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Smart Summary

Concise Analytical Summary of the Opinion

Factual and Procedural Background

Respondent No. 1 owned a building known as Neela Bhuvan. M/s. Bindraban Jain and Sons was the tenant of a ground-floor godown composed of four galas. That tenant sub‑let three galas to Respondent No. 2 and the remaining gala to the petitioner. Respondent No. 1 sued the original tenant in R.A.E. Suit No. 813/4237 of 1956; the petitioner joined the suit on its own application. A decree was passed against the original tenant on 13 July 1959, and the suit against the petitioner was dismissed, with Respondent No. 1 agreeing to recognise the petitioner as direct tenant of the entire godown.

The petitioner paid arrears of rent (up to 31 July 1959) for the entire godown, costs and municipal taxes. Respondent No. 1 granted the petitioner a lease purportedly for one year commencing 1 August 1959 (lease dated 4 December 1959). The petitioner admits that Respondent No. 2 became the direct tenant of Respondent No. 1 under Section 14 of the Bombay Rent Act and that the petitioner remained the contractual tenant of Respondent No. 2.

After obtaining the lease, the petitioner demanded rent from Respondent No. 2, who refused to pay the petitioner and denied the petitioner’s status as landlord. The petitioner purported to terminate Respondent No. 2’s tenancy by letter dated 10 March 1960 and filed an ejectment suit (No. 241/2220 of 1960) against Respondent No. 2 for three galas for non‑payment of rent for more than six months.

Respondent No. 2 (by its sole surviving partner, Respondent No. 3) filed a declaratory suit (No. 291/2743 of 1960) asserting that Respondent No. 2 was a tenant of Respondent No. 1 and that the petitioner had no right to demand rent; Respondent No. 2 also applied for fixation of standard rent for the three galas (R.A.E. No. 487.SR of 1960). All three matters were heard together.

The trial court dismissed the respondents’ suit(s), held that the petitioner was the respondents’ landlord, fixed the standard rent at the contractual rent and rejected the petitioner’s prayer for ejectment. Respondents Nos. 2 and 3 then filed revisional and appellate proceedings (Revisional Application No. 154 of 1963 and Appeal No. 386 of 1963). The Appellate Bench held that Respondents Nos. 2 and 3 were direct tenants of Respondent No. 1, that the petitioner had not become their landlord, and fixed the standard rent at Rs. 292-30.

The present petition challenges the Appellate Bench’s decision in Appeal No. 386 of 1963. The sole question raised is whether a one‑year lease granted to the petitioner made the petitioner the landlord of Respondents Nos. 2 and 3 “for all purposes” under the Rent Act.

Legal Issues Presented

  1. Whether, by reason of a lease for one year granted to the petitioner, the petitioner became the landlord of Respondents Nos. 2 and 3 for all purposes under the Bombay Rent Act (specifically for the purposes of Sections 12 and 13 of the Rent Act).

Arguments of the Parties

Appellant's Arguments (as presented in the opinion)

  • Reliance on Section 109 of the Transfer of Property Act: the appellant's counsel (Mr. Parikh) argued that the transferee of part of the interest of a lessor is, in the absence of contract to the contrary, entitled to all the rights of the lessor and, if the lessee so chooses, to be subject to his liabilities as well.
  • Reference to Sir Dinshaw Mulla’s commentary on the Transfer of Property Act: Mr. Parikh relied on a passage stating that a landlord who, during the currency of a yearly or monthly lease, grants a lease for a term of years, cannot give notice to quit after the commencement of such lease for years because the immediate reversion is transferred to the tenant for years.
  • Reliance on case law decided under the Transfer of Property Act (and other statutes) which, according to counsel, support the proposition that a lessee for a term may acquire landlord‑type rights vis‑à‑vis an existing sub‑tenant (cases relied upon included Bhogilal v. Subramania Iyer, Ganapati Joti Kumbhar v. Jaysinghrao Abasaheb, and earlier authorities cited within those decisions).

