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  • clause (e) of subjection (1) of section 13.The provisions aforesaid of this sub-section
  • (6) of sub-s. (4) of s. 4 of the Bombay Rent Act. Sub-section (1) of s. 4
  • cl. (j) of s. 108 of the Transfer of Property Act.
  • Amending Act being Bombay Act No. XLIX of 1959.
  • ss. 14 and 15 of the Rent Act. Section 14
  • sub-s. (2) of s. 15 of the Bombay Rent Act,
  • sub-s. (2) of s. 15 of the Rent Act,
  • s. 15 of the Bombay Rent Act,
  • s. 14 of the Bombay Rent Act
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citation codes
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  • clause (e) of subjection (1) of section 13.The provisions aforesaid of this sub-section
  • (6) of sub-s. (4) of s. 4 of the Bombay Rent Act. Sub-section (1) of s. 4
  • cl. (j) of s. 108 of the Transfer of Property Act.
  • Amending Act being Bombay Act No. XLIX of 1959.
  • ss. 14 and 15 of the Rent Act. Section 14
  • sub-s. (2) of s. 15 of the Bombay Rent Act,
  • sub-s. (2) of s. 15 of the Rent Act,
  • s. 15 of the Bombay Rent Act,
  • s. 14 of the Bombay Rent Act
Smart Summary

Summary of Legal Opinion — Tarkunde, J.

Factual and Procedural Background

The dispute concerns a godown at Ballard Estate, Bombay, which is part of an estate owned by the Bombay Port Trust. The Port Trust leased the estate to the first respondents, Messrs Ambico Industries, who in turn let the godown to the second respondents, Messrs William Jacks and Company Limited. The petitioner, Josephy Santa Vincent, entered into possession of the godown in January 1957 pursuant to an agreement with the second respondents.

On 1 August 1959 the second respondents surrendered their tenancy to the first respondents. In April 1960 the first respondents sued the second respondents in the Bombay Small Cause Court for possession; the petitioner was not made a party to that suit. An ex parte decree for possession was obtained in October 1960 and subsequently executed despite the petitioner’s attempt to obstruct execution.

The petitioner then sued in the same Court for a declaration that he was the lawful sub-tenant of the second respondents and had become tenant of the first respondents under s. 14 of the Bombay Rent Act on termination of the second respondents' tenancy. He obtained an interim stay against execution, but due to a typing error in the stay order the decree was executed and he lost possession; he amended his plaint to seek restoration of possession.

The trial Judge dismissed the petitioner's suit on two grounds: (1) that sub-s. (2) of s. 15 of the Bombay Rent Act did not validate the petitioner's sub-lease because the petitioner was a sub-tenant of a sub-tenant and not entitled to protection (relying on Balkrishna v. Saidanna), and (2) that the petitioner had failed to prove a lawful sub-lease and was at most a licensee. The Appellate Bench summarily dismissed the appeal, assuming the petitioner to be a sub-tenant but holding him not protected by s. 15(2); it did not decide whether he was a licensee or a sub-tenant.

The petitioner filed this petition under Article 227 of the Constitution challenging the legality of the decree of the Small Cause Court and the confirmatory order of the Appellate Bench.

Legal Issues Presented

  1. Whether the petitioner is entitled to the protection of sub-section (2) of section 15 of the Bombay Rent Act (i.e., whether that provision validates his sub-lease and thus makes him the tenant of the first respondents under section 14 on the determination of the second respondents' tenancy).
  2. Whether the word "tenant" in section 15 of the Bombay Rent Act includes a lawful contractual sub-tenant (such as the second respondents) so that a transferee from such a sub-tenant can claim the protection of s. 15(2).
  3. Whether the High Court can entertain the petition under Article 227 in view of the alternative remedy of revision under Section 115 CPC (i.e., preliminary objection on maintainability of the petition under Article 227).
  4. Whether the petitioner was a sub-tenant or merely a licensee of the second respondents (a factual question that the Appellate Bench had not decided).

