SUPREME COURT UPHOLDS THAT TENANT CANNOT SUB-LET OUTSIDE THE CONTRACT

In a recent Special Leave to Appeal (SLP) (Civil), a two Judge Bench of the Supreme Court, comprising of Justice K.M. Joseph and Justice Hrishikesh Roy, passed a Judgement dated 02.08.2022 in ‘Shabbir Mohammad Sayed v. Mrs. Noor Jehan Mushter Shaikh & Ors., SLP (Civil) No. 32161-32162 OF 2018’ and held that it will not be lawful for a tenant to sublet or to give on license or to assign or transfer in any other manner his interest in the whole or any part of the premises rented out to him.

In this case, the Respondent No. 1 filed a civil suit (suit) at the Court of Small Causes at Bombay (Trial Court), against Respondent No. 2 to 4. Respondent No.2 to 4 were Defendants 1, 2 and 3 in the suit. The claim of Respondent No. 1 in the suit was that Defendant No. 1 and 2 were tenants of the property in question, who were ready to transfer their tenancy rights on the agreed consideration of Rs. 85,000/- which was paid to them by the Respondent No. 1. The matter was being delayed as the property had been illegally sublet to two persons. The Respondent No. 1 was alleged to have contacted the landlord-Defendant No.3. The Defendant No. 3 transferred tenancy rights by rent receipt dated 01.12.2006. However, possession was not handed over. Defendant No. 3, was examined where he admitted the rent receipt. The Trial Court dismissed the suit by Order dated 09.04.2013. The Respondent No. 1, appealed against this Order dated 09.04.2013 before the Appellate Bench of Court of Small Causes. The Appellate Court allowed the appeal and decreed in favour of the Respondent No. 1 by Order dated 09.04.2013.

The Respondent No. 1 filed an Execution Petition for executing the Order dated 09.04.2013. At this stage, the Appellant of the present case claimed that the tenant who was actually in possession of the property assigned his rights in favour of the Appellant by an agreement dated 24.01.2014. The Appellant claimed ignorance of the suit. When the Appellant came to know of the Order obtained by the Respondent No. 1 and execution of the decree, he filed an application under Order 21 Rule 97 of the Code of Civil Procedure. This application was dismissed by the Execution Court, the Appellate Court and the High Court. Thus, the Appellant filed a SLP before the Supreme Court.

The Apex Court considered Section 26 of the Maharashtra Rent Control Tenancy Act 1999 (the Act). Section 26 states that in absence of contract, a tenant cannot sub-let or transfer or give on licence. The Supreme Court observed that the law giver has provided that, it will not be lawful for a tenant to sublet or to give on license the whole or any part of the premises let out to him or to assign or transfer in any other manner his interest. The Apex Court further observed that while under the general law, subject to there being no contract to the contrary, a tenant can assign, sublease or mortgage his rights as lessee, on the other hand, in regard to a tenancy governed by the Act, the ordinary rule is that a tenant cannot sublet, give on licence or assign or transfer in any other manner subject to a contract to the contrary.

The Supreme Court held that agreement relied upon by the Appellant dated 24.01.2014, would be illegal on the face of it unless a contract to the contrary was established. The alleged agreement by the so-called
tenant in favour of the Appellant was concerned, was held to be prohibited under Section 26. There was no express contract to the contrary to rescue the Appellant. Accordingly, the Supreme Court dismissed the appeal and upheld the Order of the High Court.

Anuradha Kumari

Associate

The Indian Lawyer & Allied Services

Edited by

Sushila Ram Varma

Chief Consultant and Editor

The Indian Lawyer & Allied Services