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AMICUS AI
Citation Codes
Neutral Citations
1987 INSC 188
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Section 13(j) and Section 13(i) (sic) of the Rent Act
  • Section 4 of the Rent Act
  • The Rent Act, 1956
  • Increase of Rent and Mortgage Interest (Restrictions) Act, 1920
  • Section 8 of the Rent Act
  • Section 14(1) of the Rent Act
  • Section 105 of the Transfer of Property Act
  • The Transfer of Property Act, 1882 (Section 105)
  • Section 13(1)(h) of the Rent Act
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section 9 of the Rent Act
  • Article 136 of the Constitution
  • Section 5, especially Section 5(b) of the Rent Act
  • The Rent Acts
  • Section 13(1)(a) of West Bengal Premises Tenancy Act, 1956
  • Section 17(1), Sections 17(2), and Section 17-B of the Rent Act
  • Sections 2(h) and 2(d) of the Rent Act
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Cites
Cited by
Citation Codes
Neutral Citations
1987 INSC 188
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Section 13(j) and Section 13(i) (sic) of the Rent Act
  • Section 4 of the Rent Act
  • The Rent Act, 1956
  • Increase of Rent and Mortgage Interest (Restrictions) Act, 1920
  • Section 8 of the Rent Act
  • Section 14(1) of the Rent Act
  • Section 105 of the Transfer of Property Act
  • The Transfer of Property Act, 1882 (Section 105)
  • Section 13(1)(h) of the Rent Act
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section 9 of the Rent Act
  • Article 136 of the Constitution
  • Section 5, especially Section 5(b) of the Rent Act
  • The Rent Acts
  • Section 13(1)(a) of West Bengal Premises Tenancy Act, 1956
  • Section 17(1), Sections 17(2), and Section 17-B of the Rent Act
  • Sections 2(h) and 2(d) of the Rent Act
Smart Summary

Factual and Procedural Background

The respondent landlady owns premises No. P-71, C.I.T Road, Scheme No. (IV) M, Calcutta. The appellant became a tenant in 1972 at a monthly rent of Rs 200 plus Rs 50 service charges. Alleging that the appellant had sub-let two of the four rooms to one Lalit Mohan Biswas for a tailoring business (and earlier to one Mritunjoy Mukherjee for a music school) without written consent and had converted residential premises to non-residential use, the respondent filed a suit for eviction under Sections 13(1)(a) and 13(1)(h) of the West Bengal Premises Tenancy Act, 1956.

The trial court decreed eviction on the ground of unlawful subletting and change of user. The Additional District Judge and, in second appeal, the Calcutta High Court affirmed those concurrent factual findings and maintained the decree. The appellant obtained special leave, leading to the present Supreme Court appeal.

Legal Issues Presented

  1. Whether the evidence established a sub-tenancy within the meaning of Section 13(1)(a) of the West Bengal Premises Tenancy Act, 1956.
  2. Whether services rendered by the alleged sub-tenant could constitute “rent” or “consideration” sufficient to create a sub-lease under the Rent Act.
  3. Whether the use of a sewing machine for tailoring amounted to a change of user from residential to non-residential under Section 13(1)(h) of the Rent Act.

Arguments of the Parties

Appellant (Tenant)

  • Lalit Mohan Biswas was given temporary shelter out of pity and charity, not exclusive possession of any part of the premises.
  • No rent, premium or other monetary consideration was charged; Biswas merely performed occasional sewing for the appellant’s family.
  • Absent exclusive possession and monetary consideration, the statutory ingredients of sub-tenancy were not met.
  • The presence of a sewing machine used within the household did not convert the residential premises into a commercial establishment.

