This revision petition arises out of proceedings before the House Rent Controller, Madras. The respondent-landlord filed an application, under S. 10 of Act XVIII of 1960, for eviction of the petitioner-tenant on the ground that the petitioner had sub-let the premises to various other unions who committed nuisance and acts of waste using the building for purposes other than that for which it was leased, and also on the ground that the landlord required the portion bona fide for his own use and occupation as additional accommodation. The petitioner is the Petroleum Workers Union, represented by the General Secretary. According to the respondent landlord, contrary to the terms of the tenancy, the petitioner union used to allow its sister unions to conduct their meetings, that such meetings were noisy and stormy causing nuisance to the occupiers of the other portions of the premises, and that they had sublet the premises to the other unions collecting rents from them. The other ground alleged by the landlord was that the portion in the occupation of the petitioner was required for additional accommodation for the various purposes of the business since the building which they till then occupied had become dilapidated and had to be pulled down.
The petitioner herein resisted the petition, on the ground that the original tenancy was in the name of Standard Vacuum Employees Union and after amalgamation with the Caltex Employees Union they were known as the Petroleum Workers Union, that the respondent herein was aware of the several changes, and that the landlord was also aware that the tenancy was taken nominally in the name of the Standard Vacuum Employees Union while in fact it was to cover various other unions which had their registered office at the premises. The tenant also alleged that they had a right to conduct the meetings as part of the tenancy, that the meetings were conducted with a sense of decorum and discipline and that it was incorrect to say that there was nuisance or act of waste. Finally the petitioner alleged that the premises occupied by them would be totally unsuited for the occupation of the petitioner. On these pleadings the parties went to trial before the Rent Controller, Madras.
The two important questions that arose before the Rent Controller and before the appellate authority were whether the petitioner sublet the premises in their occupation and whether the respondent-landlord required the premises for his own use and occupation. Both the Rent Controller as well as the appellate authority found that there was a case of subletting by the tenant and that the respondent required the portion occupied by the tenant for additional accommodation.
Against the order of eviction by the Courts below, the tenant union has preferred this revision petition. The important points that arise for consideration, on the facts alleged in the petition and on the evidence adduced before the Rent Controller, are whether there is a case of subletting and whether the landlord requires the portion in the occupation of the tenant for his own use as additional accommodation.
A sub-lease is a demise by a lessee for a lesser term than he himself has. Every lessee, however short his term may be may make a sub-lease unless he is refrained by the contract of the tenancy from subletting. If the demise is for the whole term or for a period beyond the term, it amounts to assignment. If the lessee divests himself he becomes a stranger to the demised property and he has no right to have possession delivered upto him. It is true that a covenant against subletting will restrain the assignment, but a mere covenant against subletting does not prohibit under-letting a part of the premises. As long as the lessee remains in possession, he may permit another person to use the demised premises without committing a breach of covenant, namely, not to assign, underlet or part with the possession of the demised premises. In the Court of Appeal, as early as 1897, a case of landlord and tenant was decided. That case, Peebles v. Grosthwaite(1), is frequently cited in almost all the text books, whenever a question arises when the lessee in possession of the premises allows another person to be in possession. In that case, the plaintiff took a lease of a building. The lease contained a proviso for re-entry by the lessors in case of a breach of the lessee's covenants, and one of those covenants was that the plaintiff should not assign, underlet or part with the possession of the demised premises without the previous licence in writing of the lessors. After the original plaintiff's death, his executors sold the premises and business to a limited company. The property was not assigned and a licence to assign or part with the possession was obtained from the lessors. When it was contended that there was a breach of the covenant, Lord Justice Lindley said:
“No doubt they (executors of the lessee) let the company into possession, but they did not part with the possession themselves, and so long as it was true in fact that the lessees had not parted with possession they had committed no breach of the covenant.”
The principle laid down by Lord Justice Lindley has been consistently followed in almost all the cases arising in the Court of Appeal and House of Lords. In Jackson v. Simon(2), the proprietor of a night-club who was carrying on business beneath the basement of a shop requested the lessee of the ground-floor to give him permission to use the front portion of the shop between the hours 10-30 p.m to 2 a.m for sale of tickets and admission to the club. In an action for breach of covenant, Justice Romer observed at page 380:
“If the arrangement constituted an underletting it must have conferred upon Mr. Barren some estate or interest in the land, and this, in my opinion, was not the effect of the arrangement. All that was conferred upon Mr. Barren was, as it seems to me, a mere privilege or licence to use a part of the demised premises The defendant moreover retained the legal possession of the whole of the premises at all material times”
Considering the various covenants, Romer, J., observed at page 383 thus:
“A covenant against assigning the demised premises, a covenant against under letting the demised premises, and a covenant against parting with the possession of the demised premises are therefore three distinot covenants, though all belonging to the same class, and if there be any other method of disposing of the demised premises that would not amount to an assignment, under letting, or parting with possession In the same way, a covenant agaist sharing the possession is another distinct covenant, for, as already pointed out, a covenant against parting with possession of the demised premiess is not broken by sharing the possession with another.”
