Lease without allotment order is void and unenforceable where rent control law prohibits the letting outright

A lease created for letting and occupation of a building governed by the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 without an allotment or release order is void, because the statute expressly prohibits such letting and the object of the bargain is unlawful under Section 23 of the Indian Contract Act, 1872. The resulting transfer is also invalid under Section 6(h) of the Transfer of Property Act, 1882. The agreement is therefore unenforceable as a contractual tenancy, and relief cannot be founded on the illegal lease itself. Claims based on independent title and the consequences of unauthorised occupation are distinct and may be considered separately.

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Issues: (i) Whether an agreement of lease for letting and occupation of a building governed by the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972, entered into without an allotment order, is void. (ii) Whether such an agreement is enforceable in law and can support a decree for ejectment of the tenant in favour of the landlord.

Issue (i): Whether an agreement of lease for letting and occupation of a building governed by the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972, entered into without an allotment order, is void.

Analysis: Sections 11 and 13 of the Act impose an express and complete prohibition on letting and occupation except under an allotment or release order. Read with Section 31, the prohibition is backed by penalty, and the object of a lease created in breach of those provisions is to circumvent the statutory scheme governing control of letting. Under Section 23 of the Indian Contract Act, 1872, an agreement is unlawful if its object is forbidden by law, if permitted it would defeat the provisions of law, or if it is opposed to public policy. A lease created contrary to the statutory prohibition therefore falls within unlawful consideration or object, and Section 6(h) of the Transfer of Property Act, 1882 prevents the transfer from being valid.

Conclusion: Yes. Such an agreement of lease is void.

Issue (ii): Whether such an agreement is enforceable in law and can support a decree for ejectment of the tenant in favour of the landlord.

Analysis: A contract founded on a prohibited object cannot be enforced, and no court will lend its aid to give effect to rights flowing from the illegal lease itself. The landlord cannot recover rent or enforce contractual rights arising out of the void tenancy. At the same time, the landlord's claim based on ownership and the statutory consequence of unauthorised occupation is distinct from enforcement of the illegal bargain. The majority held that, depending on pleadings and proof, a decree for ejectment and damages for use and occupation may be maintained on that independent footing, though not on the basis of the void lease.

Conclusion: The agreement is unenforceable in law, and no decree for ejectment can be passed on the basis of the lease itself; claims resting on independent title are not barred by the void agreement.

Final Conclusion: The statutory prohibition under the rent control law renders a lease created without allotment void and unenforceable, and relief cannot be founded on the illegal contract itself.

Ratio Decidendi: Where a statute expressly prohibits letting and occupation except under an allotment or release order, a lease made in breach of that prohibition is void under Section 23 of the Indian Contract Act, 1872 and cannot be enforced as a contractual tenancy.

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