SHABBIR MOHAMMAD SAYEDversusMRS. NOOR JEHAN MUSHTER SHAIKH & ORS.

                        [2022] 13 S.C.R. 123                             123


                SHABBIR MOHAMMAD SAYED                                   A
                                  v.
       MRS. NOOR JEHAN MUSHTER SHAIKH & ORS.
                 (Civil Appeal Nos.5039-40 of 2022)
                         AUGUST 02, 2022                                 B
        [K. M. JOSEPH AND HRISHIKESH ROY, JJ.]
       Maharashtra Rent Control Tenancy Act, 1999 – s.26 –
Contract Act, 1872 – Ratification – The first respondent filed a civil
suit against respondent Nos.2-4 (defendant no.1,2 and 3) claiming
                                                                         C
that they (defendant nos.1 and 2) were tenants of a property in
question who were ready to transfer their tenancy rights – Appellate
Court decreed the suit, plaintiff was declared tenant and defendant
no.3(landlord) was directed to hand over possession of the suit
premises – The appellant’s case was that he had obtained the
leasehold rights of the property in question from the lawful tenant      D
by an agreement dated 24.01.2014 (Appellant claims ignorance of
the aforesaid litigation by the first respondent) – The landlord-3rd
defendant by the agreement of the same date i.e. 24.01.2014 assigned
leasehold right in favour of the appellant – Appellant had filed an
application under O. XXI r.97 of the CPC before the Execution
                                                                         E
Court, which was rejected by the Execution Court, the Appellate
Court, and the High Court – On appeal, held: An assignment by
appellant is illegal u/s. 26 of the Maharashtra Rent Control Act,
unless a contract to the contrary is established – There is no express
contract to the contrary to rescue appellant – While ordinarily a
tenant can assign or sublease his rights as a lessee, the Maharashtra    F
Rent Control Act prohibits subletting, giving on license or assigning,
or transferring in any other manner – An assignment by the tenant
can be ratified by the landlord,however, there is no ratification in
the alleged agreement executed by the landlord-3rd defendant – No
case for interference made out.
                                                                         G
      Dismissing the appeals, the Court
     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          H
                               123
124            SUPREME COURT REPORTS                       [2022] 13 S.C.R.


A     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
B
      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
C     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
D     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
E     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
F     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
G     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

H
   SHABBIR MOHAMMAD SAYED v. MRS. NOOR JEHAN                            125
             MUSHTER SHAIKH & ORS.

alleged agreement executed by the 3 rd defendant landlord. He           A
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
                                                                        B
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   C
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; 136-
A-C]
       5. As far as the case based on the alleged Tenancy               D
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      E
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                  F
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      G
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      H
126            SUPREME COURT REPORTS                        [2022] 13 S.C.R.


A     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
B
      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
C     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; 137-
      A-B]
D
            CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 5039-
      5040 of 2022.
            From the Judgment and Order dated 17.07.2018 of the High Court
      of Judicature at Bombay in Civil Revision Application No. 372 of 2017
E     and Order dated 16.08.2018 in Civil Application No. 495 of 2018 in Civil
      Revision Application No. 372 of 2017.
            Gauraj Shah, Udayaditya Banerjee, Advs. for the Appellant.
            Sandeep Sudhakar Deshmukh, Adv. for the Respondents.

F           The Judgment of the Court was delivered by
            K. M. JOSEPH, J.
            1. Leave granted.
             2. By the impugned order, the High Court in a revision petition
      filed by the appellant has upheld the order passed by the Appellate Bench
G     of the Court of Small Causes at Bombay which in turn affirmed the
      order passed in Execution Application No.386/2016 that is Order dated
      16.11.2016, rejecting the application filed by the appellant under Order
      XXI Rule 97 of the Code of Civil Procedure. The application for recall
      has been rejected by the order which is also impugned. The first
H     respondent filed a civil suit against respondent Nos.2-4. Respondent
    SHABBIR MOHAMMAD SAYED v. MRS. NOOR JEHAN                                     127
       MUSHTER SHAIKH & ORS. [K. M. JOSEPH, J.]

