Holding

The Supreme Court held that no sub‑letting occurred as there was no consideration and the bank retained constructive possession, so the tenant is not liable for eviction under Section 13(1)(a).

Summary

United Bank of India leased premises from Cook's and Kelvey Properties and allowed its employees' trade union to occupy the premises for union activities without the landlord's consent. The bank did not receive any rent from the union, maintained the premises, paid electricity charges, and retained the power to ask the union to vacate at any time. The landlord sued for eviction alleging sub‑letting under Section 13(1)(a) of the West Bengal Premises Tenancy Act, 1956. The High Court Division Bench held that sub‑letting had occurred and ordered eviction, but the Supreme Court reversed, finding that no consideration was paid and the bank retained legal control, so there was no transfer of the right to enjoy the premises. Consequently, the bank was not liable for eviction under the Act.

Issues considered

Whether the bank's permission to the trade union to occupy the premises amounts to a sub‑letting or transfer of the right to enjoy the property within the meaning of Section 13(1)(a) of the West Bengal Premises Tenancy Act, 1956.
Whether Section 13(1)(a) of the Act applies to non‑residential premises.

Legislation cited

Transfer of Property Act, 1882s. 105
West Bengal Premises Tenancy Act, 1956s. 13(1)(a), s. 14

Subjects

tenancysub‑lettingconsiderationconstructive possessionevictionnon‑residential premisesWest Bengal Premises Tenancy ActTransfer of Property Act

Judgment

----

UNITED BANK OF INDIA A
v.
COOKS AND KELVEY PROPERTIES (P) LTD.

MAY 12, 1994

[K. RAMASWAMY AND N. VENKATACHALA, JJ.] B

Tenancy Law : 17ie West Bengal Premises Tenancy Act, 1956:

Section 13(1) (a)-Eviction of tenant-Protection against-Tenant
Bank inducting its en1ployees' trade union into suit pren1ises to carry on trade
union activities-Bank receiving no nionetary consideration and retaining its
c
power to call upon union to vacate pre1nises at any tinie, as also maintaining
-· premises and paying electricity bills, thereof-Held, existence of consideration,
an ingredient of sub-letting not present-Tenant had been retaining legal
possession of premises-11iere is no transfer of right to enjoy premises by trade
union exclusively, for consideration. D
Transfer of Property Act, 1882 : Section 105-Leas~A tenant who
transfers or assigns his nght, in tenancy held by him, for consideration, creates
sub-tenancy.

The respondent-landlord filed a suit in the High Court for ejectment E
of the appellant-Bank, inter alia, on the ground that the appellant, after
taking the demised premises on rent, sub-let it to the Association of Bank's
Employees, a trade Union, without landlord's consent and thereby con·

-
travened s.13(1)(b) of the West Bengal Premises Tenancy Act, 1956. The
Single Judge dismissed the suit, but on appeal, the Division Bench decreed
F
the suit. The tenant-Bank filed the appeal by special leave.

It was contended on behalf of the appellant that the legal possession
of the demised premises was with the Bank which had control over the trade
union and had reserved the right to ask the trade union at any time to
deliver the possession back to it; that the appellant had been taking care of G
the maintenance of the premises at its own expenses, and paying the
municipal taxes in respect thereof, but had not been collecting any rent
from the trade union. It was also contended that s.13(1)(a) has no applica·
lion to the non-residential buildings.

On behalf of the respondent, it was contended that the trade union H
55
56 SUPREME COURT REPORTS 11994] S.UPP.1 S.C.R.

A admittedly being in exclusive possession of the premises for its trade union
activities which has no connection with the bank's activities, the only in-
ference that could be dra"n was that the appellant had parted mth the
possession of the demised premises in favour of the trade union and for
consideration, and the subletting, was therefore, established.

