REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.    3147          OF 2011 (Arising out of S.L.P.( C) No.19522 of 2008)

Board of Trustees of the Port of Mumbai    …..Appellant

Versus

M/s Byramjee Jeejeebhoy Pvt.Ltd. & Anr.                             …Respondents

WITH

CIVIL APPEAL NO.   3148            OF 2011 (Arising out of S.L.P.( C) No.36246 of 2010)

M/s Wadi Bunder Cotton Press Company               ….Appellant

Versus

M/s Byramjee Jeejeebhoy Pvt.Ltd. & Anr.                             …Respondents  

J U D G M E N T

AFTAB ALAM,J.

1. Leave granted.

2. These  two  appeals,  though  coming  from  separate  judgments  and  

orders  passed  by  the  Bombay  High  Court,  arise  from the  same  suit  for  

eviction  instituted  by  the  landlord  which  figures  in  both  the  appeals  as  

respondent no.1. The appellant in the appeal arising from SLP (C) No.19522  

of  2008  is  the  Board  of  Trustees  of  the  Port  of  Mumbai  (hereinafter  

“Mumbai Port Trust”). It was the sole defendant, described as the tenant, in  

the suit for eviction as it was originally filed. Later on, by an amendment  

M/s Wadi Bunder Cotton Press Company (hereinafter “WBC Company”),  

the appellant in the appeal arising from SLP (C) No.36246 of 2010, was  

joined in as defendant no.2 as the sub-tenant under the defendant, the Board  

of Trustees of the Port of Mumbai. From that stage, Mumbai Port Trust, the  

principal tenant and WBC Company, the sub-tenant came to be arrayed in  

the suit as defendants 1 & 2 respectively.  

3. The plaintiff respondent no.1 filed a suit in the court of Small Causes  

at Bombay registered as RAE suit no.83/197 of 1993, seeking  inter alia a  

decree of eviction, against the defendants from the suit land admeasuring  

about  3273.394  square  yards,  situated  at  Santacruz  Estate,  Mazgaon,  

Bombay. According to the plaintiff-respondent no.1, the suit land was given  

to defendant no.1 on lease for 999 (nine hundred and ninety nine) years by  

the plaintiff’s predecessors-in-interest  under a registered lease deed dated  

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May 10, 18861. In terms of the lease deed, defendant no.1, the lessee had the  

right to renewal but it had no right to assign the leased out land to any third  

party.  As  a  matter  of  fact,  there  was  an  express  prohibition  against  

assignment in clause 4 of the lease deed which is as under:

“4. That they the said Trustees their successors or  

assigns  will  not  (subject  never  the  less  as  

hereinafter mentioned) assign the said premises or  

any part thereof without the licence in writing of  

the  lessors  their  heirs  executors  administrators  

assigns first obtained.”

[The only exception to the above prohibition was the right given to the  

lessee to part with and dedicate some portions, up to a specified limit, from  

the aggregate of the lands covered by the lease for public roads and ways  

with the consent of the lessors. But in that case the lessors agreed to give  

such consent upon the reasonable applications of the lessee from time to  

time and within the limit (prescribed under the lease).]  

4. The plaintiffs sought eviction of the defendants on grounds of breach  

of the terms and conditions of the lease dated May 10, 1886, mainly the  

condition against assignment of any portion of the lease hold land to any  

1 As a result  of acquisition of a part  of the leasehold lands and for other  reasons,  the 1886 lease was  followed by subsequent leases in which the area of the lease hold lands was considerably reduced. But the  stipulation against assignment on which the case of the plaintiff-respondent is based remained unaltered. In  the pleadings of the parties and the judgments of the courts the reference is made to the above quoted  clause in the 1886 deed. It is, therefore, unnecessary to go into the details of the subsequent leases.  

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third party. In paragraph 4 of the plaint as it was originally filed it was stated  

that the defendant had committed breach of several terms and conditions of  

the lease and had unlawfully and illegally parted with the possession of the  

lease hold property without any licence in writing from the lessor. It was  

further  stated  that  by  an  advocate’s  notice  dated  December  7,  1991  the  

plaintiff had put on record the several acts of omission and commission by  

the defendant that were in breach of the terms and conditions of the lease  

and for that reason had determined and forfeited the lease. Despite the notice  

the defendant did not remedy but persisted in the breach of the terms and  

conditions of the lease. It had, therefore, lost the protection of the Bombay  

Rents,  Hotel and Lodging House Rates Control Act, 1947 (for short “the  

Bombay Rent Act”) and had made itself liable to quit the suit premises and  

hand over its  vacant,  peaceful  possession to the plaintiff.   It  was further  

alleged in paragraph 7 of the plaint that in consideration of a large sum as  

rent/compensation  the defendant  had created sub-leases  in favour of sub-

lessees/tenants and had unlawfully, clandestinely and surreptitiously parted  

with possession of the lease-hold land in favour of the sub-lessees/tenants. In  

the transaction, the lessee, defendant no.1, had made huge profits. It was,  

therefore,  liable  to eviction for committing breach of the covenant in the  

lease deed of May 10, 1886.  In paragraph 9 of the plaint,  injunction was  

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sought against the defendant restraining it  from sub-letting and/or parting  