Nos.2-4 are, in other words, defendants 1, 2 and 3 in the suit. The claim         A
of the first respondent in the suit was that defendant Nos. 1 and 2 were
tenants of the property in question who were ready to transfer their
tenancy rights on the agreed consideration of Rs. 85,000/- which was
paid to them by the first respondent. The parties are referred to by their
status in the Trial Court. The matter was being delayed on the basis of
                                                                                  B
the property being illegally sublet to two persons. The plaintiff is alleged
to have contacted the landlord namely defendant No.3. The 3rd defendant
transferred tenancy rights by rent receipt dated 01.12.2006. Possession
was not handed over. PW2, the 3rd defendant, was examined where he
admitted the letters dated 03.1.2004 and 19.05.2007. The Trial Court
dismissed the suit by Judgment dated 09.04.2013. The plaintiff appealed           C
the judgment by filing Appeal No.23 of 2013. The Appellate Court decreed
the suit. Following are the terms of the decree:
      1. Appeal is allowed with costs.
      2. The Judgment and decree dated 09.04.2013 is set aside and
         following order is substituted.                                          D

      i) The suit is party decreed with costs.
      ii) It is declared that the plaintiff is tenant in respect of the suit
      premises being Room No.3, Ground Floor, 98/A, Visheshwar
      Bhuvan @ Rajkotwala Compound, Pipe Road, Kurla (West),                      E
      Mumbai 400 070.
      iii) Defendant No.3/landlord/co-owner is directed to hand over
      possession of the suit premises to the plaintiff within a month and
      directed to issue rent receipt regularly to the plaintiff after accepting
      the monthly rent.                                                           F
      iv) The relief sought vide prayer clause (b) is rejected.
      3. The plaintiff levied execution by filing Execution Application
No. 386 of 2016.
        4. It is the case of the appellant that the tenant who was actually
in possession of the property assigned his rights in favour of the appellant      G
by an agreement dated 24th January 2014. The appellant claims ignorance
of the litigation.
      5. In other words, one Akhtar Habibullah Shaikh claiming to be
the lawful tenant of the premises transferred his rights in favour of the
                                                                                  H
128            SUPREME COURT REPORTS                          [2022] 13 S.C.R.


A     appellant upon receiving of ‘total cost and consideration’ of Rs.9,40,000.
      What is more important is the 3rd defendant (landlord) by agreement of
      the same date i.e. 24th January 2014 assigned leasehold right in favour
      of the appellant. The appellant came by possession of the premises.
      When he came to know of the decree obtained by the plaintiff and it
      being put to execution, he filed application purporting to be under Order
B
      21 Rule 97 of the Code of Civil Procedure. It was this application which
      was dismissed by the Execution Court, the Appellate Court and the High
      Court.
            6. We heard Shri Gauraj Shah along with Mr. Udayaditya Banerjee,
      learned counsel on behalf of the appellant and Shri Sandeep Sudhakar
C     Deshmukh, learned counsel on behalf of the plaintiff.
            7. Learned counsel for the appellant would contend that none of
      the grounds arrayed against the appellant will hold good in law. It is
      pointed out that the appellant has been non-suited on the following
      grounds.
D
             8. The assignment of lease in favour of the appellant by the person
      claiming to be the lessee was unlawful, the lease being contrary to Section
      26 of the Maharashtra Rent Control Tenancy Act 1999 (hereinafter
      referred as “the Act”). Secondly, it has been found that the assignment
      purporting to be made by the 3rd defendant landlord in favour of the
E     appellant could not be acted upon as the assignment was not registered.
      It was thirdly found that the transactions relied on by the appellant were
      afflicted by the bar of Section 52 of the Transfer of Property Act. It was
      during the pendency of the appeal filed by the plaintiff which appeal was
      later allowed that the assignments relied on by the appellant came to be
F     made. Learned counsel would elaborate and contend as follows:
             As far as Section 26 of the Act is concerned, the prohibition
            therein would not apply if there is a contract to the contrary. He
            would rely upon the Judgment of a full bench of the Bombay High
            Court and contend that in the light of the law laid down therein the
G           bar of Section 26 would not apply. The next contention is that in
            Maharashtra, Section 52 has been amended. The substance of
            the amendment is that if the party wishes to avail the benefit of
            the doctrine of lis pendens, he must give a notice which must be
            registered in the manner provided. The plaintiff has no case that
            such a notice was given and registered. This would mean that
H
    SHABBIR MOHAMMAD SAYED v. MRS. NOOR JEHAN                                     129
       MUSHTER SHAIKH & ORS. [K. M. JOSEPH, J.]

