Back
1996(1) Supreme 646
SUPREME COURT OF INDIA
G.N. Ray and G.T. Nanavati, JJ.
Ram Saran -Appellant
versus
Pyare Lal & Anr. -Respondents
Civil Appeal No. 2028 of 1996
Decided on 16-1-1996
Held : It appears to us that the res-pondent No. 1 in an attempt to show that he had not completely parted with possession of the said shop room in favour of the registered society also stated that he had been carrying on his soap business in the said premises. Such case, in our view, should not be accepted. The Respondent No. 1 has clearly stated in the written statement that the firm Ashoka Jain Industries was changed to a registered society and the said registered society is carrying on its activities in the shop room by asserting its status as a tenant. The activities of the registered society can not be held to be personal activities of the res-pondent No. 1 or the alleged partnership business of the firm Ashoka Jain Industries. Even if it is assumed on the face value of the assertion of the respondent No. 1 that he is also carrying on his soap business in the disputed premises, in the context of the written statement of the respondent No. 1 it only follows that the said registered society is possessing the tenanted premises by asserting its independent status as tenant by tendering rent in its own name through its President and the said respondent No. 1 is in permissive possession under the said society in a portion of the tenanted premises for carrying on his personal business of soap. In any event, it is quite evident from the case made out by the respondent No. 1 in the written statement that he has surrendered his right of tenancy in favour of the registered society and has delivered exclusive possession of the tenanted premises in favour of the said registered society which is occupying the same by asserting a right of tenancy. Hence, a case of lease without the written consent of landlord as required under Section 14 of the Rent Act for creating a valid assignment of sub-tenancy has been clearly established. Unfortunately, such position in law which is apparent from the case made out by the respondent No. 1 has been lost sight of both by the learned Appellate Authority and by the High Court. (Para 22)
So far as payment of rent by respondent No. 1 qua President of the said registered society and acceptance of such rent tendered on behalf of the registered society by the landlord with knowledge of the possession of the said shop room by the said society are concerned, it may be stated that the tenancy of respondent No. 1 had not been surrendered and such surrender of tenancy has not been accepted by the landlord. If upon accepting the surrender of tenancy of the said tenant, occupation of a new tenant is acknowledged by the landlord by accepting payment of rent from the new tenant, then by such payment and acceptance of rent between the tenant and landlord, a new tenancy may be created. By a unilateral action of the tenant of surrendering his right of tenancy in favour of a third party by delivering possession of the tenanted premises to the said third party, no new tenancy is created which may legally bind the landlord. By mere acceptance of rent for the tenanted premises tendered by the tenant in the name of the registered society, neither a new tenancy or a valid sub-tenancy in favour of the said registered society has been created. In this connection, reference may be made to a decision of this Court in Hiralal Kapur v. Prabhu Choudhury, 1988(2) SCC 172. In the said case rent was paid by two cheques, one drawn by the tenant himself for a part of the rent, the other was drawn by the sub-tenant for the remaining part of the rent. It has been held by this Court that the landlord was entitled to rent (Rs. 600/- p.m.) and so long he got this amount, it was immaterial for him whether the amount was paid in lumpsum or by one cheque or more than one cheque and who are makers of the cheque were. In that case, a number of cheques given to the landlord were returned dishonoured and the landlord wrote to the tenant in which he specifically referred that five cheques were given by the sub-lessee. Even then, it has been held by this Court that such fact will not improve tenant s position at all for it only evidences the fact that the landlord was receiving the cheque issued in the name of the sub-lessee in discharge of the tenant s obligation to pay rent for the tenanted premises. (Para 23)
The Rent Act is a special statute governing and regulating tenancy and sub-tenancy. Such provisions in the special statute supersede the general law of tenancy if the provisions of the special statute are incompatible with the general law of tenancy. Under Section 14 of the Rent Act, mere knowledge of the landlord about occupation of the tenanted premises by the said registered society and acceptance of rent for the tenanted premises tendered by the tenant in the name of the registered society, will not create a sub-tenancy unless induction of a sub-tenant is made with the written consent of the landlord. It is nobody s case that the landlord has given any written consent for induction of sub-tenant. There is no estoppel against statute. Hence, even if the landlord has accepted payment of rent for the disputed premises from the said society, such acceptance of rent will not constitute legal and valid sub-tenancy in favour of the registered society. Consequently, landlord will not be estopped from claiming eviction of unauthorised sub-tenant along with the tenant for indulging in inducting sub-tenant without lawful authority. (Para 24)
Held finally : We, therefore, allow this appeal and set aside the impugned order of the High Court and affirm the order of eviction passed against the respondent by the learned Rent Controller, Nalagarh in case No. 6/2 of 1986. As the eviction case is pending for a long time, it is directed that the execution proceedings should be expedited. There will be, however, no order as to cost in this appeal. (Para 25)
Based on the provided legal document, the assessment of rent does not solely depend on the presence of a formal rental agreement or deed. The document indicates that acceptance of rent by the landlord, even without a written agreement, can be relevant in establishing certain legal positions. However, for the creation of a valid sub-tenancy or for legal recognition of a tenancy, written consent from the landlord is generally required under the applicable rent control laws.