with the possession of the suit land in any manner whatsoever and in that  

connection it was once again stated that the defendant had no right to assign  

any part  of the suit  land without  the licence in writing of the lessors.  In  

paragraph 12 of the plaint it  was stated that the suit  was for recovery of  

possession of the suit land to which the  Bombay Act, 1947 was applicable  

and the claim of the plaintiff fell within section 28 of the Act. Hence, the  

court of Small Causes, Bombay, had the exclusive jurisdiction to try the suit.  

5. Later on, after the sub-lessee was joined in as the second defendant,  

paragraph  7A  and  7B  were  added  by  an  amendment  in  the  plaint.  In  

paragraph 7A, reiterating the earlier allegation it was said that in respect of  

the suit land, defendant no.1 had unlawfully created sub-lease in favour of  

defendant  no.2 and had wrongfully  inducted defendant  no.2 into the  suit  

land. Defendant no.1 had thereby committed breach of the lease and had also  

violated the provisions of the Transfer of Property Act, and also the terms of  

tenancy. In paragraph 7B it was submitted that the plaintiff was entitled to a  

decree of eviction against defendant no.1 as it had unlawfully created sub-

lease and/or given sub-tenancy and/or transferred its interest in the suit land  

to defendant no.2 and defendant no.2 was equally liable to be evicted and  

would be equally bound by the decree as it had no independent right, title or  

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interest in the suit land and it had been unlawfully and illegally inducted into  

the suit land.

6. Defendant no.1 in its written statement, denied having committed any  

breach of the terms and conditions of the lease deed dated May 10, 1886.  

The  defendant  denied  that  it  had  unlawfully  and  illegally  parted  with  

possession of the property in breach of the covenant in the lease deed and/or  

in the manner  as alleged by the plaintiff.  In paragraph 14 of  the written  

statement it was stated that the advocate’s notice sent to the defendant at the  

instance  of  the  plaintiff  was  quite  invalid.  In  different  paragraphs  of  the  

notice,  the area of the lease hold lands was stated differently. The notice  

gave  wrong  description  of  the  lease  hold  property;  it  was  vague,  

unintelligible and suffered from serious legal and factual infirmities. It was  

not possible to act upon it or to even give any proper reply to it. On account  

of its vagueness it was not possible for the defendant to know what was the  

breach alleged and whether it was capable of being remedied in terms of  

section 114-A of the Transfer of Property Act. The defendant denied that it  

had either surreptitiously or clandestinely parted with possession by creating  

sub-lease in respect of the leasehold land in favour of a third party in the  

manner  as  alleged  by  the  plaintiff.  The  defendant  further  denied  having  

demanded huge rent/compensation from the alleged sub-lessees in respect of  

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the building and the suit land, making huge profits. The defendant denied  

any breach of clause 4 of the lease deed. According to the defendant, clause  

4 of the lease deed enjoined against assignment. There was no covenant in  

the lease deed prohibiting sub-lease.  The defendant stated that  it  had not  

“assigned” the premises or any part thereof as alleged by the plaintiff and  

had not committed any breach of clause 4 of the lease deed. The plaintiff’s  

allegation was based on a misreading and misinterpretation of clause 4 of the  

lease deed. Reiterating that there was no assignment of the leasehold interest  

the defendant once again denied that it had committed any breach of clause 4  

of the deed in the manner as alleged by the plaintiff. The defendant further  

stated that the plaint nowhere stated when or in whose favour the alleged  

breach was committed. The allegations made by the plaintiff were imaginary  

and fanciful,  the averments in the plaint  were quite vague and devoid of  

particulars and did not disclose the precise breach of the lease of which it  

was being accused. .  

7. After the impleadment of defendant no.2 in the suit, defendant no.1  

filed an additional written statement. In paragraph 3 of the additional written  

statement, it took the plea that defendant no.2 was neither a necessary party  

nor a proper party to be joined in the suit and its addition had made the suit  

liable to be dismissed for misjoinder of parties. In paragraph 4, in answer to  

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paragraph  7A  of  the  plaint,  defendant  no.1  denied  that  the  sub-lease  in  

respect of the suit land was created unlawfully in favour of defendant no.2. It  

further denied that there was any breach of the lease or any violation of the  

provisions  of  the  Transfer  of  Property  Act.  The defendant  stated  that  no  

agreement  of  terms  of  tenancy  was  executed  and  hence,  there  was  no  

question of violation of any terms of tenancy as alleged by the plaintiff. In  

paragraph 5 of the additional written statement, in answer to paragraph 7B of  

the plaint, defendant no.1 denied that it had illegally and unlawfully created  

sub-lease and/or given sub-tenancy and/or transferred its interest in the suit  

land to defendant no.2. It denied that defendant no.2 was an unlawful and  

illegal sub-lessee/licensee.    

