Holding

The appellant created a sub‑lease in favour of its dealer, violating Section 14(1) Proviso (b) of the Delhi Rent Control Act, and the unregistered lease clause is inadmissible and does not constitute the specific written consent required.

Summary

The landlord (respondent) leased premises to Bajaj Auto Ltd (appellant) under an unregistered lease deed that prohibited sub‑letting without the landlord’s written consent, but allowed assignment to associate concerns without consent. Bajaj Auto sub‑let the premises to United Automobiles, its authorised dealer, without obtaining the landlord’s specific written consent. The landlord sought eviction under Section 14(1) Proviso (b) of the Delhi Rent Control Act, 1958, and the lower authorities ordered eviction, holding that United Automobiles was a sub‑tenant. The appellant argued that United Automobiles was merely a dealer, not a sub‑tenant, and that the lease clause granting permission to associate concerns was admissible despite the deed’s non‑registration. The Supreme Court held that the dealer was not an associate concern for the purpose of the lease, that the appellant had created a sub‑lease in violation of the Act, and that a clause in an unregistered lease deed is inadmissible and a general permission does not satisfy the statutory requirement of specific written consent. Consequently, the appeal was dismissed with costs.

Issues considered

Whether a lessee may create a sub‑lease without the landlord’s specific written consent under Section 14(1) Proviso (b) of the Delhi Rent Control Act, 1958.
Whether a clause in an unregistered lease deed can be admitted as evidence to prove the landlord’s consent (collateral purpose).
Whether the dealer United Automobiles qualifies as an ‘associate concern’ exempt from the consent requirement.
Whether a general permission clause can satisfy the statutory requirement of specific written consent for sub‑letting.

Legislation cited

Delhi Rent Control Act, 1958s. 14(1) Proviso (b), s. 16(2), s. 16(3)
Registration Act, 1908s. 49

Subjects

evictionsub‑lettinglease deedunregistered leaseDelhi Rent Control Actlandlord consentassociate concernevidence admissibilityregistration

Judgment

BAJAJ AUTO LIMITED
A
v.
BEHAR! LAL KOHLI

AUGUST 8, 1989

B [LALIT MOHAN SHARMA AND N.D. OJHA, JJ.]

Delhi Rent Control Act, 1958: Section 14( 1) Proviso (b)- y-•"
Eviction of tenant on ground of sub-letting-Whether lessee entitled to
create sub-lease-Lease deed. inadmissible for non-registration-Term
of the lease deed regarding sub-lease-Whether could be relied upon.

c The respondent let out bis premises to tbe appellant by way of ~
unregistered lease deed wbicb inter alia stated that without the permis-
sion of the landlord the premises should not be sub-let except to ._,\ -
associate concerns, and the lessee was liable for payment of rent. Alleg·
ing that the appellant, a manufacturing company of automobiles, had
D sub-let the premises to M/s United Automobiles without bis consent, the
respondent Initiated eviction proceedings.

The appellant contended that M/s United Automobiles, being the
authorised dealer and distributor of the prod11cts manufactured by it,
has been in occupation of the premises in that capacity and cannot ·>u
E therefore be described as a sub-tenant, Alternatively, in view of the 'r ~
specific term in. the lease deed, the arrangement with the associate
concern was not a sub-lease without the consent of the respondent, it
was contended. The respondent took the stand that the term cannot be
looked into, as the document was not registered and that M/s United
Automobiles cannot be assumed to be an 'associate concern' within the
F meaning of the term. Both the Rent Controller and the appellate I
authority held that the term of the lease was not inadmissible, but .f
ordered eviction on the ground that M/s United Automobiles was
inducted in the premises as a sub-lessee.

The appellant filed a second appeal before the High Court which
G dismissed it in limine. Hence this appeal by special leave.