Respondent (Landlady)

  • Two rooms had been sub-let to Lalit Mohan Biswas, who conducted a public tailoring business; customers frequented the premises.
  • The appellant had therefore parted with possession without written consent, violating Section 13(1)(a).
  • Running a tailoring shop in the premises constituted a non-residential use prohibited by Section 13(1)(h).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Smt Krishnawati v. Shri Hans Raj, (1974) 1 SCC 289 High Court should not interfere with concurrent findings of fact in second appeal unless a question of law arises. Reiterated the general rule but clarified that Supreme Court may interfere where essential factual ingredients are missing.
Associated Hotels of India Ltd. v. S.B. Sardar Ranjit Singh, AIR 1968 SC 933 Test for licence versus tenancy is control and exclusive possession. Used to frame the requirement that a sub-tenant must have exclusive possession of the demised portion.
Sachindra Nath Shah v. Santosh Kumar Bhattacharya, 1986 Supp SCC 657 Findings of fact ordinarily not disturbed unless basic facts are absent. Cited to justify interference where lower courts failed to find essential facts establishing sub-tenancy.
Variety Emporium v. V.R.M. Mohd. Ibrahim Naina, (1985) 1 SCC 251 Supreme Court’s duty to remedy manifest injustice despite concurrent findings. Supported the Court’s willingness to overturn lower-court findings when legally unsustainable.
Barnes v. Barratt, (1970) 2 All ER 483 (UK) Services without quantified monetary value cannot constitute “rent” under rent-control statutes. Analogous reasoning adopted to hold that services are not “consideration” for sub-tenancy under the West Bengal Act.
Hornsby v. Maynard, (1925) 1 KB 514 (UK) Rent restrictions operate only where rent is monetarily quantified. Cited indirectly through Barnes v. Barratt to reinforce the need for monetary rent.

Court's Reasoning and Analysis

Justice Sabyasachi Mukharji held that proof of sub-tenancy requires two indispensable elements: (i) exclusive possession by the alleged sub-tenant, and (ii) payment or promise of monetary rent or other legally cognisable consideration. A careful review of the pleadings and evidence revealed:

  • No allegation or proof that Lalit Mohan Biswas enjoyed exclusive possession of any demarcated portion over which the appellant retained no control.
  • No evidence of any monetary payment, premium or quantified consideration; at most, Biswas performed occasional sewing services for the appellant, which the Court ruled could not amount to “rent” under the Rent Act, having regard to Sections 2(d), 2(h), 4, 5, 8, 9, 13(j) and 17.
  • The English decisions in Barnes v. Barratt and Hornsby v. Maynard supported the view that unquantified services cannot constitute rent for the purposes of rent-control statutes.
  • Because at least one essential ingredient—exclusive possession or monetary rent—was never established by any court below, the concurrent findings of subletting were legally unsustainable. Under Variety Emporium, the Supreme Court is duty-bound to correct such manifest error.
  • Regarding change of user, the solitary sewing machine constituted part of the tenant’s household apparatus and did not establish a distinct commercial enterprise so as to invoke Section 13(1)(h).

Holding and Implications

Appeal Allowed; eviction decree set aside; suit for ejectment dismissed.

Consequences for the parties: the appellant remains in possession but must pay an increased interim rent of Rs 350 per month from 01-08-1987, with liberty to the landlady to seek standard rent determination; arrears to be cleared by 31-08-1987; no order as to costs.

Broader implications: The judgment clarifies that, under the West Bengal Premises Tenancy Act, a finding of sub-letting cannot rest solely on the presence of another occupant or the receipt of non-monetary services. Exclusive possession and monetary rent are mandatory components. The decision also underscores the Supreme Court’s readiness to overturn concurrent factual findings where the basic legal tests have been misapplied.

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    Dipak Banerjee v. Lilabati Chakraborty .

    Sabyasachi Mukharji, J.— This is an appeal by special leave from the judgment and order of the High Court of Calcutta dated 7-5-1982 dismissing the second appeal and passing a decree for eviction. The High Court refused to interfere with the concurrent findings of facts, inter alia, on subletting. The main question here in this appeal is whether in fact there was any subletting. The respondent is the owner of the Premises No. P-71, C.I.T Road, Scheme No. (iv)M, Calcutta and the appellant was a tenant at a monthly rent of Rs 200 plus service charge of Rs 50 according to English calendar month. It is alleged that the appellant was in arrear of rent for long time. For the purpose of this appeal as the decree was not passed on the ground of default it is not necessary to go into detail regarding the correctness of that allegation. The ground on which the suit proceeded and which resulted in this appeal is whether the defendant had sublet or parted with the possession of two rooms out of four to Lalit Mohan Biswas and he has established tailoring business there. Therefore, subletting without the written consent of the landlord either the whole or part of the building in violation of Section 13(1)(a) of West Bengal Premises Tenancy Act, 1956 (hereinafter called the “Rent Act”) and user for non-residential purpose of tailoring the premises let out for residential purposes, in violation of Section 13(1)(h) of the Rent Act are two offences alleged against the tenant. There was one Mritunjoy Mukherjee who opened a Music School there for more than four months prior thereto without the written consent of the landlady. Mr Mritunjoy Mukherjee is no longer in the picture and his case was not pressed any further.