The opinion does not set out a detailed, adversarial presentation of respondents’ counter‑arguments in the same manner; therefore only the appellant’s principal contentions as recorded in the text are summarized above.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Ram Anant Singh v. Shankar Singh (1908) ILR 30 All 369 That under Section 109 TPA the transferee takes “all the rights” of the lessor but the liabilities remain unless the lessee elects to make the transferee subject to liabilities. The court accepted the principle that rights pass under Section 109 but emphasised that liabilities do not automatically shift; used to limit the appellant’s claim that a lease for a term gives the lessee complete landlord status under the Rent Act.
Bombay Municipal v. Charandas, 30 Bom LR 169 : (AIR 1928 Bom 104) Authority for a wide construction of “landlord” to include persons receiving or entitled to receive rent (e.g., rent collectors, rent‑farmers) so as to impose landlord obligations on them. Cited by the court to show that the definition of “landlord” can be broad but is context‑dependent; used to support the proposition that a rent‑receiver can be treated as landlord while the owner may still retain landlord status for certain purposes.
Dattatraya Sitaram Biniwale…Accused; v. Emperor, 50 Bom LR 169 (AIR 1948 Bom 239) Support for the proposition that persons who receive rent may be treated as landlords under the relevant statutory definition. Relied upon as part of the body of authority showing the wide object of the definition of “landlord”, illustrating the context‑sensitive nature of the term under the Rent Act.
Mishrimal Chhogalal v. N.B. Patel, (1963) 65 Bom LR 15 Another authority cited for the broad construction of “landlord” to include persons entitled to receive rent and thereby carry obligations of ownership under the Rent Act. Used to demonstrate that the statute’s definition can extend obligations to rent‑receivers, but the court stressed that this does not convert a tenant with derivative title into a landlord for all purposes under Sections 12 and 13.
Emperor v. Jaffer Cassum Moosa…Accused, 30 Bom LR 1442 : (AIR 1928 Bom 528) Authority illustrating that a rent‑farmer or rent‑collector may be treated as a landlord in relation to the actual tenant in possession. Cited to show the scope of the definition of “landlord”; court used it to explain why the owner (reversioner) may continue to be a landlord while others also qualify in different contexts.
Aziz Gaffoor Kazi…Applicant; v. Emperor…Opposite Party, 30 Bom LR 1439 : (AIR 1928 Bom 527) Support for the proposition that those entitled to receive rent can be within the statutory meaning of “landlord”. Referred to in the court’s discussion of the statutory definition and its contextual limitations; used to contrast the owner’s continuing status with that of rent‑receivers.
Oakley v. Wilson, (1927) 3 KB 279 at p. 290 English authority cited in connection with the construction of who is to be regarded as landlord; used to illustrate the point about rights of reversion and duties. Invoked as part of the supporting authorities for the proposition that ownership/reversion carries a continuing role as landlord; the court cited it among cases explaining the breadth of the term in relevant circumstances.
Bhogilal v. Subramania Iyer, AIR 1954 Mad 514 Case holding that where owner granted a long lease (25 years), the lessee for a term could be treated as landlord and entitled to evict a subordinate tenant for personal requirement (relying on Transf. of Property Act authorities). The court noted this decision but disagreed with applying its ratio to the present Rent Act context; treated it as inapposite where the special scheme of the Rent Act governs.
Parbhu Ram v. Tek Chand, AIR 1919 Lah 31; Kannyan v. Alikutti, AIR 1920 Mad 838 Earlier authorities cited within Bhogilal for the proposition that a lessee for a term may acquire landlord rights vis‑à‑vis sub‑tenants. Referenced as authorities relied upon by Bhogilal; the court declined to accept their application to the Rent Act question in the present case.
Ganapati Joti Kumbhar v. Jaysinghrao Abasaheb, 58 Bom LR 20 : (AIR 1956 Bom 749) Decision under Section 88 of the Bombay Tenancy and Agricultural Lands Act, 1948, holding that a lessee for a term could claim the rights of a landlord under that statute, relying on Mulla’s passage under Section 109 TPA. The court regarded this case as decided under a different statute and therefore not directly relevant to construction of the Rent Act; the court expressed doubt about its correctness in the present context.
Sheshmal Kasturchand v. Vyankatesh Sheshgiri Nayak, Civil Revision Applications Nos. 1019–1021 of 1955 (Bombay) Case discussed in the opinion; involved a transfer of tenant’s interest (facts included transfers/mortgage) and some general observations on Section 109 TPA. The court held that the case had no application to the present issue because the transfer there was not recorded by registered document and because the earlier court did not consider the question in the context of the Rent Act; the observations were therefore not authoritative for construing “landlord” under Sections 12 and 13.

