Shabbir Mohammad Sayed vs Mrs. Noor Jehan Mushter Shaikh & Ors.

HELD:1. 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. This is made subject to a contract to the contrary. The assignment relied upon by the appellant namely by alleged lessee on 24.01.2014 would be illegal on the face of it unless a contract to the contrary is established. It is in this regard that the appellant would draw support from the action of the admitted landlord namely, the defendant no.3 who has purported to enter into the assignment in favour of the appellant on the very same day. [Para 12][130-G-H; 131-A-B]

2. The next aspect which is canvassed by the appellant is about the inapplicability of Section 52 of the Transfer of Property Act as an absolute bar or rather the effect of lis pendens as obtaining in Bombay. It is pointed out that Section 52 has a modified application in the area in which the premises in question is situated. It is the case of the appellant that the premises in dispute is located within the scope of the amended law. In view of the same, it is contended that the bar of Section 52 will not apply. When questioned as to whether the appellant had a case that the plaintiff had not given a notice and got it registered under Section 52, the answer is that the plaintiff does not have a case of having given any notice. It is actually a question of fact whether the premises is located in the area covered by the Amendment to Section 52. It is further a question of fact as to whether a notice was given. [Para 13, 14][131-G-H; 133-C-D]

3. As regards the lease not being registered, the contention of the appellant is premised on Section 55 of the Tenancy Act. In other words, it is contended that Section 55(2) of the Act clearly places the responsibility of getting the lease registered on the landlord. The failure of the landlord to get the lease registered would entitle the tenant to establish the tenancy with the document even if it is not registered. [Para 15][133-D-E]

4. As far as the alleged assignment by the so-called tenant in favour of the appellant is concerned, it is prohibited under section 26. There is no express contract to the contrary to rescue the appellant. An assignment by the tenant can be ratified by the landlord. In this case however there is no ratification in the alleged agreement executed by the 3 rd defendant landlord. He does not even refer to the alleged agreement executed by the tenant in favour of the appellant. Ratification is an act which presupposes knowledge of the act of the person whose act is sought to be ratified. A perusal of the alleged agreement executed by the landlord would reveal that it makes no reference to the alleged agreement executed by the tenant in favour of the appellant. The third defendant had proceeded to allegedly execute the agreement purporting to create interest in his own right. Therefore, we are of the view that even proceeding on the basis of the principle laid down by the full bench of the High Court of Bombay, in the facts of this case, there is no ratification. Sans any ratification and in the absence of any contract to the contrary within the meaning of Section 26, the alleged transfer by the ‘lawful tenant’ cannot pass muster. [Paras 17 and 24][134-D; 135-H; 136A-C]

5. As far as the case based on the alleged Tenancy Agreement dated 24.01.2014 between the third respondent and the appellant, we may notice certain features. As already noticed, agreement by the so-called tenant in favour of the appellant was also executed on the same day. In the Agreement executed by the tenant on 24.01.2014, the tenant states that he is the lawful tenant and that he is staying in the said premises and the tenancy is created in consideration of Rs.9,40,000/- being paid. In Clause

(3) of the Agreement, the tenant has purported to hand over vacant possession of the premises to the appellant. In fact, it is stated that the assignment will be “forever”. In the alleged tenancy agreement between the third respondent and the appellant executed allegedly on the same day it is recited that the premises is in the actual physical possession of the landlord and on a consideration of Rs.175/- per month, tenancy was created in his favour. The case of the appellant which is based essentially on the appellant having paid Rs.9,40,000/- to the ‘lawful’ tenant having found to be untenable being illegal as violative of Section

26 of the Act is in direct conflict with the case set up by the appellant regarding the tenancy with the third respondent. We have already found that the case of the landlord having ratified the tenancy of the appellant with the tenant cannot stand scrutiny of the Court. The acceptance of the case by the appellant involves harmonizing of an irreconcilable contradiction as regards the principal recital, namely, the case as to the emanation of possession. If the case of the appellant is accepted it is the tenant who was in possession and who handed it over having received a sum of Rs.9,40,000/- which is essentially the case set up in the Execution Court. Noticing no doubt, that the documents have not yet been proved and taking the documents on their face value, yet the conclusion is inevitable that the case set up by the appellant on the basis that the landlord was in possession is in the teeth of agreement of the same day with the tenant who claims that he was in possession and it does not appeal to us as anything but incongruous to say the least. In fact, in his application, before the Execution Court the specific case set up by the appellant is that he was put in possession by the alleged lawful monthly tenant. The case set up by the appellant based on the tenancy agreement by the landlord cannot be acted upon. [Para 25][136-C-H; 137A-B]