 'A' aforesaid continues to have transferable interest in the tenancy rights. Again in the case of D. H. Maniar v. Waman. , there was an agreement of licence. Eviction proveeding was filed against the former licensee. the licensee claimed protection by contending that under S. 15A of the Bombay Rent Act he has become a tenant. In para 8 of the judgment the Supreme Court considered the definition of the term "licence" as given in S. 52 of the Easements Act for deciding as to whether a person claiming protection under S. 15A was a lincesee under the Act. Of course, in addition it was also necessary to find out as to whether the licensee complies with the rest of the conditions mentioned in S. 5(4A) and S. 15A of the Bombay rent Act. Section 62 of the Easements Act deals with revocation of licence. stood revoked long before Feb. 1. 1973. Consequently, the Supreme Court rejected the claim of the person seeking protection under S. 15A of the Bombay Rent Act.
17. It would thus be clear that there must be a valid licence and the same must be subsisting on the material date. Section 52 of the Easements Act has defined the term "licence". It envisages a grant of a licence of do something upon the immovable property of the grantor. Section 53. however, would have an important bearing. It reads as follows :
"A licence may be granted by any one in the circumstances and to the extent in and to which he may transfer his interests in the property affected by the license."
This provision thus provides that one who has a transferable interest in an immovable property can to the extent thereof grant a licence in respect of it. In other words, a person who cannot transfer his interest in the property would have no right to grant a licence. Besides S. 15 of the Bombay Rent Act prohibits a transfer of the tenancy rights. But such a transfer of the tenancy rights. But such a transfer is permissible if there is a specific contract to that effect. We have already discussed this aspect in detail in the earlier part of the judgment. The eligibility of a tenant, whether contractual or statutory. to grant licence would thus depend upon his right to transfer his interest. The category 'A' tenant mentioned above has such a right to transfer his interest and consequently he would be entitled to create a licence though he is a statutory tenant. The position would be otherwise as far as the category 'B' tenant is concerned , that is, he has no right to create or grant licence.
18. In view of the above discussion, our answers to the questions referred to the Full Bench are as follows :
(1) Yes - But only to the extent provided by S. 5(11)(c) of the Bombay Rent Act.
(2) Yes - But only if he had such transferable interest as a contractual tenant.
(3) Yes - But only if under the terms of his original contractual tenancy he had a right to transfer his leasehold rights.
(4) The decisions in Vasant v. Dikkaya, and Chandrakant Kashinath Thakur v. Narayan Lakhanna Setty (First Appeal No. 754 of 1978) (reported in 1980 Bom RC 122) are not entirely correct in laying down that no statutory tenancy is entitled to transfer his interest. The aforesaid cateogry 'A' tenant would be entitled to transfer his interest irrespective of whether he is a contractual or statutory tenant. But the aforesaid category 'B' tenant will not. whether before or after the termination of his contractual tenancy, be entitled to transfer his interest.
The matter may now be placed before the learned single Judge for further hearing.
19. Reference answered accordingly.