Arguments of the Parties

Petitioner's Arguments (Mr. Nariman)

  • The Appellate Bench and trial court overlooked that the second respondents were lawful sub-tenants of premises that belong to the Bombay Port Trust and that the second respondents were therefore not precluded by s. 15 (as it stood prior to the amendment) from sub-letting; consequently they were "tenants" in relation to the head-tenant.
  • Clause (a) and clause (b) of sub-s. (4) of s. 4 of the Bombay Rent Act show that buildings on land held from Government/local authorities and their lessees are excluded from the restriction in s. 15, permitting such lessees to create sub-tenancies; hence the second respondents were lawful sub-tenants.
  • The word "tenant" in s. 15 should include a contractual sub-tenant; a contractual sub-tenant has the same capacity to transfer a leasehold interest (including by sub-lease) as a contractual tenant, particularly having regard to cl. (j) of s. 108 of the Transfer of Property Act.
  • Therefore, even though the petitioner may be a sub-tenant's sub-tenant, he stands in the position of a transferee from a "tenant" (i.e., the contractual sub-tenant) and is entitled to the protection of sub-s. (2) of s. 15.
  • Because the Appellate Bench did not decide whether the petitioner was a sub-tenant or licensee, the petitioner asked the High Court to decide that question (arguing relevant facts are not seriously disputed and citing decisions of the Court on the legal position).

First Respondents' Arguments (Mr. Banaji)

  • Preliminary objection: the petitioner should have pursued revision under s. 115 CPC; the Article 227 petition is not maintainable because no error in the exercise of jurisdiction is shown and revision is the appropriate remedy.
  • On the merits: the second respondents were sub-tenants and not "tenants" as advanced by Mr. Nariman; the petitioner, claiming through a sub-tenant, cannot claim the protection of s. 15(2) in view of the rulings in Balkrishna v. Saidanna and N.M. Nayak v. Chhotalal which, the first respondents say, limit protection to transferees from a tenant and not to transferees of a transferee.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Balkrishna v. Saidanna, 1962 65 Bom. L.R 149 Held that s. 15(2) validates transfers made by tenants but does not extend protection to a transferee of a transferee (i.e., a sub-tenant's sub-tenant). Relied upon by the trial Judge and Appellate Bench to deny protection to the petitioner; High Court distinguished the case because the prior case involved transferees who derived their title from unlawful transferees and the question whether a lawful sub-tenant falls within "tenant" was not considered there.
N.M. Nayak v. Chhotalal, 1967 69 Bom. L.R 551 Division Bench upheld the principle that sub-s. (2) of s. 15 validates transactions by tenants but not further derivative transfers by sub-lessees or assignees of assignees. Referred to as binding authority by the courts below; High Court held it was not decisive on whether a lawful contractual sub-tenant falls within the word "tenant" in s. 15.
Anand Nivas (P) Ltd. v. Anandji, [1965] A.I.R. S.C. 414 Supreme Court majority: "tenant" in s. 15 means a contractual tenant; s. 15(1) applies to contractual tenants; s. 15(2) is an exception validating assignments, transfers and sub-tenancies granted by contractual tenants. High Court used this decision to explain that "tenant" means a contractual tenant and then extended the logic to hold a contractual sub-tenant is also included because a contractual sub-tenant can transfer leasehold interests under cl. (j) of s. 108 TPA.
Surendra Nath Bibra v. Stephen Court Limited, [1966] A.I.R. S.C. 1361 Held that a High Court can correct an error of law apparent on the face of the record under Article 227 even where an application under s.115 CPC is also filed; supports broader exercise of supervisory jurisdiction. Relied on by the High Court to reject the preliminary objection and to hold that the petition under Article 227 was tenable because the alleged error was one of law apparent on the face of the record.
Dr. Chandrakant B. Joshi v. Sumant Bamdutt Desai, Special Civil Application No. 459 of 1965 (Unrep.) Held that a party aggrieved by a decree vitiated by an error of law apparent on the face of the record can approach the High Court under Article 227 if the error is not correctable under s.115 CPC. Invoked to support the proposition that Article 227 is an appropriate remedy where a legal error on the face of the record cannot be corrected under s.115; used by the High Court to reject the preliminary objection.
Aninha D'Costa v. Parvatibai, 1964 67 Bom. L.R 452 Cited by the petitioner as authority relevant to distinguishing a licensee from a sub-tenant (legal principles on that question were said to be "dear" from this decision). The High Court noted the petitioner relied on this and a related decision but declined to decide the factual question of licensee vs. sub-tenant itself, directing the Appellate Bench to decide it instead.
Sohanlal Naraindas v. Laxmidas, 1963 68 Bom. L.R 400 Cited by the petitioner as authority relevant to the legal position on licensee vs. sub-tenant. Referenced by the High Court as part of the petitioner's argument; the High Court nevertheless remitted the factual question to the Appellate Bench for decision.

