Holding

The Bombay Rent Act does not protect sub‑lessees where the building was erected by the original lessee without a building lease or agreement with the local authority; therefore Sections 4(1)(a) and 4(4)(a) are inapplicable.

Summary

The Trustees of the Port of Bombay, a local authority, leased a plot to Mustafa Husein in 1945 on a monthly tenancy and he erected a permanent godown. In 1958 Husein sub‑let the godown to Maneklal & Sons, who thereafter occupied it. The Trustees obtained a decree for eviction against Husein’s heirs, but the sub‑lessees obstructed execution and claimed protection under the Bombay Rent, Hotel and Lodging Houses Rates (Control) Act, 1947, contending that the Act shielded occupants of buildings erected on government land. The Supreme Court examined whether Section 4(1)(a) and 4(4)(a) of the Act applied where the building was constructed by the original lessee without a building‑lease agreement. It held that the protection under the Act is limited to buildings erected pursuant to an agreement or lease with the lessor, and a mere monthly tenancy does not satisfy this condition. Consequently, the petitioners were not entitled to the Act’s protection and the Special Leave Petition was dismissed, though they were permitted to remain in possession until 15 September 1988 to vacate.

Issues considered

Whether the petitioners are entitled to protection under Section 4(1)(a) of the Bombay Rent, Hotel and Lodging Houses Rates (Control) Act, 1947.
Whether a building erected by a lessee without a building‑lease agreement falls within the ambit of Section 4(4)(a) of the same Act.

Legislation cited

Bombay Rent, Hotel and Lodging Houses Rates (Control) Act, 1947s. 4(1)(a), s. 4(4)(a)
Code of Civil Procedures. Order 21 Rules 97-101

Subjects

Bombay Rent ActSection 4building leasesub‑leaselocal authorityevictionstatutory interpretationspecial leave petition

Judgment

'
MANEKLAL AND SONS
A
v.
TRUSTEES OF PORT OF BOMBAY & ORS.

OCTOBER 14, 1987

[SABYASACHI MUKHARJI AND G.L. OZA, JJ.] B

'r Bombay Rent, Hotel and Lodging Houses Rates (Control) Act,
~ 1947: Section 4(1)(a) and 4(4)(a)-Land belonging to local authority
taken on lease-Lessee constructing building and letting out the
same-Sub lessee-Whether entitled to protection.
c
I- In 1945 the first respondent-Trustees of Port ofBombay, granted
lease of plot owned by them for the purpose of erecting a godown for
carrying on commercial activities at a monthly rent of Rs. 925. In 1946
the lessee erected a permanent godown. In 1958, he granted lease of the
said godown to the petitioners. The first respondent filed a suit against D
the heirs of the original lessee for eviction on the ground of termination
of tenancy, and obtained a decree. When warrant of possession was
sought to be executed, the petitioners obstructed the execution of the
decree.
~- E
The first respondent thereupon took out a Chamber Summons for

- removal of obstruction under Order 21 Rule 97-101 C.P.C. The
petitioners contended that as they were lessees under the original lessee
they were entitled to protection of the Bombay Rent, Hotel and Lodging
Houses Rates (Control) Act, 1947-the Bombay Rent Act-which applied
to the building erected by a lessee from the local authority. The trial F
'-~ court rejected the petitioners' objection and allowed the Chamber
Summons.

The appeal of the petitioners was dismissed by the Single Judge of
the High Court holding that they were not entitled to the benefit of the
Bombay Rent Act. The contentions arising out of the Easement Act and G
alleged acquiescence of the first respondent were negatived. The Letters
Patent Appeal was also dismissed by the Division Bench.
-f
On the question whether the petitioners were entitled to protec-
tion under section 4(l)(a) of the Bombay Rent Act. H
483
484 SUPREME COURT REPORTS [1988] 1 S.C.R.

