Pooran Chand vs Motilal And Ors.

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

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 11 December 1962

Coram: J.L. Kapur, J.R. Mudholkar, K. Subba Rao, S.J. Imam

The appeal, which was granted by special leave, challenged the judgment and decree issued by the High Court of Judicature for Rajasthan at Jodhpur. The High Court had set aside the decree of the Senior Civil Judge of Ajmer and had restored the decree of the Subordinate Judge, First Class, Ajmer, which had ordered eviction of the appellant from the premises that were the subject of the suit filed by the respondents. The Court noted that the appeal therefore concerned the correctness of the High Court’s decision to overturn the lower courts’ findings and to reinstate the trial court’s decree in favour of the respondents.

The factual background was as follows. The property in question was a building located at number 41 Purani Mandi in Ajmer. The building comprised a large number of rooms, and the respondents were the owners of the entire structure. On the thirteenth day of October, 1935, the appellant’s father entered into a lease of the building for a term of one year, agreeing to pay a monthly rent of fifty rupees. Subsequently, on the tenth day of July, 1950, the respondents granted a new lease of the same building to the appellant for a period of one year, at a monthly rent of sixty‑five rupees. A further lease was executed on the eighth day of August, 1952, again in favour of the appellant, this time increasing the rent to seventy rupees per month. Under the terms of this 1952 lease, the tenancy was to commence on the first day of August, 1952.

On the twenty‑seventh day of June, 1954, the respondents, through their advocates, served a notice on the appellant demanding that he vacate the premises by midnight on the thirty‑first day of July 1954, or alternatively by the first day of August 1954. The notice alleged two grounds for the demand: that the appellant was in arrears of rent and that he had sublet the property without permission. In response, the appellant issued a reply notice in which he promised to settle the alleged rent arrears as soon as possible. He also acknowledged that he had been subletting portions of the premises to other persons, except for the portion that he himself continued to occupy.

Because the appellant failed to comply with the demands set out in the notice, the respondents instituted a civil action on the second day of August, 1954. The suit, identified as Civil Suit No. 762 of 1954, was filed in the Court of the Subordinate Judge, First Class, Ajmer, and sought eviction of the appellant, recovery of the alleged rent arrears, and other reliefs. The plaint was later amended. The appellant defended the suit on several grounds, the most important of which was the claim that the suit was not maintainable. It is relevant to note that, in the written statement filed by the appellant, the fact that the premises had been sublet to other tenants was not denied.

The Subordinate Judge, after hearing the matter, decreed the suit in favour of the respondents. The judge held that the notice served by the respondents was valid and that, under section 13(1)(b) of the Delhi and Ajmer Rent Control Act, 1952 (Act No. XXXVIII of 1952), the appellant was liable to be evicted because he had sublet portions of the premises without obtaining the landlord’s written consent. The appellant appealed this decision. On the first appeal, the Senior Civil Judge of Ajmer set aside the Subordinate Judge’s decree. The Senior Civil Judge found that the notice issued to the appellant was deficient by a period of twenty‑four hours and concluded that the appellant had no right to sublet the premises without the landlord’s permission.

The appellate court observed that although the appellant had sub‑let portions of the premises, he had done so without obtaining the landlord’s written consent, even though sub‑tenants were already occupying the premises when the appellant entered into the lease. On the second appeal, the High Court set aside the decision of the Senior Civil Judge and reinstated the decree of the trial court. The High Court based its reversal on the view that the notice served complied with section 106 of the Transfer of Property Act, 1882, and further held that, since the tenancy had come to an end merely by the passage of time, no notice was required at all. Consequently, the present appeal was filed before this Court.

Counsel for the appellant presented four specific submissions. First, counsel contended that the High Court did not have jurisdiction to entertain a second appeal against the decree and judgment of the Civil Judge. Second, counsel argued that, assuming a second appeal was unavailable, the High Court’s power to interfere with the Civil Judge’s decision was restricted solely to the provisions of section 35 of the Delhi and Ajmer Rent Control Act, and that under that section the High Court possessed no authority to set aside the judgment on the merits, whether on questions of law or fact. Third, counsel asserted that the High Court was incorrect in holding that the notice complied with the requirements of section 106 of the Transfer of Property Act, 1882. Fourth, counsel claimed that the High Court had created an entirely new case by deciding that the tenancy had terminated by the mere efflux of time.

