1. This is an appeal by the defendants from a judgment of P. B. Mu-kharjee, J., which was passed on 10th July, 1950, decreeing the landlords' suit for possession.
2. The point involved in the appeal is a short one, namely, whether the defendants come within the mischief of Section 11 (1) (b) of the Rent Control Act of 1948 (hereinafter for the sake of convenience referred to as 'unlawful subletting). It. is admitted on behalf of the parties by their counsel that the Act of 1948 governs the rights of the parties in this case.
3. That section (inter alia) provides that a tenant is deprived of the protection of the Act where he 'has sublet, or otherwise transferred his interests in the premises for more than six consecutive months and to the extent either of the whole or a major portion of the premises, in the absence of any contract or other authority in writing expressly permitting such subletting or transfer.'
4. The facts of the case are as follows: The plaintiffs (landlords) are owners (being the trustees) of premises No. 3, Bolai Dutt Street in he town of Calcutta, which is a partly three storied and partly four storied house. The premises were let to Mohammad Siddique & Sons by a lease which expired on 11th June, 1934. During the subsistence of this lease, there were sub-tenants in the premises. Their interest, of course, fell on the expiry of the lease.
5. The landlords by a lease dated 12th June, 1934, let the premises to three . persons Nawabuddin, Mehrajuddin and Mahammad Ibrahim, who carried on a partnership business under the name and style of Messrs. Mahammad Ibrahim Mehrajuddin.
6. Mohammad Siddique & Sons on the expiry of the lease refused to vacate the premises. The new tenants filed a suit for ejectment against Siddique & Sons and obtained a decree in this Court. This decree, no doubt, could be executed not only against Siddique & Sons but also against the sub-tenants. But it appears that the decree was not put into execution and the tenants under the lease of 1934 came into occupation of the two rooms which were in possession of Siddique and Sons and allowed the sub-tenants to continue. Siddique and Sons left the premises.
7. The lease of 1934 was for a period of three years but gave to the lessees option to renew it for another two years. The lessees exercised the option and the term of the lease was extended. After expiry of the term, the lessees held on.
8. Sometime towards the end of 1942, Nawabuddin retired from the partnership and on 6th January, 1943, defendants Ibrahim and Mehrajuddin wrote to the landlords informing' them that Nawabuddin had retired from the partnership and asked the landlords to issue rent bills in the name of the two persons, Mehrajuddin and Ibrahim, which previous thereto were issued in the names of the three lessees. The landlords agreed to the proposal and the rent was thereafter accepted from, and rent bills issued in the names of, the two tenants. The effect of this was the surrender of the tenancy existing previous thereto and the creation of a new tenancy. For before the landlords had agreed to accept Mehrajuddin and Ibrahim as tenants, Nawabuddin was also liable to perform the obligations of the contract of tenancy. By consent of all the parties concerned he was released from the obligations and the two remaining partners took upon themselves the burden, of performing the obligations of the contract of tenancy. This operated as implied surrender.
9. Sub-tenants, of course, continued in the premises and it is not disputed that except as to five, the sub-tenants were sub-tenants of the premises from the time of Siddique & Sons and that a major portion of the premises has been in their occupation. There are thirty-five rooms in the premises and except two rooms (namely, the godowns which are in possession of the defendants), the rest have been and are in occupation of sub-tenants.
10. The lease dated 12th June, 1934, prohibited sub-letting of the 'demised premises entirely' without the written permission of the landlords. In this case the entire premises have not been sub-let. Portions of them only have been sub-let. The lessee under Section 108 of the Transfer of Property Act may transfer by way of sub-lease the whole or any part of his interest in the premises, in the absence of a contract or any local usage to the contrary. In the present case the lease did not prohibit sub-letting of a portion of the premises nor is there any local usage to the contrary. Therefore the subletting was perfectly lawful when it was made.
11. On 30th April, 1945, there was a fresh contract of tenancy between the landlords and the defendants, which is quite different in its scope and character from the lease of 1934. There is no doubt that this again operated as surrender of the previous tenancy. If a lessee accepts a new contract of tenancy, it operates as a surrender of the old tenancy, for a new lease cannot be granted unless the old is surrendered. 'Crowley v. Vitty', (1852) 7 Ex. 319. Such a surrender takes place by operation of law and the intention of the parties is immaterial.
12. The learned Judge On the facts recited above took the view that there had been an 'unlawful subletting' by the defendants, and gave a decree for possession to the landlords. This appeal is against that decree.
13. There is no doubt in my mind that in 1934 Nawabuddin, Mehrajuddin and Ibrahim sublet the premises to the sub-tenants after their interest had determined, by allowing them to continue and accepting rent from them and treating them as their tenants, and this they could do under the law then existing. So the subletting was lawful.