In Chaplin v. Smith, also a leading case of the subject of covenant, the lessee assigned his business to a company of which he was the managing director and in which he held a controlling interest. Subsequently a second company was formed of which the lessee was the managing director and which took over the business, assets and liabilities of the first company. When the plaintiff claimed possession of the land for breach of a covenant, following the principles laid down in the cases mentioned supra, Warrington, L.J, observed at page 209:
“On these facts, did the appellant part with possession of the premises? Certainly he never meant to do so. Must he nevertheless be held in law to have done so? In the absence of authority I should say that a man may abstain from parting with possession of premises although he allows another to use them, and that then he does not commit a breach of this covenant.”
In Stening v. Abrahams, where the lessee allowed another to erect an advertisement hoarding against the front wall of the lessee's house, Farewell, J., observed at page 473:
“A lessee cannot be said to part with the possession of any part of the premises unless his agreement with his licensee wholly ousts from the legal possession of that part. If there is anything in the nature of a right to concurrent user there is no parting with possession.”
Fea on Landlord and Tenant, 6th Edn., at page 323 summarised the law on the subject in the following words:
“The mere act of letting other persons into possession by the tenant, and permitting them to use the premises for their own purposes, is not, so long as he retains the legal possession, himself, a breach of the covenant.”
As far as our High Court is concerned, in G. Rangamannar v. Desu Rangiah(3), a lessee was carrying on business in a rented premises and he entered into a partnership with another for carrying on business in onions. When the landlord started proceedings against the tenant on the ground that the lessee had sublet the premises to another firm, Subba Rao. J., in a well considered judgment, after reviewing the English cases cited above, observed at page 183.
“The mere fact that another is allowed to use the premises while the lessee retains the legal possession is not enough to create a sub lease…… Therefore to create a lease or sub lease a right to exclusive possession and enjoyment of the property should be confer red on another.”
Following the principles laid down in the cases cited, I have to hold, contrary to the finding of the Courts below, that the petitioner-tenant never parted with the legal possession to the other sister Unions, even though they gave them permission to hold their meetings and to use the premises. This would not certainly amount to sub-letting in the law of the landlord and tenant.
In regard to nuisance alleged by the landlord, there is not much of a discussion or evidence adduced to prove that there was nuisance or acts of waste committed by the petitioner-Union.
In regard to additional accommodation required by the landlord it is necessary to state some more facts. The suit premises has two entrances; one in Angappa Naicken St., and the other in Linghi Chetti St. At the time of taking the proceedings, the respondent stated in the petition that the portion of the building in their occupation had become dilapidated and had to be pulled down and that thereforeit had become necessary to require the portion under the occupation of the petitioner-Union. The respondent specifically stated then that the additional accommodation was for the various purposes of their business. But when P.W 1, a partner of the respondent firm, came into the witness box, he said that the portion of the same building had been pulled down for re-construction before filing of the petition, that a part of it had been re-constructed just to accommodate their office, that they were residing there in an uncomfortable stage and that they wanted to store hardware and household furniture belonging to them. When P.W 1 was recalled and cross-examined, he stated that one of the big rooms was occupied by his brother, that they had stored their samans like domestic furniture in the other three rooms and that they wanted the petitioner's portion of the premises for their domestic and residential purposes. Now learned Counsel for the petitioner contended before me that in the original petition the respondent wanted the portion for their business purposes but in their depositions they had stated that they required the portion for domestic and residential purposes. In such a case, it is the duty of the Rent Controller to ascertain the reasonableness and the bona fides of the landlord as on the date of the hearing of the petition and not as on the date of the institution of the petition. As observed by Lush, J., in Harcourt v. Lowe, the only time which is necessary to consider in order to apply the provisions of the Act is the time when the Court is asked to make the order. Similarly in Burman v. Woods, Somerwell, L.J observed:
“The Court has to direct its mind to the date of the proceedings and the evidence which it hears at the time, and clearly that it is the date on which its order is drawn up…” In that case, it was also observed that the altered circumstances must be taken into consideration in moulding the order. What is reasonable requirement is, of course, a question of fact and it depends upon the circumstances of each case. It connotes something more than desire although much less than absolute necessity, and the landlord must have a genuine present need for the portion. A man may say that such and such are his requirements, but the Court must objectively consider the full circumstances of the case. In the ins tant case, I feel that the Courts below have not properly concentrated upon the question of additional accommodation required by the respondent herein, and, for that purpose, I remand the application to the House Rent Controller, for a decision on that point. The Rent Controller could make an inspection of the premises, if necessary. The parties may be permitted to amend their pleadings if necessary and also adduce fresh evidence on this aspect of the case. The House Rent Controller will then dispose of the application on its merits.
In the result the civil revision petition is partly allowed. In the circumstances, each party will bear its costs throughout.
V.C.S
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