8. Defendant No.2,  M/s WBC Company, in its written statement took  

the plea that the plaintiff’s suit was barred by limitation and it was further  

liable to be dismissed because the plaintiff  had not  set  out  any cause of  

action against  defendant no.2. The second defendant denied that the sub-

lease created by defendant no.1 in its favour was unlawful or in breach of the  

lease or in violation of the provisions of the Transfer of Property Act and the  

terms  of  tenancy.  The  main  thrust  of  the  case  of  the  second  defendant,  

however, was that it had been in physical possession of the suit premises for  

several years prior to 1963 and this fact was fully within the knowledge of  

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the  plaintiff.  The  second defendant  stated  that  in  October,  1977 the  suit  

premises was inspected by a representative of the plaintiff  along with an  

architect and even at that time, the answering defendant was found to be in  

physical possession of the suit premises and the fact was acknowledged in a  

letter  of  November  7,  1977,  written  at  the  instance  of  the  plaintiff.  The  

plaintiff was, therefore, fully aware that defendant no.2 was in occupation of  

the suit premises long before the filing of the suit. The suit was, thus, clearly  

barred by limitation. Giving reply to the statement made in paragraph 9 of  

the written statement  the second  defendant  denied that  the plaintiff  was  

entitled  to  a  decree  of  eviction  against  defendant  no.1  for  inducting  the  

answering  defendant  as  a  sub-lessee/sub-tenant  into  the  suit  land.  The  

second  defendant  denied  that  it  was  an  unlawful  and  illegal  sub-  

lessee/licensee/inductee and it had no independent right, title or interest in  

the  suit  land  and  hence,  it  too  would  be  bound  by  the  decree  against  

defendant no.1. In this connection, the second defendant further stated that  

by a registered lease deed dated June 17, 1978 executed by defendant no.1  

an  area  of  4596.47sq.mts.  (that  included  the  suit  land  together  with  

building(s) standing thereon) had been demised in its favour. The sub-lease  

was for the term of 20 years 8 months and 14 days commencing from June  

15,  1964 with  the  clear  acknowledgement  that  the  sub-lessee  (defendant  

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no.2) was in occupation and possession of the demised property from that  

date. The second defendant further stated that even before the filing of the  

plaintiff’s suit, defendant no.1 had filed L.E. & C. suit no.271/309 of 1987  

seeking its  eviction from the demised premises and the suit  was pending  

before the same court, i.e. the court of Small Causes, Bombay. In paragraph  

11  of  the  written  statement,  in  answer  to  paragraph  12  of  the  plaint,  

defendant  no.2  (quite  strangely!)  denied  that  the  suit  was  between  the  

landlord and tenant, relating to the possession of the suit land to which the  

Bombay Rent Act was applicable.  

9. On the basis of the pleadings of the parties, the trial court framed as  

many as 12 issues and later on, 3 additional issues. But of relevance for the  

present are issues 4, 5 and 7 which are as under:

4. Whether the plaintiffs prove that, the defendants  have committed breaches of terms and conditions  of lease as alleged in para 4 (a) to (d) of the plaint?

5. Whether the plaintiffs prove that that they have  validly  determined  and  forfeited  the  lease  by  a  notice dated 7th December 1991?  

7.  Whether  the  defendants  prove  that  the  suit  is  barred by law of limitation?  

Of the three additional issues, additional issue no.1 was allied to issue  

no.4  and  additional  issue  no.3  to  issue  no.7  as  quoted  above.  

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Additional issue no.2 which was independent of the earlier issues was  

as under:

“2. Whether the defendant no.2 is bound by decree  against the defendant no.1?”

10. The trial court answered issue nos.4 and 5 and additional issue nos.1  

and 2 in the affirmative.  And issue no.7 and additional issue no.3 in the  

negative.

11. Discussing the question of breach of the terms and conditions of the  

lease deed dated May 10, 1886 by defendant no.1, the trial court held that  

the plaintiff had failed to establish the breach of any other term of the lease  

but had successfully proved the breach of the covenant against assignment of  

the leasehold property to a third party. The trial court pointed out, that under  

clause 4 of the lease deed defendant no.1 was not supposed to part  with  

possession  of  the  leasehold  or  to  induct  any  third  person  into  the  suit  

property unless it obtained a licence in writing from the lessor, the plaintiff.  