Dismissing tbe appeal,

HELD: I. The appellant bas created a sub-lease in favour of its
dealer, and has thus parted with the pll sr 'Ion within the !M!lning of s.
14(1) Proviso (b) of the Delhi Rent Control Act. The appellant.Com·
H
730
BAJAJ AUTO LTD. '· 8.L. KOHLI 731

pany bas a separate legal ent;iy and has nOtlfingto do with M/s United A
Automohiles except that the latter is the dealer-dilotiibat<>r of some of its
manufaeturecl articles. M/s United Automobiles is not a lli!efioee and is
not in possession of the premises on behalf of the appellant. The mone-
tary benefit available to the dealer is confined to the commission it
receives on the sale of every vehicle; and does not include .the right of
enjoyment of the premises. The dealer pays a fixed sum as rent to the B
--
appellant and the rent is not related or dependant on the sale of any
vehicle. The fact that this amount is same as what is paid by the appel-
lant to the respondent does not appear to be material. [733E-G]

~- 2. The question whether a lessee is entitled to create a sub-lease
or not is undoubtedly a term of the transaction of lease, and if it is
incorporated in the document it cannot be disassociated from the lease c
and considered separately in isolation. If a document is inadmissible for
non-registration, all its terms are inadmissible including the one dealing
with landlord's permission to his tenant to sub-let. The appellant can-
not, in the present circumstances, be allowed to rely upon the clause in
the unregistered lease deed. [734C-D] D

Sachindra Mohan Ghose v. Ramjash Agarwal/a, A.I.R. 1932
Patna 97; referred to.

3. In the instant case, a perusal of the clause relied on by the
appellant would show that it contains the respondent's consent in E
general terms without reference to M/s United Automobiles. As a mat-
ter of fact M/s United Automobiles came to be inducted as a sub-tenant
much later. Such a general permission cannot be treated to be the
consent as required bys. 14(1) Proviso (b) of the Act. Since consent of
the respondent was not obtained specifically with reference to the
sub-letting in favour of M/s United Automobiles, the clause in the F
lease deed cannot save the appeUant, even if it 'tie assumed in its
favour that the cl~use is admissible and the sub-lessee is appellant's
associate concern. [734E-G]

Mis Shalimar Tar Products v. S.C. Sharma, [1988] I SCC 70;
relied on. G

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2443
of 1980.

From the Judgment and Order dated 8.9.80 of the Delhi High
Court in S.A.0. No. 339 of 1980. H
732 SUPREME COURT REPORTS [19891 3 S.C.R.
~,....

A Mukul Mudgal for the Appellant.

Rajinder Sachhar and Mrs. J. Wad for the Respondent.

The Judgment of the Court was delivered by
y
B SHARMA, J. This is· a tenant's appeal against the decree for '
his eviction from certain disputed premises passed by the Rent Con-
troller, Delhi and confirmed in appeal and second appeal.
ll
I
2. The respondent, the owner of the premises, let it out to the
appellant in 1961 as a monthly tenant. An unregistered deed of lease ~
was executed on that occasion containing the following statement as
c one of the clauses: ~
"That they will not assign or underlet or part with the
premises hereby demised without the permission in writing
of the landlord subject however to this proviso that they
D shall be entitled to assign or otherwise part with the posses-
sion of the said premises or any part thereof to their
associate concerns without such consent but in any event
the lessees shall be liable for the payment of the rent during
the term hereby granted." r--
E 3. The appellant is a manufacturing company of Scooters, Pick-
up Vans and Auto-Three-Wheelers. Alleging that the appellant had
sub-let the premises to M/s. United Automobiles without his consent,
the respondent contended that the ground mentioned in S. 14 (1)
Proviso (b) of the Delhi Rent Control Act, 1958 was made out and the
appellant was liable to be evicted. J
F
4. The eviction proceeding was defended by the appellant on the
ground that the M/s. United Automobiles ate the authorised dealer
and distributor of the product manufactured by the appellant and has
been in occupation of the premises in that capacity and can not,
therefore, be described as a sub-tenant. It was alternatively argued
G that in view of the term of the lease as quoted above the arrangement

~'
with the M/s. United Automobiles can not be condemned as a sub-
lease without the consent of the respondent. The stand of the respon-
I.
dent has been that the above-mentioned term, of the lease can not be
looked into as document was not registered and further the M/s.
United Automobiles can not be assumed to be an 'associate a concern'
H within the meaning of the term. The Rent Controller, as well as, the
BAJAJ AUTO LTD. •·. B.L. KOHLI [SHARMA, J.] 733

