Holding

A partnership firm cannot claim status of direct tenant under the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950; only the sole proprietor could have, and the compromise decree is executable against the firm.

Summary

The landlord, ARM Group Enterprises Ltd., owned premises that were leased to Allenberry & Co., who gave notice of surrender on 31‑Aug‑1953 but failed to hand over vacant possession. The tenant vacated under a compromise decree that reserved the landlord's right to evict any sub‑tenants. The restaurant Waldorf, initially run by sole proprietor Eng Chick Wong as a sub‑tenant, later became a partnership firm after Wong joined two partners on 1‑Mar‑1954. The firm claimed status of a direct tenant under the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950, seeking protection from eviction. The Supreme Court held that only the sole proprietor could have claimed such status, and since he had left, the partnership could not claim protection; consequently the compromise decree is executable against the firm. The appeal was allowed, setting aside the Division Bench judgment and restoring the Single Judge’s order allowing execution of the decree.

Issues considered

The partnership firm’s claim to status of direct tenant under West Bengal Premises Rent Control Act, 1950, Section 13(2).
Whether a sub‑tenant created by a statutory tenant can acquire direct tenancy rights.
The effect of the compromise decree and whether it is executable against the sub‑tenant under CPC Section 47.
The appropriate remedy for the landlord – execution of the decree or a fresh suit under West Bengal Premises Tenancy Act, 1997.
Whether pleadings admissions bind the parties on the question of sub‑tenancy.
The applicability of res judicata to the present proceedings.
The bar of limitation under the Limitation Act, Section 14.

Legislation cited

Code of Civil Procedures. 47, s. Order 7 Rule XI
Indian Partnership Act, 1932s. 14
Limitation Acts. 14
Transfer of Property Acts. 106, s. 111
West Bengal Premises Tenancy Act, 1997

Subjects

rent controlevictionsub‑tenancydirect tenantcompromise decreeexecution of decreepartnershipstatutory tenantres judicataCPC Section 47Limitation Act

Judgment

A ARM GROUP ENTERPRISES LTD.
v.
WALDORF RESTAURANT AND ORS.

APR!L 1, 2003

B [DORAISWAMY RAJU AND D.M. DHARMADHIKARI, JJ.]

Rent Control and Eviction:

West Bengal Premises Rent Control (Temporary Provisions) Act, 1950-
C Seciions 12 and 13-Tenant surrendering tenancy, thereafter, inducting sub
tenant-sole proprietor of a concern---Original landlord obtaining compromise
decree of evictio11c-Firm with new partners excluding erstwhile sole proprietor
claiming status of direct tenant--Seeking protection against eviction in
execution by decree-Held: Only 'tenant inferior to tenant a/first degree' can
D claim protection as 'direct tenant' under landlord-Sub tenant of 'tenant
inferior to tenant offirs/ degree· does not have any such status or protection-
There is neither evidence nor case set up by either of the parties that erstwhile
proprietor had sub-let the premises to the firm-Thus, firm with new partners
excluding erstwhile sole proprietor cannot claim status of direct tenant-Term
of the compromise decree reserved right to the landlord to take necessary
E legal steps lo evict sub tenants, thus decree executable.

Appellant acquired title to the suit premises from the original owner.
Respondent No.3 was a contractual tenant of the original landlord. He gave
a formal notice to the landlord expressing its intention to surrender the
tenancy and vacate the leased premises by 31.8.1953. Respondent No.3
F vacated the suit premises but the vacant possession was not handed over
to the landlord. Landlord filed a suit for eviction. Suit was decreed in terms
of compromise decree under which the tenant vacated the suit premises
and reserved liberty to the landlord to take necessary legal steps for
evicting sub-tenants who had been inducted by the tenant. Landlord then
G filed suit for eviction against sub-tenant. Respondent No.I-firm pleaded
that before surrender of tenancy tenant had inducted E being the sole
proprietor of the restaurant on I. 7.1953, later on E formed a partnership
with two others, which was registered on 1.3.1954 much later after
surrender of tenancy by the tenant on 31.8.1953. Single Judge of High
Court held that the remedy of the landlord was to execute the compromise
II 222
ARM GROUP ENTERPRISES LTD. 1·. WALDORF RESTAURANT 223
decree and that it was barred by section 47 CPC. Landlord then filed an A
application for execution of decree which was allowed. Meanwhile
respondent No. I-firm as sub-tenant filed a counter suit seeking declaration
of its status as direct tenant under West Bengal Premises Rent Control
(Temporary Provisions) Act 1950 and protection thereunder. The Court
held that the remedies of the parties lay in execution proceedings. Landlord B
again filed an application for execution of the decree. High Court allowed
the same holding that the registered partnership firm could not have been
inducted as sub tenant on l. 7.1953 when as matter of fact on that date
the restaurant was only a proprietary concern of E th.us the firm cannot
claim status of protected tenant directly under the landlord as per the
provisions of Section 13(2) of.the Act. The firm filed an appeal. Division C
Bench allowed the appeal holding that by operation of.law E either as the
proprietorship concern or as a partner of partnership firm became a
tenant directly under original landlord and that the landlord would be
entitled to bring a suit for eviction against the firm on the ground that as
sub-tenant, it was inducted unlawfully by the proprietor of the restaurant
who had become tenant directly under the Act but recourse to execution D
proceedings was impermissible in law. Hence the present appeals.

