Dalip Chand and others vs Rajinder Singh and another

Rajendra Nath Mittal, J.—This revision has been filed by the tenant/sub-tenants against the order of the Appellate Authority, Hoshiarpur, dated 26th July, 1983, affirming the order of the learned Rent Controller by which they were ordered to be ejected.

Briefly, the facts are that the land in dispute was vacant site. Shivdev Singh, one of the two owners, gave it on lease to Dalip Chand (hereinafter referred to as tenant) vide lease deed dated 7th September, 1949, for a period of 20 years commencing from 10th September, 1949, on payment of rent at the rate of Rs. 12.50 per month. In the lease deed, it was provided that the lessee could raise super-structure on the site at his expense and sub-lease the same It was further provided therein that he could remove the material of the super-structure after the expiry of the period of lease or could sell the same to the owners at a reasonable price. In 1954-55, consolidation proceedings took place in the village and the property in dispute and some other property fell to the share of the applicants and their brother Devinder Singh. They got their shares separated and Devinder Singh sold his share. It is alleged that Dalip Chand thus became a tenant under the applicants on the property. He after the expiry of the period of lease continued in the premises as a statutory tenant. It is alleged that he sub-let the property to Respondents Nos. 2 to 5 (hereinafter referred to as sub tenants) after the expiry of the lease period. It is further alleged that after the expiry of the lease, the premises could not be sub-let by the tenant without the written permission of the applicants and consequently they are liable to ejectment. Some other pleas were also taken by the applicants but they do not survive in the revision petition.

The tenant contested the petition and inter alia pleaded that he had the right to sublet the property according to the terms of the lease deed even after the expiry of the period of lease. The parties were governed by the same terms and conditions, and therefore, he was entitled to sub-let the property without the written consent of the landlord after the expiry of the said period of lease. He also pleaded that the sub-tenants were inducted prior to the expiry of the period of lease. Respondents Nos. 2 to 5 also resisted the application on similar grounds.

The Rent Controller held that Darshan Lal and Tarsem Lal were inducted as sub-tenants by the tenant after the expiry of the period of lease which could not be done by him without the written consent of the applicants. Consequently, he ordered ejectment of the tenant and sub-tenants. In appeal, the appellate authority affirmed the said order. They have come up in revision to this Court.

The question that arises for determination is whether a contractual tenant, authorised to sublet the tenanted premises situated within the area governed by the provisions of the East Punjab Urban Rent Restriction Act. can sublet it after the expiry of the period of lease without the written consent of the landlord.

Mr. Gill has strenuously argued that the terms of the lease by which the tenant was governed apply to the parties even after the expiry of the period of lease. Consequently the tenant could sublet the property to the sub-tenants even after the expiry of the period of lease. In support of his contention he places reliance on Ujagar Singh v. Prem Kumar (1986) 89 P. L R. 509 and Ratanlal Chandi Prasad Jalan and Ors. v. Raniram Darkhutt 1986 (1) R. C. R. 449.

On the other hand the learned Counsel for the Respondents submits that after the expiry of the period of lease the tenant becomes a statutory tenant and he is governed by the provisions of the Rent Act. If there is a clause in the rent deed authorising him to sublet the property, that clause is not applicable after he becomes a statutory tenant. Thus the tenant could not sublet the property after the expiry of the period of lease. To fortify his argument he refers to Anand Nivas (Private) Ltd. Vs. Anandji Kalyanji Pedhi and Others, , Firm Sardarilal Vishwanath and Others Vs. Pritam Singh, , Mahavir Prasad Verma v. Dr. Surinder Kaur AIR 1982 S. C. 1043 and Gian Devi Anand Vs. Jeevan Kumar and Others, :

I have duly considered the arguments. However, I agree with the submission of Mr. Gill. The facts of the case are not disputed. Further it is not disputed that in the area where the Rent Act applies, a tenant who has been inducted for a fixed period becomes a statutory tenant after the expiry of the period of lease. The main question to be seen is whether the terms of the rent deed will govern the parties after the expiry of the period of lease. Similar point arose in Ujagar Singh''s case (supra) which was decided by me. I, after noticing various precedents, held that all the terms in the rent note applicable to the tenants holding over except those which contravene the provisions of the Rent Act would remain applicable to the statutory tenants. Similar view has been expressed by a Full Bench of the Bombay High Court in Ratanlal Chandi Prasad Jalan''s case (supra). K. Madhava Reddy, C.J. speaking for the Court, observed as follows:

The net result is that the contractual tenants be divided into two categories:

(A) a tenant who, under the tenancy agreement is specifically entitled to sub-lease his interest (for short, "category ''A'' tenant").

