1983 (1) TMI 285 - HC - Indian Laws

Summary

Issues Involved:
1. Unlawful assignment of tenancy rights.
2. Applicability of the notification under Section 15 of the Bombay Rent Act.
3. Definition and existence of a "business as a going concern."
4. Request for additional evidence.

Detailed Analysis:

1. Unlawful Assignment of Tenancy Rights:
The core issue revolves around the alleged unlawful assignment of tenancy rights by Defendant No. 1 to Defendant No. 2. The plaintiffs filed a suit for possession of the suit premises on the grounds that Defendant No. 1 had unlawfully assigned his interest in the suit premises, contravening Section 15 of the Bombay Rent Act, making him liable for eviction under Section 13(1)(e) of the Act.

2. Applicability of the Notification under Section 15 of the Bombay Rent Act:
The defendants argued that the assignment dated 5th February 1973 was saved by the notification issued by the State Government under the proviso to sub-section (1) of Section 15 of the Bombay Rent Act. They claimed that Defendant No. 1 had assigned his entire interest in the suit premises along with the business as a going concern to Defendant No. 2. However, both the trial court and the appellate court found that there was no business being carried on in the suit premises at the time of the assignment, thus making the assignment a colorable transaction and not a lawful transfer under the notification.

3. Definition and Existence of a "Business as a Going Concern":
The courts examined whether there was a business as a going concern that could be assigned under Clause (2) of the Schedule to the notification. It was found that for at least a year before the assignment, there was no stock-in-trade or business transactions in the suit premises. The courts concluded that there was no business as a going concern, which is a requirement for a lawful assignment under the notification. The Supreme Court's decision in Shah & Co. v. State of Maharashtra was referenced, which supported the view that an assignment without an ongoing business and stock-in-trade is merely a transfer of tenancy rights, which is prohibited under Section 15 of the Rent Act.

4. Request for Additional Evidence:
The petitioner (Defendant No. 2) made an oral application for an opportunity to lead additional evidence to prove the existence of stock-in-trade in the suit premises at the time of the assignment. The court denied this request, noting that the petitioner had ample opportunity to present evidence in the trial court and the appellate court but failed to do so. The court emphasized that additional evidence could not be introduced at this stage, especially in a petition under Article 227 of the Constitution of India.

Conclusion:
The petition was dismissed, and the rule was discharged with costs. The courts upheld the finding that the assignment was unlawful as there was no business as a going concern in the suit premises, making the defendants liable for eviction under Section 13(1)(e) of the Bombay Rent Act.