Pandit Kishan Lal v. Ganpat Ram Khosla and Another

Shah J. SHAH, .J.-The Singer Sewing Machine Company-

hereinafter referred to as the company-was, since the year 1934, the tenant for business purposes of a shop situate at Gurgaon in the State of Punjab and belonging to Pandit Kishan Lal-hereinafter called the appellant. One Ganpat l'tam Khosla-hereinafter referred to as Khosla-was the Sales Manager of the company.

The Legislature of the State of East Punjab enact-ed Act III of 1949 called the East Punjab Urban Rent Restriction Act., 1949, to restrict the increase of rent of certain premises situated within the limits of urban areas and the eviction of tenants therefrom. The Act granted protection to tenants of premises used for residential and non-residential purposes. By s. 2, cl. (i), the expression "tenant" was defined, in so far as the definitioa is material, as meaning any per-son by whom or on whose account rent was payable for a building or rented land and included a tenant continuing in possession after the termination of the tenancy in his favour, but did not include a person placed in occupation of a building or rented land by its tenant, unless with the consent of the landlord ... ... Bys. 13, the right of the landlord to evict a tenant even in execution of a decree was restricted and the landlord could seek to evict his tenant by an applica-tion to the Controller in certain specified circumstan-ces set out in that section.

On August 30, 1954, the company addressed a letter to the appellant intimating that it desired to close down its office in Gurgaon with effect from Septem-of her 1, 1954. The relevant part of the letter ran as follows:

"Now the Company has closed its agency busi-1961 ness at Gurgaon and Mr. Khosla will be carrying on Pandit Sewing Machine business in Gurgaon in your shop Kishan Lal in his personal capacity and not as a Manager of v. Singer Company. In order that there may not be Gan at am any misunderstanding about, the payment of rent Khosla in future, you are informed that from September, Shah 1954 onwards Mr. Khosla will be personally respon-sible for the payment of rent of your shop."

The appellant informed the company that unless vacant possession was delivered to him tenancy could not be validly determined, and that the company will be held responsible till such delivery for liability to pay rent and that in the event of possession being transferred to any other person, legal action will be taken against the company. But the company deli-vered possession of the shop to Khosla and allowed him to occupy the shop in his personal capacity from September 1, 1954. Thereafter, on October 31, 1954, the appellant applied under s. 13 of the Act to the Controller for an order against Khosla and the com-pany on three grounds, (1) that the company did not require the premises any longer while the appellant required the same for his own use, (2) that the com-pany had neglected to pay rent ~ince September 1, 1954, and (3) that the company had assigned or sub-let the shop to Khosla without the written consent of the appellant. Khosla and the company resisted the application contending that Khosla was the tenant of the appellant and that in any event, on August 28, 1954, the company through its local Supervisor had delivered possession of the shop to the appellant and that the latter agreed to treat Khosla as his tenant with effect from September 1, 1954. The Controller rejected the pleas raised by Khosla and the company and ordered that possession be delivered by the com-pany to the appellant. In appeal to the District Conrt at Rohtak, the order passed by the Controller was confirmed. In a petition under Art. 227 of the Constitution filed by Khosla in the High Court of Judicature for ?unjab at Chandigarh, the order pass-ed by the District Court was quashed. The High Court was of the view that after August 31, 1954, the

company had no interest left in the tenancy and the tenancy being from month to month terminable at the Pandit will of the appellant, such tenancy could not be the Kishan Lal

v. subject-matter of transfer or of sub-letting. The High Ganpat Rain Court therefore held that the order passed was with-

Khosla out jurisdiction. In the course of the judgment, the

High Court observed tha.t full rent had been paid Shah ]. even after September 1, 1954, and therefore the

ground of non-payment of rent "was not open to" the appellant. It is accepted at the bar that in mak-ing this observation, the High Court was under a mis-apprehension. The rent accruing due was not paid to the appellant, but was deposited in court. Against the order passed by the High Court, this appeal is pre-ferred with special leave.

The Controller and the District Court found that the tenant of the shop in dispute was not Khosla but the company. These two tribunals also found that possession of the shop was handed over by the com-pany to Khos]a without the consent of the appellant. These findings were binding upon the High Court.

The only question which fell to be determined by the High Court was whether by unilateral action on its part, the company could require the appella.nt to treat Khosla as his tenant. In our view, the High Court misconceived the nature of the tenancy. A tenancy except where it is at will, may be terminated only on the expiry of the period of notice of a speci-fied duration under the contract, custom or statute governing the premises in question. A tenant does not absolve himself from the obligations of his tenancy by intimating that as from a particular date he will cease to be in occupation under the landlord and that some one else w horn the landlord is not willing to accept will be the tenant. It is one of the obliga-tions of a contract of tenancy that the tenant will, on determination of the tenancy, put the landlord in possession of the property demised (see s. 108( q) of the Transfer of Property Act). Unless possession is deli-vered to the landlord before the expiry of the period of the requisite notice, the tenant continues to hold the premises during the period as tenant. Therefore, by merely assigning the rights, the tenancy of the company did not come to an end. It was observed z961 by this court in W. H. King v. Republic of India('):

"There is a clear distinction between an assign-Pandit Kishan Lal ment of a tenancy on the one hand and a relinquish-v. ment or surrender on the other. In the case of an Ganpat Ram assignment, the assignor continues to be liable to Khosla the landlord for the performance of his obligations under the tenancy and this liability is contractual, Shah while the assignee becomes liable by reason of pri-vity of estate. The consent of the landlord to an assignment is not necessary, in the absence of a contract or local usage to the contrary. But in the case of relinquishment it cannot be a unilateral transaction; it can only be in favour of the lessor by mutual agreement between them. Relinquish-ment of possession must be to the lessor or one who holds his interest: and surrender or relinquishment terminates the lessee's rights and lets in the lessor."

In the present case, the company did not surren-der its rights to the appellant; it sought to transfer its rights to Khosla. The company admittedly did not serve the notice as required by law, nor did the appellant agree to accept the unilateral determination of the tenancy by the company. The true position was therefore that the company did not immediately on the service of the notice cease to be a tenant; and Khosla, because he was let into possession became an assignee of the rights of the company as a tenant, and he could not be regarded as a trespasser. The High Court was tharefore in our view in error in holding that the proceedings were not maintainable in the court of the Controller for possession. Khosla being an assignee of the tenancy rights of the conipany was as much liable to be sued in the court of the Controller as the company for an order in ejectment.

We therefore allow the appeal, set aside the order passed by the High Court and restore the order passed by the District Court, Rohtak. The appellant will be entitled to his costs in this court as well as in the High Court from Khosla.

Appeal allowed.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 356 of 1959.

Appeal by special leave fro!IY the judgment and order dated the November 18, 1957, of the Punjab

18 SUPRE¥E COURT REPORTS [1962]

I96I High Court at Chandigarh in Civil Miscellaneous

Application No. 712 of 1956.

Pandit f{is.hnn Lal B. D. Sharma, for appellant.

v. Hardev Singh and A.G. Ratnaparkhi, for respondent Ganpat Ra1n No. 1.

J( hos la

Y. Kumar, for respondent No. 2.

1961. April 17. The Judgment of the Court was delivered by