14. In 1943, as I have said, there was an implied surrender of the previous tenancy and again in 1945 by the contract of tenancy of that year there was surrender of the tenancy existing previous thereto.
15. Section 115 of the Transfer of Property Act provides that a surrender, express or implied, of a lease does not prejudice an under-lease of the property. The section proceeds on the principle that a man is not permitted to derogate from his own grant. As between the parties to the transaction a surrender by the lessee puts an end to his interest, but it does not affect third persons who have acquired an interest from him. A lessee who has assigned his interest by way of mortgage or otherwise cannot defeat his assignee's right by a surrender to the lessor and in the same way a surrender by the lessee cannot prejudice the under-lessee. Such a surrender operates as an assignment to the lessor of the lessee's' interest and thus brings the under-lessee into immediate relations with the lessor. This is a well-established principle of law which is clearly stated in books of authorities like Woodfall, Foa and Redman.
16. Therefore, the rights created by the subletting of 1934 in favour of the sub-tenants could not be affected by the surrender of 1943 or 1945. The defendants could not determine the interest of the sub-tenants by surrendering their term to the landlords because from the date of the under-lease they had parted with their own interest in the land to the extent of the interest created by the sub-tenancy.
17. Sub-tenancy is an interest carved out of the interest of the tenant. If surrender does not prejudice the rights of sub-tenants, it implies that these rights existed before the surrender - and rights which 'exist' at any point of time are not 'created' at that point of time.
18. In this view there was no sub-letting by the defendants in 1943 or 1945 or at any time thereafter. If there was no sub-letting, there could not be an unlawful sub-letting, that is to say, a sub-letting within the mischief of Section 11 (1) (b).
19. Further in 1934 when the lessees of the lease of that year sub-let the premises, the sub-letting was perfectly lawful. How the Act of 1948 could make it an unlawful sub-letting is very difficult to see.
20. Then again in this case it is 'mitted that at all material times the landlords had knowledge of the sub-tenancy and of the subtenants' rights and with that knowledge accepted rent from their immediate tenants and twice accepted surrender of their tenancies, once in 1943 and other in 1945.
21. In these circumstances, I do not think the landlords can call the subletting of 1934 as 'unlawful sub-letting' and use that as a ground lor the eviction of the defendants.
22. Another question of importance arises in this case which, however, does not fall to be considered in this appeal, namely, whether a sub-letting previous to the commencement of the Act of 1948 could be an 'unlawful sub-letting' within the meaning of the Act. 'There are a number of decisions of this Court noticed in 'Gangamoyee v. Manindra Chandra', 53 Gal W N, 718, which have taken the view that on a construction of Section 11 of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1948, any period of sub-letting prior to and continuing on or after the 1st December, 1948, deprives tenants of any protection under Section 11 1(1) (b) of the Act, if such sub-letting has been for more than six consecutive months for the whole or a major portion of the premises without a contract in writing expressly permitting such sub-letting. On this view, the Act of 1948 would to a great extent curtail the rights of the landlords acquired previous to the commencement of the Act of 1948, as a comparison of the relevant provisions of the Rent Control Act of 1943, the Ordinance of 1946 and of the Rent Act of 1948 clearly shows. It is not necessary to burden this judgment by consideration of these provisions of the Acts and the Ordinance.
23. Whether the 1948 Act can be given a retrospective operation on this point requires fuller consideration and we do not think it fit to say anything as regards the cases which have taken the view that Section 11(1) (b) of the 1948 Act has retrospective operation in the sense I have stated. We reserve the consideration of this point in future when the occasion arises. It is not necessary to consider this point in this appeal. It is quite sufficient for the disposal of this appeal to find, as we have done, that in this case there has been no 'unlawful sub-letting' - that is to say, a sub-letting within the meaning of Section 11(1) (b) of the Act of 1948.
24. We accordingly allow the appeal, set aside the judgment of the learned trial Judge and dismiss the suit with costs here and below. Certified for two counsel.
25. I agree. The changes which occurred in 1943 and 1945 could not prejudice the rights of the sub-tenants by reason of Section 115 of the Transfer of Property Act. The rights of the sub-tenants continued in spite of the surrenders in 1943 and 1945 and as these surrenders were made for the purpose of obtaining new leases the sub-tenants continued in my view as sub-tenants of the new lessees. It cannot I think be said that the lessees under the new leases of 1943 or 1945 ever sublet to the sub-tenants. The rights of the sub-tenants, after the surrenders in those two years, remained wholly unaffected and their sub-tenancies continued and therefore could not be said to have been created by the new lessees in 1943 and 1945. That being so, the tenants in this case could not be said to have sublet the major portion to the sub-lessees because the subletting to these sub-lessees took place as early as 1934 as pointed out in the judgment delivered by my learned brother.