{"id":29674,"date":"2002-01-30T00:00:00","date_gmt":"2002-01-29T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/raghuram-rao-and-others-vs-eric-p-mathias-and-others-on-30-january-2002"},"modified":"2015-03-16T01:23:39","modified_gmt":"2015-03-15T19:53:39","slug":"raghuram-rao-and-others-vs-eric-p-mathias-and-others-on-30-january-2002","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/raghuram-rao-and-others-vs-eric-p-mathias-and-others-on-30-january-2002","title":{"rendered":"Raghuram Rao And Others vs Eric P. Mathias And Others on 30 January, 2002"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Raghuram Rao And Others vs Eric P. Mathias And Others on 30 January, 2002<\/div>\n
Author: Shah<\/div>\n
Bench: M.B. Shah, R.P. Sethi<\/div>\n
           CASE NO.:\nSpecial Leave Petition (civil) 15509-15512  of  1999\n\n\n\nPETITIONER:\nRAGHURAM RAO AND OTHERS\n\n\tVs.\n\nRESPONDENT:\nERIC P. MATHIAS AND OTHERS\n\nDATE OF JUDGMENT:\t30\/01\/2002\n\nBENCH:\nM.B. Shah & R.P. Sethi\n\n\n\n\nJUDGMENT:\n<\/pre>\n
Shah, J.\n<\/p>\n
\tLeave granted.\n<\/p>\n
\tThese appeals are filed against the judgment and decree dated
\n27.10.1998 passed by the High Court of Karnataka at Bangalore in
\nRSA Nos.1319-22 of 1996.  By the impugned judgment and decree,
\nthe High Court set aside the judgment and decree passed by the lower
\nappellate court and held that plaintiffs are entitled to recover the
\npossession of lease hold property and decreed the suit accordingly.\n<\/p>\n
\tBefore dealing with the contentions of both the parties, we
\nwould refer to the relevant facts in short.  One Nellikai Vyasa Rao
\nwas the owner on mulgeni right of TS No.234 corresponding to RS
\nNo.359 of Attavar village of Mangalore City.  Out of the said
\nproperty, on 1.11.1903, a registered mulgeni lease was granted for a
\nland admeasuring approximately 35 cents (subsequently it was found
\nas 40 cents) by Nellikai Vyasa Rao in favour of Ammanna Maistry.
\nThe relevant condition of the permanent lease deed  mulgeni chit
\ndated 1.11.1903 executed by one Ammanna Maistry in favour of
\nNellikai Vyasa Rao, which requires consideration is as under:-\n<\/p>\n
“In case I do not pay rent within time every year or
\nif there is any short payment I am liable to pay the said
\nsum with interest at 12% per annum from the date it is
\ndue till payment on the security of the building that may
\nbe built on the property and other improvements therein.
\nIn the event of my feeling that I do not require the said
\nproperty, the said property alongwith the buildings and
\nthe improvements shall have to be handed over only to
\nyou on receiving the value of the buildings and
\nimprovements estimated by four Gentlemen and I shall
\nnot have any right to alienate the property either the right
\nof permanent tenancy or the building etc., by way of sale,
\nmulgeni or in whatsoever manner to others.  If I effect
\nalienation contrary to this in any manner or if I allow the
\nproperty to be attached and sold by any court in
\nconnection with my personal debt, immediately, such
\nalienation and also this permanent lease shall be liable to
\nbe totally cancelled and the property shall be reverted to
\nyour possession and enjoyment.”\n<\/p>\n
Thereafter, Nellikai Vyasa Rao sold his mugleni rights in respect of
\n1.20 acres of land in favour of P.F. Mathias which included 40 cents
\nalready leased out to Ammanna Maistry by registered sale deed dated
\n24.2.1914.\n<\/p>\n
\tOn the death of lessee Ammanna Maistry, his mulgeni holding
\nwas partitioned among his legal heirs pursuant to the decree dated
\n31.3.1955 passed in partition suit no.O.S.235 of 1950, as under: –
\nPortion No.\t\tTo\n<\/p>\n
1.\t\tAmba Bai and\t\tdaughter and grand-daughter
\n\t\tS. Jyothi\t\t\tof lessee.\n<\/p>\n
2.\t\tChandrashekhar\n<\/p>\n
3.\t\tGangadhar
\nsons of deceased Ammanna
\nMaistry<\/p>\n
\tIt is also admitted that by a gift-deed dated 17.11.1960
\nGangadhar gifted 11 cents to his sister Amba and sold remaining 11
\ncents to Sanjiva Sapalya by a sale deed dated 31.3.1960.  Again on
\n3.10.1974 Amba transferred her holding to Sucharita.\n<\/p>\n
For the aforesaid transfers, plaintiffs did not invoke and enforce the
\nforfeiture clause on the ground that alienations were within the