Court's Reasoning and Analysis

The court’s analysis proceeded by reference to the special statutory scheme of the Bombay Rent Act and the textual limits of the definitions and eviction provisions:

  1. Statutory context and definitions: The court examined Section 12 (tenant’s right to remain in possession if paying rent and observing tenancy conditions), Section 13 (limited grounds for eviction), and Section 5(3) (definition of “landlord” to include persons receiving or entitled to receive rent and those deriving title under a landlord). The court emphasised that the general definition is subject to context and must be read in light of the Act’s purposes.
  2. Distinction between rights and liabilities under Transfer of Property Act: While Section 109 TPA can give a transferee the rights of the lessor, prior authorities demonstrate that liabilities do not automatically shift unless the lessee elects; the court relied on this to limit the appellant’s reliance on Section 109.
  3. Purpose of the Rent Act: The Act is designed to protect tenants against eviction because of scarcity of housing, to prevent premia, and to allow recovery of possession only on limited grounds. The court observed that construing the Rent Act in a way that permits a landlord to repeatedly grant short-term leases (e.g., one‑year leases) to circumvent the Act would defeat its remedial object and enable evasion.
  4. Contextual construction rule: The court invoked the established canons of statutory construction — that a statute should be construed to suppress the mischief and advance the remedy and avoid evasions — and concluded that the Rent Act should not be read so as to facilitate circumvention.
  5. Application to the facts: Given that the petitioner’s so‑called lease was only for one year (and, after expiry, the petitioner’s tenancy would become monthly), the petitioner’s rights were not superior to those of Respondents Nos. 2 and 3 on the date the suit was decided. The court treated the one‑year lease as an attempted device to bypass the Act and held that derivative title from the landlord (i.e., the petitioner’s position) did not make him a “landlord for all purposes” vis‑à‑vis a direct tenant of the original landlord for the purposes of Sections 12 and 13 of the Rent Act.
  6. Treatment of authorities under other statutes: The court examined cases relied upon by counsel (including decisions under the Transfer of Property Act or other tenancy legislation) and concluded that they were not authoritative for construing the Rent Act’s protections. Decisions under different statutes (e.g., Tenancy and Agricultural Lands Act or general principles under TPA) do not override the special protection scheme enacted by the Rent Act.

Holding and Implications

Holding: The petition is dismissed.

Direct effect on the parties:

  • The court found no merit in the petitioner’s contention that a one‑year lease converted the petitioner into the landlord of Respondents Nos. 2 and 3 for all purposes under the Bombay Rent Act. Consequently, the Appellate Bench’s conclusion that Respondents Nos. 2 and 3 were direct tenants of Respondent No. 1 and not subject to the petitioner’s claim survived the challenge. The Appellate Bench had fixed the standard rent at Rs. 292‑30 for the relevant galas; that outcome is left intact by this dismissal.

Broader implications:

The opinion interprets the Rent Act restrictively to prevent evasions by landlords using short-term leases to defeat tenant protections. It emphasises that the special statutory scheme (the Rent Act) governs the rights to evict and the meaning of “landlord” for the purposes of Sections 12 and 13. The judgment does not purport to create a new general rule overriding the Transfer of Property Act; rather, it resolves the question in accordance with the Rent Act’s object and contextual definitions. The opinion does not assert that it is laying down a novel precedent beyond its application to the facts before the court.