(B) a tenant who under the tenancy agreement is not so specifically entitled to sub-lease or whose tenancy agreement is silent about it (for short, "category ''B'' tenant").

Category ''A'' tenant, even after the termination of his tenancy would continue to have a right to sub-lease. The right under the original contractual lease has not been taken away the Bombay Rent Act. In fact that right has been kept intact. However, the tenant of category ''B'' would not either before or after the termination of his contractual tenancy be able to sublet his interest in view of the specific bar u/s 15.

In the above case the provisions of the Bombay Rents, Hotel and Lodging House, Rates Control Act, 1947 were taken into consideration which are somewhat similar to the provisions of the East Punjab Urban Rent Restriction Act. I am in respectful agreement with the view expressed by the learned Bench.

Now I advert to the cases referred to by the learned Counsel for the Respondents. The majority, in a Bench consisting of three Hon'' ble Judges, in Anand Nivas''s case (supra) observed that a person remaining in occupation of the premises let to him after the determination of or expiry of the period of the tenancy is commonly though in law not accurately, called "a statutory tenant." Such a person is not a tenant at all; he has no estate or interest in the premises occupied by him. He has merely the protection of the statute, in that he cannot be turned out so long as he pays the standard rent and permitted increases, if any, and performs the other conditions of the tenancy. His right to remain in possession after the determination of the contractual tenancy is personal; it is not capable of being transferred or assigned, and devolves on his death only in the m inner provided by the statute. The right of a lessee from a landlord on the other hand is an estate or interest in the premises and in the absence of a contract to the contrary is transferable and the premises may be sublet by him. But with the determination of the lease, unless the tenant acquires the right of a tenant holding over, by acceptance of rent or by assent to his continuing in possession by the landlord, the terms and conditions of the lease are extinguished, and the rights of such a person remaining in possession are-governed by the statute alone. Section 12(1) of the Act merely recognises his right to remain in posssession so long as he pays or is ready and willing to pay the standard rent and permitted increases and performs the other conditions of the tenancy, but not the right to enforce the terms and conditions of the original tenancy after it is determined. No doubt the observations of the learned Bench do help the Respondents to some extent but the observations in the above case were not followed by their Lordships of the Supreme Court in subsequent cases. In Damadilal and Others Vs. Parashram and Others, , another Bench consisting of three Hon''ble Judges noticing the above case, observed as follows:

We find it difficult to appreciate how in this country we can proceed on the basis that a tenant whose contractual tenancy has determined but who is protected against eviction by the statute, has no right of property but only a personal right to remain in occupation, without ascertaining what his rights are under the statute. The concept of a statutory tenant having no estate or property in the premises which he occupies is deprived from the provisions of the English Rent Acts. But it is not clear how it can be assumed that the position is the same in this country without any reference to the provisions of the relevant statute. Tenancy has its origin in contract. There is no dispute that a contractual tenant has an estate or property in the subject-matter of the tenancy, and heritability is an incident of the tenancy. It cannot be assumed, however, that with the determintion of the tenancy the estate must necessarily disappear and the statute can only preserve his statute of irremovability and not the estate he had in the premises in his occupation. It is not possible to claim that the ''sanctity'' of contract cannot be touched by legislation.