B Allomng the appeal, this Court

HELD : 1.1. It cannot be said that the appellant had sub-let the
demised premises so as to make it liable for eviction under s.13(1) (a) of the
West Bengal Premises Tenancy Act, 1956. (62-D]

C 1.2. From the evidence it is clear that though the appellant had
inducted the trade union into the suit premises for carrying on the trade
union activities, it has nOt received any monetary consideration from the
trade union. Thus, the Existence of consideration, an ingredient of sub-let-
ting, has not been proved. (61-G]

D 1.3. The President of the trade union, in his cross-examination, stated
that the Bank had retained its power to call upon the Union to vacate the
premises at any time and the Union has given such an undertaking. It is
also staled that the Bank has been maintaining the premises at its own
expenses and also paying the electricity charges. Thus, the appellant had
E retained its legal control of the possession of the premises and let the trade
u11ion to occupy it for trade union activities. Though the trade union was
in possession of the premises, the possession must be deemed to be con-
structive possession held by it on behalf of the Bank. The Bank retains its
control over the trade union whose membership is confined to the
employees of the Bank. Jn the circumstances, there is no transfer of right
F to enjoy the premises by the trade union exclusively for consideration.
(61-H, 62-A-C]
Deepak Banerjee v. Smt. Lilabati Chakraborty, (1987] 3 SCR 680;/agan
Nath (deceased) through Lrs. v. Chander Bhan & Ors., (1988] l Suppl. SCR
325; Gopa/ Saran v.Satyanarayana, (1989] l SCR 767 and Delhi Stationers &
G Printers v. Rajendra Kumar, (1990] 2 sec 331, relied on.

Smt. Rajbir Kaur & Anr. v. Mis Chokesiri & Co., (1989] 1 SCC 19 and
Bhairab Chandra Nandan v. Ranadhir Chandra, (1988] 1 SCC 383, referred '
to.

H 2. The provision of s.13(l)(a) of the West Bengal Premises Tenancy
-.. -
UNITED BANK OF INDIA 1•. COOKS AND KELVEY PROPERTIES

Act, 1956 applies to the residential as well as non-residential premises
57

A
governed by the provisions of the Act. (59-D]

3. The meaning of transfer of a right to enjoy the property for
consideration envisaged under sJ05 of the Transfer of Property Act, which
postulates that a tenant who transfers or assigns his right in the tenancy
or any part thereof in whole or in part held by him is a sub-tenancy without B
the previous consent in writing. [61-E]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2972 of
1992.

From the Judgment and decree dated the 4th October, 1991 of the c
High Court of Calcutta in Appeal No. 309 of 1984 arising out of Suit No.
840 of 1979.

Alta[ Ahmad, A.S.G., Dr. S. Bhardwaj, Ms. Mridula Bhardwaj, Ms.
Rakhi Verma and S. Roy for the Appellant.
D
Dr. Shankar Ghosh, L.K. Poddar and Vivek Gambhir for the
Respondent.

The following order of the Court was delivered :

The respondent filed a suit. O.S. No. 840/79 on the original side of E
Calcutta High Court for ejectment of the appellant from 4th floor of
premises No. 20. Old Court House Street, Calcutta on diverse grounds
under the West Bengal Premises Tenancy Act. 1956, for short 'the Tenancy

-
-
Act'. That suit was dismissed by a learned single Judge but on appeal, ·
Appeal No. 309 of 1984 filed by the respondent before the Division Bench,
was allowed, judgment and decree of learned single Judge set aside, and F
the suit was decreed on the ground of subletting under section 13(1)(a) of
the Tenancy Act. Thus, this appeal by special leave from appellate judg-
ment and decree dated October 4, 1991.

The respondent's case is, that the appellant after taking demised
premises on rent of Rs.2,250 per mensum, has inducted the United Bank G
of India Employees' Association Central Committee, a registered trade
• union into the demised premises and allowed it to have its exclusive
possession and use of the same for its trade union activities without its
(landlord's) written consent and that thereby it has contravened section
13(1)(a) of the Tenancy Act. The Division Bench upheld that case finding H
58 '' SUPREME COURT REPORTS (1994) SUPP. 1 S.C.R. --
A that the landlord had succeeded in proving that the bank had parted with
the possession of the demised premises in favour of the union which was
-;.
in complete and exclusive possession of the 4th floor of the premises No.
20. Old Court House Street, Calcutta, and hence there was subletting
and/or transfer of tenancy interest in favour of the third person without the
consent of the landlord and as such the tenant was not entitled to any
B protection under the Tenancy Act. The contention of the appellant is that
though the trade union was in possession of the demised premises, it is a
part of the appellant's trading activity and the appellant had control over
the trade union. The trade union is bound to vacate the demised premises
when appellant needs and it is the appellant which has been taking care of
c the maintenance of the premises at its own expenses. It has been paying
the municipal taxes, in charge of management and also has reserved its
right to ask the trade union at any time to deliver possession back to it. It
has not been collecting any rent from the trade union. Under those
circumstances, the legal position remained with the bank and thereby it
had not sublet the premises to the trade union in terms of section 13(1)(a)
D
of the Act..

