(1) This Second Appeal against Order has come up before us on a reference by B. C. Misra J. The said second appeal has been filed under Section 39 of the Delhi Rent Control Act No. 59 of 1958 (hereinafter referred to as the Rent Control Act) by Lal Chand (landlord) against the appellate order of Mr. M. L. Jain, Rent Control Tribunal, dated 15th May, 1969, in Rent Control Appeal No. 237 of 1967, whereby he dismissed the appeal and affirmed the order of Mr. P. K. Bahri, 1st Additional Controller, dated 10th January, 1967, in Suit No. 950 of 1962, dismissing a petition for eviction filed by Lal Chand against the respondents herein on the ground of unlawful subletting.
(2) The premises in question bears No. 73, Moti Bazar, Chandni Chowk, Delhi, and belongs to Lal Chand. It was let out by Lal Chand to Gopi Krishan Nath Mal, respondent 1 herein, sometime in 1934. According to the concurrent findings of the first Additional Controller and the Rent Control Tribunal, sometime before 9th June, 1952, respondent 1 sublet various portions of the premises to respondents Nos. 2, 3, 4 and 5. Again, sometime before the aforesaid date, respondent 3 sublet a portion of the premises to respondent 6. The first Additional Controller as well as the Tribunal held that the said sub-lettings were lawful since they had taken place prior to 9th June, 1952, and requisite notices under Section 17 of the Rent Control Act had been served on respondents 2 to 6. The first Additional Controller and the Tribunal, however, found that respondent 6 sublet a portion of the premises to respondents 7 and 8 subsequent to 9th June, 1952, without the written consent of Lal Chand (landlord), and held that the said subletting was, thereforee, unlawful.
(3) On 27th July, 1962, the landlord filed the petition which has given rise to the present second appeal praying for the eviction of the tenant, respondent 1, as well as the subtenants, respondents 2 to 8, on the ground of unlawful subletting. The first Additional Controller, by his order, dated 10th January, 1967, dismissed the petition as against respondents I to 5 as he found the subletting to be lawful. As regards respondents 6 to 8 also, the first Additional Controller dismissed the petition on the ground that although the subletting by respondent 6 to respondents 7 and 8 was unlawful inasmuch as the subletting was subsequent to 9th June, 1952, without the written consent of the landlord, no order of eviction could be passed against them under clause (b) of the proviso to sub-section (1) of Section 14 of the Rent Control Act, inasmuch as the said subletting had not been made by the tenant, Gopi Krishan Nath Mal, respondent I, but had been made by the subtenant, respondent 6. In support of the said view, the first Additional Controller relied upon the decision of the Supreme Court in South Asia Industries (P) Ltd. v. S. Sarun Singh and others, : 3SCR829 . In the result, the first Additional Controller dismissed the petition for eviction against all the respondents.
(4) As already stated, the said order was confirmed by the Rent Control Tribunal by its order, dated 15th May, 1969. It is against the said order of the Tribunal that the present Second Appeal has been filed by the landlord, Lal Chand. The Second Appeal came up for admission before Andley J. (as his lordship then was). By an order, dated 10th September, 1969, the Second Appeal was admitted by the learned Judge, but notice was directed to be issued only to respondents 1, 6, 7 and 8, and notice was refused to be issued to the other subtenants. The result is that the Second Appeal stands dismissed as against respondent 2 to 5, and the order of the Tribunal has become final as against them. The Second Appeal, as it stands now, is only as against respondents 1, 6, 7 and 8. As stated above, the ground on which eviction was refused by the first Additional Controller and the Tribunal as against the aforesaid respondents was that the unlawful subletting was not by the tenant (respondent 1) but was by the subtenant, respondent 6, and there could, thereforee, be no order of eviction for the unlawful act of subletting by the subtenant. The view taken by the first Additional Controller and the Tribunal was that under clause (b) of the proviso to sub-section (1) of Section 14 of the Rent Control Act, eviction could be ordered only if the A pTemises were sublet by-the tenant without the written consent of the landlord, and not when the subletting without the consent of the landlord was made by the subtenant. Support for the said view was sought to be derived from the decision of the Supreme Court in the case of South Asia Industries (P) Ltd. (supra).
