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Madhusudan A. Mahale v. P.M Gidh
Structured Summary of the Opinion (Chandurkar, J.)
Factual and Procedural Background
The dispute concerns a single room occupied by the petitioner under a leave-and-licence agreement originally dated 31 July 1969 (in the name of the wife of respondent No.1/respondent No.2), renewed until 30 April 1972, after which the petitioner admittedly continued in occupation. Plaintiff No.1 (respondent No.1), who had shifted to Government accommodation but was to retire on 31 August 1975, served a letter on 24 July 1975 calling upon the petitioner to vacate on 31 August 1975. The petitioner did not vacate.
Plaintiff No.1 then filed an ejectment application under s. 41 of the Presidency Small Cause Court Act; the petitioner defended by claiming protection under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 ("Rent Act") on the basis that his licence subsisted on 1 February 1973. That ejectment application was rejected. The plaintiffs thereafter treated the petitioner as a tenant, served a fresh notice on 26 April 1976 claiming need for personal occupation, and, after the petitioner failed to vacate, filed a suit for eviction against him. The trial Court decreed eviction for the plaintiffs, finding the notice valid, the suit maintainable, the bona fide need of plaintiff No.1 proved, and that greater hardship would be caused to the plaintiffs if eviction were refused. The petitioner appealed to the Appeal Bench of the Small Cause Court at Bombay; the Appeal Bench affirmed the trial Court. The petitioner then filed this petition challenging the decree for eviction.
Legal Issues Presented
- Whether a suit for eviction filed by licensor-plaintiffs against a person who was an original licensee but deemed to be a tenant under s. 15A of the Rent Act is maintainable, where the licensor's tenancy (vis-à-vis the owner) had been terminated.
- Whether the definitions and interplay of s. 15A, s. 14(2) and the amended definition of 'landlord' in s. 5(3) of the Rent Act mean that the licensor (and not the owner) is the 'landlord' in relation to a licensee deemed to be a tenant.
- Whether the licensor (included in the definition of 'landlord') is prevented from invoking ss. 12 or 13 of the Rent Act to recover possession from a licensee deemed to be a tenant.
- Whether (on the facts) the notice terminating the deemed tenancy was valid and whether the trial Court's finding on hardship was correct.
Arguments of the Parties
Petitioner's Arguments
- The petitioner argued that the licensor (plaintiff No.1) had had his tenancy terminated in respect of the premises and therefore had no remaining interest; being out of possession, the plaintiff could not claim rights under the Rent Act beyond protection of possession as a statutory tenant.
- On that basis the petitioner contended the plaintiff was not within the definition of 'landlord' in s. 5(3) of the Rent Act and thus could not maintain a suit to recover possession from the petitioner (the original licensee) who claimed protection under s. 15A read with s. 14(2).
- The petitioner also challenged the validity of the notice terminating the deemed tenancy and contested the trial Court's findings on hardship.
Plaintiffs' / Respondents' Case (as reflected in the opinion)
- The plaintiffs treated the petitioner as a (deemed) tenant and served a notice on 26 April 1976 claiming the premises for personal occupation; they proceeded to file suit for eviction when the petitioner failed to vacate.
- The plaintiffs relied on the validity of their notice and on their bona fide requirement for personal occupation; the trial Court found in their favour on these points and on the issue of hardship.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Devji Keshavji & Co. v. Dahibai [1971] A.I.R. Bom. 285, S.C. 72 Bom. L.R. 267 | The observations that, in a case of derivative title from the landlord, a tenant of the landlord would not be a 'landlord' in relation to a sitting tenant for all purposes, and that for ss. 12 and 13 'landlord' means the person in whom the reversion is vested. | The court treated this decision as distinguishable on its facts (involving sub-tenancies and s. 14(1) facts) and observed that the concluding part of s. 5(3) (introduced in 1973 to include a licensor as 'landlord' in relation to a licensee deemed a tenant) did not fall for consideration in that case. Thus the decision did not preclude finding that a licensor (included by the 1973 amendment) is a 'landlord' able to sue a deemed tenant. |
| Hiralal v. Kasturbhai [1967] A.I.R. S.C. 1853 | Construction of the phrase "is determined for any reason" in s. 14(1): the interest of a contractual tenant comes to an end for s. 14 purposes only when he has lost the right to remain in possession (i.e., after termination followed by an order of ejection under s. 28 on grounds in s. 12 or s. 13). | The court applied this principle by analogy to s. 14(2), holding that the interest of a licensor who is a tenant is not 'determined' for s. 14(2) purposes until there is a decree for eviction of that licensor; therefore a protected licensee cannot claim to be a tenant of the owner under s. 14(2) unless the licensor's interest has been so determined. |
Court's Reasoning and Analysis
The Court's reasoning proceeded by statutory construction of s. 15A, s. 14(2) and the amended definition of 'landlord' in s. 5(3) of the Rent Act and by application of existing case law on when a tenant's interest is to be regarded as "determined".