Show full summary ...

    M/S. Devji Keshavji & Co. v. Dahibai Bhailal Shah And Others Opponents.

    1. Respondent No. 1 is the owner of the building known as Neela Bhuvan. M/s. Bindraban Jain and Sons was a tenant of a godown consisting of four galas on the ground floor. The tenant sub-let three galas out of them to respondent No. 2 and the remaining to the petitioner. Respondent No. 1 filed a suit for ejectment against the tenant, M/s. Bindraban Jain and Sons being R.A.E Suit No. 813/4237 of 1956. The petitioner on its own application was made a party to the suit. A Decree was passed against the original tenant on July 13, 1959 and the suit against the petitioner was dismissed and respondent No. 1 agreed to recognize the petitioner as direct tenant of the entire godown. The petitioner paid all arrears of rent to respondent No. 1 upto July 31, 1959 in respect of the entire godown, costs and Municipal taxes. Respondent No. 1 granted a lease for one year commencing from August 1, 1959. The date of the lease is December 4, 1959. The petitioner admits that respondent No. 2 became the direct tenant of respondent No. 1 under Section 14 of the Bombay Rent Act and the petitioner her contractual tenant.

    2. After obtaining the lease the petitioner demanded rent from respondent No. 2, but respondent No. 2 refuse ed to pay the rent to the petitioner denying petitioner's right as landlord. The petitioner, therefore, terminated the tenancy of respondent No. 2 by letter dated March 10, 1960. The petitioner filed the ejectment suit No. 241/2220 of 1960 against respondent No. 2 for the three galas inter alia for non-payment of rent for more than six months. Respondent No. 2 by its sole surviving partner, respondent No. 3, filed a declaratory suit No. 291/2743 of 1960 against the petitioner and respondent No. 1 that respondent No. 2 was a tenant of respondent No 1, that they are liable to pay, rent to respondent No. 1 only and that the petitioner had no right, Respondent No 2 also filed an application for fixing of the standard rent for the three galas in its possession the application being R.A.E No. 487.SR of 1960. All the three matters were heard together.

    3. The trial Court dismissed the suit of respondents Nos. 2 and 3, held that the petitioner was their landlord, fixed the standard rent at the contractual rent and rejected the petitioner's prayer for ejectment.

    4. Respondents Nos. 2 and 3 filed revisional application No. 154 of 1963 against the decision in the standard rent application and Appeal No. 386 of 1963 against the decision in the declaratory suit. The Appellate Bench held that respondents Nos. 2 and 3 were the direct tenants of respondent No. 1, that the petitioner had not become their landlord and fixed the standard rent at Rs. 292-30. By this application the petitioner challenges the decision of the Bench in Appeal No. 386 of 1963. The only question raised is, whether by reason of the lease for a year the petitioner becomes the landlord of respondents Nos. 2 and 3 for all purposes within the Rent Act.

    5. Mr. Parikh places reliance upon Section 109 of the Transfer of Property Act. It provides inter alia that the transferee of part of interest of a lessor, in the absence of a contract to the contrary, would be entitled to all the rights of the lessor and if the lessee so chooses be subject to his liabilities. No doubt, the section gives him all the rights, but liabilities remain where they are, unless the lessee elects to make the transferee subject also to liabilities as held in Ram Anant Singh v. Shankar Singh, (1908) ILR 30 All 369. Mr. Parikh relies upon the statement in Sir Dinshaw Mulla's Transfer of Property Act at page 670, 1966 Edition, where the following appears: “The landlord who during the currency of a yearly or monthly lease, grants a lease for a term of years, cannot give notice to quit after the commencement of such lease for years, as his immediate reversion is then transferred to the tenant for years.”

    6. There is no doubt that the observation is based on the principle that the tenancy of a monthly or annual tenant can be terminated by notice under Section 106 and in a suit against him he has no defence, and the lessor for years has a higher Interest. Can the same result follow tinder the Rent Act?