Court's Reasoning and Analysis

The Court approached the matter in stages: first addressing the preliminary objection on maintainability under Article 227, and then addressing the substantive question whether s. 15(2) protected the petitioner.

Preliminary objection (Article 227 vs. Section 115 CPC)

  • The bench rejected the preliminary objection that the petitioner should be confined to a revision under s.115 CPC. The Court held that where a decree is vitiated by an error of law apparent on the face of the record and that error is not correctable under s.115, the High Court's supervisory jurisdiction under Article 227 is available. The Court relied on prior authority (Dr. Chandrakant B. Joshi) and treated Surendra Nath Bibra (Supreme Court) as settling the question that Article 227 may be used in such circumstances.

Substantive question: interpretation of s. 14 and s. 15

  • The Court set out the text and effect of s. 14 (which deems a sub-tenant to become tenant of the landlord on determination of the intermediate tenancy, if the premises were "lawfully sub-let") and the history of s. 15 (prohibition on sub-letting prior to amendment, and the validating proviso added by the 1959 Ordinance/Amendment as sub-s. (2)).
  • The Court analyzed the prior cases (Balkrishna and N.M. Nayak) which held that s. 15(2) protects transferees from a tenant but not the transferee of a transferee. The Court distinguished those cases on the ground that the transferees who sought protection there derived their title from transferors who were themselves unlawful transferees under s. 15 as it stood before amendment; those decisions did not consider the situation where the intermediate transferor (the transferor from whom the claimant derives) was a lawful sub-tenant.
  • The Court relied on Anand Nivas (Supreme Court) for the proposition that the word "tenant" in s. 15 means a contractual tenant (because s.15(1) applies to persons who can effect transfers). The majority in Anand Nivas held s. 15(1) applied to contractual tenants and s. 15(2) was an exception validating transfers granted by contractual tenants.
  • The Court then connected that principle to the Transfer of Property Act, s. 108(j), which provides that in the absence of contract/local usage a lessee may transfer or sub-lease his interest and any transferee may again transfer it. On this statutory scheme, the Court found it implausible that the Legislature intended to prohibit transfers by contractual tenants but leave contractual sub-tenants free to transfer; accordingly, the Court concluded the word "tenant" in s. 15 must include a lawful contractual sub-tenant.
  • As a second line of reasoning the Court observed that if it accepted the respondents' argument that second respondents were not "tenants" under s. 15, that would still leave the second respondents free to grant a valid sub-lease under s.108(j) TPA and hence the petitioner would be a lawful sub-tenant even without relying on s.15(2). This reinforced the correctness of construing "tenant" to include lawful contractual sub-tenants.
  • Therefore the Court concluded s. 15(2) protects transferees (by sub-lease, assignment or otherwise) of contractual tenants and also transferees of lawful contractual sub-tenants.

Question of fact (sub-tenant vs. licensee)

  • The High Court noted that the Appellate Bench made no finding on whether the petitioner was a sub-tenant or merely a licensee. Although the petitioner invited the High Court to decide that question, the Court held that contested questions of fact were likely involved and that the issue should be decided by the Appellate Bench of the Small Cause Court.
  • The High Court therefore did not decide the factual question but remitted the appeal to the Appellate Bench for determination of that surviving factual issue and for final disposal.

Holding and Implications

Holding: The High Court reached the following dispositive conclusions and directions:

  • Core ruling: The word "tenant" in s. 15 of the Bombay Rent Act includes a contractual tenant as well as a lawful contractual sub-tenant whose sub-lease is valid under the Act; consequently sub-s. (2) of s. 15 protects a transferee (by sub-lease, assignment or otherwise) of a contractual tenant and also of a lawful contractual sub-tenant.
  • The judgment and decree passed by the Appellate Bench of the Bombay Small Cause Court are set aside and the appeal before that Bench is restored. The Appellate Bench is directed to decide, after hearing the parties, the surviving question whether the petitioner was a sub-tenant or a licensee, and to dispose of the appeal as far as possible within two months of receipt of the order.
  • The first respondents were ordered to pay the petitioner's costs of the petition; advocate's fees were fixed at Rs. 500 in assessing costs.
  • The interim injunction previously granted by the High Court on 2 August 1966 was ordered to continue operative during the pendency of the appeal before the Appellate Bench, subject to the statement about current occupation made by counsel for the first respondents.
  • Decree set aside (explicit final line: "Decree set aside").