(5) Shri S. N. Misra, learned counsel for the appellant, landlord, contended that the view taken by the first Additional Controller and the Tribunal was incorrect and based on a wrong view of the relevant provisions of the Rent Control Act, and that the decision of the Supreme Court in South Asia Industries (P) Ltd. (supra) does not support the view taken by them.
(6) For a proper appreciation of the said contentions, it is necessary to refer to the legal position regarding subletting under the ordinary law and then under the Rent Control Act. Section 108(j) of the Transfer of Property Act provides that subject to a contract to the contrary a lessee may sublease the whole or any part of his interest in the property, and the transferee of such interest or part may again transfer it. It also provides that the lessee shall not, by reason only of such transfer, cease to be subject to any of the liabilities attaching to the lease. Thus, unless there is a contract to the contrary, a lessee may sublease the whole or a part of his interest, and the sublessee, in his turn, may further sublet. In such a case of subletting and further subletting, the lessee continues to be liable for the liabilities attaching to the lease, and the landlord continues to have the right to enforce the liabilities against his lessee by reason of privity of contract. So far as the sublessee or his sublessee are concerned, their interests being only derivative interests, there is privity of estate between them and the landlord. Consequently, if there is any breach of the terms or covenants of the lease, whether by the lessee or by the aforesaid sublessee, the landlord can take action for evicting the lessee as well as the sublessees. In such an action by the landlord, as the sublessee holds only under the lessee and the sublessee under the further sublease holds under the sublessee from the lessee, the lessee cannot plead in defense that the breach is by the sublessee or the further sublessee and not by himself. This is the position under the ordinary law.
(7) We shall now refer to the position under the Rent Control legislation which places restrictions on the right of a landlord to obtain an order of eviction by providing that he cannot obtain such an order except on the grounds specified in the Act. Section 2(1) of the Delhi Rent Control Act provides that in the said Act, 'tenant' includes a 'subtenant' unless the context otherwise requires. Sub-section (1) of Section 14 of the said Act provides that, notwithstanding anything to the contrary contained in any other law or contract, no order or decree for the recovery of possession of any premises shall be made by any Court or Controller in favor of the landlord against a tenant. The sub-section has, however, a proviso wherein it is laid down that the Controller may make an order for the recovery of the premises on one or more of the grounds set out in the clauses of the proviso. Clause (b) is 'that the tenant has, on or after the 9th day of June, 1952, sublet assigned, or otherwise parted with the possession of the whole or any part of the premises without obtaining the consent in writing of the landlord'. In other words, while sub-section (1) of Section 14 places a bar on the Court or the Controller against passing an order or decree for the recovery of possession of any premises in favor of a landlord against a tenant, the proviso recognises certain exceptions to the said bar, one of them being the aforesaid ground in clause (b)
(8) The question for consideration is whether clause (b) which refers to subletting by a tenant on or after 9th June, 1952, without obtaining the consent in writing of the landlord, includes subletting by a subtenant also without obtaining the consent in writing of the landlord. Section 2 defines the various terms used in the Act. Section 2(1) defines the term 'tenant' and provides that in the Act 'tenant' includes 'subtenant'. In view of the said definition, the subletting by a tenant mentioned in clause (b) of the proviso to Section 14(1) would include a subletting by a subtenant also without obtaining the written consent of the landlord.
(9) The Additional Controller and the Tribunal, however, relied upon the decision of the Supreme Court in the case of South Asia Industries (P) Ltd. (supra). In that case, S. Sarup Singh and others, who were the owners of certain premises in Connaught Circus, in New Delhi, let them out to the Alien Berry and Co. (Calcutta) Limited. Subsequently, the tenant, Alien Berry and Co., transferred the lease to South Asia Industries (P) Ltd. and put the latter in possession. Thereupon, the owners (landlords) alleging that the transfer had been made without their consent, filed an application under the aforesaid clause (b) of the proviso to sub-section (1) of Section 14 of the Delhi Rent Control Act, 1958, before the Controller, praying for an order of recovery of possession of the premises from Alien Berry & Co. as well as the South Asia Industries (P) Ltd. i.e. from the tenant and the transferee. During the pendency of the application, the tenant, Alien Berry & Co., went into liquidation and was in due course dissolved, and thereupon its name was struck off from the proceedings. Thereafter, the Controller heard the application and passed an order in favor of the owners for recovery of possession of the premises from South Asia Industries (P) Ltd. On appeal by the South Asia Industries (P) Ltd., the order of the Controller was confirmed by the Rent Control Tribunal. On second appeal to the High Court by the South Asia Industries (P) Ltd., the order of the Tribunal was confirmed. South Asia Industries (P) Ltd., Transferee, then filed an appeal to the Supreme Court.