Specifically, the document emphasizes that mere acceptance of rent by the landlord, even if done with knowledge of occupation or subletting, does not automatically establish a lawful tenancy or sub-tenancy if there is no written agreement or consent. The law prioritizes written agreements and explicit consent to validate the tenancy relationship, and the absence of such documentation can undermine the legal assessment of rent and tenancy rights.
In summary, while rent can sometimes be assessed based on payments and acceptance without a formal deed, the legal validity of such arrangements heavily relies on the existence of proper documentation and compliance with statutory requirements. Without a rental agreement or deed, the rent may be difficult to legally assess or enforce, especially in cases involving sub-letting or tenancy disputes.
JUDGMENT
G.N. Ray, J.-Leave granted. Heard learned counsel for the parties.
2. This appeal is directed against the judgment dated 23.6.1992 passed by a Single Bench of the Himachal Pradesh High Court in C.R. No. 134 of 1992 arising out of judgment dated 16.5.1990 passed by the Appellate Authority (II), Solan in Rent Appeal No. 5 NL/14 of 1990/1988 reversing the order of eviction dated 30.9.1988 passed by the Rent Controller. Nalagarh in Case No. 6/2 of 1986.
3. The relevant facts concerning this appeal may be stated as hereunder. The shop room appertaining to khewat-khatanni No. Min. 354/498, Khasra No. 734, in Main Bazar, Nalagarh town is owned by the appellant landlord. The appellant let out the said shop room to respondent No. 1 on 15.7.1973 for a monthly rental at Rs. 140/- excluding water and electric charges. The said respondent No. 1 had been carrying on business of soap in the name of style of Ashoka Jain Industry. The landlord filed an application under Section 14 of the Himachal Pradesh Urban Rent Control Act (hereinafter referred to as the Rent Act) for eviction of respondent No. 1 and his sub-tenant respondent No. 2 Mahavir Gram Udyog Samiti, a society registered under the Societies Registration Act in 1977 on the grounds of appears of rent and for subletting the said premises to respondent No. 2 without consent of the landlord. It was also contended that the landlord required the suit premises for carrying out business with the held of landlord s son.
4. The respondent tenant denied the material allegations of the landlord. According to respondent tenant, the shop room had not been sublet. But the name of the firm Ashoka Jain Industry had been changed to Mahavir Gram Udyog Samiti. Such Samiti is a registered society, registered on 10.2.1977 comprising the tenant and his family members. There had not been any change in the business which the tenant had been carrying in the name of Ashoka Jain Industry. The land lord being fully aware of the said fact had been accepting rent from the said Mahavir Gram Udyog Samiti. Accordingly, the landlord was estopped from seeking eviction on the ground of subletting. The other grounds for eviction were also denied by the tenant respondent.
5. The learned Rent Controller, Nalagarn in Rent Case No. 6/2 of 1986 inter alia came to the finding that the tenant respondent No. 1 had parted with the possession of the said shop room in favour of the said registered society namely Mahavir Gram Udyog Samiti and the said samiti was a distinct legal entity which could sue and be sued in its own name. The learned Rent Controller had also indicated that on scrutiny of the memorandum of association of the said society (Ext. 1/A). It was revealed that the samiti could include new members and any existing member could be removed from the membership of the society by 2/3rd of the majority of general members. Accordingly, the respondent No. 1 who was then a member of the said registered society could also be removed from the said society. The learned Rent Controller further held that the tenant respondent No. 1 had exclusive control and possession of the suit premises which was being occupied by the said registered society.
6. The tenant respondent No. 1 was also not in a position to recover possession of the said shop room from the said registered society. The said registered society being a distinct legal entity did not represent the Ashoka Jain Industries belonging exclusively to the Respondent No. 1 and his son stated to be a partner of the said firm. The Rent Controller had also found that the tenant respondent No. 1 had also not been paying rent on his behalf or on behalf of Ashoka Jain Industries but on his own admission, he was paying rent from the funds of registered society in his capacity as President of the said registered society. As no lawful sub-tenancy could be created under Section 14 of the Rent Act without written consent of the landlord the payment of rent by respondent No.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