Key steps in the analysis:
- The Court explained the effect of s. 15A (added by Maharashtra Act 17 of 1973): a licensee in possession of premises of not less than a room on 1 February 1973 is deemed to have become, for the purposes of the Rent Act, the tenant of the landlord. This gives a fictional status to the licensee with effect from that date.
- The amendment adding sub-section (2) to s. 14 (s. 14(2)) was considered: s. 14(2) operates only when the interest of the licensor (who is a tenant of the premises) is "determined for any reason"; then the licensee deemed a tenant under s. 15A shall be deemed to become the tenant of the landlord (i.e., the owner) on terms consistent with the Act.
- The Court examined the amendment to the definition of 'landlord' in s. 5(3), noting the concluding portion added in 1973 expressly includes, in respect of a licensee deemed to be a tenant by s. 15A, the licensor who gave the licence. The Court read this to mean that where s. 15A deems a licensee to be a tenant, the 'landlord' referred to in s. 15A is the licensor (not necessarily the owner).
- The Court distinguished the Devji Keshavji decision on its facts and observed that the 1973 amendment (which explicitly included the licensor within the definition of 'landlord') was not considered in that earlier decision; therefore its observations did not govern the present statutory scheme.
- Interpreting s. 14(2) in the light of Hiralal v. Kasturbhai, the Court held that "is determined for any reason" means that the licensor's interest is not taken to have ended for s. 14(2) purposes unless and until there is a decree for eviction (i.e., the contractual tenant has been ordered to be ejected under s. 28 on grounds in s. 12 or s. 13). Thus the licensor retains an interest until a decree for eviction is obtained.
- From the above, the Court concluded that the licensor, being included in the statutory definition of 'landlord' in relation to a licensee deemed to be a tenant, is entitled to invoke the provisions of the Rent Act (including ss. 12 and 13) to recover possession from the licensee/deemed tenant. Consequently, the petitioner's contention that the plaintiffs had no right to sue because their tenancy had been terminated and they were out of possession was rejected.
- On ancillary matters: the Court noted that notices (including notices under s. 106 of the Transfer of Property Act) are to be liberally construed; it accepted the trial Court's and appellate findings that the notice in question asked the petitioner to deliver possession and was valid (the notice itself had not been produced in the petition). On hardship the Court treated the appellate factual findings as binding and found no reason to disturb them: both Courts had found no independent evidence that the petitioner could not live with his son and that greater hardship would result to the plaintiffs if eviction were refused.
Holding and Implications
Holding: The petition is dismissed with costs.
Implications and immediate effect:
- The decree for eviction in favour of the plaintiffs (respondents) as affirmed by the Appeal Bench stands.
- The Court held that, under the statutory scheme as amended in 1973, a licensor who is included within the definition of 'landlord' (in relation to a licensee deemed to be a tenant by s. 15A) is not precluded from suing to recover possession; further, the licensor's interest is not "determined" for the purposes of s. 14(2) until there is a decree for eviction of the licensor/tenant.
- This opinion applies the existing statutory amendments and prior Supreme Court construction of "is determined for any reason" (in Hiralal) to the facts; the decision affirms the eviction decree in this case. The opinion does not state that a new binding precedent beyond these applications is being created; its reasoning is rooted in the text of the statute and applicable authorities described in the opinion.