(10) It was contended before the Supreme Court that the order for recovery of possession passed against South Asia Industries (P) Ltd. (transferee) after Alien Berry and Co. (lessee) had ceased to be a party to the proceedings, was incompetent. It was urged that the first part of sub-section (1) of Section 14 puts a complete ban on recovery of possession from all tenants, that the proviso to it is only any excepting clause and it lifts that ban in the circumstances mentioned in it, that the proviso, though it does not expressly mention tenants, permits orders for recovery of possession against them alone, that the use of the article 'the' before the word 'tenant' in clause (b) of the proviso shows that the tenant mentioned in the said clause means only the tenant sought to be evicted under the proviso, such tenant having also to be, by the express terms of the clause, a tenant who had assigned his tenancy. It was urged that in view of the same, the only person against whom an order for recovery of possession can be made under clause (b) of the proviso is the tenant who has assigned his tenancy, and no such order can, hence, be made against the person to whom the tenancy has been assigned. It was submitted that since the South Asia Industries (P) Ltd. (transferee) was such a person, no order for eviction could be made against it.
(11) A. N. Sarkar J. speaking for the Court, observed in paragraph 4 of the judgment that the argument of the appellant was based really on the article 'the' pre-fixed to the word 'tenant' in clause (b) of the proviso, and according to the argument the article clearly indicated that the only person against whom an order for ejectment could be made under clause (b) was the tenant who assigned or sublet or parted with possession of the tenancy without the landlord's consent, that the said argument could not be accepted as the proviso expressly stated that an order for ejectment could be made 'on one or more of the following grounds' and then set out the grounds in the different clauses that followed, one of which was the ground in clause (b), and that the clauses, thereforee, set out the circumstances in which the operative part of the proviso was set in motion, i.e., the circumstances in which an order for recovery of possession may be made. The learned Judge went on to observe that if this was so, and Ire thought it was, the clauses could not have been intended to indicate the person against whom an order for recovery of possession could be made, that their purpose was entirely different, and that the various clauses did not intend to indicate the persons against whom an order for recovery of possession could be made, and so it could not be argued that the order could not be made against any other person. The learned Judge then observed in paragraph 5 of the judgment that the article 'the' before the word 'tenant' in clause (b) appeared to have been used to show that the tenant assigning must be the tenant of the landlord seeking eviction, and that, so read, the effect of the clause (b) in the proviso was that a landlord could recover possession if his tenant had assigned, sublet or transferred possession without his consent. After making the said observation, the learned Judge further observed as follows:-
'IFthis is not the correct reading of the provision, the situation would be anomalous. As the word 'tenant' includes by virtue of its definition in S. 2(1), a subtenant, it would at least be arguable that cl. (b) authorised a superior landlord to recover possession when the subtenant assigned without his consent. That could not possibly have been intended for the intermediate tenant would then have lost his tenancy for no fault of his. thereforee, I think the article 'the' was used only to emphasize that the tenant assigning mast be the tenant of the landlord seeking eviction. The article 'the' does not, in my opinion, lead inevitably to the conclusion that the only person against whom an order for recovery of possession can be made on the ground mentioned in cl. (b) is the tenant assigning or subletting or parting with possession of his tenancy without the landlord's consent.'
Then, paragraph 6 of the judgment, the learned Judge observed as follows:-
'Ithink that there are good reasons why it must be held that the Act contemplated orders for recovery of possession also against persons other than a tenant who has assigned or sublet without the landlord's consent. The offending tenant must of course go for, as I have said, he is the immediate tenant of the landlord desiring to recover possession and if he remains he would be entitled to possession and the landlord cannot recover possession. But this does not mean that the order may not also direct the removal from possession of others along with the immediate tenant when there is one. The reason for this view I will presently state.'