The Court indicated that it need not address the first submission, because it was satisfied that even if a second appeal to the High Court against the Civil Judge’s decree and judgment was not permissible, the High Court nevertheless had sufficient jurisdiction to intervene in this matter under section 35(1) of the Act. Section 35(1) provides that the High Court may, at any time, call for the record of any case brought under the Act in order to be satisfied that the decision rendered therein is “according to law,” and may pass any order it deems appropriate in relation thereto.

In support of the appellant’s argument concerning the limited scope of the High Court’s jurisdiction under section 35, counsel relied upon the Supreme Court’s decision in Hari Shankar v. Rao Girdhari Lal Chowdhury, reported in the 1962 Supplement to the Supreme Court Reporter at page 933. That precedent examined whether the plaintiff had consented to the sub‑letting of parts of the demised premises, and if so, the timing and effect of such consent. The trial judge had found no evidence that the landlord had ever been consulted, a finding that was upheld by the District Judge on appeal. However, the High Court, on revision, re‑examined the evidence and reached a contrary conclusion. In that context, the Supreme Court considered the ambit of section 35 of the Rent Control Act. Justice Hidayatullah, speaking for the majority, observed that the phrase “according to law” refers to the decision as a whole and should not be equated merely with errors of law or fact taken separately. He further explained that the provision is intended to confer broader powers than those available under section 115 of the Code of Civil Procedure, which is limited to correcting jurisdictional errors.

Justice Hidayatullah’s remarks were followed by a quotation in full of the observations of Chief Justice Beaumont, as recorded in Bell & Co. Ltd. v. Waman Hemraj (1938) 40 Bom. L.R. 125. Chief Justice Beaumont gave illustrative examples and clarified that his observations were not exhaustive. He concluded that the Court should not interfere merely because it thought that the judge who heard the case might have arrived at a conclusion different from that which the High Court would have reached. The present Court found these observations persuasive and, together with the reasoning of Justice Hidayatullah, affirmed that the High Court possessed the authority under section 35 to examine the records and ensure that the decision of the lower court was indeed “according to law.”

In the judgment, the Court explained that the expression “according to law” refers to the entire decision and that a decision cannot be said to be according to law if a miscarriage of justice occurs because of an error of law. The provision therefore grants powers that are broader than the limited power to correct a jurisdictional error that is available under section 115 of the Code of Civil Procedure. The learned Judge then reproduced at length the observations of Beaumont, C. J. in Bell & Co. Ltd. v. Waman Hemraj [(1938) 40 Bom. L.R. 125] and recorded his full agreement with those observations. By way of illustration, the Chief Justice noted that his examples were not exhaustive and concluded that the Court should not interfere merely because it thinks that the trial Judge might have arrived at a conclusion different from what the High Court would have reached.

The Court observed that the remarks of Hidayatullah, J. and those of Beaumont, C. J., which the former had fully extracted, demonstrate that the power conferred on the High Court by section 35 of the Act is wider than the power under section 115 of the Code of Civil Procedure, although the power cannot be equated with the jurisdiction of an appeal. The Court further stated that it is neither possible nor advisable to define with precision the scope and ambit of section 35 of the Act; instead, the High Court should be allowed to decide in each case whether the impugned judgment is according to law, as explained in the earlier decision.

Having kept the Court’s view in mind, the judgment proceeded to examine whether the High Court had acted within its jurisdiction. The principal issue depended on the construction of section 13(1) of the Act. The material portion of that section reads: “Notwithstanding anything to the contrary contained in any other law or any contract, no decree or order for the recovery of possession of any premises shall be passed by any Court in favour of the landlord against any tenant (including a tenant whose tenancy is terminated): Provided that nothing in this sub‑section shall apply to any suit or other proceeding for such recovery of possession if the Court is satisfied – (a) that the tenant has neither paid nor tendered the whole of the arrears of rent due within one month of the date on which a notice of demand for the arrears of rent has been served on him by the landlord in the manner provided in section 106 of the Transfer of Property Act, 1882 (IV of 1882); or (b) that the tenant without obtaining the consent of the landlord in writing has, after the commencement of this Act, – (i) sub‑let, assigned or otherwise parted with the possession of, the whole or any part of the premises.” The learned counsel for the appellant argued that the provisions of the aforementioned section constitute an additional protection for the tenant and do not permit the landlord to dispense with a statutory notice before filing an eviction suit. The counsel further contended that the notice given in the present case did not comply with the requirements of section 106 of the Transfer of Property Act, 1882.