\nmembers of the family of the deceasedlessee.\n<\/p>\n
Original Suit No.786 of 1990<\/p>\n
On 30.3.1981, Sucharita (1) by sale deed sold some portion of
\nthe land in favour of defendant nos.1 to 4;  (2) on the same day,
\nunder another sale deed, sold some other portion of the land in favour
\nof defendant nos.5 and 6; and  (3) thereafter on 13.5.1982 sold
\nremaining portion of the land in favour of defendant no.7.  On the
\nalienation of entire mulgeni holding i.e. 11 cents, by Sucharita, the
\nplaintiffs invoked the forfeiture clause on the ground of breach of the
\ncondition referred to in the parental lease and, therefore, filed Original
\nSuit No.25\/83, which was subsequently numbered as Original Suit
\nNo.786 of 1990 for possession of the mulgeni holding.\n<\/p>\n
Original Suit No. 929 of 1990<\/p>\n
\tOn the death of Chandrashekhar (son of lessee), his heirs filed
\nO.S. No.541 of 1980 for partition of the property held by him and a
\ndecree was passed dividing the leased properties between the heirs
\nwho are defendant nos.1 to 3 and 8 to 12 and they acquired
\nproportionate leasehold rights over the land.  For this partition of the
\nproperty, it is the say of the plaintiff that the suit invoking forfeiture
\nclause was not filed on the ground that alienations were within the
\nmembers of the family of the deceased-lessee.\n<\/p>\n
\tThereafter(1) defendant no.1 by sale deed dated 14.3.1980
\nsold 0.25 cents 1.12 Sq. meters for Rs.3,000\/- in favour of the 6th
\ndefendant;\n<\/p>\n
(2)\tThe 2nd defendant along with her 5 minor children by a sale
\ndeed dated 14.3.1980 sold an extent of 3\u00bd cents of land for
\nRs.57,000\/- in favour of the 6th defendant;\n<\/p>\n
(3)\tDefendant no.1 by a sale deed dated 27.4.1983 sold 0.12 cents
\nbut actually 11\u00bc cents for Rs.1,30,000\/- in favour of the 4th defendant.\n<\/p>\n
(4)\tThe 4th defendant in his turn executed a gift deed dated
\n27.4.1983 in favour of the 5th defendant.\n<\/p>\n
(5)\tThe 3rd defendant by a sale dated 25.2.1988 sold her portion
\nmeasuring 2\u00bd cents of land for Rs.1,05,000\/- in favour of the 4th
\ndefendant.\n<\/p>\n
Hence, Original Suit No.929 of 1990 was filed seeking possession of
\nthe above land by invoking forfeiture clause.\n<\/p>\n
\tBoth the suits were tried separately and the trial court arrived at
\nthe conclusion that the lease deed does not specifically prohibit
\nalienation of the part of the property, but merely because in the
\ndocument as there is no recital which bars to alienate a portion of the
\nproperty, would itself be not conclusive and the Court has to read the
\ndocument according to the intention of the parties.  The Court also
\nheld that if there is an express condition, not to alienate the whole
\nleasehold property, then portion of the leasehold property could not,
\nalso, be transferred by implication. The Court held that the properties
\nare situated within the metropolitan area to which The Karnataka Rent
\nControl Act, 1961 (hereinafter referred to as ‘Rent Act’) is applicable
\nand, therefore, plaintiff was not entitle to actual possession of the
\nschedule property but only to constructive possession of the land
\nsubject to payment of all improvements thereon as provided under the
\nlease-deed.\n<\/p>\n
\tBeing aggrieved thereby, RA Nos.46 and 52 of 1992 were filed
\nagainst the judgment and decree dated 31.1.1992 passed in OS No.929
\nof 1990 and RA Nos.148 and 150 of 1994 were filed against the
\njudgment and decree dated 30.9.1994 passed in OS No.786 of 1990,
\nbefore the District Court at Mangalore.\t The First Appellate Court
\nheld that what has been alienated in both the suits was only to the
\nextent of 29 cents from the leasehold property which was 40 cents and
\nthe remaining 11 cents of the leasehold property is not the subject
\nmatter of alienation.  The Court, therefore, held that as there is no
\ncondition which prohibits partial alienation of the property in the
\nmulgeni lease, it would not give right to the plaintiffs to enforce the
\nforfeiture clause.  The Court further held that the lessor has to seek the
\nrelief\tmainly against the lessee even though the lessee has assigned
\nthe property in favour of his assignee as by virtue of Section 108 of
\nthe Transfer of Property Act, 1882 (hereinafter referred to as “the T.P.