No other parties, separate remedies or monetary orders are discussed beyond the dismissal of the petition with costs and the affirmation of the trial and appellate findings described above.
Chandurkar, J.:— The main question of law which has been argued in this petition on behalf of the petitioner, who was the original licensee of the premises in question, is whether the suit filed by his licensors in respect of the premises of which respondent No. 1 was alone the tenant and whose tenancy was already terminated by the landlord was not maintainable against him in view of the provisions of s. 15A read with s. 14(2) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as the “Rent Act”).
2. The facts out of which this petition arises are not in dispute. The subject-matter of the dispute is a room of which respondent No. 1 is the tenant. The owner of the premises is not a party to any of these proceedings. The petitioner was admittedly allowed to occupy the room on leave and licence basis by an agreement dated July 31, 1969 which was in the name of the wife of respondent No. 1 who is also respondent No. 2-plaintiff No. 2. From time to time this agreement came to be extended and was renewed up to April 30, 1972, but admittedly even thereafter the petitioner continued to occupy the premises. Plaintiff No. 1-tenant who had shifted to Government accommodation, however, was due to retire on August 31, 1975 from Government employment and he, therefore, called upon the defendant to vacate the premises on August 31, 1975 by a letter dated July 24, 1975. The petitioner having failed to vacate the premises, respondent No. 1-plaintiff No. 1 filed an ejectment application under s. 41 of the Presidency Small Cause Court Act. In those proceedings the petitioner took a defence that his licence was subsisting on February 1, 1973 and he was, therefore, entitled to the protection under the Rent Act. That application filed by plaintiff No. 1 came to be rejected. The plaintiffs treated the petitioner as a tenant and served a fresh notice calling upon the petitioner to vacate the premises on April 26, 1976 on the ground that the plaintiffs needed the premises for his personal occupation. The petitioner having failed to vacate the premises, a suit for eviction came to be filed against him by both the respondents. Apart from the challenge to the bona fide requirement of plaintiff No. 1, the maintainability of the suit was itself challenged. The trial Court passed a decree in favour of the plaintiffs. The notice was held to be valid; the suit was held to be maintainable; the requirement of plaintiff No. 1 was held to be proved and on the issue of hardship, the trial Court found that greater hardship would be caused to the plaintiffs if a decree for eviction was refused. It was found that the defendant was not keeping good health and even according to him, he had been maintained by his son Anil who was staying with him and the trial Court took the view that the defendant could reside with his other son who was at Dombivali. It was urged before the trial Court that the landlord of the premises, that is, the owner of the premises had himself terminated the tenancy of plaintiff No. 1 and, therefore, the present plaintiffs had no right or interest left in the premises which would enable him to file a suit for eviction against the petitioner. This contention was negatived by the trial Court. The petitioner filed an appeal before the Appeal Bench of the Small Cause Court at Bombay. The Appeal Bench confirmed the findings recorded by the trial Court and dismissed the appeal. This petition is now filed by the petitioner challenging the decree for eviction.
3. At the outset, the learned counsel appearing on behalf of the petitioner has raised a question of law which does not seem to have been canvassed before the Appeal Bench but was raised before the trial Court with regard to the maintainability of the suit. The contention is that the landlord of plaintiff No. 1 has terminated the tenancy of plaintiff No. 1 in respect of the suit premises; the plaintiff, therefore, has no interest left in the suit premises; the plaintiff being a statutory tenant, the only right which the Rent Act gave to him was the right to protect his possession but that since the plaintiff was already out of possession, he could claim no further right under the Act and consequently he was not covered by the definition of ‘landlord’ in s. 5(3) of the Rent Act so as to enable him to sue or recover back possession from the petitioner. It was vehemently stressed that all that is protected in the case of a statutory tenant was the status of irremovability and since plaintiff No. 1 was himself not in possession, there was no further status available to him under the Act.
