Tenants would not be entitled to the benefit and rights under the Tenants Act unless they are in actual physical possession of the building constructed by them

Kosha Doshi | Symbiosis Law School, Pune | 6th April 2020

Bharat Petroleum Corp. Ltd. v. Chandramouleeswaran [Civil Apeeal No. 2870 of 2007; Supreme Court of India]

Facts:

            The appeal filed by the companies had raised a question of law in relation to the right of a tenant, in terms of Section 9 of the Madras City Tenant’s Protection Act, 1921. The following was in relation to an order whereby the landlords could be directed to sell the leasehold land in whole or part at a price fixed by the court. 

The appellant had under different written registered lease deeds with the landlords taken land on long-term lease term or duration of the leases, even where leases were renewed, has expired. The landlords, who are the contesting respondents had filed suits for ejectment for recovery of possession of the land. The appellant had filed applications purportedly in exercise of their right under Section 9 of the Act for transfer/sale of the leasehold land in whole or in part at the price fixed by the court. 

The Division Bench of this Court, the Madras High Court has rejected the applications filed by the appellant. This was a further appeal against the impugned order which had been passed. 

Issue:

            Whether the tenant under The Madras City Tenants’ Protection Act, 1921 would be entitled to the benefit and rights irrespective of actual possession?

Judgment:

            Justice NV Ramana, Justice Sanjiv Khanna and Justice Krishna Murari heard the following appeal and highlighted that Madras City Tenants’ Protection Act, 1921 under Sections 9 and 12 the appellant tenants would not be entitled to the benefit and rights under the Act unless they are in actual physical possession of the building constructed by them.  

It had been observed in the court that Section (4) (i) & (ii)(a) of Section 2 of the Act apply to all tenants who had entered into oral or unregistered written agreements or registered written agreements without any stipulation with regard to ‘erection of buildings’ for taking land on lease, and had subsequently constructed buildings. Such tenants would be entitled to protection of the Act provided the tenant satisfies the conditions mentioned in sub-clauses (i) or (ii)(a) to clause (4) of Section 2 of the Act.

The court further stated that paragraph 1 of sub-clause (ii)(b) to clause (4) of Section 2 of the Act applies to tenants who are not entitled to the rights under the Act by reason of the proviso to Section 12 which stood deleted vide the Amendment Act, 1972. Paragraph 2 of the said sub-clause applies to cases where a decree of declaration or decree or an order of possession or similar relief has been passed against a tenant on the ground that the proviso to Section 12, which was omitted by the Amendment Act, 1972, disentitles the tenant from claiming rights under the Act. Accordingly, sub-clause (b) to Section 2(4)(ii) would apply only to tenancies which were earlier excluded from the protection under the Act vide the proviso to Section 12 which stands deleted with retrospective effect vide the Amending Act, 1972.

Lastly, sub-clause (ii)(c) to clause (4) of Section 2 states that heirs of a tenant referred to in sub-clause (i) or sub-clauses (ii)(a) or (ii)(b) would be entitled to benefit of the Act. However, it expressly excludes a sub-tenant or heirs of the sub-tenant. The appellant tenants would not be entitled to the benefit and rights under the Act unless they are in actual physical possession of the building constructed by them. In other words, in case the appellants have let out or sub-let the building or given it to third parties, including dealers or licensees, they would not be entitled to protection and benefit under the Act.