(12) The learned Judge then gave the reasons in paragraphs 7, 8 and 9 of the judgment. They are-
(1)The object of interpreting a statute is to ascertain the intention of the legislature enacting it. The object of the first part of sub-section (1) of Section 14 is to ban all recovery of possession of tenanted premises by a landlord, and the object of the proviso is to lift that ban in specified cases and enable the landlord to recover possession in any of the said specified cases. Assuming that in agiven case the landlord became entitled to recover possession under clause (b) of the proviso, clearly then the statute intended the landlord to recover possession, and it is the duty of the court to give effect to that intention. That being so, orders against all 'persons in occupation' must have been contemplated so that the landlord might without trouble recover possession. thereforee, in the case before the learned Judge, the tenant assigning having become extinct, an order for recovery of possession could be made against the assignee alone as that would enable the object of the statute which was to enable the landlord to recover possession, to be achieved (see paragraph 7).
(2)Section 18 of the Rent Control Act clearly contemplates an order for recovery of possession under Section 14 against a subtenant, and plainly implies that an order for recovery of possession against a subtenant is contemplated by cl. (b) of the proviso to sub-section (1)-of Section 14. If Section 14 contemplates an eviction order against a subtenant, it must equally contemplate such an order against assignees of tenants as the section makes no distinction between subtenants and assignees for the purpose of making such orders (see paragraph 8).
(3)Under Section 25 of the Rent Control Act an order for recovery of possession of any premises under .Section 14 would be binding on all persons in occupation of the premises except those who have independent title to then. An assignee or subtenant is, thereforee, entitled to be made parties to the proceedings so that he could defend by showing that there was in fact the requisite consent of the landlord for the assigning or subletting. If he is thus entitled to be heard to oppose the order of eviction, that would be another reason for saying that order of eviction can be made against him also (see paragraph 9).'
(THElearned Judge, however, left open the question as to whether in view of Section 25, an order for eviction against a tenant is in fact binding on his assignee or subtenant). The following propositions emerge from the above decision:-
(1)The clauses of the proviso to sub-section (1) of Section 14 merely set out the circumstances in which an order of recovery of possession may be made, and are not intended to indicate the person against whom such- anorder can be made (paragraph 4).
(2)The article 'the' before the word 'tenant' in clause (b) has been used only to emphasize that the tenant assigning must be the tenant of the landlord seeking eviction. Otherwise, the situation would be anomalous, because in view of the definition of 'tenant' as including 'subtenant', it would at least be arguable that clause (b) authorises a superior landlord to recover possession when the subtenant assigns or sublets without his consent, and the intermediate tenant would then lose his tenancy for no fault of his.
(3)An order for recovery of possession may be made also against persons other than the tenant who has assigned or sublet without the landlord's consent.'
(13) In the present case, the subletting by the respondent (tenant) to respondent 3 and the subletting by subtenant (respondent 3) to respondent 6 (subtenant) were both lawful, and it was the further subletting by respondent 6 to respondents 7 and 8 that was unlawful as it was done without the written consent of the landlord. The first Additional Controller and the Tribunal applied the second of the above propositions, and held that since according to the proposition the ground for an order of eviction as provided in clause (b) is unlawful subletting by the tenant and not by the subtenant, and since in the present case the subletting by the tenant was lawful and it was the subletting by the subtenant (respondent 6) that was unlawful for want of written consent by the landlord, the ground mentioned in clause (b) of the proviso to sub-section, (i) of Section 14 was not available and consequently no order for recovery of possession of the premises in question could be passed against respondents 1, 6, 7 and 8.
(14) In view of the clear observations of the Supreme Court in paragraph 5 of the aforesaid judgment in the case of South Asia Industries (P) Ltd. (supra) in which the second of the above propositions has been laid down, it has to be held that the definition of 'tenant' in Section 2(1) as including 'subtenant' does not apply in the context of the clause (b) of the proviso to sub-section (1) of Section 14. It, thereforee, follows that no order of recovery of possession could be passed against respondent I (tenant) as the subletting by him to respondent 3 was lawful, nor could it be passed against respondents 6, 7 and 8 under clause (b) as the unlawful subletting by respondent 6 to respondents 7 and 8 was not a ground covered by the said clause (b).
(15) We accordingly hold that the view taken by the first Additional Controller and the Rent Control Tribunal was correct, and dismiss the S.A.O. No. 292 of 1969, but in the circumstances without costs.