There was no material  to show that it  had obtained any licence from the  

plaintiff  before  parting  with  possession  of  the  leasehold  in  favour  of  

defendant no.2, the sub-lessee. The trial court found it was undeniable that  

defendant  no.1  had  inducted  defendant  no.2  into  the  suit  premises  by  

executing a sub-lease on June 17, 1978 for a term of 20 years 8 months and  

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14 days. The only plea raised on behalf of the defendants was that defendant  

no.2 was inducted over the suit premises in full knowledge of the plaintiff  

and defendant no.2 was in possession of and hence, it could not be said that  

the induction of defendant no.2 into the suit premises was illegal. The trial  

court also observed that for inducting defendant no.2 into the suit premises,  

defendant no.1 had charged compensation higher than the rent/compensation  

it  paid  to  the  plaintiff.  The  act  of  defendant  no.1  was,  therefore,  

undoubtedly, contrary to clause 4 of the original lease deed and defendant  

no.1 was guilty of committing breach of the covenant as contained in clause  

4 of the lease deed. The trial  court  also upheld the validity of the notice  

issued by the plaintiff to defendant no.1 determining and forfeiting the lease.  

It further held that the transaction between the plaintiff and defendant no.1  

was covered by the provisions of the Transfer of Property Act and, therefore,  

by no stretch of imagination the suit could be said to be barred by limitation.  

Dealing with the question of the decree being binding on defendant no.2, the  

trial court observed that once it was held that the sub-lease created in favour  

of defendant no.2 was unlawful and illegal,  the decree of eviction passed  

against the lessee would fully bind the sub-lessee. The trial court decreed the  

suit by judgment and order dated June 12, 2002.

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12. Against  the  judgment  and  order  passed  by  the  trial  court,  both  

defendant nos. 1 and 2 filed their separate appeals (no.741 and 742 of 2002  

respectively).  The  appellate  court  formulated  a  number  of  points  for  its  

consideration of  which point  no.2 related to the breach of the terms and  

conditions of the lease by defendant no.1 and point nos.4 and 5 related to the  

protection that might be available to defendant no.2 under section 15(1) of  

the Bombay Rent Act, 1947 and whether defendant no.2 would be bound by  

the  decree  of  eviction  passed  against  defendant  no.1.  Dealing  with  the  

breach of the terms of the tenancy by defendant no.1, the appeal court held  

the evidence on record showed that there was no written permission from the  

plaintiff  to  defendant  no.1  for  sub-letting  the  lease  hold  in  favour  of  

defendant no.2 in the year 1978. The appellate court observed that on behalf  

of the defendants,  it  was sought to be shown that  defendant  no.2 was in  

possession of the premises from before February 1, 1973, and, therefore,  

they were protected by the provisions of Bombay Rent Act, 1947. It went to  

the extent of saying that the evidence on record showed that the possession  

of the suit premises by defendant no.2 from before February 1, 1973 was  

admitted  but since the premises belonged to defendant no.1 which was a  

Local Authority, the protection envisaged under the Bombay Rent Act, 1947  

was  not  available  to  defendant  no.2  and  it,  therefore,  could  not  claim  

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protection under section 15(2) of the Act. In this connection, the appellate  

court said as follows:  

“Evidence on record shows that the fact of possession of the  Defendant No.2 in the premises prior to 1.2.1973 is admitted  but  when the premises belongs to the local  authority  i.e.  the  Defendant  No.1  and  Defendant  No.2  is  the  lessee  of  the  Defendant No.1, the provisions of the Bombay Rent Act, 1947  will not be applicable and, therefore, the Defendant No.2 are  not entitled for protection of amendment of 1987 in Sec.15(2)  of  the  Act.  There  is  no dispute  about  the  legal  position that  amended  section  15(2)  gives  protection  to  the  unlawful  occupant  who were  in  possession  on  1.2.1973 but  when the  provisions of the said Act are not applicable to the sub-lease  between  the  Defendant  No.1  and  2,  there  is  no  question  of  giving  protection  of  the  amended  provisions  of  the  Bombay  Rent Act. When it is admitted that the premises are sub-let by  Defendant No.1 to Defendant No.2 in the year 1978 and it is  also admitted that there is no written permission granted by the  Plaintiffs for sub-letting, it is clear cut breach of the terms and  conditions of the lease agreement. After careful scrutiny of the  evidence  on  record,  we  are  of  the  view  that  Plaintiffs  established sub-letting by Defendant No.1 to Defendant No.2 in  the  year  1978  without  prior  permission  in  writing  and,  therefore, the Plaintiffs are entitled for a decree on the ground  of breach of terms and conditions of the tenancy.”

In light of its  findings, the appellate court  dismissed both the appeals by  

judgment and order dated 31st March and April 1, 2004.  

13. Both, defendants 1 and 2 sought to challenge the orders passed by the  

Small Causes Court by filing civil revisions before the Bombay High Court.  

