Case Note & Summary
The litigation arose from an eviction suit filed by the respondent landlord against the appellant bank under the West Bengal Premises Tenancy Act, 1956. The landlord sought ejectment of the bank from the fourth floor of premises No. 20, Old Court House Street, Calcutta, alleging that the bank, after taking the demised premises on rent of Rs.2,250 per mensem, had inducted the United Bank of India Employees' Association Central Committee, a registered trade union, into the premises without the landlord's written consent, thereby subletting in contravention of Section 13(1)(a) of the Act. The trial court, a learned Single Judge of the Calcutta High Court, dismissed the suit. On appeal, the Division Bench reversed the Single Judge, held that the bank had parted with possession in favour of the trade union in complete and exclusive possession, and decreed the suit on the ground of subletting. The appellant bank then appealed to the Supreme Court by special leave. The Supreme Court considered two main legal issues: first, whether Section 13(1)(a) of the West Bengal Premises Tenancy Act, 1956 applies to non-residential premises; and second, whether the bank had sublet the premises within the meaning of that provision. The appellant contended that the trade union was part of the bank's trading activity, that the bank retained control over the union, that the union was bound to vacate on the bank's demand, that the bank maintained the premises and paid municipal taxes and electricity charges, and that no rent was collected from the union. The respondent argued that the trade union's exclusive possession for union activities unconnected with the bank's business led to the inference that the bank had parted with possession for consideration, establishing subletting. The Court first held that Section 13(1)(a) applies to both residential and non-residential premises governed by the Tenancy Act, rejecting the appellant's contention to the contrary. On the question of subletting, the Court analyzed the essential ingredients under Section 105 of the Transfer of Property Act and Section 13(1)(a) of the Tenancy Act. It noted that subletting requires a transfer of the right to enjoy the property for consideration. From the evidence, the Court found that though the bank had inducted the trade union, it had not received any monetary consideration from the union. The President of the trade union testified that the bank retained the power to call upon the union to vacate at any time and the union had given an undertaking to that effect. The bank also maintained the premises at its own expense and paid electricity charges. Thus, the bank retained legal control of the possession, and the union's occupation was deemed constructive possession on behalf of the bank. The Court applied the principle from Smt. Rajbir Kaur v. M/s. Chokesiri & Co. that exclusive possession may raise an inference of subletting, but such inference is rebuttable. Here, the bank successfully rebutted the inference by showing absence of consideration and retention of control. Consequently, the Court held that the appellant had not sublet the premises and was not liable for eviction under Section 13(1)(a). The Supreme Court allowed the appeal, set aside the Division Bench's judgment and decree, and restored the Single Judge's dismissal of the eviction suit.
Headnote
A) Tenancy Law - Subletting - Essential Ingredients - West Bengal Premises Tenancy Act, 1956, Section 13(1)(a); Transfer of Property Act, 1882, Section 105 - The court examined whether a tenant bank sublet premises to its employees' trade union by inducting the union for union activities. The court held that a subletting requires transfer of a right to enjoy the property for consideration; since the bank received no monetary consideration from the union and retained power to call upon the union to vacate at any time, there was no transfer of exclusive right to enjoy the premises for consideration. The tenant retained legal possession and the union's occupation was constructive possession on behalf of the bank. Held that the appellant had not sub-let the demised premises and was not liable for eviction under Section 13(1)(a). (Paras 1.1-1.3) B) Tenancy Law - Applicability of Eviction Grounds - Residential and Non-Residential Premises - West Bengal Premises Tenancy Act, 1956, Section 13(1)(a) - The court considered the contention that Section 13(1)(a) does not apply to non-residential buildings. Upon examining the provision and related clauses including Section 14, the court held that the provision applies to residential as well as non-residential premises governed by the Tenancy Act. Held that the ground of subletting is available for eviction irrespective of the nature of the premises. (Para 2) C) Transfer of Property - Lease and Sub-lease - Definition of Sub-tenancy - Transfer of Property Act, 1882, Section 105 - The court clarified that under Section 105, a lease is a transfer of a right to enjoy property for consideration, and a tenant who transfers or assigns his right in the tenancy or any part thereof in whole or in part without previous consent in writing creates a sub-tenancy. The tenant bank, by allowing the trade union to occupy the premises while retaining maintenance and control, did not transfer its right to enjoy the property exclusively for consideration. Held that no sub-tenancy was created. (Para 3) D) Evidence - Proof of Subletting - Exclusive Possession and Inference - West Bengal Premises Tenancy Act, 1956, Section 13(1)(a) - The court discussed the principle from Smt. Rajbir Kaur v. M/s. Chokesiri & Co. that exclusive possession may allow an inference of subletting, but the tenant may rebut it. In this case, the bank showed no monetary consideration, maintenance by the bank, and union's undertaking to vacate on demand, rebutting the inference of subletting. Held that the landlord failed to prove the ingredient of consideration and thus subletting was not established. (Paras 1.2-1.3)
Issue of Consideration
Whether the tenant bank had sub-let the demised premises within the meaning of Section 13(1)(a) of the West Bengal Premises Tenancy Act, 1956; Whether Section 13(1)(a) applies to non-residential premises.
Final Decision
The Supreme Court allowed the appeal, set aside the judgment and decree of the Division Bench of the Calcutta High Court, and held that the appellant bank had not sub-let the demised premises under Section 13(1)(a) of the West Bengal Premises Tenancy Act, 1956. Consequently, the eviction suit stood dismissed.
Law Points
- Subletting requires transfer of right to enjoy property for consideration
- exclusive possession alone does not establish subletting
- tenant retaining legal control and no monetary consideration means no subletting
- Section 13(1)(a) of West Bengal Premises Tenancy Act
- 1956 applies to residential and non-residential premises
- Section 105 of Transfer of Property Act
- 1882 defines lease and sub-tenancy