\nAct”) the liability of the lessee will not extinguish by mere reason of
\nsuch alienation.  Hence, the last recognized lessee is a necessary party.
\nThe lessor can seek relief against the lessee and also the assignee and
\nhe may execute the decree for possession only against the assignee,
\nbut the decree has to be obtained against the lessee. Sucharita was last
\nrecognized lessee, who was necessary party to the suit and the
\ndefendants were proper parties.\t Hence, the appeals were allowed and
\nsuits were dismissed.\n<\/p>\n
\tIn appeals against the judgment and decree of First Appellate
\nCourt, the High Court referred to the judgments which were
\nconsidered by the First Appellate Court and which were referred to at
\nthe time of hearing of the appeals and arrived at the conclusion that
\nthe said decisions would be applicable where there is partial alienation
\nof the leasehold property, but held that in the present case there was
\nalienation of the entire leasehold property.  The High Court observed
\nthat the decisions in A. Venkataramana Bhatt and Another v.
\nKrishna Bhatt and Others<\/a> [AIR 1925 Madras 57], David Cutinha v.
\nSalvadora Minazes and others [AIR 1926 Madras 1202], Terrell v.
\nChatterton [(1922) 2 Ch. D. 647] and P. Veda Bhat v. Mahalaxmi
\nAmma [AIR (34) 1947 Madras 441] would not be applicable as there
\nis alienation of the entire leasehold property.\t The Court has not dealt
\nwith any other contention.\n<\/p>\n
\tBeing aggrieved by the judgment of High Court, the defendants
\nhave filed the instant appeals.\n<\/p>\n
\tAt the outset, for the nature of Mulgeni lease, we would refer to
\nthe decision in Vyankatraya Bin Ramkrishnapa v. Shivrambhat Bin
\nNagabhat [(1883) VII Bombay Series 256], wherein the High Court
\nof Bombay considered the same and held as under: –\n<\/p>\n
\t“In the minute of the Revenue Board (see p.28 of a
\nbook, Exhibit A, in the suit of Vyakunta Bapuji v. The
\nGovernment of Bombay [(12 Bom. HC Rep. App.1),
\nbetter known as the Kanara Case] it is said:”The
\nexclusive rights to the hereditary possession and usufruct
\nof the soil is in Kanara termed varga, meaning separate
\nindependent property in the land, and seems originally, as
\nin Malabar, to have been vested in the military tribe of
\nthe Nayrs, the first and, at one time, the exclusive mulis
\nor landlords of that province; for, except to unclaimed
\nwaste, and to estates escheated from want of heirs, it does
\nnot appear that the Government in Kanara at any time
\npossessed, or even pretended to, the smallest right to
\nproperty in the land.  The Nayrs had under them a
\nnumber of inferior rayats, called genis or tenants, to
\nwhom they rented out the portions of their lands which
\nthey did not cultivate by means of hired labourers or
\nslaves; the genis or tenants were of two distinct classes
\nthe mulgenis, or permanent tenants, and the chali genis or
\ntemporary tenants.  The mulgenis, or permanent tenants
\nof Kanara, were a class of people unknown to Malabar,
\nwho, on condition of the payment of a specified
\ninvariable rent to the muli, or landlord, and his
\nsuccessors, obtained from him a perpetual grant of a
\ncertain portion of land to be held by them and their heirs
\nfor ever.  This right could not be sold by the mulgeni or
\nhis heirs, but it might be mortgaged by them, and so long
\nas the stipulated rent continued to be duly paid, he and
\nhis descendants inherited this land like any other part of
\ntheir hereditary property.  This class of people, therefore,
\nmay be considered rather as subordinate landlords than as
\ntenants of the soil, more especially as though many of
\nthem cultivated their lands by means of hired labourers or
\nslaves, others sub-rented them to the chali genis or
\ntemporary tenants.”\n<\/p>\n
\tThe Court in that case traced the history of mulgeni tenure and
\nobserved thus:-\n<\/p>\n
\t“These authorities show clearly that the mulgenis
\nwere only tenants, although tenants in perpetuity, holding
\nunder their superior landlords, the mulgars, whose estate,
\nlike that of tenants in fee simple in England, would
\nappear to have been the highest estates in the land known
\nto the law in Kanara; and, further, that although
\noriginally mulgeni tenants were not restricted by the
\nterms of their leases from alienation, the practice had
\ngrown uphow soon it does not appear, but at any rate
\nby the beginning of the present centuryof leasing the
\nland in perpetuity at a fixed rent coupled with such and
\nother restrictions.\n<\/p>\n
\tLastly, it is not suggested that the law has either by
\nStatute or judicial decision defined the mulgeni tenure.\n<\/p>\n
\tUnder these circumstances it would be impossible,
\nwe think, to hold that restriction against alienation is so
\nrepugnant to the mulgeni tenure in the contemplation of
\nlaw, that a clause to that effect must be held to be void.
