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Judgment
Chandra Reddy, J.—Both the appeals relate to the same subject matter and raise the question whether the first respondent in C.M.A. No.
87 of 1953 (4th respondent in C M. A. No. 88 of 1953) can invoke the provisions of the Madras Buildings (Lease and Rent Control) Act XV of
1946 (hereinafter referred to as the Act). The back ground of this litigation is this : The property involved in these appeals, a cinema hall originally
belonged to a family which consisted of Anjayya and his three sons. Anjayya was adjudged an insolvent in I.P. No. 36 of 1930 and the insolvent''s
estate was vested in the Official Receiver on 4th January 1932. In the course of the administration of the estate, the Official Receiver sold the
property involved in these appeals along with some other items and it was purchased by the father of the first appellant in C.M.A. No. 87 of 1953
(and the appellant in C.M.A. No. 88 of 1953). Subsequently one of the sons of the insolvent filed a suit O.S. No. 35 of 1940 on the file of the
Subordinate Judge''s Court, Masulipatam, for partition and separate possession of his one-fourth share on the ground that the Official Receiver''s
sale did not bind his share. This suit was dismissed by the trial Court but was decreed on appeal by this Court, Pending the passing of the final
decree, the plaintiff in the suit applied to the Court in I.A. No. 1217 of 1948 for the appointment of a Receiver to take possession of the cinema
hall and lease it out for a period of one year and to deposit the amount in Court. The following order was passed on that application:
Both sides are willing to have an auction of the cinema hall (excluding articles claimed in O.S. No. 70 of 1947) to the highest bidder. Advertise in
Krishna Patrica that auction will be held on 7th October 1948 before the Principal Subordinate judge. Petitioner may make the aforesaid
advertisement. Hearing adjourned to 7th October 1948.
On the adjourned date bids for the leasehold interest for one year from 1st November 1948 were taken before the Court and it was knocked
down in favor of the first respondent who happened to be the highest bidder for Rs. 8,100 and the interlocutory application was allowed. On 26th
October 1948, a further order was passed:
As it is now represented, that further directions are necessary, the following is issued :
The purchaser of leasehold interest may take possession of the hall from 1st November 1948 and may run the cinema subject to rules.
It now appears that the lessee could get possession of the property only a few months later as it was in a state of disrepair and that he had to
spend some money to effect the necessary repairs.
When the lease was about to expire, the appellants moved the Subordinate Judge of Masulipatam, by I.A. No. 1278 of 1949 to appoint a
Receiver to auction the leasehold rights of the property involved in these appeals for the year 1949-1950. This was opposed by the first
respondent, inter alia, on the ground that be was entitled to the benefits of the Madras Buildings (Lease and Rent Control) Act. Overruling these
objections of the first respondent, a Receiver was appointed. This order was set aside on appeal by this Court and the petition was remanded for
fresh disposal. One of the questions which the trial Court was directed to decide was whether the Rent Control Act applied or not. Subsequently
I.A. No. 732 of 1951 was filed for a relief similar to one in I.A. No. 1278 of 1949 for the succeeding year namely from 1st November 1950 to
1st November 1951. The opposition to this was based on the same grounds as in the earlier application. The learned Subordinate Judge agreed
with applicability of the Madras Buildings (Lease and Rent Control) Act and dismissed the applications. It is these orders that are now under
appeal.
The view of the learned Subordinate Judge is canvassed by the appellants. In support of these appeals, it was first urged that the provisions of
the Act do not apply to this case as the respondent had taken the property on lease only for one year after the Act had come into operation and
had agreed to deliver possession of the same at the expiry of the period, the effect of which was to contract himself out of benefits of the Act. In
support of this contention reliance was placed on S. Raja Chetty and Another Vs. Jagannathadas Govindas and Others, There a lease of cinema
theatre with furniture, fittings, talkie equipment, machinery etc., was given by a registered agreement after the commencement of Madras Act XV
of 1946. The lease, inter alia, provided that if the rent remained unpaid for two tenancy months after the same became payable, the landlord was
entitled to re-enter upon the demised premises. In an application for eviction under S. 7 (2) (1)of the Act for default in payment of a month''s rent
on the due date, two questions arose for consideration whether the Act was applicable as the lease was not of a mere bounding and furniture only
but of finding to the equipment, machinery etc., and secondly whether the default in payment of the month''s rent entitled the landlord to ask for
abetment in spite of the provisions in the lease that the landlord could re-enter upon the premises demised when there was default in payment of
two months rent. Both the questions were answered against the landlord.
