UNION BANK OF INDIA Vs. MITTERSAIN RUPCHAND

JUDGEMENT

(1.) AN interesting question as to whether the tenancy rights and the goodwill of running the concern can be attached in execution under Order 21 Rule 54 of the Code of Civil Procedure falls for determination in this appeal preferred by decree holder to challenge the order dated February 8, 1994 passed by executing Court on Chamber Summons No. 563 of 1991. To appreciate the question only few facts are required to be set out. The appellants/decree holder instituted Suit No. 1975 of 1988 on June 7, 1988 for recovery of Rs. 5,83,828-50 inclusive of interest. The suit was instituted as a summary suit. And the defendants/respondents were granted conditional leave to defend on deposit of certain amount. The defendants failed to deposit the amount and consequently decree came to be passed on March 20, 1989. As the amount was not paid, except the sum of Rs. 54,391. 29, the appellants preferred execution application No. 229 of 1989 on September 14, 1989. The appellants sought to attach goodwill and tenancy rights in the property situated at 336-A, 3rd floor, Kalbadevi Road, Bombay. The premises admeasuring about 2,000 sq. ft. was secured by the respondents on lease. The executing Court by order dated September 27, 1989 levied attachment in accordance with the provisions of Order 21 Rule 54 of the Code of Civil Procedure.

(2.) ON June 28, 1991 the respondents took out Chamber Summons No. 536 of 1991 for raising attachment. The gravemen of the claim of the respondents was that the goodwill and tenancy rights are not saleable property and over which the respondents have no disposing power and consequently the execution levied by the appellants was invalid. It was also claimed that section 15 (1) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 prevents creation of any sub-tenancy or assignment or transfer in any manner of the interest of a tenant. It was claimed that this provision of the Rent Act prohibits the respondents from sub-letting and assigning the tenancy rights and consequently the attachment levied by this Court was invalid. The respondents pleaded by affidavit dated January 29, 1990 sworn by respondent No. 2 that the respondents had closed the business for more than 3 years before the date of the affidavit. It was further claimed that the respondents have inducted number of sub-tenants and licensees in the premises and the respondents are in occupation of a small portion admeasuring about 150 sq. ft. The Chamber Summons for raising the attachment was resisted by the appellants pointing out that the goodwill and the tenancy rights are saleable property and the respondents have disposing power over the same. It was pointed out that section 15 of the Rent Act do not prescribe for a total prohibition of creation of sub-tenancy or assignment of interest but on the other hand prescribes that such sub-tenancy or assignment is permissible by contract between the lessor and lessee and in respect of business premises, the running business along with the stock-in-trade and tenancy rights can be assigned. The appellants pointed out that the respondents have created illegal sub-tenancies and licences only with a view to defeat the claim of the appellants.

(3.) THE trial Judge by impugned judgment came to the conclusion that the respondents did not have the disposing power over the tenancy rights and therefore the property was not liable for attachment as prescribed by section 60 of the Code of Civil Procedure. The learned trial Judge further held that as the transfer of tenancy rights are prohibited by law the same cannot be attached. The learned trial Judge felt that as respondents are claiming that the business was closed and the stock-in-trade was not available it was not open to transfer or assign the tenancy rights as incidental to the sale of business. The learned Judge further held that the goodwill being the very sap and life of the business the same cannot be attached and sold in execution. On these finding, the learned Judge made the Chamber Summons absolute and attachment was raised. The appellants feeling aggrieved have preferred the present appeal. Mr. Shah, learned Counsel appearing on behalf of the appellants, submitted that the learned Judge was in error in concluding that the respondents did not have saleable interest and which could be disposed of goodwill and tenancy rights of premises in their occupation. Mr. Shah further submitted that the learned Judge was not right in the construction placed on provision of section 15 of the Rent Act. Reliance on two decisions of this Court in (Zarina Umer Chandewala v. Sati Lalchand Verumal Lalwani) reported in 71 B. I. R 809 and (M/s. D Vasantrai and Co. v. The Official Assignee, High Court of Judicature at Bombay and others) reported in A. I. R. 1985 Bom. 1, and that of Delhi High Court in (Belrex India Ltd. v. Singhal Electric Co. and others) reported in A. I. R. 1983 Delhi 430 was not accurate. Mr. Bansal, learned Counsel appearing on behalf of the respondents, on the other hand submits that the decision of the learned trial Judge does not suffer from any infirmity and is not required to be disturbed in this appeal. Mr. Bansal did not dispute that the decretal amount is due and that the respondents have parted with substantial portion of the leased premises.