Implications:

  • Direct effect: The Appellate Bench's dismissal is quashed, the appeal is restored, and the lower Appellate Bench must decide the factual issue of whether the petitioner was a sub-tenant or licensee and then proceed to final disposal within the directed timeframe. The petitioner obtains costs and continuation of the interim injunction during the rehearing.
  • Legal/interpretive consequence: The Court has declared that, for the purposes of s. 15 (both pre- and post-amendment), the term "tenant" includes lawful contractual sub-tenants; therefore s. 15(2)'s validating protection extends to transferees from such lawful contractual sub-tenants. This interpretation narrows the reach of earlier authorities (Balkrishna; N.M. Nayak) in cases where the intermediate transferor was a lawful contractual sub-tenant rather than an unlawful transferee.
  • No final finding on the key fact (whether the petitioner was a sub-tenant or licensee) was made by this Court; that question remains for the Appellate Bench to decide. Thus the ultimate applicability of s. 15(2) to the petitioner will depend on the Appellate Bench's factual determination.

Note: This summary is based exclusively on the content of the provided opinion and does not add or infer facts beyond that text.

    Josephy Santa Vincent v. Ambico Industries

    Tarkunde, J.:— This petition has been filed by with a view to challenge the legality of a decree passed bu a Judge of the Bombay Small Cause Court and confirm by an Appellate Bench of that Court. The property in dispute consists of a godown at Ballard Estate in Bombay. The godown is a part of an extensive estate which belongs to the Bombay Port Trust and which has been leased by the Port Trust to the first respondents Messrs Ambico Industries. The first respondents let out the godown to the second respondents Messrs William Jacks and Company Limited. In January 1957 the petitioner Josephy Santa Vincent went into the possession of the godown under an agreement with the second respondents. On August 1, 1959, the second respondents surrendered their tenancy to the first respondents. In April 1960, the first respondents filed a suit against the second respondents in the Bombay Small Cause Court for possession of the godown. The petitioner was not made a party to that suit. An ex-parte decree for possession was obtained in that suit by the first respondents in October, 1960. When the ex-parte decree was sought to be executed an obstruction was offered by the petitioner but the obstruction was ordered to be removed by the Court. The petitioner then filed a suit in the same Court for a declaration that he was the lawful sub-tenant of the second respondents and had become the tenant of the first respondents under s. 14 of the Bombay Rent Act on the determination of the second respondents' tenancy. After filing the suit, the petitioner obtained an order of interim stay against the execution of the ex-parte decree. Due to some typing error in the stay order, however, the decree was executed and possession of the godown was obtained by the first respondents. Thereupon the petitioner got his plaint amended so as to add a prayer for restoration of possession of the godown.

    2. The suit was dismissed by the trial Judge on two grounds. The learned trial Judge held, in the first place, that assuming the premises to have been sub-let by the second respondents to the petitioner in January 1957, the sub-lease was not validated by sub-s. (2) of s. 15 of the Bombay Rent Act, that the premises cannot be held to have been lawfully sub-let to the petitioner, and that the petitioner cannot, therefore, be deemed to have become the tenant of the first respondents under s. 14 of the Act. The learned Judge observed in this connection that, as the property belonged to the Bombay Port Trust, the first respondents were the tenants of the godown, that the second respondents were the sub-tenants and that the petitioner could only claim to be the subtenant of a sub-tenant. Relying upon the decision in Balkrishna v. Saidanna . 1962 65 Bom. L.R 149., the learned trial Judge held that the petitioner, being the sub-tenant of a sub-tenant, cannot claim the protection of sub-s. (2) of s. 15. Secondly, the learned Judge held that the petitioner had failed to prove that the premises had been sub-let to him in January 1957 by the second respondents. The learned Judge was of the view that the petitioner was only a licensee with the right of storing goods in the premises. From this decree dismissing his suit the petitioner went in appeal to the Appellate Bench of the Bombay Small Cause Court. The appeal was summarily dismissed by the Appellate Bench. In its judgment the Appellate Bench proceeded on the assumption that the petitioner was a sub-tenant of the second respondents. Relying on the said decision in Balkrishna v. Saidanna, the Appellate Bench held that a sub-tenant's sub-tenant was not protected by the Rent Act and that the trial Court was, therefore, justified in dismissing the petitioner's suit. The Appellate Bench did not decide the question whether the petitioner was a tenant or a licensee of the second respondents.