Appellant contended that the firm having come into existence on its
registration on 1.3.1954, after surrender of tenancy by the tenant on
31.8.1953 and also admitting the fact of entry of E in the tenanted premises E
on I. 7.1953 for carr.ying on the business of restaurant as the sole
proprietor, the firm, of which the sole proprietor subsequently became
partner and which came into existence on 1.3.1954 on registration, could
not, on surrender of tenancy by the tenant on 31.8.1953, claim status of
direct tenant under the Act; that the Division Bench failed to make a
distinction between the claim of status of direct tenant by the sole F
proprietor and the firm of which the sole proprietor subsequently became
a partner; and that the sole proprietor to whom the tenant had sub-let
the suit premises on 1.7.1953 had left India and ceased to be a partner of
the firm, the present firm comprising totally new partners and in
occupation of the disputed premises through the erstwhile proprietor E G
have absolutely no right, title or interest to resist execution of the decree
obtained against the tenant.

Respondents contended that the averments in the pleadings of the
appellant in the courts below amount to admission that restaurant in either
of the capacities as 'proprietary concern' or 'partnership firm', came into H
224 SlJPREME COURT REPORTS 12003] 3 S.C.R.

A possession of the suit premises as a sub-lessee on 1.7.1953 prior to the
surrender of tenancy by the tenant on 31.8.1953; that the compromise
decree under which the tenant has already surrendered the tenancy and
vacated the premises, is not executable against the firm as sub-tenant as
the latter has become direct tenant under Act; and that the remedy of the
B la11dlord i!; to institute a fresh suit on the ground if available to them under
the provisions of West Bengal Premises Tenancy Act, 1997.

Allowing the appeals, the Court

HELD: I.I. The claim for status of direct tenant and protection
C under the West Bengal Premises Rent Control (Temporary provisions) Act
1950 could if at all have been claimed only by E as the sole proprietor of
the business concern to whom the premises were sublet prior to the
surrender of tenancy, by substanti~ting the necessary conditions precedent
including the point of time when he became one such, in the background
of the notice of surrender of tenancy by the tenant. After E had walked
D out of the tenanted premises ceasing to have any concern, connection or
interest in the firm and left India. the present partners of the firm, who
are in occupation of the business premises have no right in presenti to resist
their dispossession under the decree obtained against the tenant. Along
with the tenant who has already surrendered the tenancy and vacated the
E leased premises and the suh-tenant having already lost possession of the
leased premises, the present firm with its new partners who claim to be
in occupation through the sub-tenant have no right to resist the execution
of the decree. 1241-A-CI

1.2. The Division Bench of High Court erred in holding that sub-
F tenancy is created both for the proprietary concern and the partnership
firm merely because the trade name in which the business was continued
remains the same i.e. Waldorf Re~taurant. Waldorf Restaurant is merely

-
a trade name. It is not a legal entity independent of proprietor of the
business carried on in that name and the partnership firm which came
into existence later on. The legal entities or the legal persons are the
CJ "proprietor' and the 'partnership firm'. Sub-tenancy was created in favour
of E as the sole proprietor. In the absence of disclosure of the partnership
agreement, to which the proprietor was a party, it is not ascertainable
whether tenanted premises were brought as assets into the business of the
firm by the erstwhile rnle proprietor. It also erred in assuming that there
H could have been a sub-letting by the sole proprietor to the partnership
ARM GROUP ENTERPRISES LTD. r. WALDORF RESTAURANT 225
firm and even in that case the firm will have status of a sub-tenant and A
protection under the 1950 Act. Under the 1950 Act only the "tenant
inferior to the tenant of first degree" can claim protection as 'direct tenant'
under the landlord. A sub-tenant of a "tenant inferior to the tenant of first
degree" does not have any such status or protection under the 1950 Act.
There is neither evidence nor a case set up by either of the parties that B
the erstwhile proprietor had sub-let the premises to the present firm. The
provisions of 1950 Act do not permit, without consent of the landlord,
creation of sub-tenancy by a sub-tenant or in other words "tenant inferior
to the tenant of first degree". Furthermore, the erstwhile proprietor of
the business himself became partner of the firm. Such an act on his part
was sub-letting or not, would depend upon the terms of the partnership C
deeds, which were withheld from disclosure to the Court despite a lawful
demand therefor. Mere carrying on by the tenant a partnership business
as partner in the leased premises, no doubt, does not per se amount to
sub-letting unless it is shown that he withdrew his control of the leased
premises and parted with the possession of the property and thereby

- surrendered his individual tenancy rights in favour of the partnership firm. D
[240-D-H; 241-DcE[

t.3. Mere averment in the pleadings of the appellants that 'use of
the leased premises by the restaurant was a wrongful entry' and that too
by way of reference to the claims made by the firm in the various E
proceedings cannot be an admission of the fact that the firm came into
possession of the premises prior to the surrender of the lease b.Y the tenant.
There can be no admission on a question of Jaw to be held as binding on
the appellant. All the more so when the said fact is one which has.to be
necessarily and properly established by the firm, as a condition precedent
to claim the cover of statutory protection under the Tenancy Act. F
[242-E-GJ

