The lessee, even if in possession, remains liable for rent and other obligations to the lessor, and the sub-lessee is not liable to the lessor. The lessee does not lose the benefits of S.106 even if he creates sub-leases or is dispossessed by a stranger, as long as he retains the residual leasehold.

1. Appellant was the plaintiff in a suit for arrears of rent and recovery of possession of the plaint schedule property and other incidental reliefs. The property admittedly belongs to the plaintiff's family of which the plaintiff is the head. In 1929 the property was taken on lease by one Ramji Rao Kalaji Rao since deceased under Ext. A2. Ext. A2 permitted the construction of certain buildings and prohibited the construction of other types of buildings. After the expiry of the term of Ext. A2 Kalaji Rao executed another marupat Ext. A3 in 1932 By Ext. A3 he agreed to surrender the property on demand after demolishing the buildings and a petrol pump which he was allowed to construct. Pursuant to the lease deeds buildings have been constructed. Kalaji Rao assigned his tenancy to one Yacoob Cheerakkadan, father of the first defendant. Cheerakkadan attorned to the plaintiff and executed a marupat Ext. A4 dated 4-6-1946. The plaintiff issued a registered notice terminating the tenancy and brought the suit. Yacoob Cheerakkadan is dead and he is represented by bis legal representative defendant 1. Defendant 2 is an assignee of the rights of the tenant. Defendants 3 to 19 are sub-tenants.

2. The only defence that needs to be noted is the plea taken by the 2nd defendant claiming the protection of S.106, Land Reforms Act (Act I of 1964). The appellants sought to meet this plea contending that since the land was in the possession of sub-tenants and not of the 2nd defendant he was disentitled to claim the benefits of S.106. This contention was rejected by the courts below. The appellant challenges the decisions in this appeal.

3. A learned judge has referred the appeal to a Bench considering the importance of the question involved and the frequency with which it might arise.

4. The short question that falls to be decided is whether a tenant who otherwise satisfies the terms of S.106 loses its benefits if he has parted with possession in favour of sub-tenants. S.3(1) (iii) of the Act exempts from the provisions of Chapter II "leases of land or of buildings or of both specifically granted for industrial or commercial purposes". Chapter II by S.13 confers fixity of tenure upon tenants. The effect of S.3(1)(iii) is to deny tenants, hit by its terms the protection of fixity of tenure and other benefits laid down in Chapter II. S.106 was enacted in order to give some measure of protection to tenants of commercial or industrial premises. Starting with a non-obstante clause S.106 provides, so far as relevant, "where on any land leased for commercial or industrial purpose, the lessee has constructed buildings for such commercial or industrial purpose before the 20th May, 1967, he shall not be liable to be evicted from such land, but shall be liable to pay rent under the contract of tenancy, and such rent shall be liable to be varied every twelve years." The Explanation by clause (a) defines 'lessee' to include a legal representative or an assignee of the lessee. Sub-section (1A) provides that the lessor or the lessee might apply to the prescribed authority for varying the rent referred to in sub-section (1) and that thereupon the authority should take into consideration such matters as may be prescribed and pass such orders as it deems fit. We do not think it necessary to refer to the later provisions in the Section as they have little bearing on the question in dispute. Counsel for the appellant contended that although sub-section (1) does not in terms require that the lessee should be in possession to claim its benefit, the idea of possession is implicit from the expression that "he shall not be liable to be evicted from such land". Counsel argued that there can be no question of evicting a lessee who is not in possession. We are unable to accept this contention. Counsel did not argue, indeed he could not also argue that a lessee ceases to be a lessee when he creates sub-leases and goes out of possession. He remains the lessee with the