W.H. King vs Republic of India and Another

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Criminal Appeal No. 8 of 1951

Decision Date: 1 February 1952

Coram: N. Chandrasekhara Aiyar, M. Patanjali Sastri, Mehr Chand Mahajan, B.K. Mukherjea

In the matter styled W.H. King versus the Republic of India and another, the Supreme Court delivered its judgment on 1 February 1952. The opinion was written by Justice N. Chandrasekhara Aiyar, who sat on a bench together with Justices M. Patanjali Sastri, Mehr Chand Mahajan and B.K. Mukherjea. The petitioner was identified as W.H. King and the respondents were the Republic of India and an additional party. The decision was reported in the 1952 volumes of the All India Reporter and the AIR, bearing the citations 1952 AIR 156 and 1952 SCR 418, and it was subsequently cited in later reports such as R 1961 SC1554 and RF 1982 SC 949. The case concerned the interpretation of section 19 of the Bombay Rents, Hotel and Lodging House Rates Control Act, LVII of 1947, specifically the question of whether a tenant who transferred possession of a premises to a third person in consideration of a “pugree” had effected a relinquishment of his tenancy, and the distinction between an assignment and a relinquishment under a penal provision.

Section 19(1) of the Act provided that it was unlawful for a tenant or any person acting on the tenant’s behalf to claim or receive any sum or other consideration as a condition for relinquishing the tenancy of any premises. Section 19(2) stipulated that any tenant or person who, in violation of subsection (1), received such a sum or consideration would, upon conviction, be liable to imprisonment and also to a fine. In the factual scenario before the Court, a person designated as “A” was the tenant of a flat. A transferred vacant possession of the flat to a third party identified as “B” after receiving a “pugree” under a written document that expressly stated that A would have no further claim over the flat and that B would remit rent directly to the landlord. A was subsequently convicted under section 19(2) for receiving consideration in connection with the purported relinquishment of his tenancy.

The Court examined whether A’s act amounted to a “relinquishment” within the meaning of section 19(1). It held that the transaction did not constitute a relinquishment of tenancy as contemplated by the statute, and consequently the conviction could not be sustained. The judgment drew a clear distinction between an assignment of a tenancy and a relinquishment or surrender. In an assignment, the assignor remains contractually liable to the landlord for the performance of the tenancy obligations, while the assignee acquires liability by virtue of privity of estate, and landlord consent is not required absent a contrary contract or local usage. By contrast, relinquishment cannot be a unilateral act; it must be a mutual agreement favoring the lessor, with possession returned to the lessor or his representative, thereby terminating the lessee’s rights and restoring the lessor’s possession. Because section 19 creates a criminal offence and imposes both imprisonment and fine, the Court emphasized that the language of the provision must be construed strictly in favour of the accused, focusing on the actual wording rather than on possible legislative intent. The judgment therefore reversed the conviction, holding that no statutory relinquishment had occurred.

The Court noted that the appeal before it originated from a decision of the Bombay High Court which had been set aside. The appeal was Criminal Appeal No 8 of 1951 and was taken from an order of the High Court dated 20 February 1950 in Criminal Appeal No 106 of 1950. That order itself arose from a judgment of the Presidency Magistrate, 19th Court, Esplanade, Bombay, dated 9 January 1950 in case number 10879/P of 1949. The judgment of the High Court was reversed, and the matter proceeded to this Criminal Appellate jurisdiction. Counsel for the appellant comprised Iswarlal C. Dalai and R. B. Dalai. The Republic of India, respondent No 1, was represented by the Solicitor-General, C. K. Daphtary, assisted by G. N. Joshi. Respondent No 2 was represented by counsel Jindra Lal. The judgment was delivered on 1 February 1952 by Justice Chandrasekhara Aiyar.

The factual matrix, as recorded by the Court, concerned the appellant, W. H. King, who conducted business in Bombay under the name Associated Commercial Enterprises. King was a monthly tenant of a second-floor flat in a building known as “Ganga Vihar” on Marine Drive, the premises being owned by a lady named Durgeshwari Devi, with a monthly rent of Rs 215. King desired to travel to the United Kingdom for treatment of deteriorating eyesight and, through an intermediary named Sayed, entered into negotiations with the complainant, Mulchand Kodumal Bhatia, the second respondent, regarding the surrender of his tenancy. According to the prosecution, King demanded Rs 30,000 as consideration for delivering vacant possession of the flat, later reducing the amount to Rs 29,500, and additionally sought Rs 2,000 for the furniture. Bhatia allegedly consented to these terms and paid King Rs 500 on 7 November 1948 and another Rs 500 on 17 November 1948. On 1 December 1948 Bhatia approached the police, and a plan was devised to entrap King. The scheme involved Bhatia bringing the outstanding Rs 1,000 for the furniture while the police would supply Rs 29,500 to be handed to King. On 4 December 1948 Bhatia, accompanied by a Sub-Inspector masquerading as his brother, met King, delivered the two sums, and received from King the keys to the flat and the motor-garage. As King and his wife were departing, the Sub-Inspector discarded his disguise and identified himself as a police officer. Police units positioned below then stopped King’s car and recovered Rs 30,500 from the vehicle’s rear compartment.