    2. The main contention was whether the premises in question was sublet to Lalit Mohan Biswas who had established some tailoring business or not. There was evidence before the learned trial court and it is material in view of the contentions urged on the question of subletting to set out the same, of the plaintiff, the respondent herein who gave evidence and stated as under:

    “I am the owner of the suit property. The defendant is a tenant at a monthly rental of Rs 250 payable according to English calendar month. The defendant is a defaulter since July 1977. The defendant sublet one room to Lalit Mohan Biswas in December 1976. The subtenant has established tailoring business there. Customers visit his tailoring shop. Another room was sublet to Mritunjoy Mukherjee, who opened a Music School there.”

    3. It was further stated that notice had been given for terminating the tenancy. It was further stated in the evidence as under:

    “My wife Lilabati Chakraborty is the owner of the suit property. I do not know how much rent is collected by the defendant from the subtenants. I am not aware of the profits made by the subtenants. The defendants pay sum of Rs 200 plus Rs 50 as service charge. The defendant paid the arrear rents by instalments. I am at present receiving rents from the defendant. It is not a fact that Lalit Mohan Biswas is not a subtenant and trades on behalf of the defendant.”

    4. It appears that a suggestion was made that Lalit Mohan Biswas was not a subtenant, which was denied by the witness. There was however no suggestion that Lalit Mohan Biswas was in exclusive possession of any part of the premises in question. Sree Lalit Mohan Biswas did not give evidence in the witness box.

    5. There was also evidence that a sewing machine was used by Lalit Mohan Biswas; who owned the machine was not clear. From this evidence as above the learned trial judge came to the conclusion that there was evidence of a sewing machine being used. The learned Judge also came to the conclusion that Lalit Mohan Biswas was occupying the suit premises for tailoring business and he further came to the conclusion that it was for defendant to establish that Lalit Mohan Biswas, had not been inducted as a subtenant the moment his physical presence in the house was proved. According to learned trial judge the character and the conduct of the tenant suggested that he had sublet portion of the premises and it is for the tenant to prove that he had given shelter to a helpless man. It was further in evidence that Lalit Mohan Biswas was doing some sewing work for the tenant and he was also doing some independent works for others and it did come out in the evidence that he used to take meals with the tenant. The evidence of the tenant was that Lalit Mohan Biswas was allowed to occupy part of the premises due to pity and charity and further he was sewing in the house without any rent. He did some work for the tenant and his family members and for others. On this evidence the learned trial judge, in the absence of the evidence of Lalit Mohan Biswas, drew the inference that there was subtenancy in favour of Lalit Biswas. There was an appeal to the Additional District Judge, Alipore and he discussed the evidence and upheld the said finding. There was a further appeal before the High Court and the High Court also did not interfere with the findings of the courts below.