4. The contention which is raised by the learned counsel for the petitioner requires consideration of the provisions of s. 15A read with s. 14(2) of the Rent Act and the definition of ‘landlord’ in s. 5(3) of the Rent Act. It is now well-known that the effect of inserting s. 15A in the Rent Act was that where there is a subsisting licence in respect of premises which are not less than a room and the licensee is in possession of such premises on February 1, 1973, the licensee is deemed to have become for the purposes of the Rent Act the tenant of the landlord in respect of premises or part thereof in his occupation. By the same Act, that is, maharashtra act 17 of 1973, by which s. 15A was added in the Rent Act, two simultaneous amendments at two other places came to be made. Sub-section (2) was added in s. 14 and the newly added provision reads as follows:
“Where the interest of a licensor, who is a tenant of any premises is determined for any reason, the licensee, who by section 15A is deemed to be, a tenant, shall, subject to the provisions of this Act, be deemed to become the tenant of the landlord, on the terms and conditions of the agreement consistent with the provisions of this Act.”
5. The other addition made by the same enactment, that is, maharashtra act 17 of 1973 is to be found in s. 5(3) where the definition of landlord has been extended. The definition of ‘landlord’ now reads as follows:
“‘landlord’ means any person who is for the time being, receiving, or entitled to receive, rent in respect of any premises whether on his own account or on account, or on behalf, or for the benefit of any other person or as a trustee, guardian, or receiver for any other person or who would so receive the rent or be entitled to receive the rent if the premises were let to a tenant; and includes any person not being a tenant who from time to time derives title under a landlord; and further includes in respect of his sub-tenant, a tenant who has sub-let any premises; and also includes in respect of a licensee deemed to be a tenant by section 15A, the licensor who has given such licence;…”
6. It is the underlined portion which has been added so as to include within the definition of the word ‘landlord’ the licensor who had given the licence to the licensee who is now by s. 15A deemed to be a tenant. If s. 14(2) and s. 15A are read in their proper perspective, it is apparent that they operate at different points of time. Section 15A operates with effect from February 1, 1973 in respect of persons who satisfy the conditions which are prescribed in s. 15A. The conditions are that there must be a licensee, he must be in occupation of premises or any part thereof which is not less than a room and if he satisfies these conditions, then he is deemed to have become the tenant of the landlord. A fictional status is thus given to a licensee with effect from February 1, 1973. Section 14(2) operates only when the interest of the licensor is determined.
7. Now, what is contended by Mr. Bafna is that the ‘landlord’ referred to in s. 15A is the landlord of the premises, that is, the owner of the premises in whom the right of reversion vests. The word ‘landlord’ has been defined in the Rent Act in s. 5(3). It is significant that the definition of landlord as it originally stood before it was amended by maharashtra act 17 of 1973 did not make any reference to the landlord of a licensee. It was only by amendment which was consequent upon the provisions of s. 15A being introduced in the Rent Act that the concluding part of the definition was added in the definition of landlord. By this newly added inclusive part, express provision is made by the Legislature to indicate who is the landlord in respect of a licensee deemed to be a tenant by s. 15A. The newly added portion includes in respect of a licensee who is deemed to be a tenant by s. 15A the licensor who has given such licence. It is the licensor of the licensee, who is now given a fictional status, who has been now included in the definition of landlord. This newly added provision, therefore, has reference only to the fictional status given to a licensee by the provision in s. 15A. In view of this express provision, where the licensor has been specifically included in the definition of a landlord by extending the definition, he alone will become the landlord for the purposes of s. 15A. Apart from this clear indication in the definition of ‘landlord’ the enactment of s. 14(2) also shows that the word ‘landlord’ in s. 15A has no reference to the owner of the premises. Section 14(2) provides that a licensee who is deemed to be a tenant by s. 15A is to be deemed to have become the tenant of the landlord if the interest of the licensor who is a tenant of the premises is determined. Therefore, the condition precedent for the licensee who is deemed, to be a tenant to get the status of a deemed tenant of the landlord referred to in s. 14(2) is that the interest of the licensor of the licensee must be determined. Section 14(2) also uses the word ‘landlord’. It is obviously used here in a sense different from the sense in which it is used in s. 15(2). While s. 15(2) deals with fictional status bestowed on a licensee and he is deemed to be a tenant of the licensor who is described as a landlord, s. 14(2) creates a direct relationship between the owner of the premises and the licensee it the intervening interest of the tenant who was the licensor has been determined. Privity is, therefore, created by s. 14(2) between the landlord, who for the purposes of s. 14(2) is a person other than the one covered by the concluding portion of the definition of ‘landlord’ added by maharashtra act 17 of 1973, and the original licensee who has by the operation of s. 15A been deemed to be a tenant of the licensor but is now deemed to be a tenant of the owner of the premises. It will, therefore, not be possible to construe the word ‘landlord’ in s. 15A as referring to the owner of the premises in whom the right of reversion vests. There is thus no difficulty in holding that even in a case where a licensee invoking the provisions of s. 15A claims to have become a tenant, his landlord is not the owner of the premises but his landlord is his licensor alone.