Dealing with the second question, the learned Chief justice remarked that since S. 7 (2) (1) was enacted for the benefit of the landlord and there
was no express prohibition against contracting out of it, it was open to a landlord to enter into a contract with the tenant giving the latter larger
rights and greater privileges than those conferred on him by the Act. It was held that landlord could nut apply for eviction for default in payment of
one month''s rent as contemplated under S. 7 (2) as it was expressly provided that it was only if the rent remained unpaid for two tenancy months
after the same become repayable that he could re-enter upon the premises.
It looks to us that this decision does not govern the case on hand. That the learned Judge''s did not intend to lay dawn a broad proposition that it
was up to the tenant also to contract himself out of the benefits of the Act appears from the observations of Rajamannar C.J. who was a party to
S. Raja Chetty and Another Vs. Jagannathadas Govindas and Others, , in George Oakes Ld. v. Chief Judge, Small Cause Court, Madras 63 L
W. 860.:
I would like to say something about the doubt expressed by my learned brother whether the decision in S. Raja Chetty and Another Vs.
Jagannathadas Govindas and Others, would impliedly lead to the conclusion that the tenant can also contract himself out of the benefits conferred
on him by the Act by taking a lease after the Act containing terms and conditions which operate to curtail the rights and privileges conferred upon
him by the Act. There was no doubt in cur mind that he could not. I would be prepared to go 10 the length of holding that it would be against
public policy and the spirit of the Act. The provisions of S. 6 embody the principle that the tenant can be saved from the terms of an express
agreement when such terms are to his detriment.
Although these observations are obiter, they have a direct hearing on the present enquiry. It is clear from the passage that the tenant can invoke
the provisions of S. 7 despite the fact that the lease was taken for a, fixed period alter the earning into force of the Act. As pointed cut by the
learned Chief Justice S. 6 of the Act was enacted to save the tenant from the terms of an express agreement when the terms are to his detriment,
and it applied not only to leases created prior to the Act but even to those coming into existence after the Act. Referring to S. Raja Chetty and
Another Vs. Jagannathadas Govindas and Others, , Viswanatha Sastri J. another member of the Bench said;
I therefore doubt whether the learned Judges who decided S. Raja Chetty and Another Vs. Jagannathadas Govindas and Others, , would have
held in such circumstances that the tenant had validly contracted himself out of the right to a fair rent and immunity from eviction, conferred on him
by the Act.
On a reading of the provisions of Ss. 6 and 7 of the Act from the pronouncement in George Oakes Ld. v. Chief Judge, Small Cause Court
Madras 63 L.W. 860 , the conclusion we have reached is that a tenant cannot contract himself out of the rights conferred on him; by the Act and
that he could take advantage of the provisions of the Act notwithstanding that the lease was for a specified period. It follows that the first
respondent could not be evicted although what was auctioned was only the leasehold right for one year if he is a tenant within the meaning of the
Act.
This leads us to the next contention put forward on behalf of the appellants that the first respondent could not claim the advantage of the relevant
provisions of the Act as there was no lease, to attract the applicability of the Act. The petition is put thus by the learned Government Pleader for
the appellants. The bids were called for in this case by the Court. A Court cannot transfer an interest in immovable properly and hence the
transaction cannot amount to a lease but should be regarded as a license for occupying the cinema hall for a fixed period on payment of a premium.
The answer to this is furnished by the order of the Subordinate Judge dated 7th October 1948 and the memorandum of grounds of appeal. In the
face of these documents, it is futile to contend it is not a lease but a license. For one thing it is incontrovertible that bids were called for only for
leasehold interest in the cinema hall for a period of one year. This is made absolutely clear in the order itself. Even in the memorandum of grounds
of appeal the counsel for the appellants proceeded only on the footing that it was a lease of the premises for a period of one year. There is
therefore no substance in the contention that the transaction amounted only to a license and not a lease. On the question whether the lesser was the
Court or the Receiver, there can be little doubt that the lease was by the Receiver. The prayer in the affidavit in support of the petition for leasing
out the property was that it was just and convenient that the Receiver already appointed by the Court should be directed to lease out item 7 of the
suit property namely cinema hall for a period of one year etc. The final order thereon was ""I.A. allowed"". In this situation there is very little force in
the argument that the lease was not by the Receiver merely because bids were taken before Court. On the materials on record the only conclusion
that could be reached is what was auctioned was the leasehold interest in the cinema hall and the lease was by the Receiver. It is therefore
unnecessary for us to consider whether a Court acting on behalf of the parties could be a landlord within the meaning of the Act. For these reasons
we must hold that the first respondent in C.M.A. No. 87 of 1953 (fourth respondent in C.M.A. No. 88 of 1953) cannot be evicted and the
judgment of the lower Court should be affirmed though for different reasons on the second point. In the result the appeals are dismissed but we
make no order as to costs.