On the other hand, the contention of the respondent was that in view
of the admitted fact that the working hours between the bank and the
Trade Union activities are different and the trade union is having been in
E exclusive possession of the premises for its trade union activities Which has
no connection with the bank's activities of the appellant, the only inference
that could be drawn is that the appellant had parted with the possession
of the demised premises in favour of the trade union and for consideration.

F
The subletting, was therefore, established by the respondent. Accordingly,
the Division Bench had considered the problem, and granted the decree.
Hence, there is no illegality in the decree granted by the Division Bench. -
The crucial question that requires our consideration is , whether the
appellant had sub-let the premises within the meaning of section 13(l)(a)
of the Tenancy Act, which postulates that notwithstanding anything to the
G contrary in any other law, no order or decree for the recovery of possession
of any premises shall be made by any Court in favour of the landlord
against a tenant except on one or more of the fallowing grounds namely :
'
(a) Where the tenant or any person residing in the premises let to
H the tenant without the previous consent in writing of the landlord
-- UNITEDBANKOFINDIA v. COOKSANDKELVEYPROPERTIES 59

transfers, assigns or sub-lets in whole or in part the premises held A
t
by him:

The contention that the above provision has no application to the
non-residential building, although appears to be plausible ex facie on a
closer scrutiny, it becomes clear that ·the provision makes no difference
between the residential and non-residential, in its application. It would B
appear that the provision is intended to apply to any premises defined
under the Tenancy Act, and enable a landlord to get back possession of
the premises from the tenant on the ·ground envisaged thereunder. That
ground says, that if the tenant, without the previous consent in writing of
the landlord, transfers, assigns or sub-lets in whole or in part the premisesc
held by him, would give a cause of action to the landlord to seek eviction
of the tenant from the demised premises. The position becomes clear when
we read clauses b, c, d, e and other related provisions vis-a-vis section14
of the Tenancy Act. Thus, it is. clear that the provision applies to the
residential as well as non-residential premises governed by the provisions D
of the Tenancy Act.

The next question is whether subletting has been established. This
Court on a consideration of the entire case law on the topic of proof of
passing of the consideration held in Smt. Rajbir Kaur & Anr. v. Mis.
Chokesiri & Co., [1989] 1 sec 19 at page 43 in paragraph 59 thus : E

"If exclusive possession is established, and the version of the
respondent as to the particulars and the incidents of the transac-
tion is found acceptable in the particular facts and circumstances
of the case, it may not be impermissible for the court to draw an F
inference that the transaction was entered into with monetary
consideration in mind. It is open to the respondent to rebut this.
Such transactions of subletting in the guise of licences are in their
very nature, clandestine arrangements between the tenant and the
subtenant and there cannot be direct evidence got. It is not, un G
often, a matter for legitimate inference. The burden of making

-· good a case of subletting is, of course, on the appellants. The
burden of establishing facts and contentions which supp~rt the
party's case is on the party who takes the risk of non-persuasion.
If at the conclusion of the trial, a party has failed to establish these
to the appropriate standard, he will lose. Though the burden of H
•.,,..-
60 SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R.

A proof as a matter of law remains constant throughout a trial, the
evidential burden which rests initially upon a party bearing the .,
legal burden, shifts according as the weight of the evidence ad-
duced by the party during the trial. In the circumstance of the case,
we think, that, appellants having been forced by the courts below
to have established exclusive possession of the ice-cream vendor
B . of a part of the demised premises and the explanation of the
transaction offered by the respondent having been found by the
., courts below to be unsatisfactory and unacceptable. It was not
impermissibk for the courts to draw an inference, having regard
to the ordinary course of human conduct, that the transaction must
c have been entered into for monetary considerations. There is no
explanation forthcoming from the respondent appropriate to the
situation as found. 11

In Dipak Banerjee v. Smt. Lilabati Chakraborty, (1987] 3 SCR 680 at page
D 684, this Court held that the question whether the alleged sub-tenant was
in exclusive possession of the part of the premises .................. the essential
ingredient necessary for a finding, is that the sub-tenancy must be in
exclusive possession and for consideration.

This was reiterated in Jagan Nath (deceased) through L.R's. v.
E Chander Bhan & Ors., [1988] 1 Suppl. SCR 325.