The two civil revisions were dealt with separately in the High Court. The  

civil revision filed by defendant no.1 (no.183 of 2007) was first dismissed  

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by a reasoned order dated April 17, 2008 and later on the civil revision filed  

by defendant no.2 (no.21 of 2009) by order date October 29, 2010, primarily  

following the order passed in the case of the first defendant.  

14. In the case of the first defendant, the High Court affirmed the findings  

of the courts below that the execution of the sub-lease by defendant no 1 in  

favour of defendant no.2 without obtaining the permission in writing from  

the plaintiff was in breach of clause 4 of the lease deed. The High Court also  

dealt with the plea of defendant no.1 based on section 114A of Transfer of  

Property Act, and held that the provision had no application to a case of sub-

letting or under letting. It further held that the suit filed by defendant no.1  

for the eviction of defendant no.2 would not remedy the breach committed  

by it, more so as at the time of hearing of the Civil Revision the suit still  

remained pending.  On these findings,  the High Court  dismissed the civil  

revision.

15. The strange thing about this case is the completely wrong course on  

which it has proceeded thus far. The suit was framed by the plaintiff and it  

was contested by the defendants and adjudicated on by the courts, right up to  

the High Court on the basis of the provisions of the Transfer of Property Act.  

The provisions of law that must actually determine the rights and liabilities  

of the parties find no mention in the pleadings of the parties or even the  

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judgments  of  the  courts.  In  the  plaint,  at  one  place  it  is  stated  that  for  

committing breach of the terms and conditions of the lease the defendants  

had lost the protection of the Bombay Rent Act. Further, for invoking the  

jurisdiction of the Small Causes Court, it is stated in the plaint that the suit  

was for recovery of  possession of  land situated at  Bombay to which the  

Bombay Rent Act is applicable. (Interestingly even this statement made in  

the plaint is rather unmindfully denied by defendant no.2 vide paragraph 11  

of its written statement!). Beyond this there is no reference to the provisions  

of  the  Bombay Rent  Act.  In  the  three  judgments  of  the  courts  there  are  

discussions on sections 106, 108 (j) and 114A of the Transfer of Property  

Act but there is hardly any reference to the provisions of the Bombay Rent  

Act.  It  seems that  the provisions of the Bombay Rent Act  which have a  

direct bearing on the case were completely overlooked by the three courts.  

From  the  judgment  of  the  first  appellate  court  it  indeed  appears  that  

defendant no.2 had sought the protection of section 15(2) of the Bombay  

Rent Act but the court brushed aside the submission observing that since the  

suit  premises belonged to defendant no.1, Mumbai Port Trust,  which is a  

local  authority  and  since  defendant  no.2  was  the  lessee  under  defendant  

no.1, the provisions of the Bombay Rent Act would not be applicable and  

the second respondent was not entitled to the protection of section 15(2) of  

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that  Act.  The  appellate  court  clearly  failed  to  appreciate  the  way  the  

provision of section 15 along with some other provisions of the Act applied  

to the case set up by the three parties to the suit.

16. At the material time the relationship between the landlord, tenant and  

sub-tenant was regulated and fully governed by the Bombay Rent Act, 1947  

(which came into force on January 19, 1948 and expired on March 31, 2000  

when  it  was  replaced  by  the  Maharashtra  Rent  Control  Act  1999).  The  

preamble to the Act described it as an Act to amend and consolidate the law  

relating to the control of rents and repairs of certain premises, of rates of  

hotels and lodging house and of evictions and also to control the charges for  

licence of premises, etc. It is undeniable that the plaintiff is a “landlord” as  

defined in section 5(3) and the suit land “premises” as defined in section  

5(8) of the Act to mean “any land not being used for agricultural purposes”.  

Section 13 of the Act had the marginal title, “When landlord may recover  

possession” and enumerated the grounds on which alone a landlord would  

be  entitled  to  recover  possession  of  any  premises.  One  of  the  grounds,  

enumerated  in  clause  (e)  of  the  section,  was  unlawful  sub-letting  by  the  

tenant. Clause 13(1)(e) in so far as relevant for the present is as under:

“13. When landlord may recover possession.

(1)Notwithstanding anything contained in this Act  but  subject  to  the  provisions  of  sections  15  and  

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15A,  a  landlord  shall  be  entitled  to  recover  possession of any premises if the Court is satisfied-

(a) xxxxxxx (b) xxxxxxx (c) xxxxxxx (d) xxxxxxx (e) that the tenant has, since the coming into  

operation of this Act,  unlawfully sub-let or after  the date of commencement of the Bombay Rents,  Hotel  and  Lodging  House  Rates  Control  (Amendment)  Act,  1973,  unlawfully  given  on  licence,  the  whole  or  part  of  the  premises  or  assigned  or  transferred  in  any  other  manner  his  interest therein; or”

Section 14 of the Act afforded protection to sub-tenants and licensees and  

provided as follows:

“14. Certain  sub-tenants  and  licensees  to  become tenant on determination of tenancy (1) When the interest of a tenant of any premises is  determined  for  any  reason,  any  sub-tenant  to  whom the premises or any part thereof have been  lawfully  sub-let  before  the  1st  day  of  February  1973 shall subject to the provisions of this Act, be  deemed to become the tenant of the landlord on the  same terms and conditions as he would have held  from the tenant, if the tenancy had continued. (2) 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.”   

