1. Eviction suit for premises let to a mill where employees resided — dispute over status as sub-tenants versus service tenants under the Bombay Rents Act. (Para 1 , 2 , 3 , 4 )
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1999 Supreme(SC) 1343
SUPREME COURT OF INDIA
S.N.Phukan : V.N.Khare
Janaklali S.Gupta
Versus
Namdeo Mahadeo
Case No. : 355 , 356 of 1999
Date of Decision : 11/17/99
Under the Bombay Rents Act, an employee of a tenant who pays rent to the employer and maintains exclusive possession is a sub-tenant, not a licensee, as the statutory definition of 'licensee' specifically excludes persons in the service or employment of the tenant.
Headnote:(A) Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 - Section 5(4-A) - Licensee - Definition - Person in service or employment of tenant - Status of occupant paying rent to employer and in exclusive possession - A person in the service or employment of the tenant is specifically excluded from the definition of a licensee - Where occupants pay rent to their employer and maintain exclusive possession of the premises, their status is that of a sub-tenant and not a licensee. (Para 5)
(B) Eviction - Permanent construction - Construction made outside the let-out premises - If the alleged permanent construction is located outside the premises let out to the occupant, it cannot be a ground for eviction from the let-out premises. (Para 6)
Facts of the case:
The landlord sought eviction of occupants who were employees of the original tenant and had been provided residence in specific rooms. The suit for eviction was based on grounds of sub-letting, erection of permanent structures, bona fide requirement, and default in rent. The appellate court had previously ruled that the occupants were service tenants and had made permanent constructions, thereby justifying eviction. However, the High Court set aside this judgment, holding that the occupants were protected under the Act.
Findings of Court:
The court found that the occupants paid a monthly rent to their employer and were in exclusive possession of the premises, which established their status as sub-tenants. Regarding the permanent construction, it was found that the construction made by one occupant was outside the let-out premises and the other had made no such construction.
Issues: Whether the occupants were service tenants (licensees) or protected sub-tenants, and whether the constructions made by them were of a permanent nature justifying eviction.
Ratio Decidendi: Under Section 5(4-A) of the Act, the definition of a licensee does not include a person in the service or employment of the tenant. Consequently, employees who pay rent to the tenant and hold exclusive possession are treated as sub-tenants. Furthermore, construction occurring outside the leased area does not constitute a ground for eviction from the leased premises.
Result: Appeals dismissed.
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Table of Contents
2. Whether employees residing in premises provided by their employer are protected sub-tenants or licensees under the Bombay Rents, Hotel and Lodging House Rates Control Act. (Para 5 )
3. Exclusive possession and payment of rent to the employer indicate sub-tenancy status; constructions outside the let premises do not justify eviction for permanent construction. (Para 5 , 6 )
4. Persons in exclusive possession of premises paying rent to their employer are sub-tenants protected under the Bombay Rents, Hotel and Lodging House Rates Control Act. (Para 5 )
5. Appeals dismissed. (Para 7 )
6. Does a service tenancy constitute a license or a sub-tenancy under the Bombay Rents Act?
If the occupants are in exclusive possession of the premises and pay rent to their employer, they are considered sub-tenants rather than licensees, thereby gaining protection under the Act. (Para 5 )
7. Does construction made outside the let premises constitute a ground for eviction based on permanent construction?
No, construction made on an area outside the premises let to the tenant does not justify eviction on the grounds of making permanent constructions within the let premises. (Para 6 )
(1) THE appellants are the landlord of the premises in dispute. Admittedly, the premises were let out to New Prabhat Silk Mills in the year 1954. The Mill, and the predecessors-in-interest of the respondents shall hereafter be referred to as per their rank in the original suit for the sake of convenience and reference as Defendants 1, 2 and 3 respectively. It appears that originally Defendants 2 and 3 were the employees of Defendant 1 and they were given residence in Rooms 1 and 3 respectively in the aforesaid premises.
(2) SUBSEQUENTLY, the landlord brought a suit for eviction of the defendants on the grounds of sub-letting, erection of permanent structure, bona fide requirement of the premises and default in payment of rent. The Small Cause Court decreed the suit excepting Defendants 2, 3, 5 and 7.
(3) AGGRIEVED, the landlord filed an appeal against that part of the order whereby the suit against Defendants 2, 3, 5 and 7 was dismissed. The appellate court found that Defendants 2 and 3 were having a service tenancy and therefore were not covered by the protection made available to the subtenant by the Act. The appellate court also found that since the sub-tenant made construction which was of a permanent nature it amounted to waste and nuisance and therefore they were liable to be ejected on those grounds. Consequently the appeal filed by the landlord was allowed.
(4) AGGRIEVED, Defendants 2 and 3 preferred a writ petition under Article 227 of the Constitution before the Bombay High Court. The Bombay High Court allowed the writ petition and set aside the judgment of the appellate court.
(5) IT is against the said judgment, the landlord is in appeal before us. Learned counsel appearing for the appellant urged that the view taken by the High Court that Defendants 2 and 3 were protected under the Act is erroneous since they were having a service tenancy. According to the learned counsel a person having service tenancy is a licensee and not a subtenant. The expression licensee has been defined in Section 5(4-A) of the BOMBAY RENTS, HOTEL AND LODGING HOUSE RATES CONTROL ACT , 1947 which provides that a licensee does not include a person in the service or employment of the tenant. There was ample evidence on record to show that Defendants 2 and 3 had been paying Rs 25 per month to their employer and were in exclusive possession of the premises. In such circumstances the only status which Defendants 2 and 3 could enjoy was of a sub-tenant. Since their status as a sub-tenant was protected under the Act, they could not have been ejected from the premises in dispute.
(6) SO far as the next submission that the defendants had made constructions which were of permanent nature is concerned, the finding is that the alleged construction was made by Defendant 2 on area which is outside the premises let out to him and for which the landlord has already filed a suit which is pending before the Bombay City Civil Court. So far as Defendant 3 is concerned, there is no finding that he has made any construction which is permanent in nature. For all these reasons, the High Court was justified in holding that Defendants 2 and 3 had not made any permanent construction.
(7) WE, therefore, do not find any merit in these appeals. The appeals fail and are accordingly dismissed. There shall be no order as to costs.