    3. In order to appreciate the arguments addressed before me by Mr. Nariman for the petitioner and Mr. Banaji for the first respondents, it would be useful to refer to ss. 14 and 15 of the Rent Act. Section 14 provides in substance that where the interest of a tenant of any premises is determined for any reason, any sub-tenant to whom the premises or any part thereof have been “lawfully sub-let” shall be deemed to have become the tenant of the landlord on the same terms and conditions as he would have held from the tenant if the tenancy had continued. It follows that the petitioner can claim to have become the tenant of the first respondents on the determination of the tenancy of the second respondents if the premises had been lawfully sub-let to him by the second respondents. Now, s. 15 prior to its amendment by Ordinance No. Ill of 1959 ran as follows:

    “Notwithstanding anything contained in any law, it shall not be lawful after the coming into operation of this Act for any tenant to sub-let the whole or any part of the premises let to him or to assign or transfer in or any other manner his interest therein.”

    4. There was a proviso to this section with which we are not concerned. Section 15 was amended first by Bombay Ordinance No. III of 1959 which came into effect on May 21, 1959, and then by an Amending Act being Bombay Act No. XLIX of 1959. By the amendment the above provision of s. 15 (with a slight modification) was numbered as sub-s. (1) and the following was added as sub-s. (2):

    “The prohibition against the sub-letting of the whole or any part of the premises which have been let to any tenant, and against the assignment or transfer in any other manner of the interest of the tenant therein, contained in sub-section (1), shall, subject to the provisions of this sub-section, be deemed to have had no effect before the commencement of the Bombay Rents, Hotel and Lodging House Rates Control (Amendment) Ordinance, 1959 in any area in which this Act was in operation before such commencement; and accordingly, notwithstanding anything contained in any contract or in the judgment, decree or order of a Court, any such sublease, assignment or transfer or any such purported sub-lease, assignment or transfer in favour of any person who has entered into possession, despite the prohibition in sub-section (1), as a purported sub-lessee, assignee or transferee and has continued in possession at the commencement of the said Ordinance, shall be deemed to be valid and effectual for all purposes, and any tenant who has sub-let any premises or part thereof, assigned or transferred any interest therein, shall not be liable to eviction under clause (e) of subjection (1) of section 13.

    The provisions aforesaid of this sub-section shall not affect in any manner the operation of sub-section (1) after the commencement of the Ordinance aforementioned.”

    5. In Balkrishna v. Saidanna, referred to above, Mr. Justice Chandrachud had to decide the extent to which transfers which were invalid under s. 15, as it stood prior to the amendment, were validated by sub-s. (2) which was added to that section. In the suit in that case, defendant No. 1 was the original tenant, defendant No. 1 had sub-let the premises to defendant No. 2, defendant No. 2 had sub-let the premises to defendant No. 3, defendant No. 3 had sub-let the premises to defendant No. 5, and it was defendant No. 5 who claimed to be in lawful possession of the premises by virtue of sub-s. (2) of s. 15. The learned Judge held that defendant No. 5 could not claim the protection of that provision. The learned Judge observed (p. 151):

    “…It seems to me difficult to take the view that the intention of the Legislature was not only to validate transfers and assignments by tenants but also to legalise every transfer and assignment effected by the sub-tenants or by transferees and assignees of sub-tenants…. As I have stated earlier, the protection which is intended to be conferred by the Ordinance can be availed of only by persons who can be described as sub-lessees, assignees or transferees from the tenants…”

    6. If the word “transfer” be used to cover a sub-lease, an assignment or any other type of transfer of a leasehold interest, the decision of the learned Judge amounts to this, that sub-s. (2) of s. 15 affords protection to the transferee of a tenant and not to a transferee of the tenant's transferee.

    7. The learned Judge's view with regard to the scope of sub-s. (2) of s. 15 was upheld by a Division Bench consisting of Mr. Justice Patel and Mr. Justice Thakker in N.M Nayak v. Chhotalal . 1967 69 Bom. L.R 551.. In that case the tenant of certain premises had assigned his leasehold interest to a certain person and the latter on his part had assigned his interest in the premises to the petitioner. One of the questions before the Court was whether such assignee of an assignee of the leasehold interest was entitled to the protection of sub-s. (2) of s. 15. In holding that the petitioner was not entitled to the protection, the Division Bench observed (p. 559):

    “…The Legislature whilst introducing sub-s.(2) intended to validate the sub-letting, transfer and assignment by tenants and not further sub-letting or further derivative transfer or assignment by such sub-lessees, transferees or assignees. In our opinion, the protection intended to be conferred by the Ordinance can be availed of by only those persons who can be described as sub-Iessess, assignees or transferees from the contractual tenant.”

