Tenancy of premises inalienable under the Rent Act is not property of the insolvent that can vest in the Official Assignee.

REGE, J .:- This is an appeal by an applicant-appellants one M/s. D. Vasantrai and Co. against the judgment and order of Mrs. Sujata Manohar, J. dated 20th September 1978.

2. BY an order of adjudication dated 6-3-1973 by the Insolvency Court, on the petition dated 6-3-1973 by the Petitioning creditors, the firm of M/s. Bhavanidas and its partners were adjudicated insolvents (hereinafter called the Insolvents.). At the relevant time the said insolvents were the tenants of the premises at the ground floor, Sethna Building, opposite Parsee Fire Temple, Princess Street, Bombay 400002, where they were carrying on business in cloth. By an agreement of sub-tenancy dated 11-10-1971 made between the insolvent firm and its partners of one part and one Messrs. D. Vasantrai and Co. the appellants herein of the other, the insolvents sublet the said premises to the appellants. The said agreement specifically stated that the insolvent firm had closed, down the business and that it had given the said premises on the tenancy basis on the terms and conditions stated therein.

3. After the said M/s. S. Bhavanidas and its partners were adjudicated Insolvents, the Official Assignee made a report to the Court for a direction against the appellants to pay to the Official Assignee arrears of rent of Rs. 36,500/- for the period of 73 months from June 1972 to June 1978 at the rate of Rs. 500/- per month remaining payable by the appellants to the Insolvents and also to deliver possession of the said premises of which the Insolvents were tenants to the Official Assignee as the same being the property of the insolvents vested in the Official Assignee. Although initially the appellants had contended that they had paid the said arrears of rent directly to the landlord, factually they had not paid the same either to the landlord or to the Insolvents. The fact of the appellants being in arrears of the said rent was admitted by them. It may also be pointed out that the said M/s. D. Vasantrai and Co. had filed in the Court of Small Causes at Bombay a suit against the Official Assignee of Bombay as such, without describing him to be the Official Assignee of the estate of the insolvent firm for a declaration that they were sub-tenants or deemed tenants (licensees) of the premises protected under the Rent Act and were therefore liable to pay only the standard rent and permitted increases. To that suit, the Insolvents were not made parties nor was the permission of the Insolvency Court obtained to file the said suit, as according to the appellants no such leave was required under S.17 of the Presidency-Towns Insolvency Act.

4. The trial Court on the said report of the Official Assignee directed the appellants to the said M/s. D. Vasantrai and Co. to pay to the Official Assignee the said arrears of Rs. 36,500/- and a further amount at the rate of Rs. 500/- per month from July 1978 onwards till the possession was handed over to the Official Assignee. The Court also directed that the Official Assignee was entitled to take possession of the business premises. Against the said order this appeal has been filed.

5. The contentions in the appeal may be dealt with in two parts. First one was as regards the direction to pay the arrears of rent and recurring rent to the Official Assignee. As regards the admitted said arrears of Rs. 36,500/-and liability to pay recurring amount of Rs. 500/- per month towards the rent there was no dispute that they would form the estate of the insolvent vesting in the Official Assignee. The Insolvency Court had therefore, under S.7 of the Presidency-towns Insolvency Act, jurisdiction to determine the question as to the liability to pay the said amount to the insolvent and to give direction in respect of the same.

6. However, the question as to the sub-tenancy and direction to the appellants to hand over possession of the premises to the Official Assignee appears to stands on a different footing. The learned Counsel for the appellants ha