# M/S. A. C. ESTATES v. M/S. SERAJUDDIN & CO. AND ANOTIIER

- **Citation:** [1966] 1 S.C.R. 235
- **Court:** Supreme Court of India
- **Decided:** 1965-05-07
- **Bench:** K. N. Wanciioo, J. C. Shah, J. R. Mudholkar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-a-c-estates-v-m-s-serajuddin-co-and-anotiier-3534
- **Pages:** 8

## Headnote

West Bengal Premises Tenancy Act (12 of 1956), s. 16(3)-Scope of.
The appellant, the owner of certain premises in Calcutta, leased them
out and the respondent was inducted as a sub-tenant by the tenant in
June, 1954.. In July. 1954, the appellant issued notice to the tenant
determining the tenancy from the end of August 1954. In September
1954, the appellant filed a suit for ejectment of the tenant. While the
suit was pending, the West Bengal Premises Tenancy Act, 1956,
came into force on 31st March 1956, The respondent filed a petition
under •· 16(3) of the Act, praying that the Controller may declare that
tho interest of the tenant had ceased, that the respondent had become a
direct tenant under the appellant and for fixation of the rent On 9th
August 1956, the Controller made an order declaring the respondent as
a direct tenant and adjourned the proceedings for evidence regarding the
rent payable. On 22nd August 1956, the ejectment suit was decreed and
so, the appellant applied to the Controller praying that the respondent's
petition under s. 16(3) may be dismissed. The Controller dismissed tho
respondent's application on the day fixed for determining the rent. The
respondent's appeal to the Court of Small Causes was allowed. The ap·
pellant then filed a petition under Art. • 227 of the Constitution to the
Hlgti Court, and it was dismissed except as to fixation of rent.
In hi• appeal to this Court, lhe appellant contended that : (i) the
order of 9th August 1956 was not a final order and therefore the Controller
could rescind it, and (ii) the rei;pondent was nQt
entitled
to invoke
s. 16(3), because the tenant had beetn ejected on 22nd August 1956.
HELD : (i) The High Court was right in holding that the Controller
had no power to set aside tho order that had been made on 9th August
1956, for it was right when it was made. [242 C-D]
The word "tenant" is defined in s. 2(h) of the Act to include any perwn continuing in poosession after the termination of his tenancy, but
shall not include any person against whom any decree or order
for
eviction had been made by a court of competent jurisdiction. There is
nothing repugnant in the subject or context of s. 16(3) to take the view
that the definition of "tenant" in s. 2(h) would not apply to a case under
s. 16 ( 3) . Therefore, the tenant continued to be a tenant up to 22nd
August 1956, and the respondent, who became a sub-tenant in June 1954,
continued ,to be sub-tenant after the coming into force of the Act. [240
E-G]
Under the first part of s. 16(3), the Controller has to declare by
order that the tenant's interest in the premises sub-let has ceased and that
the sub-tenant has become a direct tenant under the landlord; and under
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the second part, the Contr01ler has to fix the rents payable to the land·
lord, by the tenant and the sub-tenant. [240 H-241 BJ
In the instant case after having made such a declaration under the
first part of the section, in favour of the respondent, it was not open
LSSup./65-16
236
SUPRl!MI! COURT RP.PORTS
[1966] l S.C.R
to tho Controller (while proceeding to fix rent under the second part)
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to rescind the order which bad become final so far as the Controller was
concerned, on some ground which supervened
after the date of
the
order nor can the Controller's latter order be justified under s. 29(5) of
the Act, which gives the Controller the powers under ss. 151 and 152
and the power of review under 0.47, of the Civil
Procedure Code.
[241 G-H; 242 B-CJ
(ii) There is nothing in the contention of the appellant thats. 16(3)
would not apply to the respondent. (242 El
In the present case, the benefit of th.<; section was given to the respondent not after 22nd August 1956, when the tenant was evicted, but
before that date, that is, on 9th August 1956. That order so far as
it
went was final and was not open to review or cancellation by lhe Con ..
troller who had thereafter only to flX the rent under the second part of
the oection. [242 E-Fl
CIVIL APPELLATE Jt:

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M/S. A. C. ESTATES
v.
M/S. SERAJUDDIN & CO. AND ANOTIIER
May 7, 1965
235
[K. N. WANCIIOO, J. C. SHAH AND J. R. MUDHOLKAR, JJ.]
West Bengal Premises Tenancy Act (12 of 1956), s. 16(3)-Scope of.