In this case, counsel for the appellant argued that the provisions of the cited section served only as an additional safeguard for a tenant and did not permit a landlord to forgo the requirement of a statutory notice before instituting an eviction suit. The counsel further maintained that the notice issued in the present matter failed to satisfy the requirements of section 106 of the Transfer of Property Act, 1882. The Court did not need to pronounce on the correctness of that particular contention because it was satisfied that the tenancy had already terminated by the mere passage of time, and consequently the issue of a statutory notice did not arise. Nevertheless, the counsel asserted that this point had never been raised either in the plaint or before the lower courts and that it was introduced for the first time before the High Court. The counsel characterized the matter as a mixed question of fact and law and therefore claimed that the High Court erred by permitting this new issue to be considered at that stage. The Court observed that the contention was, in fact, not entirely absent from the plaint. The suit filed by the respondents sought eviction on two grounds: non‑payment of rent and the appellant’s alleged sub‑letting of the premises. While the plaint did not expressly describe the tenancy as a monthly tenancy, the respondents alleged, and the appellant admitted, that the tenancy was created under a lease deed dated 8 August 1952. The lease deed, which was filed along with the plaint, clearly stipulated a term of one year. There was no denial by the appellant that the lease term was not for a year; on the contrary, the appellant accepted the terms of the deed. Accordingly, the Court concluded that the High Court was correctly empowered to examine the validity of the notice, since the notice’s validity depended on the nature of the tenancy, and the determination of the tenancy’s term required a construction of the lease deed. By interpreting the deed, the High Court found that the lease was for a single year and that it had come to an end by the simple expiry of that period. The deed expressly stated that the house had been taken on rent for one year by the first party and contained a clause indicating that if rent fell into arrears, the second party would be jointly and severally entitled to eject the first party before the tenancy term ended and recover the due rent. This language made it clear that the lease was for a fixed one‑year period and not a month‑to‑month arrangement. Because the fixed term had elapsed, the appellant could not invoke any statutory notice requirement under section 106 of the Transfer of Property Act, 1882. Even assuming, for argument’s sake, that the notice issue were relevant, the appellant’s claim that no sub‑letting occurred within the meaning of section 13(1)(b)(i) of the Act was also rejected. The counsel contended that the sub‑section applied only to a new sub‑tenancy created after the original lease and not to the replacement of an existing sub‑tenant. The Court found no merit in that contention, noting that section 13(1)(b)(i) expressly prohibited any tenant, without the landlord’s written consent, from sub‑letting, assigning, or otherwise parting with possession of any part of the premises after the Act came into force. The facts demonstrated that, after the 1952 lease deed, the appellant had indeed sub‑let portions of the building to other persons without obtaining the landlord’s written consent, thereby falling squarely within the prohibition of section 13(1)(b)(i).

The contention raised was that the statutory provision applies only to a first sub‑letting that occurs after the lease has been taken and that it does not extend to a situation where a sub‑tenant already occupied part of the premises and a new sub‑tenant was introduced only after the former vacated. This argument was derived from the expression “sublet, assigned, or otherwise parted with the possession”; the submitters argued that once possession had already been transferred by a prior sub‑lease, merely substituting another person in the place of the earlier sub‑tenant would not bring the clause within the ambit of the statute. The court found no merit in this line of reasoning. Section 13(1)(b)(i) explicitly provides that if a tenant, without obtaining the landlord’s written consent, sub‑lets, assigns or otherwise parts with possession of the whole or any part of the premises after the commencement of the Act, the tenant becomes liable to be evicted. In the present case, it was admitted that after the execution of the lease deed of 1952 the appellant had sub‑let several rooms in the building to other persons without securing the landlord’s written permission. The existence of earlier sub‑tenants in those portions could not in any way assist the appellant, because the subsequent occupants were not holding under the earlier sub‑tenants; rather, they were inducted directly by the appellant after the earlier sub‑tenancies had terminated. Consequently, the appellant, having sub‑let part of the premises without the landlord’s written consent, could not invoke the protection afforded by Section 13 of the Act. In this view, the High Court was correct in setting aside the decree of the Civil Judge, since the Civil Judge had refused to pass an eviction order on the erroneous legal premise that the appellant was a monthly tenant, thereby disregarding the clear term of the lease deed. As the decree was not “according to law,” the High Court, exercising its jurisdiction under Section 35 of the Act, was well within its power to annul that decree. Accordingly, the appeal failed and was dismissed with costs, and the appeal was dismissed.