Both the abovementioned and several other cases were considered by a larger Bench consisting of 5 Hon''ble Judges in Smt. Gian Devi Anand''s case (supra). Briefly the facts of the case were that Wasti Ram was a tenant of a shop in dispute under Jiwan Kumar Respondent. The landlord determined his tenancy by serving a notice to quit on him in April, 1970. The landlord filed an application for ejectment inter-alia on the grounds of non-payment of rent and subletting The trial Court held that the tenant was in arrears of rent. The other pleas of the landlord were, however, rejected. The Court further ordered that the landlord would be entitled to possession if the arrears were not deposited within one month. The landlord filed an appeal and the tenant cross-objections against the said judgment. During the pendency of the appeal the tenant died, and his widow Smt. Gian Devi Anand and others were brought on the record as his legal representatives. The cross-object ions were allowed and it was held by the Appellate Court that there was no default in payment of the rent by the tenant. However, the appellate court ordered ejectment of the tenant on the ground of subletting. Smt. Gian Devi and others, legal representees, filed an appeal in the High Court and the landlord cross-objections. A contention was raised on behalf of the landlord that on the death of Wasti Ram his widow and other legal representatives were not entitled to remain in possession and consequently they had no right to continue the proceedings. The High Court accepted this contention and passed a decree for ejectment. Smt. Gian Devi filed in appeal in the Supreme. Court. Bhagwati, J. (as he then was), speaking for the Court and after making reference to the above-mentioned and several other cases observed that the decisions indicate that there is a divergence of opinion in that Court on the question whether the heirs of a deceased tenant whose contractual tenancy in respect of commercial premises has been determined, can inherit the tenancy rights of the deceased tenant and can claim the benefit and protection to which the deceased tenant was entitled under the Act. The learned Judge then dealt with the purpose of the Rent Acts in the following terms:

The Rent Acts which are indeed in the nature of social welfare legislation are intended to protect tenant against harassment and exploitation by landlords, safeguarding at the same time the legitimate interests of the landlord. The Rent Acts seek to preserve social harmony and promote social justice by safeguarding the interests of the tenants mainly and at the same time protecting the legitimate interests of the landlords. Though the various Rent Acts appear to be the same, namely, to promote social justice by affording protection to tenant against undue harassment and exportation by landlords, safeguards of the legitimate interests of the landlords, the Rent Acts undoutedly lean more in favour of the tenants for whose benefit the Rent Acts are essentially passed. It may also be noted that various amendments have been introduced to the various Rent Acts from time to time as and when situation so required for the purpose of mitigating the hardship of tenants.

Thereafter the learned Judge deals with the rights of a contractual tenant whose tenancy has come to an end. The relevant observations are as follows:

Keeping in view the main object of Rent Control Legislation, the position of a tenant whose contractual tenancy has been determined has to be understood in the light of the provisions of the Rent Acts, Though provisions of all the Rent Control Acts are not uniform, the common feature of all the Rent Control Legislation is that a contractual tenant on the termination of the contractual tenancy is by virtue of the provisions of the Rent Acts not liable to be evicted as a matter of course under the ordinary law of the land and he is entitled to remain in possession even after determination of the contractual tenancy and no order or decree for eviction will be passed against a tenant unless any ground which entitles the landlord to get an order or decree for possession specified in the Act is established. In other words, the common feature of every Rent Control Act is that it affords protection to every tenant against eviction despite termination of tenancy except on grounds recognised by the Act and no order 01 decree for eviction shall be passed against the tenant unless any such ground is established to the satisfaction of the Court.

This Court has very aptly observed in Damadilal''s case (AIR 1916 S.C. 2229) (supra) that it cannot be assumed that with the determination of the tenancy, the estate must necessarily disappear and the statute can only preserve the status of irremovability and not the estate he has in the premises in his occupation; and it is not possible to claim that the sanctity of contract cannot be touched by legislation. As already noticed, this Court in Damadilal''s case (supra) after referring mainly to the definition of tenant in S. 2 (i) of the Madhya Pradesh Accommodation Control Act, 1961 came to the conclusion that the so-called statutory tenant had an interest in the premises occupied by him and the heirs of the statutory tenant ''had a heritable interest in the premises.

(emphasis supplied by underlining)

The learned Judge while referring to Damadilal''s case (supra) further observed that the Court in that case had correctly appreciated the status and the legal position of a tenant who continued to remain in possession after termination of the contractual tenancy. He also observed that a proper interpretation of of the definition of ''tenant'' in the light of the provisions made in the Rent Acts makes it clear that the tenant continues to enjoy an estate or interest in the tenanted premises despite the termination of the contractual tenancy. From the above observations it is evident that the view expressed by the Supreme Court in Anand Niwas''s Case (supra) has not been followed in this case. Consequently I am of the opinion that the learned Counsel for the Respondents cannot take any benefit from the observations made in Anand Nivas''s case (supra).