The appellant, the owner of certain premises in Calcutta, leased them
out and the respondent was inducted as a sub-tenant by the tenant in
June, 1954.. In July. 1954, the appellant issued notice to the tenant
determining the tenancy from the end of August 1954. In September
1954, the appellant filed a suit for ejectment of the tenant. While the
suit was pending, the West Bengal Premises Tenancy Act, 1956,
came into force on 31st March 1956, The respondent filed a petition
under •· 16(3) of the Act, praying that the Controller may declare that
tho interest of the tenant had ceased, that the respondent had become a
direct tenant under the appellant and for fixation of the rent On 9th
August 1956, the Controller made an order declaring the respondent as
a direct tenant and adjourned the proceedings for evidence regarding the
rent payable. On 22nd August 1956, the ejectment suit was decreed and
so, the appellant applied to the Controller praying that the respondent's
petition under s. 16(3) may be dismissed. The Controller dismissed tho
respondent's application on the day fixed for determining the rent. The
respondent's appeal to the Court of Small Causes was allowed. The ap·
pellant then filed a petition under Art. • 227 of the Constitution to the
Hlgti Court, and it was dismissed except as to fixation of rent.
In hi• appeal to this Court, lhe appellant contended that : (i) the
order of 9th August 1956 was not a final order and therefore the Controller
could rescind it, and (ii) the rei;pondent was nQt
entitled
to invoke
s. 16(3), because the tenant had beetn ejected on 22nd August 1956.
HELD : (i) The High Court was right in holding that the Controller
had no power to set aside tho order that had been made on 9th August
1956, for it was right when it was made. [242 C-D]
The word "tenant" is defined in s. 2(h) of the Act to include any perwn continuing in poosession after the termination of his tenancy, but
shall not include any person against whom any decree or order
for
eviction had been made by a court of competent jurisdiction. There is
nothing repugnant in the subject or context of s. 16(3) to take the view
that the definition of "tenant" in s. 2(h) would not apply to a case under
s. 16 ( 3) . Therefore, the tenant continued to be a tenant up to 22nd
August 1956, and the respondent, who became a sub-tenant in June 1954,
continued ,to be sub-tenant after the coming into force of the Act. [240
E-G]
Under the first part of s. 16(3), the Controller has to declare by
order that the tenant's interest in the premises sub-let has ceased and that
the sub-tenant has become a direct tenant under the landlord; and under
H
the second part, the Contr01ler has to fix the rents payable to the land·
lord, by the tenant and the sub-tenant. [240 H-241 BJ
In the instant case after having made such a declaration under the
first part of the section, in favour of the respondent, it was not open
LSSup./65-16
236
SUPRl!MI! COURT RP.PORTS
[1966] l S.C.R
to tho Controller (while proceeding to fix rent under the second part)
A
to rescind the order which bad become final so far as the Controller was
concerned, on some ground which supervened
after the date of
the
order nor can the Controller's latter order be justified under s. 29(5) of
the Act, which gives the Controller the powers under ss. 151 and 152
and the power of review under 0.47, of the Civil
Procedure Code.
[241 G-H; 242 B-CJ
(ii) There is nothing in the contention of the appellant thats. 16(3)
would not apply to the respondent. (242 El
In the present case, the benefit of th.<; section was given to the respondent not after 22nd August 1956, when the tenant was evicted, but
before that date, that is, on 9th August 1956. That order so far as
it
went was final and was not open to review or cancellation by lhe Con ..
troller who had thereafter only to flX the rent under the second part of
the oection. [242 E-Fl
CIVIL APPELLATE Jt:RJSDICTIOl'i : Civil Appeal No. 258 of
1963.
Appeal by special leave from the judgment and order dated
May 6, 1960 of the Calcutta High Court in Civil Rule No. 3579
of 1959.
S. C. Mawmdar, for the appellant.
D. N. Mukherjee, for the respondent No. I.
The Judgment of the Court was delivered by
Wanchoo, J.
This is an appeal by special leave against
the judgment of the High Court of Calcutta. The appellant is
the owner of premises bearing No. P-16, Bentinck Street, Calcutta.
It had let out a suite on the second floor of the premises on a
monthly rental of Rs. 66 to Gee Tsing Po. The exact date when
the suite was let to Po is not on the record but it was sometime
b:efore June 1954.
In June 1954, Po sub-let the entire suite
to respondent No. 1, Messrs. Serajuddin and Company, which
will hereafter be referred to as the respondent.
In July 1954,
the appellant gave notice to Po terminating his tenancy with the
expiry of August 1954.