Dismissing the Special Leave Petition,
A
HELD: Where a building was erected by the lessee not pursuant
to or not under any agreement with the lessor then the case did not fall
under section 4(1)(a) of the Bombay Rent, Hotel and Lodging Houses
Rates (Control) Act, 1947. l48CiG]
ll
Section 4(1) gives immunity to the local authority in respect o>f the
land which it has let out to the lessee and that immunity cannot be taken
away merely because the lessor on his own volition and without being In
obligation under any agreement choses to put up structures on that
land. Therefore, if the premises belonged to the Government or a local
C authority then the Act would not apply. [48CiH; 487A, DI

In the Instant case, the lands belong to the local authority but the
structures were put on by the lessees of the first respondent not under
any building lease, and sud1 protection cannot be claimed in respect of
these premises. In view of the fact that the original lease was only a
D month!~ tenancy and not a building lease, the High Court was right in
dismissing the objections on behalf of the petitioners. Since the petition-
rrs have been in possession of the premises for some time, the petition-
ers are allowed to continue to remain in the premises upto 15th
September, 1988. [489F, H]

E Kanji Manji v. The Trustees of the Port of Bombay, [1962] Suppl.
3 S.C.R. 461 applied.

CIVIL APPELLATE JURISDICTION: Special Leave Petition
(Civil) No. 9887 of.1987.
-
F From the Judgment and Order dated 20.8.1987 of the Bombay ~
High Court in L.P.A. No. 77 of 1987. ,.___,.

K.K. Venugopal, A.K. Sen, M.K. Nesari, P.H. Parekh and R.K.
Dhillon for the petitioners.

G F.S. Nariman, U.J. Maskeja, B.S. Basaniaum, J. Peres, A.K.
Verma and D.N. Mishra for the Respondents.

The Judgment of the Court was delivered by +-
SABYASA CHI MUKHARJI, J. This petition is for leave to
H appeal against the judgment and order of the Division Bench of the
MANEKLAL v. TRUSTEES OF PORT OF BOMBAY [MUKHARJI, J.J 485

1 Bombay High Court dismissing Letters Patent Appeal from the order
A
of the learned Single Judge. The 1st respondents being the trustees for
the Port of Bombay are the owners of plot of land bearing Plot No. 62
admeasuring 576 sq. yards lying and situate in Pooria Street, Elphin-
stone Estate, Bombay-3. In or about 1945 the trustees of the Port of
Bombay granted lease of the said plot of land to one Mustafa Husein
for the purpose of erecting a godown for carrying on commercial B
activities at 11 monthly rent of Rs. 925 which later on was increased to
'Y
:Rs.1,465. ln or about 1946 Mustafa Husein being the lessee of the 1st
Respondent erected a permanent godown of brick, mortar and
cement. The said Mustafa Husein in 1958 granted lease of the said
godown to the petitioners; the area of the godown is about 3,000 sq. ft.
lt is alleged that petitioners have since been carrying on their business
in the said godown. The Trustees of the Port of Bombay filed suit
c
f- against the heirs of Mustafa Husein for eviction from the lease granted
to Mustafa Husein for termination of the tenancy. The ground for
eviction was termination of tenancy. The Trustees of the Port of
Bombay in July, 1977 obtained a decree on admission against the heirs
of Mustafa Husein in the said suit. In or about May, 1985 warrant of D
possession in execution of decree dated 20th of July, 1977 was sought
to be executed agairtst the petitioners. The petitioners obstructed the
execution of the decree. Thereupon in or about June, 1985, the
Trustees of the Port of Bombay took out a Chamber Summons in the
~ High Court of Bombay for removal of obstruction under Order 21
Rules 97 to 101 of the Code of Civil Procedure. Petitioners contended E
that they were lessees under the said Mustafa Husein and as such they
were entitled to the protection of the Bombay Rent, Hotel and Lodg-
ing Houses Rates (Control) Act, 1947, hereinafter called the Bombay
Rent Act, as the Bombay Rent Act applied to the building erected by a
lessee from the local authority and as such the petitioners right of
possession was protected under the provisions of the Bombay Rent F
-{ Act. The Trial Court allowed the Chamber Summons and rejected the
petitioner's contentions. He observed that it was not necessary to re-
cord evidence in this case. The petitioners being aggrieved preferred a
first appeal. The learned single judge of the High Court dismissed the
first appeal holding that the petitioners were not entitled to the benefit
of the Bombay Rent Act and negatived the contentions arising out of G
the Easement Act and also arising out of the alleged acquiescence of
_., the Trustees of the Port of Bombay. The petitioners preferred Letters
Patent Appeal which was also dismissed by the Division Bench of the
Bombay High Court. The High Court observed that if the contentions
of the petitioners were accepted then the provisions of Section 4(1)(a)
of the Bombay Rent Act would become nugatory. Being aggrieved H
486 SUPREME COURT REPORTS [1988] I S.C.R.