Then came section 15 which is reproduced below:

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“15. In absence of  contract  to the contrary,  tenant not to  sub-let or transfer or to give on licence.

(1) Notwithstanding anything contained in any law but subject  to any contract to the contrary, it shall not be lawful after the  coming into operation of this Act for any tenant to sub-let the  whole or any part  of the premises let  to him or to assign or  transfer in any other manner his interest therein and after the  date  of  commencement  of  the  Bombay  Rents,  Hotel  and  Lodging House Rates Control (Amendment) Act, 1973, for any  tenant to give on licence the whole or part of such premises:

Provided that the State   Government may by notification in the  Official Gazette, permit in any area the transfer of interest in  premises held under such leases or class of leases or the giving  on licence any premises or class of premises and no such extent  as may be specified in the notification.   

(2) The prohibition against the sub-letting of the whole or any  part  of  the  premises  which  have been let  to  any tenant,  and  against the assignment or transfer in any other manner of the  interest of the tenant therein, contained in sub-section (1), shall,  subject to the provisions of this sub-section be deemed to have  had no effect before the 1st day of February, 1973, in any area  in which this Act was in operation before such commencement;  and  accordingly,  notwithstanding  anything  contained  in  any  contract or in the judgment, decree or order a Court, any such  sub-lease,  assignment  or  transfer  of  any such purported  sub- lease, assignment or transfer in favour of any person who has  entered into possession, despite the prohibition in sub-section  (1)  as  purported  sub-lessee,  assignee  or  transferee  and  has  continued  in  a  possession  on  the  date  aforesaid    shall  be  deemed  to  be  valid  and  effectual  for  all  purposes,  and  any  tenant who has sub-let any premises or part thereof, assigned or  transferred any interest therein, shall not be liable to eviction  under clause (e) of sub-section (1) of section 13.

The  provisions  aforesaid  of  this  sub-section  shall  not  affect in any manner the operation of sub-section (1) after the  date aforesaid.”

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17. It  is  important to clearly understand the interplay between sections  

13(1)(e)  and  section  15  of  the  Act.  Section  13(1)(e)  provided  that  any  

unlawful sub-letting  by  the  tenant  since  January  19,  1948,  the  date  of  

coming into  operation  of  the  Act  or  after  February  1,  1973,  the  date  of  

commencement of the Amendment Act (Maharashtra Act 17 of 1973) any  

licence  given  by  the  tenant  unlawfully  or  any  unlawful assignment  or  

transfer  of  his  interest  in  any  other  manner  in  the  whole  or  part  of  the  

demised premises would make the tenant liable to eviction.

18. Section 15, in sub-section (1) then laid down what would make the  

sub-letting,  assignment,  transfer or licence unlawful. It  said that any sub-

letting or assignment or transfer of his interest in any manner made by the  

tenant after January 19, 1948 or any licence given by him after February 1,  

1973  for  the  whole  or  part  of  the  premises,  unless  sanctioned  by  the  

contract, would not be lawful, notwithstanding any thing contained in  

any law.  Section 15(1), thus, took away any protection given to the tenant  

by any other law, e. g., section 108 (j) of the Transfer of Property Act and  

prohibited him from any sub-letting or licensing or assignment or transfer of  

his interest in any other manner in the absence of a sanctioning provision in  

the contract unless, of course, the demised premises came under the proviso  

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to section 15(1). But it is no one’s case here that the proviso to section 15(1)  

has any application to the present suit land.  In light of section 15(1), so  

much emphasis put on behalf of the plaintiff on clause 4 of the lease deed  

dated May 10, 1886 would appear to be rather out of place because even  

without  clause  4,  in the  absence of  a sanctioning clause in  the  lease  the  

subletting by the tenant would not be lawful and would come within the  

mischief of section 13(1)(e).

