Case Note & Summary
The dispute centered on the eviction of a tenant from a shop in Mumbai under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. The landowners, a company, filed an eviction suit against the tenant, a private limited company, alleging unlawful subletting. The lease, dated 18 July 1955, contained a covenant prohibiting assignment, underletting, or parting with possession without consent. The plaintiffs claimed that the tenant allowed third parties to use the premises for exhibition-cum-sale of goods on a daily or periodic basis, collecting charges, and permitting them to issue their own sale documents, thereby parting with exclusive possession. The tenant denied the allegations, asserting that it merely displayed goods on its own account and retained possession. The trial court dismissed the suit, holding that no subletting was proved. On appeal, the Appellate Court of Small Causes reversed the trial court and ordered eviction, directing delivery of vacant possession within three months. The tenant challenged this decision by way of a civil revision application under Section 115 of the Code of Civil Procedure, 1908. The High Court considered the scope of unlawful subletting and the effect of the 1973 amendment to section 13(1)(e) of the Bombay Rent Act, which explicitly included ‘unlawfully given on licence’ as a ground for eviction. The court examined the pre-amendment and post-amendment provisions, noting that subletting requires parting with legal possession, i.e., possession with the right to exclude others. The amendment further recognized that granting a licence creating an interest in the premises would also attract eviction. Relying on the tenant’s own admissions—including the collection of charges, the issuance of cash memos by third parties, and the discrete periods of commercial use—the court concluded that the tenant had indeed parted with exclusive possession and interest in the premises. The court thus upheld the appellate order of eviction, dismissing the revision application.
Headnote
A) Landlord and Tenant - Eviction - Subletting - Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, Sections 13(1)(e), 15 - Under the pre-1973 amendment, subletting required the tenant to part with legal possession, i.e., possession with the right to include and exclude others. The landlord had to prove that the tenant sublet the whole or part of the premises or assigned or transferred interest. The Supreme Court held that mere permission to use is not subletting unless exclusive possession is given. (Paras 14-16) B) Landlord and Tenant - Eviction - Unlawful Licence - Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, Sections 13(1)(e), 15(1), 5(4A) - After the 1973 amendment, unlawfully giving on licence also constitutes a ground for eviction. The licence under the Act must create an interest, requiring exclusive possession of a definite portion. The tenant's admission of granting premises to third parties for commercial activities with payment of charges and issuance of their own memos established a licence. (Paras 17, 11-12, 7) C) Evidence - Admissions - Eviction Suit - Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 - The tenant's director admitted that the premises were given to third parties for specific periods, charges were collected, and the third parties issued their own cash memos. These admissions sufficiently proved that the tenant parted with exclusive possession of a definite portion, thereby establishing unlawful subletting or licence. (Paras 11-12, 7)
Issue of Consideration
Whether the defendants' acts of allowing third parties to use the suit premises for commercial activities, collecting charges, and letting third parties issue their own sale documents, constituted unlawful subletting or giving on licence under Section 13(1)(e) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
Final Decision
The High Court dismissed the civil revision application and upheld the eviction order of the appellate court, directing the defendants to deliver vacant possession within three months.
Law Points
- Subletting requires parting with exclusive possession
- giving on licence under amended Section 13(1)(e) creates interest in premises
- admission by tenant of collecting charges and allowing third-party sales indicates parting of possession
- mere permission to use premises does not constitute subletting unless exclusive possession is transferred
- clause 2(o) of lease deed covers licence with interest
- definition of licensee under Section 5(4A) requires creation of interest