       Section 52 would not apply. Still further even Order 21 Rule 102           A
       of the Code of Civil Procedure has been omitted in the State of
       Bombay. Therefore, the assignment in favour of the appellant will
       not be afflicted with the Bar under Section 52 or Order 21 Rule
       102, runs the argument.
       As far as the 3rd finding against the appellant goes, namely, the          B
       fact that the lease deeds were not registered, it is pointed out that
       the lease deeds were actually monthly in nature. At any rate even
       if lease extends for a period of more than one year, the appellant
       stands shielded by virtue of the provisions of Section 55 of the
       Act. He would contend that though a review petition was filed
       bringing to the notice of the High Court, the aspects relating to          C
       Section 26 and the provisions of Section 55, the High Court has
       dismissed the review petition as well. He would point out that
       when a person who is not a party to the suit or in the execution
       proceeding is in possession and has independent rights and is sought
       to be dispossessed, under the law as laid down by this Court, he is        D
       entitled to have his right investigated and adjudicated in the manner
       provided in Order 21 Rules 98 and 101. He would point out that
       actually the decree obtained by the plaintiff is collusive in nature.
       The 3rd defendant came to be examined by the plaintiff as her
       witness namely PW2. The same 3rd defendant came to execute
       the agreement on 24th January 2014 in favour of the appellant.             E

       9. Per contra learned counsel for the plaintiff supported the
impugned Judgment. He would point out that there is no bona fides in
the claim of the appellant. According to the plaintiff, appellant has neither
any right nor even possession of the property.
                                                                                  F
       10. We have already noticed the facts. Originally the Trial Court
dismissed the suit filed by the plaintiff. It is after she filed the appeal and
during the pendency of the appeal that the two transactions relied upon
by the appellant allegedly came to be entered into. The transactions are
said to be entered into on 24.01.2014.
                                                                                  G
        11. We must first consider whether the said transactions dated
24.01.2014 said to have been entered into by the tenant Shri Habibullah
is hit by the bar of Section 26 of the Act. This we do, proceeding on the
basis that it is proved.
       Section 26 of the Act reads as follows:
                                                                                  H
130             SUPREME COURT REPORTS                           [2022] 13 S.C.R.