\nBut it was said that such a clause in a permanent lease
\nmakes the land for ever inalienable and is, therefore, void
\non the ground of public policy.\t That view however,
\nwould not appear to have been taken by the framers of
\nthe Transfer of Property Act, for we find that by Section
\n105 it recognizes leases in perpetuity, and that Section
\n10, which forbids a clause against alienation in general,
\nmakes an exception in the case of leases where it is
\nintroduced for the benefit of the lessor.”\n<\/p>\n
\tNothing is pointed out to take any other view with regard to the
\nnature of the mulgeni tenure and we, therefore, adopt the same.\n<\/p>\n
\tThe submissions of the learned counsel for the parties which
\nrequire consideration are: –\n<\/p>\n
(I)\tWhether in case of perpetual lease, the condition not to
\nalienate the property would be illegal and void?
\n(II)\tWhether notice under Section 111(g) of the T.P. Act is
\nnecessary before filing of the suit in the present case?
\n(III)\tIn any case, there is no express condition restraining
\npartial alienation of the leasehold property, therefore
\nalso, the judgment and decree passed by the High Court
\nis illegal.\n<\/p>\n
(IV)\tWhether the heirs of the original lessee are necessary
\nparties in case of determination of lease?\n<\/p>\n
Contention Nos.I and II<\/p>\n
\tFor appreciating these contentions, we would first refer to
\nSection 10 of the T.P. Act which inter alia provides that “where
\nproperty is transferred subject to a condition or limitation absolutely
\nrestraining the transferee or any person claiming under him from
\nparting with or disposing of his interest in the property, the condition
\nor limitation is void, except ‘in the case of a lease where the
\ncondition is for the benefit of the lessor or those claiming under
\nhim’.”\tThe section does not carve out any exception with regard to
\nperpetual or permanent lease.  It applies to permanent or temporary
\nlease.\tIn view of the specific exception carved out in case of lease, in
\nour view, there is no substance in the contention of the learned
\ncounsel for the appellant that the condition which restrains the lessee
\nfrom alienating leasehold property is in any way illegal or void.\n<\/p>\n
\tSimilarly, contention that notice in writing is required as
\ncontemplated under Section 111 (g) before terminating the lease is
\nalso without any substance because in the present case, the lease deed
\nwas executed prior to the coming into force of the Transfer of
\nProperty (Amendment) Act, 1929 (20 of 1929).   The relevant part of
\nthe amended section provides that a lease of immoveable property
\ndetermines “by forfeiture; that is to say, in case the lessee breaks an
\nexpress condition which provides that, on breach thereof, the lessor
\nmay re-enter and the lessor or his transferee ‘gives notice in writing to
\nthe lessee of’ his intention to determine the lease”.  The words ‘gives
\nnotice in writing to the lessee of’ were substituted by the Amendment
\nAct which came into force from 1st April 1930 for the words ‘does
\nsome act showing’.  So prior to the aforesaid amendment which
\nrequires giving of notice in writing was not essential for determining
\nthe lease and what was required was some act of showing intention to
\ndetermine the lease.  This issue is concluded by the decision of this
\nCourt in Namdeo Lokman Lodhi v. Narmadabai and others<\/a> [(1953)
\nSCR 1009] and Shri Rattan Lal v. Shri Vardesh Chander and others<\/a>
\n[(1976) 2 SCC 103].  The  First Appellate Court, therefore, has also
\nrightly rejected the said contention.\n<\/p>\n
Contention No.III<\/p>\n
\tHowever, the next contention which requires consideration is
\nwhether there is express condition which prohibits partial alienation of
\nthe leasehold property?\n<\/p>\n
\tThe finding of High Court on the question of partial alienation,
\nin our view, is without considering the facts as discussed in detail by
\nthe trial court as well as by the First Appellate Court.  Both the courts
\non facts held that there was partial alienation of the leasehold
\nproperty.  It appears that the High Court took into consideration the
\nalienations because of the partition suits filed between the family
\nmembers of the deceased lessee, but forgot the fact that the lessor in
\nthe suit itself had stated that as the said alienations were between
\nfamily members, forfeiture clause was not invoked at that time.\t Same
\nthing is stated before this Court in written submission filed by the
\nlearned counsel for the appellants-defendants.\tThe First Appellate