In Gopal Saran v. Satyanarayana, (1989] 1 SCR 767 at page 789, this
Court held that :

F "Having regard to the quality, nature and degree of the occupation
of the transferee and the facts found, it cannot be said that either
"there was any assignment or sub-letting or parting with possession
to such a degree by permitting the boarding that the tenant had
·lost interest. He was using this premises for his benefit. Unless the
tenant has infracted the Prohibition Act, he is not liable to be
G evicted. The case rests on the express provisions of the Act and
there is no scope to explore the latent purpose of the Act".
•
Considering all these cases in Delhi Stationers & Printers v. Rajendra
Kumar, (1990] 2 SCC 331 at page 333, in paragraph 5, this Court reiterated
H that.
UNITED BANK OF INDIA v. COOKS AND KELVEY PROPERTIES 61

"Parting Of the legal possession means possession \vith the right to A
include and also a right to exclude others-. Mere occupation is not
sufficient to infer either sub-tenancy or parting with possession''.

In Bhairab Chandra Nandan v. Ranadhir Chandra, 11988] 1 SCC 383
at page 387 relied upon by Dr. Shankar Ghose, the question was, whether B
one brother who had taken the premises on lease but adrnitte<l.ly re~iding
in another premises, parted with possession in favour of his other brother
Manadhir who was in occupation of the premises, was a sub-tenant or not.
This Court on consideration of the said facts, held that the lease and
licence pleaded by the tenant was not right. It was a case of subletting
without the consent of the landlord and that, therefore, the decree of C
eviction was upheld. The question, as stated earlier, is whether the appel·
!ant had sublet the premises? It is seen that under section 105 of the
Transfer of Property Act, the lease has been' defined as the transfer of a
right to enjoy such property, made for a certain time, express or implied,
or in perpetuity, in consideration of a price paid or promised, or of money, D
a share of crops, service or any other thing of value, to be re.ndered
periodically or on specified occasions to the transferor by the transferee,
who accepts the transfer on such terms. Section 13(1)(a) does not define
the word 'transfer', Section 14 of the Tenancy Act provides for penalty for
subletting. The meaning of transfer of a right to enjoy the property for
consideration envisaged under section 105 of the Transfer of Property Act, E
which postulates that a teoant who transfers or assigns his right in the
tenancy or any part thereof in whole or in part held by him is a sub-tenancy
without the previous consent in writing. When the sub-tenancy was created,
the sub-tenant is liable for prosecution under Section 14 read. with section
13(3) of the Tenancy Act. When it is a penalty as provided under section p
14 for transfer or assignment of the right in the tenancy in whole or in part
of the premises held By the tenant in favour of the sub-tenant, the sub-lease
envisaged under section 105 of the Transfer of Property Act would equally
apply.

From the.evidence, it is clear that though the appellant had inducted G
the trade union into the premises for carrying on the trade union activities,
.~
the bank has not received any monetary consideraiion from the trade
union, which was permitted to use and enjoy it for its t~ad~ union activities.
It is elicited in the cross-examination of the President of the trade union
that the bank had retained its power to a call upon the union t~ vacate the H
-'
62 SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R:

A premises at any time and they had undertaken to vacate the premises. It is
also elicited in the cross-examination that the bank has been maintaining
the premises at its own expenses and also' paying the electricity charges
consumed by the trade union for using the demised premises. Under these
circumstances, the inference that could be drawn is that the appellant had
retained its legal control of the possession and let the trade union to occupy
B the premises for its trade union activities. Therefore, the only conclusion
that could be reached is that though exclusive possession of the demised
premises was given to the trade union, the possession must be deemed to
be constructive possession held by it on behalf of the bank for using the
premises for trade union activities so-long as the union· used the premises
C for trade union activities. The Bank retains its control over the trade union
whose membership is only confined to the employees of the bank. Undet
these circumstances, the inevitable conclusion is, that there is no transfer
of right to enjoy the premises by the trade union exclusively, for considera-
tion. Thereby, the existence of consideration an ingredient of the subletting
D has not been present to hold that the respondent had sublet as would make
it liable for eviction under section 13(1)(a) of the Tenancy Act. The appeal
is accordingly allowed. The judgment and decree of the Appellate Court
is set aside, trial court judgment is confirmed, but in the circumstances, the
parties are directed to bear their own costs throughout.

R.P. Appeal allowed.