appellate authority held that the afore-mentioned term of the lease A
was not inadmissible and the appellant was entitled to rely upon the
same, but ordered eviction on the ground that M/s. United Automo-
biles was inducted in the premises as a sub-lessee. The High Court
dismissed the appellant's second appeal in limine, and in this situation
the present appeal by special leave has been filed.
B
5. It has been strenuously contended by the learned consel for
the appellant that as, (i) the United Automobiles is a distributor of the
,' I produ.ct manufactured by the appellant on the basis of commission, (ii)
\._ .. it pays the same amount to the appellant as the rent of the premises
' payable by the appellant to the respondent, and (iii) is entitled to be in
possession only as long as it continues to be a distributor, it should be C
held to be an 'associate concern' within the meaning of the afore-
mentioned term of the lease. In reply of the respondent's contention
that the term can not be taken into consideration as the deed is not a
registered one, it was urged that the appellant, in view of the provi-
sions of S. 49 of the Registration Act, is entitled to rely upon the term
for 'collateral purpose'. The argument is that the document may not be D
admissible for the purpose of proving the existence of a lease or the
terms thereof, but as the afore-mentioned clause does not come within
that category, in as much as, it merely amounts toa written permission
to the appellant to create a sub-lease, it can ·cnot: be excluded from
consideration on the ground of non-registration.
E
6. There is no dispute that the appellant has put M/s. United
Automobiles in possession of the premises and has thus parted with
the possession within the meaning of s, 14(1) Proviso (b) of the Act.
The appellant-Company has a separate legal entity and has nothing .to
do with M/s. United Automobiles 'except that the latter is the dealer-
distributor of some of its manufactured articles. M/s. United Auto- F
mobiles is not a licensee and is not in possession of the premises on
behalf of the appellant. The monetary benefit available to the dealer is
confined to the commission it receives on the sale of every vehicles;
and does not include the right of enjoyment of the premises. The
dealer pays a fixed sum as rent to the appellant and the rent is not
related or dependant on the sale of any vehicle. The fact that this G
amount is same as what is paid by the appellant to the respondent does
not appear to be material. The irresistible conclusion is that the appel-
lant has created a sub-lease in favour of its dealer. The question now is
whether the clause in the lease mentioned above amounts to the re-
spondent's consent in writing.
H
7. The contention of the learned counsel for the respondent that
734 SUPREME COURT REPORTS [1989) 3 S.C.R.

the aforesaid clause can not be looked into for want of registration of
the lease deed appears to be correct. Reliance has been placed on the
observations of Fazal Ali, J. in Sachindra Mohan Ghose v. Ramjash
Agarwal/a, A.LR. 1932 Patna 97 that if a decree purporting to create a
lease is inadmissible in evidence for want of registration, none of the
term~';·o! the lease can be admitted in evidence and that to use a
B document for the purpose of proving an important clause in the lease is
not using it as a collateral purpose.

8. The learned counsel for the appellant attempted to meet the
point by saying that so iar the consent Qf the landlord permitting )
sub:letting is concerned, it does not require registration and the
clause, therefore, must be excepted from the requirement of registra- _.
c tion and consequent exclusion from evidence. We do not see any force \

in this argument. The question whether a lessee is entitled to create a
sub-lease, or not is undoubtedly a term of the transaction of lease, and
if it is incorporated in the document it can not be disassociated from
the lease and considered separately in isolation. If a document is inad- ..
D missible for non-registration, all its terms are inadmissible including ~
the one dealing with landlord's permission to his tenant to sub-let. It
follows that the appellant can not, in the present circumstances, be
allowed to rely upon the clause in his unregistered lease deed. 'r·~
9. There is still another reason to hold that the aforesaid clause
E can not come to the aid of the appellant. A perusal of its language
would show that it contains the respondent's consent in general terms
without reference"to M/s. United Automobiles. As a matter of fact
M/s. United Automobiles came to be inducted as a sub-tenant much
later. Can such a general permission be treated to be the consent as
required by S. 14 (1) Proviso (b) of the Aet? It was held by thi~ Court j
F In Mis. Shalimar Tar Products v. S.C. Sharma, [1988) 1 SCC 70; that
Ss, 14(1) Proviso (b) and 16(2) and (3) of the Delhi Rent Control Act,
1958 enjoin the tenant to obtain consent of the landlord in writing to
the specific sub-letting and any other interpretation of the provisions
will defeat the object of the statute and is, therefore, inpermissible,
Since it is not suggested that the consent of the respondent was
obtained specifically with reference to the sub-letting in favour of M/s.
G
United Automobiles, the clause in the lease deed, which has been
relied on can not save the appellant, even if it be assumed in its favour
--i..
that the clause is admissible and the sub-lessee is appellant's associate
"
concern. The appeal, therefore, fails and is dismissed with costs.

H G.N. Appeal dismissed.