\nCourt has specifically arrived at the conclusion that out of the
\nleasehold property which was 40 cents what has been alienated in
\nboth the suits was only to the extent of 29 cents and remaining 11
\ncents acquired in the partition by Sanjiva Sapalya was not the subject
\nmatter of alienation.  It appears that the High Court has overlooked
\nthis aspect and decided the entire matter without application of mind
\nto the facts and contentions of the parties.\n<\/p>\n
\tIn the present case, the aforequoted lease deed was executed by
\nthe lessee and not by the lessor.  In the lease deed it is provided that
\nthe lessee (I) will not have any right to alienate the property, either the
\nright of permanent tenancy or the buildings etc. (which may be built
\nby the lessee on the property) by way of sale of mulgeni or in
\nwhatsoever manner to others and if such alienation is affected, the
\npermanent lease shall be liable to be totally cancelled and the property
\nshall be reverted to the possession and enjoyment of (you) lessor, on
\nreceiving the value of the buildings and improvements estimated by
\nfour gentlemen.\t Therefore, there is express condition accepted by the
\nlessee not to alienate the leasehold property.\tHowever, there is no
\nexpress condition to the effect that lessee will have no right to alienate
\npart of the property.  With regard to the nature of the mulgeni tenure,
\nit has been observed by the Bombay High Court in Vyankatraya Bin
\nRamkrishnapa’s case (Supra) that this class of people may be
\nconsidered rather as subordinate landlords than as tenants of the soil
\nmore especially as though many of them cultivated their lands by
\nmeans of hired labourers or others sub-rented them to the temporary
\ntenants.\n<\/p>\n
\tFurther, Section 111(g) itself requires that for forfeiture, lessee
\nshould commit breach of ‘an express condition’ which provides that
\non breach thereof, the lessor may re-enter.  The words ‘express
\ncondition’ itself stipulates that condition must be clear, manifest,
\nexplicit, unambiguous and there is no question of drawing any
\ninference.  In our view, as there is no express condition restraining
\npartial alienation of the leasehold property, it would not be open to the
\ntransferee of the lessor’s right to invoke the forfeiture clause for
\ndetermining the perpetual lease and such conditions cannot be inferred
\nby implication.\n<\/p>\n
\tOn similar clause, it appears that there is uniformity of
\ninterpretation by various High Courts that unless there is an express
\ncondition restraining partial alienation, forfeiture clause would not
\napply.\n<\/p>\n
\tIn A. Venkataramana Bhatta vs. Krishna Bhatta [AIR 1925
\nMADRAS 57], the Court held thus:-\n<\/p>\n
\t“A clause for forfeiture must always be construed
\nstrictly as against the person who is trying to take
\nadvantage of it, and effect should be given to it, only so
\nfar as it is rendered absolutely necessary to do so by the
\nwording of the clause.\n<\/p>\n
\tA covenant against assignment does not prevent
\nthe tenant from assigning for any part of the term or from
\nassigning a portion of the premises and unless the
\ncovenant is expressly worded to exclude a partial
\nalienation of the premises, a partial alienation will not
\nwork forfeiture under a clause which prevents alienation
\nof the premises.  It is always open to the landlord to put
\ninto his lease a covenant against alienation either
\ncomplete or partial, if he intends that forfeiture should
\nresult from partial alienation as well, but where he does
\nnot do so, the covenant will not apply to a partial
\nalienation.  Grove v. Portel (1902) 1 Ch. Dn. 727.”\n<\/p>\n
\tIn David Cutinha vs. Salvadora Minazes and others [AIR
\n1926 Madras 1202}, the Court observed thus:-
\n\t“.There is ample authority in the English Law
\nand in fact in the law here too to show that unless there is
\na restriction against the assignment of any portion of the
\ndemised property, the restraint on the alienation of the
\ndemised premises will not prevent the alienation of a
\nportion.  I am not impressed with the reasoning of the
\nlearned District Judge as to the grant of a mulgeni lease
\nnot being an alienation.  It clearly is an alienation.\tBut I
\nthink that the respondents must succeed on the ground
\nthat the restriction on alienation of a portion of the
\ndemised premises is not contained in the words of the
\nlease which I have set out above.  It is perhaps not
\nnecessary to multiply examples, but there are some cases
\nwhich have been cited and which lend support to the
\ncontention for the respondent, for instance in Grove v.