A            “26: In absence of contract tenant not to sub-let or transfer or to
             give on licence
             Notwithstanding anything contained in any law for the time being
             in force, but subject to any contract to the contrary, it shall not be
             lawful for any tenant to sub-let or give on licence the whole or
B            any part of the premises let to him or to assign or transfer in any
             other manner his interest therein:
             Provided that, the State Government may by notification in the
             Official Gazette, permit in any area the transfer of interest in
             premises held under such leases or class of leases any premises
C            or class of premises other than those let for business, trade or
             storage to such extent as may be specified in the notification.”
             Section 26 begins with a non-obstante clause and purports to
             provide for the position despite whatever is contained in any law
             for the time being in force. In this regard, it must be noticed that
D            the Transfer of Property Act, 1882, in Section 108 (B)(j) provides
             that in the absence of a contract to the contrary:
             “(j) The lessee may transfer absolutely or by way of mortgage or
             sub-lease the whole or any part of his interest in the property,
             and any transferee of such interest or part may again transfer it.
E            The lessee shall not, by reason only of such transfer, cease to be
             subject to any of the liabilities attaching to the lease;
             Nothing in this clause shall be deemed to authorise a tenant having
             an untransferable right of occupancy, the farmer of an estate in
             respect of which default has been made in paying revenue, or the
F            lessee of an estate under the management of a Court of Wards,
             to assign his interest as such tenant, farmer or lessee;”
             12. Thus, the law giver has provided that, notwithstanding, the
      aforesaid provision it will not be lawful for a tenant to sublet or to give on
      license the whole or any part of the premises let to him or to assign or
      transfer in any other manner his interest therein. This in turn is, however,
G
      made subject to any contract to the contrary. In other words, 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
H
    SHABBIR MOHAMMAD SAYED v. MRS. NOOR JEHAN                                 131
       MUSHTER SHAIKH & ORS. [K. M. JOSEPH, J.]

other manner. This is made subject to a contract to the contrary. The         A
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 learned counsel for 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
                                                                              B
in favour of the appellant on the very same day. In this regard, our
attention is drawn to the Judgment of the full bench of the Bombay High
Court. Therein speaking on behalf of a Full Bench in 2004 (2) Maharashtra
Law Journal 305 R.M. Lodha,J as His lordship then was, inter alia, dealing
with Section 26 held as follows:
      “15. The said section 26 does not absolutely prohibit or totally        C
      forbid the tenant the tenant as meant by section 7(15) - to sublet
      or give on licence or assign or transfer in any other manner whole
      or any part of the premises let to him since it is subject to the
      contract to the contrary with the landlord. In other words, the
      landlord is always at liberty to permit the tenant to sublet or give    D
      on licence or assign or transfer in any other manner whole or any
      part of the premises let to him. The contract contrary to the
      prohibition provided in section 26 can be at any time at the time
      the premises are let out to the tenant or any time thereafter, even
      after the tenant has sublet or given on licence or assigned or
      transferred his interest in the premises let out to him. The landlord   E
      can always ratify the action of the tenant in subletting or giving on
      licence or assigning or transferring in any other manner his interest
      in the premises let to him. Thus, section 26 of the Act of 1999
      cannot be held to contain the absolute bar against the tenant of
      the non-residential premises nor the transfer in contravention of       F
      section 26 is absolutely void that is void against the whole world
      but may be void against the landlord furnishing him the ground to
      get a decree for ejectment.”
        13. The next aspect which is canvassed by the appellant is about
the inapplicability of Section 52 of the Transfer of Property Act as an       G
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. In regard to this area by
virtue of Bombay Amendment Act, 1939 (Act XIV of 1939), being
enacted, Section 52 reads as follows:
                                                                              H
132            SUPREME COURT REPORTS                         [2022] 13 S.C.R.