When the police seized the appellant’s vehicle, they also recovered a collection of papers that included a typed draft of a partnership agreement between the complainant and the appellant, together with an application form seeking permission to occupy the building as caretaker. In addition, the authorities recovered from the complainant a bunch of keys and several documents that the appellant had previously handed to him. These documents comprised a letter handing vacant possession of the flat, identified as Exhibit D, a receipt for rupees two thousand for the furniture items, identified as Exhibit E, a letter addressed to the Bombay Gas Company requesting transfer of the gas connection to the complainant’s name, identified as Exhibit F, and a letter to the Bombay Electric Supply and Transport Committee seeking transfer of the telephone connections and confirming the deposit of rupees twenty-seven, identified as Exhibit G. The appellant was then charged under section eighteen of the Bombay Rents, Hotel and Lodging House Rates Control Act, LVII of 1947, for receiving a bribe of rupees twenty-nine thousand five hundred, and further charged under section nineteen, subsection two, of the same Act for receiving that sum as a condition for relinquishing his tenancy. His wife, who stood as the second accused, was charged with aiding and abetting her husband in both offences. The appellant contended that he was seeking a business partner to manage his enterprise during his intended absence and that the partner would also serve as caretaker of his flat. He argued that the sum of rupees twenty-nine thousand five hundred represented capital for a one-half share in the business rather than a bribe, and that the rupees two thousand paid for the furniture constituted a guarantee against disposal or damage, to be refunded upon his return to India. The appellant’s wife denied any participation in aiding or abetting.

The Presidency Magistrate, who presided over the trial, rejected the appellant’s defence, finding that the amount received by the accused was indeed a bribe. Because the magistrate concluded that section eighteen, subsection one, of the Act did not apply, he convicted the appellant under section nineteen, subsection two, imposing a sentence that reflected the appellant’s advanced age and blindness: one day of simple imprisonment and a fine of rupees thirty thousand. The magistrate acquitted the appellant’s wife, citing insufficient evidence to establish any abetment on her part. The appellant subsequently appealed to the High Court of Bombay, but the appeal was dismissed summarily on 20 February 1950. He then sought a certificate under article 134(1)(c) of the Constitution, which was rejected on 10 April 1950. Following that denial, he applied for special leave to appeal to this Court, and the application was granted on 3 October 1950. The only point that required further consideration before this Court was a brief legal argument advanced on behalf of the appellant, which focused on the precise wording of section nineteen, subsection one, of the Act.

The provision under discussion is divided into two sub-sections and reads as follows: “(1) It shall not be lawful for the tenant or any person acting or purporting to act on behalf of the tenant to claim or receive any sum or any consideration as a condition for the relinquishment of his tenancy of any premises; (2) Any tenant or person who, in contravention of the provisions of sub-section (1), receives any sum or consideration shall, on conviction, be punished with imprisonment for a term which may extend to six months and shall also be punished with a fine which shall not be less than the sum or the value of the consideration received by him.” The argument advanced on behalf of the appellant was that the offence contemplated by sub-section (1) is triggered only when a sum or consideration is received as a condition for the tenant’s relinquishment of his tenancy, and that the facts of the present case did not involve any such relinquishment. The most material document, Exhibit D, records the manner in which the appellant transferred vacant possession of the flat to the complainant. The language of that document shows that the transaction was an assignment of the tenancy rather than a relinquishment. Exhibit D states: “I, W.H. King, hereby hand over vacant possession of my flat No. 3 situated on 2nd floor and garage No. 4 on the ground floor of Ganga Vihar Building on Plot No. 55 situated on Marine Drive Road to Mr. Mulchand Kodumal Bhatia from this day onward and that I have no claim whatsoever over this flat and Mr. Mulchand Kodumal Bhatia will pay the rent directly to the landlord.” The legal distinction between an assignment on the one hand and a relinquishment or surrender on the other is clear and cannot be ignored. In an assignment, the assignor remains contractually liable to the landlord for the performance of the obligations arising under the tenancy, while the assignee acquires liability by virtue of privity of estate. Unless a specific contract or local usage requires it, the landlord’s consent to an assignment is not a prerequisite. By contrast, relinquishment cannot be a unilateral act; it must occur in favour of the lessor and must be the result of a mutual agreement between tenant and lessor. The relinquishment of possession must be directed to the lessor or to a person holding the lessor’s interest. Effectively, a surrender or relinquishment terminates the lessee’s rights and restores the lessor’s entitlement to the premises. Although the term “relinquishment” does not appear in the Transfer of Property Act, it is used in many provincial Tenancy Acts that contain provisions dealing with the tenant’s relinquishment of his holding in favour of the landlord upon written notice. The section under consideration, it is noteworthy, does not use the generic language of relinquishment or giving up possession; it specifically refers to “the relinquishment of his tenancy of any premises.” The relinquishment of a tenancy therefore refers to the surrender by the lessee of his tenancy rights, a concept distinct from the assignment evidenced by Exhibit D.

The Court explained that relinquishment of a tenancy is the same as a surrender by the lessee or tenant of the rights that belong to him under the lease. The question of whether abandonment of a tenancy could be treated as relinquishment did not arise for consideration in this appeal because, based on Exhibit D, there was no evidence of abandonment in the sense that the tenant had disappeared entirely, said nothing, and made no arrangements concerning his interest or possession under the lease. Since the statute creates a criminal offence and prescribes both a monetary fine and a term of imprisonment, the language of the provision must be interpreted strictly in favour of the person charged. The Court stated that it was not interested in speculating about what might have been intended; rather, it focused on the actual words used in the statute. Finding that, on the facts, there was no “relinquishment” as defined in section 19, sub-clause (1), the Court concluded that the conviction under sub-clause (2) could not be upheld. Consequently, that conviction was set aside and the fine of Rs 30,000 was ordered to be refunded if it had already been paid. The remainder of the learned Presidency Magistrate’s order, specifically the directions concerning the disposal of Rs 1,000 that had been paid by the complainant to the appellant and the sum of Rs 29,500 that had been recovered by the police, was left unchanged. The conviction was therefore set aside. The Court noted the agents appearing for the parties: the agent for the appellant was P.K. Chatterjee, the agent for respondent No. 1 was P.A. Mehta, and the agent for respondent No. 2 was Ganpat Rai.