2011 (4) TMI 1552 - SC - Indian Laws

Supreme Court Dismisses Suit, Upholds Sub-Tenant's Rights Under Bombay Rent Act, 1947; Overturns Lower Court Rulings.

Board of Trustees of the Port of Mumbai, M/s Wadi Bunder Cotton Press Company Versus Byramjee Jeejeebhoy Pvt. Ltd. and Ors.

The SC set aside the judgments of the HC and lower courts, dismissing the Plaintiff's suit. The SC emphasized the overlooked provisions of the Bombay Rent ... - Issues Involved:1. Breach of lease terms and conditions.2. Validity of the notice of determination and forfeiture of the lease.3. Applicability of the law of limitation.4. Binding nature of the decree on the sub-tenant (Defendant No. 2).Detailed Analysis:1. Breach of Lease Terms and ConditionsThe Plaintiff sought eviction of the Defendants on grounds of breach of the lease dated May 10, 1886, particularly the condition against assignment of any portion of the leasehold land to any third party. The Plaintiff alleged that the Defendant had unlawfully parted with possession of the leasehold property without any written license from the lessor. The trial court held that the Plaintiff had successfully proved the breach of the covenant against assignment of the leasehold property to a third party, as Defendant No. 1 had sub-let the property to Defendant No. 2 without obtaining the necessary written permission from the Plaintiff. The appellate court and the High Court affirmed this finding.2. Validity of the Notice of Determination and Forfeiture of the LeaseThe trial court upheld the validity of the Plaintiff's notice determining and forfeiting the lease, which was issued on December 7, 1991. The notice was found to be in compliance with the legal requirements, and the Defendant's arguments against its validity were dismissed. The appellate court and the High Court concurred with the trial court's decision.3. Applicability of the Law of LimitationThe Defendants argued that the Plaintiff's suit was barred by limitation. However, the trial court, appellate court, and the High Court all held that the suit was not barred by limitation. The courts found that the transaction between the Plaintiff and Defendant No. 1 was covered by the provisions of the Transfer of Property Act, and therefore, the suit was timely.4. Binding Nature of the Decree on the Sub-Tenant (Defendant No. 2)The trial court held that once the sub-lease created in favor of Defendant No. 2 was found to be unlawful and illegal, the decree of eviction passed against Defendant No. 1 would fully bind Defendant No. 2. The appellate court and the High Court affirmed this view. However, the Supreme Court found that the lower courts had overlooked the provisions of the Bombay Rent Act, 1947, which were crucial to the case. The Supreme Court noted that Defendant No. 2 had been in possession of the suit premises since before February 1, 1973, and was therefore protected under Section 15(2) of the Bombay Rent Act. This provision stated that any sub-letting, assignment, or transfer of interest made before February 1, 1973, would be deemed valid and would protect the tenant from eviction under Section 13(1)(e) of the Act.Conclusion:The Supreme Court found that the judgments and orders passed by the High Court and the two lower courts were unsustainable. It set aside the judgments and orders of the High Court and the court of Small Causes, dismissing the Plaintiff's suit. The appeals were allowed, but with no order as to costs. The Supreme Court emphasized the importance of the provisions of the Bombay Rent Act, 1947, which had been overlooked by the lower courts, and recognized the protection afforded to Defendant No. 2 under Section 15(2) of the Act.