19. But then came section 15 (2) that removed the “unlawful” tag from  

any  sub-letting,  assignment,  transfer  of  interest  in  any  other  manner  or  

licensing, though contrary to sub-section (1), that were made before the 1st  

day of  February,  1973.  The  second part  of  section  15(2)  laid  down that  

regardless of the prohibition in sub-section (1) and notwithstanding anything  

contained in any contract or in the judgment, decree or order of a court a  

sub-lease,  assignment or transfer of interest  in any other manner shall  be  

deemed to be valid if the person in whose favour transfer is made entered  

into possession of the demised property and continued to be in possession on  

February 1, 1973. It  needs to be emphasised here that the second part of  

section  15(2)  overruled  a  contract  by  saying  at  the  beginning,  

“Notwithstanding any thing contained in any contract…”. This means that  

clause 4 of the lease deed would be ineffective and inoperative if the sub-

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lease  made  by  defendant  no.1  in  favour  of  defendant  no.2  otherwise  

conformed to the conditions laid down in section 15(2) of Bombay Rent Act.  

More  importantly,  section  15(2)  further  provided  that  any  sub-letting,  

assignment or transfer of interest in any other manner made by the tenant  

that came within its protective ambit would save him from eviction under  

section 13(1)(e). To sum up, any sub-letting, assignment, transfer of interest  

in any other manner or licensing made by the tenant after February 1, 1973  

without there being any sanctioning clause in the contract  or without the  

express consent of the landlord would constitute a ground for eviction under  

section 13(1)(e) of the Act.

20. It is in the light of the legal position as explained above that we may  

now proceed  to  examine  the  findings  of  fact  recorded in  this  case.  It  is  

undeniable  that  defendant  no.1  made  a  sub-lease  and  parted  with  the  

possession  of  the  suit  land  in  favour  of  defendant  no.2.  But  the  crucial  

question is when did this  transaction take place and when was defendant  

no.2 inducted into the suit land? The plaintiff in its pleadings and evidence is  

completely silent on this question. The trial court also did not advert to the  

question. But, the first appellate court has recorded a finding. The appellate  

court observed:

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“The learned advocate for both the appellants took  us to the evidence to show that defendant no.2 is in  possession of the premises since prior to 1/2/1973  and  therefore,  they  are  protected.  Evidence  on  record shows that the fact of possession of the  defendant no.2 in the premises prior to 1/2/1973  is admitted but….”

         (Emphasis  Added)

Having  come  to  this  finding,  the  appellate  court  misdirected  itself  by  

misconstruing the provision of section 15(2) of the Bombay Rent Act. But  

the finding of fact that defendant no.2 came in possession of the suit land  

from before February 1, 1973 and continued to be in its possession on that  

date is very much there.  

21. The finding is arrived at for good reasons and it is supported by both  

oral and documentary evidences. A charge certificate issued by the Estate  

Manager’s Department, Mumbai Port  Trust dated February 1, 1963 is  on  

record as Annexure P5. It is as under:

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No.551

MUMBAI PORT TUST

ESTATE MANAGER’S DEPARTMENT

CHARGE CERTIFICATE

This is to certify that the Plot of Land i.e. position of old RR  No.736 situated at Wadi Bunder Road Santa Cruz Estate & agreed to  be leased by Trustees’ Resolution No.1121 dated 11/12/1962 to M/s  Morarji  Dharamsey  Bhawanji  &  Ors.  (Wadi  Bunder  Cotton  Press  Company) has been pegged out to the dimensions measuring 5571 5/6  square yards and handed over to Mr. Morarji Dharamsey Bhawanji  this day the 1st of February 1963 by me with effect from 1st March  1955.

Signed________(illegible)_______Surveyor

and taken over and acknowledged correct by me.  

Signed Morarji Dharamsey Bhawanji Lessee Sd/- Assistant Manager North/ South District

Forwarded to the Lessee/s M/s Morarji Dharamsey Bhawanji &  others trading in the name and style of M/s Wadi Bunder Cotton Press  Co. for information and record.  

No building operations on the plot  mentioned on the reverse  should be commenced until the plans in respect thereof are previously  approved by the Trustees.

This  permit  should  be  produced  for  inspection  whenever  demanded by an Officer of the Port Trust.

Dated 1/2/1963 Sd/-

Estate Manager”

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22. There are receipts of the years 1963 and 1965 issued by the Mumbai  

Port Trust acknowledging the payment of rent from defendant no.2. More  

importantly the sub-lease deed that forms the sheet-anchor of the plaintiff’s  

case, though executed on June 1, 1978, was made effective retrospectively  

from June 15, 1964. It came to an end on February 26, 1985.  

23. On the basis of the materials on record, we must accept and proceed  

on the basis  that  defendant  no.2 was in occupation of  the suit  land long  

before February 1, 1973 and had continued to be in its possession on that  

date. The sub-letting by defendant no.1 in favour of defendant no.2, thus,  

clearly fell within the protective ambit of section 15(2) of Bombay Rent Act.  