    8. Mr. Nariman on behalf of the petitioner made it clear that he did not accept the above cases as having been rightly decided but he agreed that these decisions are binding on me. Argument on both sides were advanced before me on that basis.

    9. Mr. Nariman argued that, in holding the petitioner in the present case to be disentitled to the protection of sub-s. (2) of s. 15, the Courts below had overlooked the fact that the second respondents, who had sub-let the premises to the petitioner, were themselves the lawful sub-tenants of the premises. Mr. Nariman referred in this connection to cls. (a) and (6) of sub-s. (4) of s. 4 of the Bombay Rent Act. Sub-section (1) of s. 4 lays down that the Act shall not apply to any premises “belonging to the Government or a local authority” or apply as against the Government to any tenancy or other like relationship created by a grant from the Government in respect of premises taken on lease or requisitioned by the Government; but that it shall apply in respect of premises let to the Government or a local authority. Clause (a) of sub-s. (4) of s. 4 provides that the expression “premises belonging to the Government or a local authority” in sub-s. (1) shall not include a building erected on any land held by any person from the Government or a local authority under an agreement, lease or other grant, even though the building may belong to the Government or the local authority, as the case may be. Then cl. (b) of sub-s. (4) of s. 4 lays down that “notwithstanding anything contained in section 15” the person who holds such a building under an agreement, lease or other grant from the Government or a local authority shall be entitled to create a sub-tenancy in respect of the building or any part thereof. Since the premises in the present case belong to the Bombay Port Trust, it follows from the above provisions that the first respondents, who hold the premises from the Port Trust, were not precluded by s. 15, as it stood before the amendment, from sub-letting the premises to the second respondents. The second respondents were thus the lawful sub-tenants of the premises when they sub-let them to the petitioner. Mr. Nariman argued that the word “tenant” in s. 15 includes a contractual sub-tenant (like the second respondents) whose sub-lease is valid under the Act. According to Mr. Nariman, although the petitioner is a sub-tenant's sub-tenant, he is in the position of a tenant's sub-tenant, and is entitled to the protection of sub-s. (2) of s. 15.

    10. On behalf of the first respondents Mr. Banaji raised a preliminary objection to the effect that the argument advanced by Mr. Nariman cannot be entertained in this petition under art. 227 of the Constitution. On the merits Mr. Banaji argued that the second respondents were sub-tenants and not tenants as argued by Mr. Nariman and that the petitioner, claiming as he does from a sub-tenant, is not protected by sub-s. (2) of s. 15 according to the rulings mentioned above.

    11. On the preliminary objection Mr. Banaji argued that it was open to the petitioner to file a revision application under s. 115 of the Civil Procedure Code from the decrees passed by the Courts below and that the hearing of this petition under art. 227 of the Constitution must, therefore, be confined to such contentions as can be entertained by this Court in the exercise of its revision its jurisdiction. Since no error was committed by the Courts below in the exercise of their jurisdiction, this petition, according to Mr. Banaji, was not tenable. I do not find any merit in this preliminary objection. If a revision application were an adequate remedy in the present case, the petitioner would not have been entitled to invoke the jurisdiction of this Court under art. 227 of the Constitution. This petition has been filed because, according to the petitioner, the decrees passed by the Courts below are vitiated by an error of law which is apparent on the face of the record, but which is not an error in the exercise of their jurisdiction. In Dr. Chandrakant B. Joshi v. Sumant Bamdutt Desai . 1965 Special Civil Application No. 459 of 1965, decided by Tambe, Ag. C.J and Abhyaakar J., on December 14/15, 1965 Unrep., it was held that a party who is aggrieved by a decree passed against him, and who claims that the decree is vitiated by an error of law apparent on the face of the record, can approach this Court under art. 227 of the Constitution, if the error is not capable of being corrected under s. 115 of the Civil Procedure Code. Moreover, the question must now be held to have been concluded by the decision of the Supreme Court in Surendra Nath Bibra v. Stephen Court Limited . . [1966] A.I.R S.C 1361. That was an appeal from the judgment of the Calcutta High Court in an application which had been filed in the High Court under s. 115 of the Civil Procedure Code as well as art. 227 of the Constitution. What was challenged before the High Court was a decree of the Court of Small Causes, Calcutta. The Supreme Court held that, since the application in the High Court had been filed under art. 227 of the Constitution as well as s. 115 of the Civil Procedure Code, it was open to the High Court to correct an error of the Court below which was not an error in the exercise of that Court's jurisdiction. In the case before me the alleged error of law of the Courts below is apparent on the face of the record and the petition is, therefore, tenable under art. 227 of the Constitution.