In September 1954 the appellant filed
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a suit against Po praying for his ejectment on certain grounds
under the
West Bengal Premises Rent Control
(Temporary
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Provisions) Act, No. XVII of 1950, which was then in force.
That suit was still pending when the West
Bengal
Premises
Tenancy Act, No. XII of 1956 (hereinafter referred to as the
Act) came into force from March 31, 1956.
Section 16 (3)
of the Act gave certain rights to sub-tenants.
As the appeal
turns on the interpretation of that provision, it is necessary to
set it out here :-
"16(1)
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A. c. ESTATES v. SERAJUDDIN & co. (Wanchoo, J.)
237
(2) Where before the commencement of this Act,
the tenant, with or without the consent of the landlord,
has sublet any premises either in whole or in part, the
tenant and every sub-tenant to whom the premises have
been sublet shall give notice to the landlord of such sublettincr in the prescribed manner within six months of
the c~mmencement of the Act and shall in the prescribed manner notify the termination of such sub-tenancy
within one month of such termination.
( 3) Where in any case mentioned in sub-section
( 2) there is no consent in writing of the landlord and
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the landlord denies that he gave oral consent, the Controller shall, on an application made to him in this
behalf either by the landlord or the sub-tenant within
two months 0£ the date of the receipt of the notice
of sub-letting by the landlord or the issue of the
notice by the sub-tenant, as the case may be, by
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order declare that the tenant's interest in so much of the
premises as has been sub-let shall cease and that the subtenant shall become a tenant directly under the landlord
from the date of the order. "The Controller shall also
fix the rents payable by the tenant and such sub-tenant
to the landlord from date of the order. Rents so fixed
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shall be deemed to be fair rent for purposes of this Act."
The respondent took action under s. 16 ( 3)
as apparently
the sub-letting to him by Po was not with the consent of the
landlord, and made an application thereunder to the Controller on
June 4, 1956 and prayed that· the Controller should declare that
F the interest of the tenant had ceased and the respondent had become the tenant directly under the landlord in respect of the suite
in question.
It was also prayed that fair rent of the premises
should be fixed at Rs. 66 per mensem.
The application was opposed on behalf of the appellant and
G two main points were urged in that connection, namely,-(i)
The tenancy of Po had been lawfully terminated at the end of
August 1954 and the suit for his ejectment was pending in the
Small Cause Court and therefore the respondent could not take
advantage of the Act in 1956, for it never became a sub-tenant
in law before the Act was passed; and (ii) the respondent was
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not in fact the tenant of Po from before March 31, 1956.
The matter came up before the Controller on August 9, 1956.
The Controller accepted the respondent's case that it had become
238
Sl!PREME COURT
REPORTS
(1966] l S.C.R
the sub-tenant of Po in fact from June 9, 1954. Tue Controller
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further held that in view of this fact, the respondent became a
sub-tenant under the appellant in law, for in any case, the tenancy
of Po had not been determined till August 1954 even on the case
put forward by the appellant.
He therefore made the following
order :-
....
"The app1icant (i.e. Serrajuddin & Co.) is therefore
entitled to be declared to be a direct tenant under the
O.P. No. I. But this will not be sufficient to dispose
of the present proceeding inasmuch as
under section
16(3) of the Act of 1956 I am to fix the fair rent payB
able by the tenant and that of the sub-tenant."
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He thereupon <lirected the Inspector to go to the locality and
measure the accommodation of the disputed premises and other
similar premises in the neighbourhood as might be
shown by
either or both parties. The Inspector was also directed to make
note of advantages and amenities of all the premises measured by
him and thereafter suhmit his report as to the fixation of fair
rent.
A date wa' fixed for the submission of the Inspector's
report and thereafler the fair rent was to be fixed.
Before however the Inspector's report was received, the suit
for ejectment of Po pending in the Court of Small Causes was
decreed on August 22, 1956 and time was given to him to vacate
the same by the end of October 1956. Therefore on September
11. 1956, the app~llant filed what it called an additional written
objection.
Jn that the appellant infonned the Controller that a
decree for ejectment against Po had been passed. It was urged
that in view of that deer~. Po was no longer a tenant of the
appellant and therefore the respondent could not be a sub-tenant.
The appellant prayed th1t the application of the respondent was
not maintainable in the circumstances and the Controller had no
jurisdiction to entertain the application and so the application
should be dismissed.
The matter then came uo before the Controller on January 29. 1957, on which date the aopellant's additional objection as well as the Inspector's report
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was taken up
for consideration.