24. Faced  with  this  situation,  Mr.  Sundaram,  learned  senior  advocate,  

appearing for the plaintiff-respondent no.1 contended that in order to claim  

protection  under  section  15(2)  of  the  Act,  it  was  incumbent  upon  the  

claimant to show that there was a sub-lease, assignment or transfer in his  

favour prior to 1973 and it was in pursuance of such sub-lease, assignment  

or transfer that it came in possession and continued to be in possession of the  

demised property and was actually in possession of the demised property on  

February 1, 1973. In this case, according to Mr. Sundaram, apart from the  

sub-lease dated June 17, 1978, there was no other sub-lease or any other  

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instrument of transfer to show that defendant no.2 came in possession of the  

suit land in pursuance of any sub-lease, assignment or transfer, etc.

25. We find no force in this submission. Section 15(2), apart from others  

uses  the  expression  ‘transfer  of  interest  in  any  other  manner’.  It  is  

sufficiently wide to include even an oral arrangement pursuant to which the  

sub-lessee might enter upon the land and continue in its possession. We have  

no manner of doubt that the initial induction of defendant no.2 on the suit  

land was covered by section 15(2) of the Act.  

26. Mr. Sundaram next contended that the possession of the suit land by  

defendant no.2 on February 1, 1973 might have had the protection of section  

15(2) of the Act. But a basic change was brought about by the execution of  

the  lease  deed  on  June  17,  1978  which  gave  rise  to  a  new relationship  

between the two defendants, the lessee and the sub-lessee. Mr. Sundaram  

submitted that the execution of the sub-lease by defendant no.1 in favour of  

defendant no.2 on June 17, 1978 and the continued possession of the suit  

land by defendant no.2 on the basis of that sub-lease would certainly not  

come under the protection of section 15(2) of the Act.

27. In  order  to  appreciate  Mr.  Sundaram’s  submission  it  would  be  

apposite to refer to section 22 of the Bombay Rent Act, which is as follows:  

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“22.  Particulars  to  be  furnished  by  tenant  of  tenancy  sub-let  or  transferred  before  the  1st  day of February 1973.   

(1)  Every  tenant  who   before  the  1st  day  of  February  1973,  has  without  the  consent  of  the  landlord given in writing sub-let the whole or any  part  of  the  premises  let  to  him  or  assigned  or  transferred in any other manner his interest therein,  and every sub-tenant to whom the premises are so  sub-let  or the assignment  or transfer  is  so made,  shall furnish to the landlord, within a month of the  receipt of a notice served upon him by the landlord  by  post  or  in  any  other  manner,  a  statement  in  writing  signed  by  him  giving  full  particulars  of  such sub-letting  assignment  or  transfer  including  the rent charged or paid by him.

(2) Any tenant or sub-tenant who fails to furnish  such  statement  or  intentionally  furnishes  a  statement which is false in any material particular  shall,  on  conviction,  be  punished  with  the  fine  which may extend to one thousand rupees.”

28. Section  22  provided  for  the  landlord  to  have  full  information  

concerning  the  sub-lessee/licensee  who  might  be  in  occupation  of  the  

demised premises on February 1, 1973, including the rent charged from him  

by the tenant. The provisions of section 22 clearly suggest that after the cut  

off date, i.e., February 1, 1973 there should be no material change, to the  

detriment  of  the  landlord in  the  terms and conditions  on which the  sub-

tenant was in possession of the demised premises on that date and in case  

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after that date, any material change is brought about in the status of the sub-

tenant, to the prejudice of the landlord that might not have the protection of  

section 15(2) but may come within the mischief of section 13(1)(e).  And  

hence, the point raised by Mr. Sundaram appears to be theoretically correct.  

But  in the facts  of  the case the point  does not  seem to arise.  Mr.  Parag  

Tripathi,  learned Additional  Solicitor  General,  appearing for the  Mumbai  

Port Trust, rightly submitted that in pith and substance the sub-lease deed of  

1978, was simply a formalization and continuation of the arrangement as  

existing between the defendants prior to February 1, 1973. There was no  

material change in the status of defendant no.2 or in the terms and conditions  

on which it was in possession of the suit land on February 1, 1973 or in the  

inter se relationship between the two defendants. The execution of the sub-  

lease on June 17, 1978 by defendant no.1 in favour defendant no.2 would  

not, therefore, militate against the protection offered by section 15(2) of the  

Act. The execution of the lease would not constitute a ground for eviction  

against defendant no.1 in terms of section 13(1)(e) of the Act.

29. In light of the discussion made above, we find that the judgments and  

orders  passed  by  the  High  Court  and  the  two  courts  below  are  quite  

unsustainable. We, accordingly, set aside the judgments and orders passed  

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by the High Court and the court of Small Causes and dismiss the suit filed  

by the plaintiff-respondent no.1.  

30. The appeals are allowed but with no order as to costs.

          ……………………………… …J

  ( AFTAB ALAM )

…………………………………J    ( R.M. LODHA )

New Delhi, April 8,  2011

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