Statutory tenancy under rent control may carry heritable and transferable rights only if the original tenancy contract allows it.

A statutory tenant under the Bombay Rent Act retains heritable and transferable incidents only to the extent recognised by the statute and the original contractual tenancy. Section 5(11) preserves the tenant status after termination of the contractual tenancy, and Section 5(11)(c) limits inheritance accordingly. Transferability depends on whether the original lease or tenancy agreement conferred a right to transfer; if it did, that right may continue despite the tenancy becoming statutory, but if it did not, Section 15 bars transfer. A valid licence could likewise be created only where the tenant had transferable leasehold rights under the original contract.

---

---

Issues: (i) Whether a statutory tenant governed by the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 retains heritable interest in the premises; (ii) whether such a statutory tenant retains transferable interest in the premises; (iii) whether such a statutory tenant could have created a valid licence before 1973; and (iv) whether the earlier Division Bench decisions holding that a statutory tenant cannot transfer his interest were correct.

Issue (i): Whether a statutory tenant governed by the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 retains heritable interest in the premises.

Analysis: The extended definition of tenant under Section 5(11) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 treats a person continuing in possession after termination of the contractual tenancy as a tenant. In the absence of a contrary provision, the protection afforded by rent control legislation does not merely preserve possession but may preserve the estate or interest in the premises. The statute expressly recognises the limited heritable position under Section 5(11)(c).

Conclusion: Yes, but only to the extent provided by Section 5(11)(c) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.

Issue (ii): Whether such a statutory tenant retains transferable interest in the premises.

Analysis: Transferability depends on the terms of the original contractual tenancy and the statutory bar under Section 15 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. If the tenancy agreement specifically permits transfer, that contractual right may survive even after the tenancy becomes statutory. If the agreement is silent, or does not confer such a right, transfer is prohibited.

Conclusion: Yes, but only if the tenant had such transferable interest as a contractual tenant.

Issue (iii): Whether such a statutory tenant could have created a valid licence before 1973.

Analysis: A valid licence requires a licensor who has a transferable interest in the property. Section 53 of the Easements Act permits a licence only to the extent of the grantor's transferable interest. Since a statutory tenant can create a licence only where the original contractual tenancy itself carried a right to transfer the leasehold interest, the power to grant licence depends on that antecedent contractual right.

Conclusion: Yes, but only if under the terms of the original contractual tenancy the tenant had a right to transfer the leasehold rights.

Issue (iv): Whether the earlier Division Bench decisions holding that a statutory tenant cannot transfer his interest were correct.

Analysis: The reasoning that a statutory tenant can never transfer his interest is too broad. The correct position is that a tenant falling within the category whose original contract permits transfer may continue to have that right even after the tenancy becomes statutory, while a tenant without such a contractual right cannot transfer. The earlier decisions were therefore not fully correct to the extent they treated all statutory tenants alike.

Conclusion: The earlier decisions were not entirely correct in holding that no statutory tenant is entitled to transfer his interest.

Final Conclusion: The reference was answered by recognising that heritability and transferability under rent control law depend on the statutory definition of tenant and the original contractual terms, and the matter was sent back for further hearing.

Ratio Decidendi: Where the rent statute preserves the status of a tenant after termination of the contractual tenancy, the tenant retains heritable and transferable incidents to the extent the statute and the original contract permit, and a licence can be granted only if the tenant had a transferable interest in the premises.

---