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Smart Summary

Factual and Procedural Background

The respondent-plaintiff owned a shop which he leased to petitioner No. 1-original defendant No. 1 on 12-1-1968 for a monthly rent of Rs. 125/-. One of the tenancy terms prohibited subletting, assigning, or transferring the premises. Defendant No. 1 conducted business as Vijay Traders but allegedly wound up the business in April 1973 and sublet the premises to defendant No. 2, who was then operating a hotel there. The plaintiff filed Regular Civil Suit No. 388 of 1973 seeking possession of the premises after terminating defendant No. 1’s tenancy and demanding vacant possession.

At trial, it was undisputed that defendant No. 1 was not in possession and defendant No. 2 was in possession at the suit’s commencement. Defendant No. 1 did not file a written statement but was examined as a witness for defendant No. 2. Defendant No. 2 claimed that defendant No. 1 vacated the premises in February 1973 and returned possession to the plaintiff, from whom defendant No. 2 claimed to have taken a lease on 1-3-1973. The trial judge disbelieved defendant No. 2’s evidence and found that the plaintiff had not leased the premises to defendant No. 2, granting a decree for eviction. On appeal, the appellate court upheld the trial court’s decision. The defendants then filed a revision application under Section 29(2) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (the "Rent Act").

Legal Issues Presented

  1. Whether the transfer of possession of the suit premises by defendant No. 1 to defendant No. 2 amounted to unlawful subletting under Section 13(1)(e) of the Rent Act.
  2. Whether the plaintiff was required to prove that the transfer to defendant No. 2 was for valuable consideration to establish unlawful subletting.
  3. Whether a transfer of possession without valuable consideration still falls within the scope of "transfer in any other manner" under Section 13(1)(e) of the Rent Act, entitling the landlord to possession.

Arguments of the Parties

Defendants' Arguments

  • Defendants contended that even if possession was transferred by defendant No. 1 to defendant No. 2, it did not constitute subletting as there was no proof of valuable consideration for the transfer.
  • They argued that neither the pleadings nor evidence showed the transfer was made for consideration, which is essential to prove unlawful subletting under Section 13(1)(e) of the Rent Act.
  • Reliance was placed on the decision in Dahiben v. Administrative Officer, which held that proving unlawful subletting requires evidence of exclusive possession and valuable consideration, which can be inferred but must be established.

Plaintiff's Arguments (as inferred from court’s discussion)

  • The plaintiff asserted that defendant No. 1 had unlawfully sublet or transferred possession of the premises to defendant No. 2 in breach of the tenancy terms.
  • The plaintiff denied having leased the premises to defendant No. 2 and maintained that the transfer was unauthorized and unlawful.
  • It was argued that valuable consideration for the transfer could be inferred from the circumstances, including the relationship between defendant No. 2 and one of the partners of defendant No. 1 and the explicit prohibition against transfer in the tenancy agreement.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Dahiben v. Administrative Officer, 21 GLR 90 Requirement to prove exclusive possession and valuable consideration to establish unlawful subletting under Section 13(1)(e) of the Rent Act. The court cited this precedent to emphasize that valuable consideration can be inferred from circumstances, supporting the inference of unlawful subletting in the present case.
Bhagwati Spg. & Wvg. v. New Cotton Mills, 20 GLR 932 Valuable consideration for subletting can be inferred from surrounding circumstances. Used to support the principle that even if explicit proof is lacking, consideration may be inferred, strengthening the court’s finding of unlawful subletting or transfer.

Court's Reasoning and Analysis

The court first acknowledged the tenancy term prohibiting subletting or transfer. It accepted the undisputed fact that defendant No. 1 had ceased possession and defendant No. 2 was in exclusive possession of the premises. The court analyzed the requirement under Section 13(1)(e) of the Rent Act, which prohibits unlawful subletting or transfer of the leased premises.

The court recognized that to prove unlawful subletting, two elements are generally necessary: exclusive possession by the sub-tenant and that the transfer was for valuable consideration. However, the court noted that valuable consideration may be inferred from circumstances, such as the nature of the relationship between the parties and the explicit prohibition in the tenancy agreement.

The court rejected the defendants’ contention that absence of direct proof of consideration negated unlawful subletting. It reasoned that even if valuable consideration could not conclusively be established, the transfer still amounted to a "transfer in any other manner" within the scope of Section 13(1)(e), which is broader than just subletting. This interpretation prevents rendering that part of the statute redundant.

Given the facts and the tenancy terms, the court inferred that defendant No. 1 had transferred his interest to defendant No. 2 unlawfully, entitling the plaintiff to possession.

Holding and Implications

The court discharged the rule, thereby upholding the eviction decree against the defendants.

This decision confirms that under Section 13(1)(e) of the Rent Act, a tenant’s transfer of possession to another person without landlord’s consent, even if not explicitly proven to be for consideration, can be regarded as unlawful subletting or transfer in any other manner, entitling the landlord to possession. The ruling reinforces the broad protective scope of the statute for landlords against unauthorized transfers. No new precedent was established beyond the application of existing principles.

    Harshachandra Narsibhai Patel And Others v. Ibrahim Haji Khubanbhai Opponant.