    7. Section 12 of the Rent Act places certain restrictions on the land lord of the premises. He is not entitled to evict the tenant so long as he is reader and willing to pay the rent and obser ves other conditions of the tenancy. This right of the tenant is subject to Sec. 13 which enables the landlord to evict the tenant under certain limited circumstances. Section 5(3) of the said Act defines the words “landlord” in a com prehensive manner to include even a person who is receiving or is entitled to receive the rent. But the word carries this meaning unless there is anything repugnant thereto in the subject or con text The definition is widely worded in order to see that those who receive the rent carry on the obligations which are imposed on the owner by the Act, Thus a rent collector or a rent-farmer is held to be a landlord, (see Bombay Municipal v. Charandas, 30 Bom LR 169 : (AIR 1928 Bom 104), Dattatraya Sitaram Biniwale…Accused; v. Emperor, 50 Bom LR 169 (AIR 1948 Bom 239) and Mishrimal Chhogalal v. N.B Patel*, (1963) 65 Bom LR 15. He cannot however eject the tenant on the ground that he needs the premises. On the other hand, though a rent-fanner is a landlord in relation to the actual tenant sitting in the property, the owner continues to be the landlord as he is entitled to receive the rent from his tenant. See Emperor v. Jaffer Cassum Moosa…Accused*, 30 Bom LR 1442 : (AIR 1928 Bom 528); Aziz Gaffoor Kazi…Applicant; v. Emperor…Opposite Party., 30 Bom LR 1439 : (AIR 1928 Bom 527) and Oakley v. Wilson, (1927) 3 KB 279 at p. 290, This is so because the later part of the definition clearly includes those “who would so receive the rent or be entitled to receive the rent if the premises were left to a tenant” There can be no doubt that respondent No. 1 continues to be the landlord of the premises. The further portion of the section clearly excludes a tenant such as the petitioner for it says “and includes any person not being a tenant who from time to time derives title under a land lord; and further includes in respect of his sub-tenant a tenant who has sub-let any premises,” Having regard to the words of the Section, I am clearly of the view that in the case of derivative title from the landlord, a tenant of the landlord would not be a landlord for all purposes in relation to a sitting tenant who is a direct tenant of the landlord, at least for all purposes as long as the Rent Act continues. It must also be remembered that even this definition is subject to context.

    8. Now, what is the scheme of the Act. Before a particular meaning can be given to the words used, the Court must see the context and the subject. Wider definition is intended for enforcing the obligations imposed by the provisions of the Act In other cases, wider definition could not have been intended.

    9. The scheme of the Rent Act is to protect tenants from eviction and that is because of scarcity of accommodation. It prevents landlords from receiving premia for granting of lease and enables him to recover possession only under some limited circumstances. One of such purpose is for his own reasonable and bona fide occupation, Even here the Court has to decide the question whether greater hardship will be caused to the tenant by the passing of the decree than to the landlord by refusing to pass the decree. This could be easily by-passed by accepting the present contention. A landlord may charge a heavy pugree and grant a short term lease say for five years or even for only one year as In this case to another. This other may have a need and thus he may be able to obtain a decree. The landlord may repeat the performance again and again. In this connection, I may refer to the, well-established rule of construction. It is that a statute should be so construed as will suppress the mischief and advance the remedy and avoid evasions for the continuance of the mischief. (Maxwell on Interpretation of Statutes, 9th Edition, page 118). A construction which facilitates evasion on the ground of inconvenience is to be avoided (ibid p. 204). The Rent Act which is intended for the public good, preventing evictions except under limited circumstances defined in the Act must be so construed as not to enable the landlord to evade the Act It is true that in doing so it should be reasonably construed. In fact the provisions of the rent act are being circumvented by creating “licences” and to accept the present contention would mean doing away with the Rent Act. I am of the opinion that for the purposes “of Sections 12 and 13” “landlord” means the person in whom the reversion is vested and not merely a right to the possession of the premises as a tenant In fact, the later portion of the definition as shown earlier, excludes any such construction, though of course in other cases, it applies.