A therefrom the petitioners seek leave to appeal to this Court under ;_
Article 136 of the Constitution.

The question, is, whether the petitioners are entitled to protec-
tion under section 4(l)(a) of the Bombay Rent Act. The answer will
depend upon the question whether there was any building lease
B granted to the original tenant Mustafa Husein. There was none, at
least no such evidence was adduced before the learned Trial Judge or -..r·
before the Division Bench of the High Court. When the matter came
before this Court for admission by our Order dated 17th of September,
1987 as the question involved was whether there was any agreement or ...
lease with the lessor that they will have to construct building on the
C land demised to them, but as no such lease had been produced so far,
time was granted for production of such evidence. -..\

Pursuant to the same today we have been shown two letters, one
dated 16th of April, 1951 written by the Architect of the lessor for-
warding the plants in triplicate to the Bombay Port Trust for approval,
D and the other letter dated 14th of June, 1951 written by the Manager,
Land and Bunders to the architect of the lessor on the following
subject:

"Elphinstone State Reconstruction of a Shed on Monthly
Tenancy Plot at Poona Street."
E
The petitioners were informed that the plan was approved subject to
the compliance of the Municipal Regulations.

This question arose in the Bombay High Court in Ram Bhag-
wandas v. Municipal Corporation of the City of Bombay, A.LR. 1956
f Bombay 364. There interpreting the Bombay Rent Act and section
4(1) and 4(a) thereof Chief Justice Chagla speaking for the Division ,k
Bench held that the proper interpretation to put upon section 4(4)(a)
was that "under an agreement, lease or grant" must qualify both "build-
ing erected" and "land held". In other words, the building must be
erected by the lessee pursuant to the agreement, lease or grant given
G to the person who held the land under that agreement, lease or grant.
Therefore, where a building was erected by the lessee not pursuant to
any agreement with the lessor or not under any agreement with the +
lessor then the case did not fall under section 4( I){ a).

What section 4(1) does is to give immunity to the local authority
H in respect of the land which it has let out to the lessee and that immu-
MANEKLAL v. TRUSTEES OF PORT OF BOMBAY [MUKHARJI, J.] 487

nity cannot be taken away merely because the lessee on his own voli- A
tion and without being under any obligation under any agreement
choses to put up structures on that land.

Section 4 deals with exemptions and sub-section ( 1) provides as
follows:
B
"This Act shall not apply to any premises belonging to the
Government or a local authority or apply as against the
Government to any tenancy or other like relationship
created by a grant from the Government in respect of pre-
mises taken on lease or requisitioned by the Government:
but it shall apply in respect of premises let to the Govern- C
mentor a local authority".
~--
Therefore, if we have premises which belong to Government or a
local authority, then the Act would not apply. The land here belongs
to the local authority but the structures were put on·by the lessees of
the Port not under any building lease, and such protection can not be D
claimed in respect of these premises. Sub-section (4)(a) of section 4 is
also relevant. It was held "The expression 'premises belonging to the
Government or local authority' in sub-section (1) shall, notwithstand-
ing anything contained in the said sub-section or in any judgment
decree or order of a Court, not include a building erected on any land
held by any person from the Government or a local authority under an E
agreement, lease or other grant, although having regard to the provi-
sions of such agreement, lease or grant the building so erected may
- belong or continue to belong to the Government or the local authority,
as the case may be".

Chief Justice Chagla considered the historical background under F
which Section 4(a) was enacted by the Bombay Act of 1953. This
decision was approved by this Court in Kanji Manji v. The Trustees of
the Port of Bombay [1962] Suppl. 3 S.C.R. 461. Sub-section (4)(a) and
(b) read as follows:

"(4)(a). The expression "premises belonging to the G
Government or a local authority" in sub-section (1) shall,
notwithstanding anything contained in the said sub-section
or in any judgment, decree or order of a Court, not include
a building erected on any land held by any person from the
Government or a local authority under an agreement, lease
or other grant, although having regard to the provisions of H
488 SUPREME COURT REPORTS [1988] 1 S.C.R.

such agreement, lease or grant the building so erected may ;J.,
A
belong or continue to belong to the Government or the
local authority, as the case may be; and

(b) notwithstanding anything contained in section
15, such person shall be entitled to create a tenancy in
B respect of such building or a part thereof."