\nPortal [(1902) 1 Ch. D. 727], Joyee, J., quotes the
\npassage already cited from Church v.Brown [(1808) 15
\nVes. 258] and says that the dictum of the lower Court has
\nnever been disapproved of; and again in Russell v.
\nBeecham [(1924) 1 K.B.525] Serutton, L.J. says quoting
\nLord Eldon again that<\/p>\n
\ta covenant not to part with possession of premises
\nwould not restrain the tenant from parting with a part of
\nthe premises, these covenants having been always
\nconstrued by Courts of law with the utmost jealousy to
\nprevent the restraint from going beyond the express
\nstipulation.\n<\/p>\n
In Chatterton v. Terrel [(1923) A.C. 578] Lord
\nWrenbury says:\n<\/p>\n
\tIt is said and said with truth, that if there be a
\ncovenant not to assign or underlet the premises, it is not a
\nbreach to assign or sub-let part of the premises.  It was
\nnot so stipulated, if those be the words, for the words or
\nany part thereof are not found in the covenant.”\n<\/p>\n
\tThe above judgments are followed in P. Veda Bhat v.
\nMahalaxmi Amma [AIR (34) 1947 Madras 441].  Same view is also
\ntaken in Keshab Chandra Sarkar and others vs. Gopal Chandra
\nChanda [AIR 1937 Cal 636] and in Indraloke Studio Ltd. vs. Sm.
\nSanti Debi and others [AIR 1960 Cal 609].\n<\/p>\n
Contention No.IV<\/p>\n
\tFurther, the First Appellate Court rightly held that for
\ndetermining the lease the lessees are necessary parties.  Principle is
\nprivity of contract is between the lessor and lessee and not between
\nthe lessor and the transferees.\t If there is breach of contract, that is to
\nsay, express condition of lease, then it gives option to the lessor to
\ndetermine the lease and re-enter the properties let out.  For that
\npurpose, lessee is a necessary party and transferees would be only
\nproper parties.\t But without the presence of lessees, lease cannot be
\ndetermined and decree for possession of the property cannot be passed
\nin favour of the lessor.  Section 108 (j) of T.P. Act specifically
\nprovides that the lessee shall not, by reason only of such transfer,
\ncease to be subject to any of the liabilities attaching to the lease.  In
\nthe present case, the liability to hand over vacant possession is that of
\nthe lessee.  Privity of contract is with the lessee and not with the
\nassignee.  Further, under clause (q) of Section 108, on determination
\nof lease, the lessee is bound to put the lessor into possession of the
\nproperty.  Therefore, the First Appellate Court rightly relied upon the
\ndecision rendered by Chagle, C.J. in Treasurer of Charitable
\nEndowments vs. S.F.B. Tyabji, [AIR (35) 1948 Bombay 349],
\nwherein dealing with a similar contention, it was observed:-
\n\t“The question that arises for determination in this
\nappeal is what are the rights and liabilities of the lessee
\nwhen he has transferred absolutely his interest in the
\nproperty.  Clause (j) of S.108 expressly provides that the
\nlessee shall not, by reason only of such transfer, cease to
\nbe subject to any of the liabilities attaching to the lease.