    12. Turning to the main question, namely, whether the petitioner is entitled to the protection of sub-s. (2) of s. 15 of the Rent Act, it appears to me, in the first place, that the question is not covered either by the decision of Mr. Justice Chandrachud in Balkrishna v. Saidanna, or by the decision of Mr. Justice Patel and Mr. Justice Thakker in N.M Nayak v. Chhotalal. As mentioned above, it was held in those cases that s. 15(2) protects a transferee of the leasehold interest from a tenant but not the transferee of a transferee. The Courts in those cases, however, had no occasion to consider the scope of the word “tenant” in sub-ss. (1) and (2) of s. 15. This was because in both the cases the persons who claimed the protection of sub-s. (2) of s. 15 had derived their interest in the premises in dispute from transferors who were themselves unlawful transferees under s. 15, as it stood before the amendment, and who could not claim to be tenants by virtue of that section. In the present case the petitioner claims under the second respondents who were lawful sub-tenants of the premises in dispute and who, according to the petitioner, were in the same position as a tenant under s. 15 as it stood before the amendment. Now, a lawful sub-tenant like the second respondents, while he is a sub-tenant in relation to the owner of the premises, is also a tenant in relation to the head-tenant. The relations between the head-tenant and the sub-tenant are not different from the relations between a landlord and a tenant. Both the relations are governed by the provisions of the Rent Act. In matters such as fixation of rent or recovery of possession of the premises, the tenant in relation to the sub-tenant has the same rights and obligations as the landlord in relation to his tenant. More than one category of sub-tenants are lawful tenants under the Rent Act. One category consists of those sub-tenants who had derived their title under tenants before the commencement of the Rent Act. Another category is the one to which the present second respondents belonged; it consists of sub-tenants of those tenants who are the lessees of buildings belonging to Government or local authorities. The second respondents in this case were admittedly the tenants of the first respondents and the question is whether the second respondents were not covered by the word “tenant” which was used in s. 15, as it stood before the amendment, and which has been used in sub-ss. (1) and (2) of s. 15 as it stands at present. The Courts in the cases referred to above were not required to deal with such a question.

    13. In my view, there are sound and indeed compelling reasons for holding that the word “tenant” in s. 15 includes a lawful sub-tenant. The meaning of the word “tenant” in s. 15 was considered by the Supreme Court in Anand, Nivas (P) Ltd. v. Anandji . [1965] A.I.R S.C 414.. A majority of the Court held that the tenant under s. 15 means a contractual tenant. With reference to sub-s. (1) of s. 15 Mr. Justice J.C Shah, delivering the judgment of the majority, said. (p. 425):

    “…By cl. (1) of S. 15 all transfers and assignments of interest in the premises and subletting of premises, by tenants are, subject to any contract to the contrary, made unlawful. The clause however saves contracts to the contrary and to be effective can operate only in favour of contractual tenants. A statutory tenant having no interest in the property, it was plainly unnecessary to prohibit transfer of what was ineffective. Nor can there be letting of the premises by a statutory tenant, for letting postulates a transfer of the right to enjoy property made for a certain time, express or implied, in consideration of price paid or promised, and a statutory tenant has merely a personal right to resist eviction. section 15(1) therefore applies only to contractual tenants.”

    14. After pointing out that sub-s. (2) of s. 15 is in terms an exception to sub-s. (1), His Lordship went on to observe (p. 425):

    “…The exception clause could manifestly not apply to statutory tenancies when the principal clause applied only to contractual tenancies. The effect of the clause is to validate assignments, transfers and sub-tenancies granted by contractual tenants, despite the prohibition contained in sub-s. (1) or even in the contract of tenancy, and this validation is effective, notwithstanding any judgment, decree or order of a Court.”