8. The next question which, therefore, arises is whether such a licensor who is now included in the definition of landlord is prevented from filing a suit for eviction against the licensee who is deemed to be his tenant. Apparently there is nothing in any of the provisions which can indicate that the licensor, who is a landlord vis-a-vis a person, who is deemed to be a tenant, cannot invoke the provisions of s. 12 or s. 13 of the Rent Act. What is, however, contended by Mr. Bafna is that it has been held in a decision of this Court in Devji Keshavji & Co. v. Dahibai . [1971] A.I.R Bom. 285, S.C 72 Bom. L.R 267., that though the word ‘landlord’ includes a person who is receiving or is entitled to receive rent, having regard to the words of s. 5(3), it is clear in the case of derivative title from the landlord, a tenant of the landlord would not be a landlord 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, and for the purposes of ss. 12 and 13, the ‘landlord’ means the person in whom the reversion is vested and not merely a right of possession of the premises as a tenant. The decision in Devji Keshavji's case is clearly distinguishable on facts. The facts of that case would show that the tenant of the premises had sub-let those premises to two persons. The petitioner was one of those two sub-tenants and the other one was respondent No. 2. The owner of the premises, respondent No. 1, filed an ejectment suit against the tenant. The petitioner who was a sub-tenant was a party to the suit. A decree was passed against the tenant, but the suit was dismissed against the petitioner because the landlord agreed to recognise the petitioner as direct tenant of the entire godown. Respondent No. 2 who was another sub-tenant had become a direct tenant of the landlord under s. 14 of the Bombay Rent Act. The petitioner who had obtained a direct lease from the landlord demanded rent from respondent No. 2 who had become a direct tenant by virtue of s. 14. The petitioner, therefore terminated the tenancy of respondent No. 2 and filed a suit for ejectment. Respondent No. 2 through its sole surviving partner, respondent No. 3, filed a declaratory suit against the petitioner and the owner of the premises for a declaration that the respondent No. 2 was a tenant of respondent No. 1 and they were liable to pay rent only to respondent No. 1 and the petitioner had no right to eject them. The suit came to be dismissed by the trial Court. In appeal the appellate Bench held that respondents Nos. 2 and 3 were the direct tenants of respondent No. 1 and that the petitioner had not become their landlord. The petitioner, therefore, filed a petition under art. 227 of the Constitution in which the question raised was whether by reason of the lease for a year, the petitioner became the landlord of respondents Nos. 2 and 3. It was on these facts that Patel, J. took the view that in the case of a derivative title from the landlord, the tenant of the landlord would not be for all purposes in relation to a sitting tenant a direct tenant of the landlord. The learned Judge further observed that for the purposes of ss. 12 and 13 the ‘landlord’ means a person in whom the reversion is vested and not merely a right to the possession of the premises as a tenant. The decision will thus show that what the Court was called upon to decide in that case was whether a person who claimed to be a tenant of the entire premises by virtue of a lease from the landlord could claim possession from a person who had by virtue of the provisions of s. 14(1) become direct tenant of the landlord. The observations made by the learned Judge must, therefore, be read in the light of the facts before him.
