1. Eviction suit for recovery of possession of leased premises on grounds of unlawful assignment of business under Section 13(1)(e) of the Bombay Rents Act, 1947. (Para 2 , 6 )
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2023 Supreme(SC) 250
SUPREME COURT OF INDIA
SUDHANSHU DHULIA, SANJAY KUMAR, JJ.
Yuvraj @ Munna Pralhad Jagdale and Others – Appellants
Versus
Janardan Subajirao Wide – Respondent
Civil Appeal Nos. 2855-2856 of 2011, I.A. Nos. 89837-89838 of 2021, I.A. Nos. 38142-38143 of 2023
Decided On : 21-03-2023
Advocates:
Advocate appeared:
For the Appellant(s) : Mr. Vinay Navare, Sr. Adv. Ms. Gwen Karthika, Adv. Ms. Abha R. Sharma, AOR
For the Respondent(s): Mr. Sudhanshu S. Choudhari, AOR Mr. Mahesh P. Shinde, Adv. Ms. Rucha A. Pande, Adv. Mr. M. Veeraragavan, Adv.
Advocate appeared:
For the Appellant(s) : Mr. Vinay Navare, Sr. Adv. Ms. Gwen Karthika, Adv. Ms. Abha R. Sharma, AOR
For the Respondent(s): Mr. Sudhanshu S. Choudhari, AOR Mr. Mahesh P. Shinde, Adv. Ms. Rucha A. Pande, Adv. Mr. M. Veeraragavan, Adv.
Important Points
Execution of an assignment agreement to transfer leasehold interest for consideration constitutes a breach of lease conditions and statutory mandates under the Bombay Rents Act, warranting eviction, regardless of whether the assignee subsequently fails in a suit for specific performance.
Subject
Sub- - Rent Control
Act Referred
BOMBAY RENTS, HOTEL AND LODGING HOUSE RATES CONTROL ACT: S.13(1)(e), S.13(1)(b), S.15, S.15(1)
CRIMINAL PROCEDURE CODE: S.145
TRANSFER OF PROPERTY ACT: S.105
CRIMINAL PROCEDURE CODE: S.145
TRANSFER OF PROPERTY ACT: S.105
Headnote
- Eviction - Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947, Section 13(1)(e), Section 15(1) SUMMARY
Fact of the Case:
The case involves a dispute over the eviction of a tenant from leased premises under the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947.Finding of the Court:
The court found that the tenant had breached the lease condition by assigning his business in the leased premises to a third party, warranting eviction under Section 13(1)(e) of the Act.Issues:
The main issue was whether the tenant's assignment of his leasehold interest constituted a breach of the lease condition justifying eviction.Ratio Decidendi:
The court relied on the admissions made by the tenant during his deposition as evidence of breaching the lease condition. It also emphasized the clear prohibition against subletting or transfer in Section 15(1) of the Act.Final Decision:
The High Court's judgments were set aside, and the Trial Court's decision for eviction was restored. The legal representatives of the deceased tenant were ordered to vacate and hand over possession of the premises to the appellants within two months.Legal Category Hierarchy
Table of Contents
2. Whether induction of a partner or execution of an assignment agreement for business constitutes unlawful subletting or transfer of interest under rent control legislation. (Para 16 , 17 )
3. Execution of an assignment agreement for consideration constitutes a breach of lease and statutory mandate, regardless of whether the assignee subsequently fails in a specific performance suit. (Para 20 , 21 , 22 , 23 )
4. Execution of an assignment agreement for consideration completes the breach of a prohibition against transferring leasehold interest, irrespective of the subsequent failure of specific performance. (Para 22 , 23 )
5. High Court judgments set aside and Trial Court's eviction decree restored, directing the respondents to vacate the premises within two months. (Para 24 , 25 )
6. Does converting a sole proprietorship into a partnership constitute subletting?
Not necessarily. If the tenant remains actively associated with the partnership and retains use and control over the tenanted premises, it does not amount to parting with possession, provided the partnership is not a cloak to conceal an unauthorized sub-tenancy. (Para 18 , 19 )
7. Does the execution of an assignment agreement for consideration constitute a breach of rent control laws?
Yes. Where the lease deed and statutory provisions, such as Section 13(1)(e) and 15(1) of the Act of 1947, prohibit assignment, the execution of an assignment agreement for consideration is sufficient to establish a breach of the lease and statutory mandate. (Para 20 , 21 , 22 )
8. Does the failure of a specific performance suit by an assignee negate a breach of lease for assignment?
No. The breach is complete upon the execution of the assignment agreement itself. The subsequent failure of the assignee to obtain specific performance in a separate suit is irrelevant to the fact that an act of assignment was committed by the tenant. (Para 22 , 23 )
JUDGMENT :
SANJAY KUMAR, J.