    15. Thus the reason why, according to the Supreme Court, the word tenant in s. 15 means only a contractual tenant is that a contractual tenant, in the absence of the prohibition contained in sub-s. (1) of that section, is normally entitled to transfer his leasehold interest by sub-lease, assignment or otherwise, whereas a statutory tenant has no transferable right in the premises occupied by him. Now, a right to transfer the leasehold interest can, in the absence of the prohibition contained in sub-s. (1) of s. 15, be exercised not only by a contractual tenant but also by a contractual sub-tenant. This is clear from the terms of cl. (j) of s. 108 of the Transfer of Property Act. That clause lays down that, in the absence of a contract or local usage to the contrary,

    “the lessee may transfer absolutely or by way of mortgage or sub-lease the whole or any part of his interest in the property, and any transferee of such interest or part may again transfer it.”

    16. Now, it is obvious that the Legislature, in enacting s. 15 of the Bombay Rent Act, could not have intended that a contractual tenant should be prohibited from transferring his leasehold interest, but that a contractual sub-tenant should be at liberty to do so. It must, therefore, follow that the word tenant in s. 15, both before and after its amendment, includes a contractual subtenant like the second respondents and that the petitioner as the sub-tenant of the second respondents can lawfully claim the protection of sub-s. (2) of s. 15.

    17. It appears to me that the correctness of the above conclusion is borne out by another consideration. If I were to accept Mr. Banaji's argument and hold that the second respondents, being sub-tenants of the premises, were not tenants under s. 15 of the Act, the petitioner would still be a lawful subtenant of the premises without being required to depend upon the protection of sub-s. (2) of s. 15. This is because, on the supposition that the second respondents were not tenants under s. 15, they were not subject to the prohibition contained in that section, and were entitled under the terms of cl. (j) of s. 108 of the Transfer of Property Act to grant a valid sub-lease to the petitioner. Thus, if the second respondents are held not to be tenants under s. 15, the result would be that the petitioner would be a lawful sub-tenant of the premises without being required to rely on sub-s. (2) of s. 15 and can, therefore, claim to have become the tenant of the first respondents under s. 14 on the determination of the second respondents' tenancy.

    18. I must accordingly hold that the word tenant in s. 15 of the Bombay Rent Act means a contractual tenant as well as a contractual sub-tenant whose sub-lease is valid under the Act. It follows that sub-s. (2) of s. 15 protects a transferee, whether by way of a sub-lease, assignment or otherwise, of a contractual tenant as well as of a lawful contractual sub-tenant. The petitioner is, therefore, entitled to the protection of sub-s. (2) of s. 15, provided he was a sub-tenant and not merely a licensee of the second respondents.

    19. As mentioned earlier, the Appellate Bench of the Small Cause Court has given no finding on whether the learned trial Judge was right in his conclusion that the petitioner was a licensee and not a sub-tenant of the second respondents. Mr. Nariman urged that, since the Appellate Bench has not considered that question, I should myself consider and decide it. He argued that the relevant facts are hardly in dispute and that the legal position is now dear from the decisions of this Court in Aninha D'Costa v. Parvatibai . 1964 67 Bom. L.R 452. and Sohanlal Naraindas v. Laxmidas . 1963 68 Bom. L.R 400. Mr. Nariman further pointed out that, despite a stay order obtained by the petitioner from the trial Court, he has lost possession of the premises on account of a typing error in the stay order, and Mr. Nariman therefore urged that the final decision of the suit should no longer be delayed.

    20. I am of the view that, since some contested questions of fact are likely to be involved, the question whether the petitioner was a sub-tenant or licensee of the second respondents should be decided by the Appellate Bench of the Small Cause Court. It would, however, be appropriate under the circumstances of the case to give a direction to the Appellate Bench to dispose of the case at a very early date.

    21. In the result the judgment and decree passed by the Appellate Bench of the Bombay Small Cause Court is set aside, the appeal before the Appellate Bench is restored, and the Appellate Bench is directed to dispose of the appeal after hearing the parties on the surviving question mentioned above. The Appellate Bench will dispose of the appeal, as far as possible, within two months of the receipt of this order.

    22. The first respondents will pay the petitioner's costs of this petition. In assessing costs, advocate's fees will be allowed at Rs. 500.

    23. For the first respondents Mr. Rele says that at present the premises in dispute are in the occupation of the first respondents as well as one F. Buharivala. By consent it is ordered that subject to the above statement of Mr. Rele the interim injunction granted by this Court on August 2, 1966, shall continue to be operative during the pendency of the appeal before the Appellate Bench of the Bombay Small Cause Court.

    24. Decree set aside.

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