    10. Under the Act of 1948 as If originally existed even a purchaser of the building after a particular date was not entitled to evict the tenant on the ground of personal requirement That provision has been repealed. When that provision existed, it could never have been contended that a tenant for a term could evict the tenant though not a purchaser after that date. No doubt that provision is removed thus entitling: the purchaser to obtain possession of the premises. That does not mean that an assignee of a right lesser than or equal to that of the tenant should be entitled to evict the tenant.

    11. Mr. Parikh relies upon some cases decided under the Transfer of Property Act which, in my view, have no application as the rights in the present case must be governed by the Special Act. The following cases however support him. In Bhogilal v. Subramania Iyer, AIR 1954 Mad 514 the owner granted a lease for a period of twentyfive years. Relying upon the decisions in Parbhu Ram v. Tek Chand, AIR 1919 Lah 31 and Kannyan v. Alikutti, AIR 1920 Mad 838 the Court held that the lessee for a term was a landlord and entitled to evict the tenant for his personal requirement. In Ganapati Joti Kumbhar v. Jaysinghrao Abasaheb, 58 Bom LR 20 : (AIR 1956 Bom 749) the question arose under Section 88 of the Bombay Tenancy and Agricultural Lands Act, 1948. Relying upon the passage in Sir Dinshaw Mulla's Transfer of Property Act under Section 109 the Court held that a lessee for a term would be entitled to the rights of the landlord and claim benefit of Sec. 88. With respect none of these cases consider the question in the context of the scheme of the Rent Act or the Tenancy Act but they have applied Section 109 of the Transfer of Property Act With the ratio of the first decision with respect I cannot agree. The second decision is under a different Act and Is not relevant though with respect I confess, I doubt its correctness. Reliance is placed on the decision in Sheshmal Kasturchand v. Vyankatesh Sheshgiri Nayak, Civil Revn. Applns, Nos. 1019, 1020 and 1021 of 1955 (Bom) decided by Shah, J. on August 6, 1956. This case has clearly no application. One Kamath was the tenant of business premises in Shops Nos. 2 to 5. He also obtained tenancy of shops Nos. 10 to 12 and let these out to different tenants. Shop No. 11 was occupied by the petitioner-firm as his sub-tenant. He mortgaged the business to one Damodar Thakersey and got all rent bills transferred to the name of Damodar Thakersey, who thus became the tenant i.e an assignee of the whole Interest of tenant. Later one Vyankatesh Sheshgiri purchased the business from Kamath, paid off the mortgagee and eventually the bills in respect of all the shops were transferred to him. He thus became the transferee of the tenant's interest i.e the whole of the landlord's interest vis-a-vis the petitioner-firm. But the transfer was not by a registered document.

    12. He then filed the suit for eviction against the sub-tenants. It was conceded before the learned Judge that the petitioner-firm became direct tenant of the landlord under Section 14, The learned Judge made general observations in regard to the effect of Section 109 of the Transfer of Property Act, but had no need to consider and did not consider the question in the context of the Rent Act, for the reason that the right to reversion of the petitioner's landlord which was transferred to Sheshgiri by his getting the tenancy from the landlord was not created by a registered document. The observations, therefore, cannot be an authority for the construction of the word “landlord” in the subject and context of Sections 12 and 13 of the Rent Act.

    13. There is one more circumstance In this case. The so-called lease is only for a year. After the expiry of the year the petitioner's tenancy became admittedly, monthly tenancy, which is in no way superior to that of respondents 2 and 3. It is obvious that the attempt was to get round the provisions of the rent act and enable the petitioner to evict respondent No. 2 in an indirect manner. On the date when the suit was decided, its rights were not in any way superior to those of the respondents.

    14. There is thus no merit.

    15. Petition dismissed.

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    Comments

    M/S. Devji Keshavji & Co. v. Dahibai Bhailal Shah And Others Opponents.
    (Sep 23, 1969)