This Court observed at page 471 of the report that this was intro- '"(
duced by amendment and the purpose of the amendment was as
follows: .
'"l;he amendment achieved two different things. It enabled
c the lessee of the particular kind of building described in '
cl.(a) to create sub-tenancies in spite of the ban against
sub-tenancies contained in s. 15. It also excluded from the
~
operation of sub-section (1) the buildings specified in cl. (a)
of the sub-section. The amendment said nothing about the
D relationship of the Government or the local authority, on
the one hand, and the lessee, on the other, in respect of the
land. The word "premises" in sub-section ( 1) could mean
the land or the buildings or both. Sub-section (4)(a) dealt
only with the buildings, and did not deal with the land,
because it used the word "buildings" and not the more
general word "premises". The import of sub-s. (4)(a) of }-
E
s. 4 was thus limited to buildings, and did not extent to
land. The sub-section, however, was drafted somewhat in-
artistically, and the obscurity of the language presents
some difficulty. The Trial Judge followed a decision of the
Bombay High Court reported in Ram Bhagwandas v.
F Bombay Corporation, A.LR. 1956 Bombay 364. In that
case, one Khudabaksh Irani had taken lease of certain plots ,k
some 30 years back, and constructed some structures upon
the open plot, and rented them out as tenements. In 1947,
Irani sold them to one Tyaballi. In 1951, the Municipal
Corporation filed a suit to eject Tyaballi from the plots,
G and by a consent decree, Tyaballi agreed to deliver up
vacant and peaceful possession of the plots clear of all
structures. Tyaballi failed to remove the structures, and the
Municipal Corporation sought to execute the decree. The +
tenants thereupon filed a suit under 0.21, r. 103 of the Civil
Procedure Code against Municipal Corporation, but the
H suit was dismissed. In the appeal which was filed in the
MANEKLAL v. TRUSTEES OF PORT OF BOMBAY (MUKHARJI, J.] 489

High Court, it was conceded that the Municipal Corpora-
l. tion was the owners of the plots in question, but protection
A
was claimed on the basis of sub-s. (4)(a) of s. 4 of the Rent
Control Act. Chag!a, C.J. in dealing with the history of the
amending Act, pointed out that the legislature was seeking
to protect by that sub-section tenants who occupied build-
ings put upon land belonging to a local authority, if the B
buildings occupied by them were constructed under an
y agreement under which the lessee was under an obligation
to construct buildings. He pointed out that the protection
~
of sub-s. (4)(a) was to buildings and not to land, and that
the phrase "under an agreement, lease or other grant"
modified not only "held by any person from Government
or local authority" but also "erected on any land". He, c
therefore, held that the words "erected on any land held by
any person form a local authority" were descriptive of the
building and did not emphasise the point of time when the
building was erected. By that phrase, what was emphasised
was "that the nature of the building must be such as to D
satisfy the test that it was erected on land held by a person
from a local authority and the test must be applied at the
time when the protection is sought."
In that case, it was contended before this Court, as it was con-
tended in the Bombay High Court, that so long as a building was
erected under an agreement with Government or a local authmity, the E
"" benefit of sub-s. (4)(a) of s. 4 would be available, no matter how many
hands the property might have changed. This Court accepted the in-
- terpretation of the High Court in the aforesaid decision.
In our opinion, in the instant case, in view of the fact that the
original lease was only a monthly tenancy and not a building lease, the F
High Court was right in dismissing the objections on behalf of the
~ petitioners. We find no reason, therefore, to interfere with the order
of the High Court. The special leave petition therefore, fails and is
accordingly dismissed without any order as to costs.
Since, the petitioners have been in possession of the premises for
some time, in the interest of justice it is desirable, in our opinion, that G
the petitioners should have time to vacate the premises in question. In
the premises, we allow the petitioners to continue to remain in the
--f premises upto 15th of September, 1988 provided they file the usual
undertaking in this Court within four weeks.
N.P.V. Petition dismissed. H