Lease in breach of vacancy-intimation rules remains valid between landlord and tenant, but ineffective against the statutory authority

A lease made in breach of vacancy-intimation and letting restrictions under rent control law is described as effective between landlord and tenant, while remaining ineffective against the Controller or other authorised authority for allotment purposes. The text states that such statutory provisions are aimed at regulated accommodation and public interest, and do not amount to an absolute prohibition that would invalidate the tenancy inter se under Section 23 of the Contract Act. It also notes that the earlier contrary view has been overtaken by a later Supreme Court ruling and is no longer good law.

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Issues: Whether a lease created in contravention of the vacancy-intimation and letting restrictions under the rent control statutes is void inter se between the landlord and tenant and whether the civil court can entertain a suit for possession on the strength of title.

Analysis: The provisions requiring the landlord to notify vacancy and forbidding letting without compliance were held to operate for the control and allotment scheme of the statute and to protect the public interest in regulated accommodation. Contravention renders the transaction ineffective against the Controller or authorised authority, but not void as between the parties themselves. Section 23 of the Contract Act was held not to invalidate such a lease inter se, because the statutory prohibition is not an absolute prohibition against the making of the tenancy agreement, and public policy is better served by preserving the tenancy between the parties while still enabling the statutory authority to ignore the lease for allotment purposes. The earlier contrary view was held to have been eroded by the later Supreme Court ruling and was not good law.

Conclusion: A lease entered into in contravention of the vacancy-intimation provisions is valid between landlord and tenant, though void against the statutory authority, and the civil suit based on an assertion that no tenancy existed cannot succeed.

Final Conclusion: The reference was answered by holding that the contrary earlier view no longer holds good, and the matter was sent back for decision on the remaining merits in accordance with law.

Ratio Decidendi: A statutory restriction on letting that is intended to regulate accommodation and secure allotment for public purposes does not necessarily make the tenancy agreement void between the contracting parties; it is void only to the extent required to give effect to the statutory scheme against the public authority.

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