Maharashtra Tenancy Act - Tenant Cannot Sublet, Licence, Assign Or Transfer Property, Subject To Contract To Contrary - SC

The Supreme Court while adjudicating upon case related to tenancy rights has refused to grant relief to a person seeking tenancy right over the property.

The Bench of Justice KM Joseph and Justice Hrishikesh Roy while referring to Section 26 of the Maharashtra Rent Control Tenancy Act observed -

"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, 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 other manner. This is made subject to a contract to the contrary."

In this case, the first respondent had filed a civil suit against three persons. The claim 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 plaintiff allegedly contacted the landlord. The landlord transferred tenancy rights but possession was not handed over. Following this, the Appellate Court directed the landlord to hand over possession of the suit premises to the plaintiff within a month. The plaintiff levied execution by filing Execution Application

It was the case of the appellant that one Akhtar Habibullah Shaikh claiming to be the lawful tenant of the property in question had transferred his rights in favour of the appellant upon receiving of 'total cost and consideration' of Rs.9,40,000. Notably the landlord by agreement of the same date assigned leasehold right in favour of the appellant.

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 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.

Advocate Gauraj Shah appeared for the appellant whereas Advocate Sandeep Sudhakar Deshmukh appeared for respondent-plaintiff.

The Court at the outset considered whether the transactions entered into by Habibullah Shaikh were hit by the bar of Section 26 of the Maharashtra Rent Control Tenancy Act 1999.

The said section provides that it is not 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, made subject to any contract to the contrary.

The Court noted that the alleged assignment by the so-called tenant in favour of the appellant was prohibited under Section 26. Moreover, there was no express contract to the contrary to rescue the appellant.

The Court further observed "…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 refer to the alleged agreement executed by the tenant in favour of the appellant."

"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 Court noted.

The Court held that "Sans any 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."

The Court noted 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 but incongruous to say the least."

The Court refused to interfere with the impugned judgments and accordingly dismissed the appeal.

Cause Title- Shabbir Mohammad Sayed v. Noor Jehan Mushter Shaikh & Ors.

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