A           “52. (1) During the pendency in any court having authority within
            the limits of India excluding the State of Jammu and Kashmir
            established beyond such limits by the Central Government, of any
            suit or proceeding which is not collusive and in which any right to
            immovable property is directly and specifically in question, if a
            notice of the pendency of such suit or proceeding is registered
B
            under Section 18 of the Indian Registration Act, 1908, the property
            after the notice is so registered cannot be transferred or otherwise
            dealt with by any party to the suit or proceeding so as to affect
            the rights of any other party thereto under any decree or order
            which may be made therein, except under the authority of the
C           court and on such terms as it may impose.
            (2) Every notice of pendency of a suit or proceeding referred to
            in sub-section (1) shall contain the following particular, namely: -
            (a) the name and address of the owner of immovable property or
            other person whose right to the immovable property is in question;
D
            (b) the description of the immovable property the right to which is
            in question;
            (c) the Court in which the suit or proceeding is pending;
            (d) the nature and title of the suit or proceeding; and
E
            (e) the date on which the suit or proceeding was instituted.
            Explanation.—For the purposes of this section, the pendency of a
            suit or proceeding shall be deemed to commence from the date of
            the presentation of the plaint or the institution of the proceedings
            in a Court of competent jurisdiction, and to continue until the suit
F
            or proceeding has been disposed of by a final decree or order and
            compete satisfaction or discharge of such decree or order has
            been obtained, or has become unobtainable by reason of the
            expiration of any period of limitation prescribed for the execution
            thereof by any law for the time being in force.”
G           Adverting to the said provision, a division bench of the High Court
      of Bombay has held as follows interalia in the Judgment reported in
      (2016) Vol.6 Bombay CR 262:
            “58. Section 2 of the Bombay Amendment Act XIV of 1939
            provides that the Amendment Act shall apply to properties situated
H
    SHABBIR MOHAMMAD SAYED v. MRS. NOOR JEHAN                                   133
       MUSHTER SHAIKH & ORS. [K. M. JOSEPH, J.]

      wholly or partly in the City of Bombay (now Mumbai) from the              A
      date of notification in the official gazette (which has been issued)
      and provides for similar notification extending applicability of the
      Amending Act to other areas to be issued (which is not shown to
      have been issued). Thus, the amended provisions apply to
      properties in Mumbai and the unamended section applies to rest
                                                                                B
      of the State.”
                                                       (Emphasis supplied)
       14. 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         C
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.                                                             D

       15. 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         E
establish the tenancy with the document even if it is not registered. Section
55 of the Act reads as follows:
      “55. Tenancy agreement to be compulsorily registered.
      (1) Notwithstanding anything contained in this Act or any other           F
      law for the time being in force, any agreement for leave and license
      or letting of any premises, entered into between the landlord and
      the tenant or the licensee, as the case may, after the
      commencement of this Act, shall be in writing and shall be
      registered under the Registration Act, 1908.
                                                                                G
      (2) The responsibility of getting such agreement registered shall
      be on the landlord and in the absence of the written registered
      agreement, the contention of the tenant about the terms and
      conditions subject to which a premises have been given to him by
      the landlord on leave and license or have been let to him, shall
      prevail, unless proved otherwise.                                         H
134             SUPREME COURT REPORTS                             [2022] 13 S.C.R.


A            (3) Any landlord who contravenes the provisions of this section
             shall, on conviction, be punished with imprisonment which may
             extend to three - - months or with fine not exceeding rupees five
             thousand or with both.”
             16. The appellant has not raised any contention based on the
B     amended Section 52 before the Execution Court. Even in the appeal
      before the Appellate Court, the appellant has not contended that a Notice
      was required under Section 52, as applicable. Before the High Court in
      the Revision, it is not seen expressly contended. It is in the recall application
      that an effort is made in this direction. The amended provisions of Section
      52 of the Transfer of Property Act are inapplicable for the whole of
C     Maharashtra, as found by the High Court itself in the decision relied
      upon by the appellant, it is applicable to certain area. The applicability of
      the amended provisions of Section 52, thus, became a question of fact.
             17. As far as the alleged assignment by the so-called tenant in
      favour of the appellant is concerned, it is prohibited under Section 26.
D     There is no express contract to the contrary to rescue the appellant. The
      full bench of the High Court of Bombay in the decision relied upon by
      the appellant was actually dealing with the question whether the interest
      of the tenant could be attached and sold. No doubt, it has also held that
      there could be ratification by the landlord even after the transfer by the
E     tenant.
             18. In the Indian Contract Act, 1872, Chapter X deals with Agency.
      In Chapter X, Sections 196 to 200 provide for ratification. Apparently,
      the Sections embody general principles relating to ratification and we
      can safely apply the principles embodied in the Sections essentially dealing
F     with relationship between a Principal and his Agent.
             19. As to what is ratification, has been articulated in Section 196.
      It reads as under:
             “196. Right of person as to acts done for him without his authority
             Effect of ratification. - Where acts are done by one person on
G
             behalf of another, but without his knowledge or authority, he may
             elect to ratify or to disown such acts. If he ratifies them, the same
             effects will follow as if they had been performed by his authority.”
             20. In the work “The Indian Contract Act and Specific Relief
      Acts” by Pollock and Mulla (14th Edition), the learned authors have
H     stated thus:
   SHABBIR MOHAMMAD SAYED v. MRS. NOOR JEHAN                                       135
      MUSHTER SHAIKH & ORS. [K. M. JOSEPH, J.]