In Firm Sardari Lal Vishwa Nath''s case (supra) it was held that it would not be open to a statutory tenant to urge by way of defence in a suit for ejectment brought against him under the provisions of the Rent Restriction Act that by acceptance of rent a fresh tenancy was, created which had to be determined by a fresh notice to quit. These observations are not applicable to the facts of the case.

In Mahabir Prasad Verma''s case (supra) the facts were that the Appellant took on lease a shop-cum-flat situated in Chandigarh on rent from the Respondent and executed a rent note in her favour for a period of one month. One of the clauses in the rent note was that the tenant had a right to sub-let a specific portion of the tenanted premises. He within the period of one month sublet the same. In an application for ejectment the Rent Controller ordered his ejectment on the ground of sub-letting. That order was affirmed in appeal by the Appellate Authority and in revision by this Court. The tenant went up in appeal to the Supreme Court. The question that arose in that case was whether subletting by the tenant during the currency of the tenancy became unlawful and illegal on the determination of the tenancy and furnished a ground for eviction. Before dealing with the question the learned Bench made specific observations that it was not necessary for it to decide whether the tenant who on the determination of the contractual tenancy continued to remain in possession as a statutory tenant was entitled to sublet in view of the terms and conditions of the rent note. The observations of the learned Bench are as follows:

As there is no proper evidence to show that any sub-tenant was inducted after the expiry of the contractual period of tenancy it does not become necessary for us to consider whether the tenant who, on the determination of the contractual tenancy, continues to remain in possession by virtue of the provisions of the statute as statutory tenant is entitled to sublet and he continues to remain in possession on the same terms and conditions on which he became a tenant.

Thus it is clear that the point in controversy in that case was different and the learned Bench specifically said that it was not necessary for it to express its opinion on the question, which is in controversy in the present case. While deciding the matter the learned Bench observed ;

Mere continuance in possession of a sub-tenant lawfully inducted by the tenant with the written consent of the landlady contained in the rent note does not afford any ground to the landlady for eviction of the tenant on the ground of subletting as the tenant has not sublet after the commencement of the Act any portion without the consent in writing of the landlady.

It is true that the above observations support the contention of the counsel for the landlord but they lose significance in view of the fact that the learned Bench specifically said that it was not expressing any opinion on the question which arises in the present case.

Now it is to be seen whether the above observations can be treated as obiter dicta and are therefore, binding. Obiter dicta according to the Shorter Oxford English Dictionary, Third Edition, means the expression of opinion on a matter of law given by a Judge in Court, but not essential to his decision. In my view if the Court while deciding the case specifically says that it was not expressing any opinion on a point as that did not arise but still expresses some opinion, that will not be considered as obiter dicta. In the above view I am fortified by a decision of the Madhya Pradesh High Court in In Re: Lachman Nanda, Reference may also be made to judgment of the Supreme Court in Ranchhoddas Atmaram Vs. The Union of India (UOI), In that case item B in Section 167 of the Sea Customs Act came up for interpretation which prescribed penalties for certain offences. The Supreme Court earlier in passing made observations that the highest penalty which could be inflicted was Rs. 1,000/-. Some of the High Courts in view of the above observations decided the matter accordingly. Later it come up before the Supreme Court and again it was observed by their Lordships that some of the High Courts had thought that the Supreme Court had decided in the cases that the maximum penalty permissible under the provisions was Rs. 1,000/-. The fact was that the question was never required to be decided in any of the cases and could not, therefore, have been or be treated as decided by that Court. I am, therefore, of the opinion that the terms of the rent deed, which do not contravene any provision of Rent Act, govern a contractual tenant after the expiry of the period of leass. The term in the rent note that the tenant could sublet the tenanted premises cannot be deemed to be in contravention of any provision of the Rent Act as subletting with written consent is permissible by it. Therefore, a contractual tenant authorised to sublet the tenanted premises situated within the area governed by the provisions of the Rent Act can sublet it after the expiry of the period of lease without the written consent of the landlord. As already discussed above, the tenant was entitled to sublet the tenanted premises under the terms of the rent note. Consequently he was entitled to sublet the tenanted prmmises to Tarsem Lal and Darshan Lal Petitioners Nos. 4 and 5 after the expiry of the period of lease.

For the aforesaid reasons I accept the revision petition, set aside the order of the Appellate Authority and dismiss the petition for ejectment. However, I leave the parties to bear their own costs.