1. These civil appeals arise out of the judgment dated 03.12.2008 of the Bombay High Court, allowing Writ Petition No. 1067 of 1992 and its later judgment dated 09.09.2009, dismissing Review Petition No. 75 of 2009 in W.P. No. 1067 of 1992, respectively. In turn, W.P. No. 1067 of 1992 filed by Janardhan Subajirao Wide, the respondent herein, arose out of the judgment dated 21.12.1991 of the learned 13th Additional District Judge, Pune, in Civil Appeal No. 1030 of 1987, confirming the judgment dated 30.09.1987 of the learned II Additional S.C. Judge, Pune, in C.S. No. 386 of 1985.
2. C.S. No. 386 of 1985 was filed by late Ramachandra Maruti Jagadale, plaintiff No. 2, and his wife, late Sou. Rangubai Jagadale, plaintiff No. 1, the predecessors-in-title of the appellants herein, for recovery of possession of the leased premises bearing C.T.S. No. 1873 at Bhamburda, Pune, from the tenant, Janardhan Subajirao Wide. By judgment dated 30.09.1987, the Trial Court decreed their suit, holding them entitled to claim eviction of the tenant under Section 13(1)(e) of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 (for brevity ‘the Act of 1947’). Two months’ time was granted to the tenant to vacate the premises. This judgment of the Trial Court was confirmed in appeal by the learned 13th Additional District Judge, Pune, vide judgment dated 21.12.1991.
3. It is against these judgments that the tenant, viz. the respondent herein, filed W.P. No. 1067 of 1992 before the Bombay High Court. By its judgment dated 03.12.2008, the High Court opined that a case of sub-tenancy was not made out, warranting eviction of the tenant on that ground, and quashed the decree of eviction/ possession. In consequence, C.S. No. 386 of 1985 was dismissed. Aggrieved thereby, the legal representatives of the deceased plaintiffs, who were on record in the writ petition, filed Review Petition No. 75 of 2009. However, by its judgment dated 09.09.2009, the High Court reiterated its finding that the tenant had never parted with possession of the leased premises and had never left the premises, being a partner. Holding so, the High Court concluded that there was no error on the face of the record and dismissed the review petition. Presently, these two judgments are under appeal.
4. While so, the tenant, Janardhan Subajirao Wide, the sole respondent in these appeals, expired on 16.02.2018. Thereupon, the appellants filed I.A. No. 89838 of 2021 seeking condonation of the delay of 1169 days in taking steps and I.A. No. 89837 of 2021 to set aside the abatement of the appeals and to permit substitution of the legal heirs of the deceased respondent. Notice having been ordered thereon, Mr. Sudhanshu S. Choudhari, learned counsel, who had earlier appeared for the deceased respondent, efiled his vakalatnama/appearance on behalf of the legal representatives on 05.11.2022. No counter was filed by him opposing the applications. Sufficient cause having been shown, delay in taking necessary steps is condoned; abatement of the appeals is set aside; and legal representatives of the deceased sole respondent are brought on record. Registry shall make necessary changes in the cause titles in both the appeals before issuing certified copies of this judgment.
5. Heard Mr. Vinay Navare, learned senior counsel, appearing for the appellants and Mr. Sudhanshu S. Choudhari, learned counsel, appearing for the respondents.
6. The leased premises, consisting of two blocks with an approximate area of 455 sq. ft. are situated on the ground floor on the eastern side of the cement-concrete building, bearing C.T.S. No. 1873 at Bhamburda, Pune. These premises were let out to the tenant by the original landlord and landlady, the predecessors-in-title of the appellants, for the purpose of his hotel business under the name and style of Hotel Ambika. Civil Suit No. 386 of 1985 was filed by the landlord and landlady for eviction of the tenant on two grounds. Their claim w
