1985 (10) TMI 286 - HC - Indian Laws

Summary

Issues Involved:
1. Heritability of statutory tenancy under the Bombay Rent Act.
2. Transferability of statutory tenancy under the Bombay Rent Act.
3. Validity of licenses created by statutory tenants before 1973.
4. Correctness of previous judgments in Vasant v. Dikkaya and Chandrakant Jasinath Thakur v. Narayan Lakhanna Shetty.

Detailed Analysis:

1. Heritability of Statutory Tenancy:
The court examined whether a statutory tenant governed by the Bombay Rent Act retains heritable interest in the premises. The term "statutory tenant" is used to describe a tenant whose contractual tenancy has been terminated. The court considered various Supreme Court decisions, including Anand Nivas Pvt. Ltd. v. Anandji Kalyanji's Pedhi and J.C. Chatterjee v. S.K. Tandon, which held that a statutory tenant has no estate or interest in the premises and only a personal right to protection from eviction. However, the court also examined Damadilal v. Parashram and V. Dhanapal Chettiar v. Yesodai Ammal, which suggested that statutory tenants retain certain heritable interests. The recent decision in Gian Devi v. Jeevan Kumar clarified that statutory tenants have an estate or interest in the premises, and tenancy rights are heritable. Therefore, the court concluded that a statutory tenant retains heritable interest, but only to the extent provided by Section 5(11)(c) of the Bombay Rent Act.

2. Transferability of Statutory Tenancy:
The court analyzed whether a statutory tenant retains transferable interest in the premises. According to Section 108(j) of the Transfer of Property Act, a lessee has the right to transfer his tenancy rights unless there is a contract to the contrary. This right continues for statutory tenants, subject to the provisions of the Bombay Rent Act. Section 15 of the Bombay Rent Act prohibits subletting or transferring tenancy rights unless specifically permitted by the tenancy agreement. The court categorized tenants into two types:
- Category 'A' tenants, who are specifically entitled to sublet under their tenancy agreement, retain the right to transfer their interest even after becoming statutory tenants.
- Category 'B' tenants, who are not specifically entitled to sublet, cannot transfer their interest due to the prohibition in Section 15.

3. Validity of Licenses Created by Statutory Tenants Before 1973:
The court considered whether a statutory tenant could have created a valid license before 1973. Section 5(4A) of the Bombay Rent Act defines "licensee" and "licensor," and Section 15A provides that licensees in occupation on 1st February 1973 become tenants. The court referred to the distinction between lease and license, noting that a license can only be granted by someone with a transferable interest in the property. Therefore, a statutory tenant of Category 'A' could create a valid license if they had the right to transfer their leasehold rights under the original contractual tenancy. Category 'B' tenants, lacking such rights, could not grant valid licenses.

4. Correctness of Previous Judgments:
The court reviewed the correctness of the judgments in Vasant v. Dikkaya and Chandrakant Jasinath Thakur v. Narayan Lakhanna Shetty. These judgments had held that statutory tenants could not transfer their interest. However, the larger Bench in Gian Devi v. Jeevan Kumar clarified that statutory tenants retain certain rights, including the ability to transfer interest if allowed under the original contractual tenancy. Thus, the court concluded that the previous judgments were not entirely correct. Category 'A' tenants can transfer their interest irrespective of being contractual or statutory tenants, while Category 'B' tenants cannot transfer their interest either before or after the termination of their contractual tenancy.

Conclusion:
The court answered the referred questions as follows:
1. A statutory tenant retains heritable interest, but only to the extent provided by Section 5(11)(c) of the Bombay Rent Act.
2. A statutory tenant retains transferable interest only if they had such interest as a contractual tenant.
3. A statutory tenant could create a valid license before 1973 only if their original contractual tenancy allowed them to transfer their leasehold rights.
4. The decisions in Vasant v. Dikkaya and Chandrakant Jasinath Thakur v. Narayan Lakhanna Shetty are not entirely correct in stating that no statutory tenant can transfer their interest. Category 'A' tenants can transfer their interest, while Category 'B' tenants cannot.

The matter was referred back to the learned single Judge for further hearing, and the reference was answered accordingly.