The Controller took some
evidence on the
question of fair rent and heard arguments on that day. On February 11, 1957, the Controller passed final orders in which he
said that there was no tenant of the first degree on that date,
namely, 11th February 1957. As the ejectment decree bad been
passed in accordance with the provisions of the 1950-Act, the
sub-tenant had by operation of that law become a direct tenant.
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So according to the Controller th.ere was no subsisting tenancy
on February 11, 1957 and no order could be passed under s. 16(3)
of the Act.
He consequently dismissed the application under
s. 16(3), but passed no order as to costs.
The respondent then went in appeal to the Court of Small
B Causes, Calcutta, as provided in the Act. The Appeal Court held
that the order of August 9, 1956 made by the Controller was final
and further as the entire premises had been sublet there was no
necessity for any further determination of rent as the sub-tenant
would be liable to pay the rent payable by the tenant. The
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Appeal Court therefore set aside the order of the Controller dismissing the application of the respondent and declared the respondent as tenant at a rental of Rs. 66 per month.
The appellant then applied under Art. 227 of the Constitution
to the High Court and two main points were urged on its behalf
before the High Court, namely-
( i) The order of August 9, 1956 was not a final
order for the purpose of s. 16 ( 3) and therefore
it was open to the Controller to
rescind that
order when the further fact of the ejectment
decree of August 22, 1956 was brought to his
notice;
(ii) Section 16 ( 3) applies only when the original
tenancy also subsists up to the date of the final
order which the Controller was proposing to
make on January 29, 1957 and which he eventually refused to make because by that date the
tenancy of Po had come to an end by the ejectment decree of August 22, 1956.
The High Court held that s. 16 ( 3) was in two parts : first relating to the declaration of the sub-tenant as a tenant in place of
the tenant of the first degree, and second relating to the fixation
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which the declaration was made. It further held that the declaration of August 9, 1956 under the first part of s. 16(3) was final
and the Controller had no jurisdiction after August 9, 1956 to
rescind it.
The High Court pointed out that as on August 9,
1956, when the order under the first part of s. 16(3) was passed,
H the tenancy of the tenant of the first degree was subsisting, action
could be taken under s. 16 ( 3) in favour of the respondent. In
this view of the matter, the revision application of the appellant
240
SUPREME COUllT REPORTS
[1966] l S.C.R.
was dismissed except as to the fixation of rent. It is this order of
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the High Court which is being impugned before us by special
leave.
We are of opinion that the appeal must fail. There is a clear
finding of the Controller that the respondent was inducted as a
sub-tenant by Po in June 1954. At that time, the appellant had
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not even given notice to Po determining his tenancy. It was only
in July 1954 that notice was given to Po determining the tenancy
as from the end of August 1954. Therefore,
the
respondent
became a sub-tenant of the tenancy which Po held under the
appellant.
The next question is whether the respondent was entitled to
the benefit of the Act which came into force on March 31, 1956.
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On that date a suit was pending against Po based on the notice
given to him in July 1954 determining his tenancy. The argument on behalf of the appellant is that as Po's tenancy had been
determined by the end of August 1954 by virtue of the notice
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referred to above, the respondent was no longer sub-tenant on
March 31, 1956 as the tenancy of the tenant of the first degree
had itself come to an end.
This in our opinion is not correct.
The word "tenant" is defined ins. 2(h) of the Act to include any
person continuing in possession after the termination of his tenancy but shall not include any person against whom any decree
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or order for eviction had been made by a court of competent jurisdiction. In view of this inclusive definition of the word "tenant"
in the Act Po would continue to be a tenant under the Act thou eh
his tenancy had been determined by notice and he ceased to be
a tenant only on Augmt 22, 1956 when the decree for ejectment
was passed against him. It is true that the definitions in s. 2 are
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subject to anything being repugnant in the subject or context. But
we see nothing repugnant in the subject or context of s. 16(3) to
persuade us to hold that the definition of tenant in s. 2 (h) would
not apply to a case under s. 16 ( 3). The Act is a measure for
the protection of tenants and sub-tenants and should not be so
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interpreted ns to take away the protection which it intends to eive
to them. We are therefore of opinion that Po continued to be n
tenant up to August 22. 1956 and therefore the respondent continued to be a sub-tenant after the coming into force of the Act.
This takes us to the order of August 9, 1956. We have
already set out s. 16 (3) and there is no doubt that it consists of
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two parts. Under the first part, the Controller has to declare by
order tbat tbe tenant's interest in so much of the premises as has
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A. C. ESTATES V. SBRAJlJDDIN & C.O. (Wanchoo, }.)