9. It must also be noticed that the concluding part of the definition which came to be introduced in 1973 did not fall for consideration before the learned Judge. Once the licensor of the licensee who claims to have become a deemed tenant by virtue of the provisions of s. 15A is included in the definition of landlord, it is difficult to see why as between the licensor and the licensee the right of reversion did not vest in the licensor. By virtue of the definition of ‘landlord’ the licensor would be entitled to invoke the provisions relating to the recovery of possession of the licensee. Assuming for a moment that the landlord had himself filed a suit for ejectment of the plaintiff, it is difficult to see how that suit would affect the right of the plaintiff vis-a-vis his deemed tenant who was the original licensee. As already pointed out s. 14(2) does not operate so as to make the licensee, who is deemed to be a tenant of the licensor, a deemed tenant of the landlord, namely, the owner of the premises unless the interest of the licensor is determined. If the licensor vis-a-vis the original owner is in his capacity of a tenant a contractual tenant, mere termination of his lease does not terminate his interest in the premises. He is entitled to remain in possession. In spite of the fact that in the case of a licensor referred to in s. 14(2) possession would not be with him and it would be with the licensee, the Legislature has still provided that the rights of the licensee qua the original landlord, that is, the owner of the premises would change into one of deemed tenancy only if the interest of the licensor is determined. The scheme of s. 14(1) and s. 14(2) is identical except that while s. 14(1) provides for the protected sub-tenant becoming a direct tenant of the landlord, s. 14(2) provides for a protected licensee becoming a deemed tenant of the landlord. In one case, it is the interest of the tenant which has to be determined, in the other case also it is the interest of the tenant who is described as a licensor which is to be determined.
10. Section 14(1) fell for consideration before the Supreme Court in Hiralal v. Kasturbhai . [1967] A.I.R S.C 1853., and the words “is determined for any reason” were construed by the Supreme Court as follows:
“The words ‘is determined for any reason’ in the context of the Act mean that where the interest of a tenant comes to an end completely, the pre-existing sub-tenant may, if the conditions of S. 14 are satisfied, be deemed to be a tenant of the landlord. The interest of a tenant who for purposes of S. 14 is a contractual tenant comes to an end completely only when he is not only no longer a contractual tenant but also when he has lost the right to remain in possession which S. 12 has given to him and is no longer even a statutory ten suit. In other words S. 14 would come into play in favour of the sub-tenant only after the tenancy of the contractual tenants has been determined by notice and the contractual tenant has been ordered to be ejected under S. 28 on any of the grounds in S. 12 or S. 13. Till that event happens or till he gives up the tenancy himself the interest of a tenant who may be a contractual tenant, for purposes of S. 14, cannot be said to have determined i.e come to an end completely in order to give rise to a tenancy between the pre-existing sub-tenant and the landlord.”
11. Thus in the context of s. 14(1) the Supreme Court has held that the interest of a contractual tenant is for the purposes of s. 14 determined only when after the termination of his tenancy he has been ordered to be ejected under s. 28 on any of the grounds in s. 12 or s. 13. The same principle will, in my view, apply for the purposes of construction of s. 14(2). The interest of a licensor who is a tenant of the premises is required to be determined before the licensee can claim to have become a direct tenant of the landlord. The interest cannot be said to be determined even for the purposes of s. 14(2) unless there is a decree for eviction of the tenant. It is only when there is a decree for eviction of a tenant that an occasion for the protected licensee under s. 15A to claim the status of a tenant of the landlord of the premises would arise. There is thus indication in s. 14(2) itself that the interest of the tenant or the licensor continues till there is a decree for eviction. It will not, therefore, be possible to accept the argument that merely because the licensor was not in possession of the premises, all his interest in the premises had ceased and that he was not entitled to sue his licensee for restoration of possession. It is not, therefore, possible to accept the argument that the suit filed by plaintiff No. 1 was misconceived.
12. The learned counsel then wanted to raise the questions with regard to the validity of notice and the hardship. It is well-known that even a notice under s. 106 of the Transfer of Property Act has to be liberally construed.
13. The notice in question clearly asked the petitioner to deliver possession. This notice has been held to be valid as terminating the deemed tenancy. I see no reason to take a different view, especially when the notice has not been produced in this petition.
14. On the question of hardship again, the finding is one of fact where both the Courts have held that there is no independent evidence to show that the petitioner is not on cordial relations with his son with whom, according to the Courts, it was open to him to go and stay.
15. These were the only questions which were argued before me. In the view which I have taken, this petition must fail and is dismissed with costs.
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