    G.T Nanavati, J.:— The respondent-original plaintiff is the owner of a shop which was let out by him to petitioner No. 1-original defendant No. 1, on a monthly rent of Rs. 125/-, on 12-1-1968. It was one of the terms of the tenancy not to sublet or assign or transfer the suit premises to anybody else. Defendant No. 1, after taking the suit premises on lease, carried on business therein in the name and, style of Vijay Traders. The case of the respondent-plaintiff is that defendant No. 1 wound up his business sometime in April, 1973 and sub-let the suit premises to defendant No. 2 who is at present running a hotel therein. On this basis, the petitioner filed Regular Civil Suit No. 388 of 1973 in the Court of the learned Civil Judge (Junior Division), Sankheda for recovering possession of the suit premises, after giving a notice to defendant No. 1 terminating his tenancy and calling upon him to hand over vacant and peaceful possession of the suit premises.

    2. It was not in dispute before the learned trial judge that defendant No. 1 was no longer in possession and that defendant No. 2 was in possession of the suit premises on the date of the suit. Defendant No. 1 did not file any written statement; but he was examined as a witness by defendant No. 2. The case of defendant No. 2 was that the suit premises were vacated by defendant No. 1 sometime in February, 1973 and possession thereof was handed over by him to the plaintiff. He then obtained the premises on lease from the plaintiff on 1-3-1973 at a monthly rent of Rs. 125/-. The learned trial judge believed the evidence of the plaintiff that he had not given the suit premises on lease to defendant No. 2; and he disbelieved the version of defendant No. 2 as it was not supported by any reliable evidence. He, therefore, passed a decree for eviction. Both the defendants jointly filed Regular Civil Appeal No. 200 of 1974 in the Court of the District Judge, Baroda. The learned Second Extra Assistant Judge who heard the said appeal, dismissed the same as he agreed with the finding recorded by the learned trial judge.

    3. Original defendants have, therefore, filed this revision application under Section 29(2) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereafter referred to as “the Rent Act”)….

    4. [Not reported. Only portions approved for reporting by High Court are reported.]

    5. It was next urged by Mr. Majmudar that even assuming that possession of the suit premises was transferred by defendant No. 1 to defendant No. 2, it cannot be said that the premises were sublet by him, as the plaintiff has failed to prove that the transfer was for some consideration. He pointed out that neither in the pleadings nor in the evidence, it is stated by the plaintiff that the suit premises were transferred by defendant No. 1 to defendant No. 2 for some consideration. He, therefore, urged that in absence of such evidence, it cannot be said that defendant No. 1 had sublet the suit premises to defendant No. 2. In support of his submission, he relied upon a decision of this Court in Dahiben v. Administrative Officer, 21 GLR page 90. It has been held in that case that in order to prove an act of unlawful sub-letting under Section 13(1)(e) of the Rent Act, it is necessary to prove two things; (1) exclusive possession of the suit premises or a part thereof by the sub-tenant and (2) that the transfer was for a valuable consideration. But even in that case also it has been observed that existence of valuable consideration may be proved either expressly or inferred from other circumstances. In Bhagwati Spg. & Wvg. v. New Cotton Mills 20 GLR, page 932 also, it is held that existence of valuable consideration can be inferred from other surrounding circumstances. It is further pointed out that in cases where the sub-tenant is a total stranger to the tenant and yet he is inducted in a part of the suit premises, then an inference can be drawn that the possession was transferred for valuable consideration. In both these cases, this Court was concerned only with the question as to what amounts to sub-letting. Moreover, it must be remembered that Section 13(1)(e) of the Rent Act is much wider and it is not confined merely to the acts of unlawful sub-letting. It also provides that if a tenant has assigned, or transferred in any other manner his interest in the premises taken on lease by him, then also the landlord will become entitled to a decree for possession of the said premises. The words “transfer in any other manner” are much wider and would include within their meaning and ambit a transfer made in favour of a relative or a known person, once it is proved that he has left the premises and the transferee is put in exclusive possession. To give these words a restricted meaning and equate such a transfer with subletting is to make that part of the sub-section redundant. The facts of this case clearly show that defendant No. 1 had transferred his interest, in the suit premises to defendant No. 2. If it is found that the premises were transferred for valuable consideration then it will certainly amount to sub-letting. Even if it is not possible to come to that conclusion, then also it amounts to a transfer in any other manner. There is no material on record to show that defendant No. 2 was in any manner related to, defendant No. 1. The evidence on record merely shows that he is the father-in-law of one of the partners of the firm. In view of the specific term in the rent note that defendant No. 1 was not entitled to assign his interest or part with possession of the suit premises in favour of anybody else it is very unlikely that he had transferred the suit premises to defendant No. 2 without taking any consideration from him. Existence of valuable consideration can certainly be inferred in this case; and, therefore, the act of defendant No. 1 can be regarded as unlawful sub-letting within the meaning of Section 13(1)(e) of the Rent Act. Assuming for the sake of argument that it is not possible to draw such an inference even then in my opinion, once it is established by the plaintiff that defendant No. 1 had transferred possession of the suit premises to defendant No. 2, and that thereafter defendant No. 2 was in exclusive possession, the said act would be covered by the later part of Section 13(1)(e). Thus, there being no substance in the second contention also, it deserves to be rejected.

    6. [Not reported. Only portions approved for reporting by High Court are reported.]

    7. [Not reported. Only portions approved for reporting by High Court are reported.]

    8. Rule discharged.

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    Comments

    Harshachandra Narsibhai Patel And Others v. Ibrahim Haji Khubanbhai Opponant.
    (Jul 10, 1984)