\nIt is clear that as far as the privity of contract is
\nconcerned, the only person liable as between the lessor
\nand the lessee is the lessee himself.  There is no privity of
\ncontract established by the assignment executed by the
\nlessee in favour of the assignee.  But although such a
\nprivity of estate comes into existence between the lessor
\nand the assignee, the lessee continues to remain liable in
\nrespect of all his covenants by reason of privity of
\ncontract which still continues to subsist as between lessor
\nand the lessee.\t In my opinion, if there is no contract,
\nthen the provisions of S.108 would apply and all the
\nstatutory obligations cast upon the lessee by S.108 would
\nbind the lessee notwithstanding his transferring his
\ninterest absolutely to another person.\tThe latter part of
\ncl. (j) is in my opinion very plain.  It lays down that the
\nlessee shall not cease to be subject to any of the liabilities
\nattaching the lease by reason only of the fact that he has
\ntransferred his interest.  Therefore, all the liabilities
\nattaching to the lease to which he was subject would
\ncontinue notwithstanding the transfer or assignment.  To
\nput it in a different language, a lessee cannot by his
\nunilateral act, by assigning his interest in the leasehold
\npremises, put an end to the obligations which he has
\nundertaken either by the contract of lease or under the
\nstatute under S.108.”\n<\/p>\n
\tAdmittedly, in the present case, the heirs of the deceased lessee
\nare not joined as party-defendants.\tIn second suit O.S. No. 786 of
\n1990, the lessee Sucharita is not joined as a party to the suit by
\ncontending that only defendants who were assignees are required to be
\njoined as party to the suit proceedings.  Hence, the First Appellate
\nCourt rightly held that on ground of non-joinder of necessary parties,
\nthe suit was required to be dismissed.\n<\/p>\n
\tLastly, the learned counsel for the appellant referred to the
\nprovisions of Section 23 of the Rent Act, which reads thus: –
\n“23.Tenant not to sub-let or transfer after
\ncommencement of this part.\n<\/p>\n
(1)\tNotwithstanding anything contained in any law,
\nbut subject to any contract to the contrary, it shall not be
\nlawful after the coming into operation of this Part, for
\nany tenant to sub-let whole or any part of the premises let
\nto him or to assign or transfer in any other manner his
\ninterest therein;\n<\/p>\n
\tProvided that the State Government may, by
\nnotification, permit in any area the transfer of interest in
\npremises held under such leases or class of leases and to
\nsuch extent as may be specified in the notification:\n<\/p>\n
\tProvided further that nothing in this Section shall
\napply to a tenant having a right to enjoy any premises in
\nperpetuity.\n<\/p>\n
(2)\tAny person who contravenes the provisions of
\nsub-section (1), shall, on conviction, be punished with
\nfine which may extend to one hundred rupees.”\n<\/p>\n
\tOn the basis of aforesaid section, the learned counsel submitted
\nthat it shall not be lawful for any tenant to sublet or transfer the
\npremises after commencement of the Act.\t However, the said
\nprovision is not made applicable to a tenant having a right to enjoy
\nany premises in perpetuity.  Therefore, under the ‘Rent Act’ lessor is
\nnot entitled to take possession of the premises on the ground of
\nalienation of the part of the leasehold property from a present tenant
\nas the Rent Act would govern the relationship between the lessor and
\nlessee.\t He submitted that as found by first Appellate Court, Rent Act
\nis applicable to the suit premises and, therefore, suit for taking
\npossession was not maintainable as subletting by the permanent tenant
\nis not unlawful under the Rent Act.  In our view, this contention was
\nnot raised before the High Court and hence it is not required to be
\ndecided in this appeal.\n<\/p>\n
\tIn the result, the appeals are allowed and the judgment and
\ndecree passed by the High Court is set aside.  The suits filed by the
\nplaintiff(s) are dismissed.  There shall be no order as to costs.\n<\/p>\n
\t\t\t\t\t\t\t.J.\n<\/p>\n
\t\t\t\t\t\t\t(M.B. SHAH)<\/p>\n
\t\t\t\t\t\t…..J.\n<\/p>\n
January 30, 2002.\t\t\t\t\t(R.P. SETHI)<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Raghuram Rao And Others vs Eric P. Mathias And Others on 30 January, 2002 Author: Shah Bench: M.B. Shah, R.P. Sethi CASE NO.: Special Leave Petition (civil) 15509-15512 of 1999 PETITIONER: RAGHURAM RAO AND OTHERS Vs. RESPONDENT: ERIC P. MATHIAS AND OTHERS DATE OF JUDGMENT: 30\/01\/2002 BENCH: M.B. Shah & R.P. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-29674","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nRaghuram Rao And Others vs Eric P. 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