241
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been sublet has ceased and the sub-tenant has become a tenant
directly under the landlord from the date of the order. The
second part gives power to the Controller to fix rents payable by
the tenant and such sub-tenant to the landlord from the date of
the order. It may be that both orders under the two parts may
be passed on the same date; but it appears what usually happens
is that the Controller first declares that the tenant's interest has
ceased and the sub-tenant has become a tenant directly under the
landlord, and thereafter proceeds to fix rent under the second part
after taking such further evidence as he considers
necessary.
Even so, the order under the first part declaring that the tenant's
interest has ceased and the sub-tenant has
become a tenant
directly under the landlord must be treated as final so far as the
Controller is concerned and it cannot be a mere interlocutory
order, which could be rescinded by the Controller while he is
taking steps to fix the rent as provided in the second part of
s. 16 ( 3). In this connection our attention is drawn to the deciD sion of the Calcutta High Court in Artil Kumar Mukherjee v.
Malin Kumar Mazumdar('), where it was held with reference to
s. 29 of the Act that the words "final order" there mean the order
making the declaration and fixing the rent under s. 16 ( 3) or the
order dismissing the application under s. 16(3).
We do not
propose to consider whether Mukherjee's case is correctly decided.
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Assuming it to be correct, what it lays down inter alia is that an
order under the first part of s. 16(3) merely making a declaration
without the further order fixing rent under the second part thereof
is not appealable as a final order under s. 29. But what we are
concerned with here is whether it was open to the Controller after
he had made the order declaring the sub-tenant a direct tenant
under the landlord to set aside that order subsequently while proceeding to fix rent on the basis of something which transpired
after that order had been passed.
We are of opinion that an
order like that passed on August 9, 1956, must be taken to be
final fasofar as it declares the tenancy of the tenant of the first
degree to have ceased and declares the sub-tenant to be the direct
tenant of the landlord, so far as the Controller is concerned. After
having made such a declaration it is not open to the Controller
(while proceeding to fix rent under the second part of that section)
on some ground which supervenes after the date of the order to
rescind it. Our attention in this connection is drawn to s. 29(5)
of the Act which gives power to the Controller to review his orders
H on the conditions laid down under Order XL VII of the Code of
Civil Procedure. But this cannot be a case of review on the
(I) (1959-60) 64 C.W.N. 938.
SUPREME COURT
REPORTS
[ 1966] 1 S.CR.
ground of discovery of new and
important matter, for such
matter has to be something which existed at the date of the order
and there can be no review of an order which was right when
made on the ground of the happening of some subsequent event
(see Rajah Kotagiri Venkata Subbamma Rao v. Raja Val/anki
Venkatrama Rao('). Section 29 ( S) further gives power to the
Controller to act under s. 151 or s. 152 of the Code of Civil Procedure.
Section 152 has no application in the present case for
there is no clerical or arithmetical mistake here.
Nor can the
Controller in our opinion set aside an order which was right when
it was made, under s. 151 of the Code of Civil Procedure as there
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is no question in such circumstances of subserving the ends of c
justice or preventing the abuse of the process of the court.
We
are therefore of opinion that the Controller had no power to set
aside the order that had been made on August 9, 1956 for it was
right when it was made. The view taken by the High Court in this
connection is correct.
1 t is equally clear that when the Controller passed the order on
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February 11, 1957 dismissing the application under s. 16(3) that
order was appealable under s. 29 ( 1 ) , for it was undoubtedly a
final order within the meaning of s. 29( 1) and the respondent
would be entitled to appeal therefrom.
finally there is nothing in the contention of the appellant that
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s. 16 ( 3) would not apply because the tenant had been ejected on
August 22, 1956 and thereafter the sub-tenant could not claim
the benefit of s. 16(3). In the present case the benefit of s. 16(3)
was given to the sub-tenant not after August 22, 1956 but before
that date i.e. on August 9, 1956. That order so far as it went was
final and was not open to review or cancellation by the Controller
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who had thereafter only to fix the rent under the second part of
s. 16(3). While going on with the proceeding for fixation of rent.
the Controller could not set aside the order already made under
the first part of s. 16( 3) on August 9, 1956 and insofar as he did
so, he acted without jurisdiction. The Appeal Court was there·
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fore right in setting aside the order of the Controller and the High
Court was equally right in dismissing the application by the appellant except as to fixation of rent.
The appeal therefore fails and is hereby dismissed with costs.
Appeal dismissed.
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(I) L.R. (1899-1900) 271.A. 197.
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