    6. In the premises the question arises whether the High Court was right in law. It is true that in second appeal no court, and in the instant case the High Court should not interfere with the concurrent findings of facts. It was rightly pointed out and it is well settled law by this Court not to interfere with the concurrent findings of facts. This was reiterated by this Court in Smt Krishnawati v. Hans Raj (1974) 1 SCC 289, AIR 1974 SC 280, (1974) 2 SCR 524 where this Court observed that on the concurrent finding of the fact where no question of law arises, the High Court should not interfere. It was further highlighted before us that the question of subtenancy in a situation like the present, is an inference drawn from a certain conduct. But in order to prove tenancy or subtenancy two ingredients had to be established, firstly the tenant must have exclusive right of possession or interest in the premises or part of the premises in question and secondly that right must be in lieu of payment of some compensation or rent. In Associated Hotels of India Ltd., Delhi v. S.B Sardar Ranjit Singh AIR 1968 SC 933, (1968) 2 SCR 548 this Court reiterated that on the question whether the occupier of a separate apartment in a premises was a licensee or a tenant, the test was whether the landlord had retained control over the apartment. Normally an occupier of an apartment in a hotel was in the position of licensee as the hotel-keeper retains the general control of the hotel including the apartment. But it is not a necessary inference of law that the occupier of an apartment in a hotel is a tenant. A hotel-keeper may run a first class hotel without subletting any part of it. Where the hotel-keeper retained no control over the apartment, the occupier was in the position of a tenant.

    7. The question in this case is whether the alleged subtenant was in exclusive possession of the part of the premises and whether the tenant had retained no control over that part of the premises. There is no evidence on the fact that the alleged subtenant was in exclusive occupation of any part of the premises over which the tenant had not retained any control at all. On this aspect neither was there any pleading nor any evidence at all. No court gave any finding on this aspect at all. In that view of the matter one essential ingredient necessary for a finding, the case of subtenancy has not been proved. If that is so, the trial court, the first appellate court and the High Court were in error in holding that the subtenancy was proved,

    8. Our attention is drawn to this Court's decision in Sachindra Nath Shah v. Santosh Kumar Bhattacharya 1986 Supp SCC 657, AIR 1987 SC 409 where paying guests were occupying a portion of the premises, this Court reiterated that finding of fact regarding those persons would not be interfered with. But where the finding has been arrived at without finding the basic facts, it cannot be sustained.

    9. There is another aspect of the matter i.e the payment of rent for subtenancy or consideration for subtenancy. Undoubtedly the alleged subtenant rendered certain services to the tenant but can the same be considered as rent under the Rent Act? Section 14(1) of the said Act prohibits subtenancy and it was pointed out before us that the receipt of service in lieu of the occupation of a part of the premises as a licensee did not amount to payment or receipt of rent. Subtenancy as such is not defined in the Act. The subtenancy under the Transfer of Property Act, 1882 is governed by Section 105 of the said Act and it defines subleases as a lease of immovable property, as a transfer of right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferer by the transferee, who accepts the transfer on such terms

    10. There is no clear evidence in this instant case as to what kind of sewing Lalit Mohan Biswas used to perform for the tenant; on the other hand, he did perform some work which could be considered to be in lieu of his right to occupy the portion of the premises; if so, this may be sublease in terms of Section 105 of the Transfer of Property Act. But is it in lieu of consideration as contemplated under the Rent Act? The question is, whether in the context of the provisions of Rent Act, services can be consideration for subtenancy? In other words whether in view of the provisions of the Rent Act services can be a good or any consideration for sublease is the question. We are of the opinion that it cannot be. See in this connection Section 4 of the Rent Act, and the different sub-sections of that section, Section 5, especially Section 5(b). These enjoin that excess over fair rent to be irrecoverable, put restriction on claim, demand or receipt of premium or other consideration. Section 8 is also relevant in this connection, see also Section 9. Sections 2(h) and 2(d) also indicate money consideration. Section 13(j) and Section 13(i) (sic) cannot be anything but money. Section 17(1) and Sections 17(2) and 17-B also militate against the concept that services in lieu of money can be consideration. It is however not possible to accept that services in lieu of the right of occupation would amount to receipt of rent under the Rent Act to create subtenancy. This frustrates and defeats the purpose of the Rent Act. Take for instance a case where a person renders services to the landlord in lieu of rent but this will completely erode the provisions of Rent Act and defeat the claims for services. Work performed by subtenants and the wages paid by doing certain kind of services may be in lieu of rent as in the case of agricultural tenancies. But in urban area in civilized times that cannot be so. The Rent Act, 1956 cannot be fitted into a position where the services can be rendered in exchange of the right of occupation. This question arose in England in the case of Barnes v. Barratt (1970) 2 All ER 483. There the defendants occupied part of the house which was let to C. The defendants had exclusive use of three rooms and a kitchen while C had similar use of two rooms The bathroom was shared. In return for their use of the abovementioned accommodation the defendants cleaned part of the house, cooked for him and paid electricity, gas and fuel bills for the whole of the house. On more than one occasion C refused to accept any payment of rent. The arrangement continued from 1951 until C's death in February 1969. The interests of C were then surrendered to the plaintiffs who were the landlords. The plaintiffs claimed possession of the whole house. The county court judge ruled that the defendants were tenants within the protection of the Rent Acts, and were not licensees, since the services rendered by defendants, according to the county court judge constituted rent. The Court of Appeal in England held that the defendants were granted personal privilege of occupation and not tenancy. It was further held that even if there was a tenancy, the Rent Acts did not apply to it, because there was no agreed monetary quantification of the rent nor any agreed method of quantification. Sachs, L.J, observed at pages 484-85 of the report as follows:

    “That the rendering of services can constitute rent at common law is well settled but whether it can, when there has been no quantification of their value, constitute rent under the Rent Acts is a different question. It was answered 45 years ago in Hornsby v. Maynard (1925) 1 KB 514 by a divisional court particularly experienced in dealing with the manifold problems then regularly being raised by the Increase of Rent and Mortgage Interest (Restrictions) Act, 1920, the Act from which so much of the later rent legislation is derived.”

    11. The Lord Justice further observed at page 485 as follows:

    “However, if one turns to look at the structure of the Rent Acts as a whole, it is equally clear that their provisions with regard to rent restriction can only, in practice, be operated if that interpretation is correct. The effective basis of the restrictions turns on there being quantified sums to which the provisions of the Acts can apply.”

    12. The structure of the Rent Act in the instant case, as indicated above would also indicate that. We hold therefore that second ingredient viz. rent agreed, was not there. And as such on the case pleaded and proved there could not have been any subtenancy.

    13. It is true that normally this Court is too reluctant to interfere with the concurrent findings of fact. But if the essential ingredients necessary for finding of a fact have not in fact been found by the courts below then this Court is bound to examine the question where injustice or wrong is done. In Variety Emporium v. V.R.M Mohd. Ibrahim Naina (1985) 1 SCC 251, AIR 1985 SC 207 Chandrachud, C.J observed that concurrent findings of lower courts have relevance on the question whether Supreme Court should exercise its jurisdiction under Article 136 of the Constitution to review a particular decision. That jurisdiction has to be exercised sparingly. But, that cannot mean that injustice must be perpetuated because it has been done two or three times in a case. The burden of showing that a concurrent decision of two or more courts or tribunals is manifestly unjust lies on the appellant. But once that burden is discharged, it is not only the right but the duty of the Supreme Court to remedy the injustice. As there is no finding of exclusive possession nor of any payment of money in exchange of the user of part of the premises the finding of subletting cannot in law be upheld.

    14. As the sewing machine in question was used as a part of the apparatus of the appellant in the facts of this case it could not be said to have been used separately or independently and cannot constitute a change of user as defined in Section 13(1)(h) of the Rent Act.

    15. We are unable to sustain the findings of the High Court and the courts below on the basis of the pleadings and evidence. The appeal is, therefore, allowed. The judgment and order of the High Court and the courts below are set aside and the claim for ejectment is dismissed. But the justice of the case demands increase of rent. The appellant has been in occupation of the premises in question since 1972 at a monthly rent of Rs 250 per month. In the present standard this is wholly inadequate for the premises in question. We direct that the appellant shall go on paying at least Rs 350 per month from 1-8-1987. If the standard rent is more than Rs 350 then the respondent will be at liberty to make any application for increasing the rent before the appropriate authority. Arrears if any, must be paid by 31-8-1987. There will be, however, no order as to costs.

    16. This Court records its appreciation to Sree Amul Ganguly, learned Counsel for the appellant and Sree Gobind Mukhoty, learned Counsel for the respondent for the valuable assistance rendered to this Court.

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    Dipak Banerjee v. Lilabati Chakraborty .
    (Jul 30, 1987)