         “Ratification                                                             A
         An act which, at the time it was entered into or done by an agent,
         lacked the authority, express or implied, of a principal, may, by the
         subsequent conduct of the principal, become ratified by him under
         certain circumstances, and made as effectively his own as if he
         had previously authorised it. Ratification can be express or implied      B
         from conduct, and it will be held adopted throughout.
                   XXX                        XXX                XXX
         Ratification differs from consent. Consent is an express or implied
         agreement to waive the right to avoid an act, and precedes the
         transaction. Ratification is subsequent in point of time to the           C
         transaction which is voidable. Where acquiescence is made when
         the act to be ratified is in progress, it is consent; where it is done
         after the act is completed, it is ratification.”
                                                         (Emphasis supplied)
                                                                                   D
         21. We may notice Section 198 of the Contract Act. It reads as
under:
         “198. Knowledge requisite for valid ratification
         “No valid ratification can be made by a person whose knowledge
         of the facts of the case is materially defective.”                        E
      22. Pollock and Mulla, in their work “The Indian Contract Act
and Specific Relief Acts” have further stated thus:
         “Effective ratification necessarily involves knowledge of all the
         material facts on the part of him who ratifies: i.e. the person
         ratifying should be conscious that the act beyond the authority of        F
         the agent had been done, and after notice of that fact, he consciously,
         by an overt act, agreed to be bound by it or by acquiescence in
         the situation arising thereafter, allowed the business to continue.
                   xxx                        xxx                         xxx”
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      23. Therefore, the core principle of ratification is one by which a
person approves of the act of another knowing about the act.
      24. Thus, 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 3rd defendant landlord. He does not even
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136             SUPREME COURT REPORTS                            [2022] 13 S.C.R.


A     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
B
      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
C     transfer by the ‘lawful tenant’ cannot pass muster.
              25. 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
D     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
E     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’
F     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
G     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
H     and taking the documents on their face value, yet the conclusion is
    SHABBIR MOHAMMAD SAYED v. MRS. NOOR JEHAN                                  137
       MUSHTER SHAIKH & ORS. [K. M. JOSEPH, J.]

inevitable that the case set up by the appellant on the basis that the         A
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
                                                                               B
tenant. The case set up by the appellant based on the tenancy agreement
by the landlord cannot be acted upon.
        26. The matter can be looked at from a different perspective as
well. The appellant lays store by a tenancy or assignment by the ‘lawful
tenant’ on 24.01.2014. This involves the assumption that the tenancy in
favour of the lawful tenant was intact. If so, how can the landlord create     C
a tenancy in favour of the appellant without extinguishing the existing
tenancy with the ‘lawful tenant’? The case of the appellant defies both
logic and is legally untenable. It becomes unnecessary to even explore
the argument of the appellant that the suit being collusive, the courts
query as to the impact of the transfer in favour of the appellant being        D
later in point of time must stand overwhelmed would stand answered.
      27. We would therefore think that the appellant has not made out
a case for interfering with the impugned judgment. The appeals are
dismissed. No order as to costs.
                                                                               E
Ankit Gyan                                                Appeals dismissed.
(Assisted by : Aarsh Choudhary, LCRA)




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