1.4. The tenant surrendered the lease with effect from 31.8.1953 by
a notice but failed to vacate it on the due date. Landlord was therefore,
required to file a suit against the tenant on the basis of the notice for
surrender of tenancy. During pendency of the suit the tenant entered into G
a compromise and in terms thereof vacated the leased premises. As against
the sub-tenants, which the tenant had inducted during subsistence of
tenancy, one of the terms of the compromise decree reserved liberty to
the landlord to take necessary legal steps for their eviction. The landlord
thereafter instituted independent suit for eviction of the sub-tenant and H
226 SUPREME COURT REPORTS [2003] 3 S.C.R.

A the court held that the remedy of the landlord is to execute the compromise
decree. The firm as sub-tenant filed a counter suit seeking declaration of
its status as direct tenant under Act of 19SO and protection thereunder
and the Court held that the remedies of the parties lay in execution
proceedings. As the landlord failed in obtaining eviction decree in the suit
B filed by it, it moved an application for execution of the compromise decree.
One of the terms of the compromise decree which reserved right to the
landlord to take necessary legal steps to evict the sub-tenants, makes the
decree executable to that extent. 1243-A-E]

Calcutta Credit Corporation Ltd v. Happy Homes Private limited, 11968]
C 2 SCR 20; Indra Kumar Karnani v. Atul Chandra Patitundi, [196SI 3 SCR
329; Arjun Kanoji Tankar v. Santaram Kanoji Tankar, [1969] 3 SCC SSS and
Helper Girdharbhai v. Saiyed Mohd. Mirasaheb Kadri, AIR (1987) SC 1782,
referred to.

2. With regard to the plea of res judicata, since both the landlord
D and the firm had filed cross suits :~gainst each other and both the courts
came to a common conclusion that the parties should litigate their right
in execution proceedings and nothing was decided on merits of rights and
claims of the parties, thus, such a plea is no longer available to the parties
against each other in the execution proceedings. [236-8]

E 3. As both the parties had instituted suits against each other, the
appellants cannot be held to be lacking in bona jides in resorting to the
remedy of suit. The long period spent in the suit deserves to the condoned.
Under Section 14 of the Limitation Act, the period spent in prosecuting
civil proceedings bona fide and with due diligence is liable to be excluded
F in computing the period of limitation for the suit or the application.
[236-C-DI

Roshan Lal Kuthalia and Ors. v R.B. Mohan Singh Oberoi, 1197S] 4
sec 628, referred to.
G CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2609-2610
of 2003.

From the Judgment and Order dated 4.8.2000 of the Kolkata High
Court in G.A. No. 1659 of 2000 in A.P.D. No. 346 of 2000.

A.K. Mitra, Dr. A.M. Singhvi, Jaideep Gupta, Anil Agarwalla, S. Singhvi
H
ARM GROUP ENTERPRISES LTD. v. WALDORFRESTAURANT[DHARMADIIlKARl,J] 227

and K. V. Vijayakumar for the Appellant. A
Shanti Bhushan, Bimal Chatterjee, David Mantosh, Mrs. Sumita
Mukherjee, Raja Mantosh, Ms. Vandana Jalan, P.R. Ramasesh, Salish Vig.
(NP) for the Respondents.

· The Judgment of the Court was delivered by B
DHARMADHIKARI J. Leave to appeal is granted.

Long period of more than 45 years period spent in this litigation amply
demonstrates how clever parties by adopting all conceivable tactics succeed
in delaying justice and thus bring disrepute to the justice delivery system. C
The appellants (who will hereinafter be referred to as 'the landlord')
have acquired from the original owner title to building No. 2 of which ground
floor, area 2537 Sq. Ft in Park Street, Calcutta are the leased premises in
dispute between the parties before us. The previous owner of the premises
obtained a compromise decree of eviction on 27 .4.1955 against Allenberry & D
Company limited (respondent No.3) which was the tenant in the leased
premises. Presently in the said premises, a well-known restaurant in the trade
name of "Waldorf Restaurant' is being run by registered partnership firm of
that name (Respondent No. I) herein and hereinafter shortly referred to as the
'firm'). E
Under the terms of the compromise decree, the tenant - Allenberry &
Co. (respondent No.3 herein), has vacated the suit premises. The firm in
assertion of its claim to the status of sub-tenant has been successful for the
past 45 years in ·resisting the execution of the decree against it.
F
The main question involved in these appeals is whether the respondent
firm can claim status of sub-tenant and seek protection against eviction in
execution of the compromise decree against the tenant, under the provision
of the West Bengal Premises Rent Control (temporary provisions) Act 1950
(hereinafter shortly referred to as the Act of 1950).
G
Shorn of unnecessary details of long drawn litigation between the parties,
only the facts relevant for decision of the legal question are required to be
stated.

The suit premises presently in use for running Waldorf Restaurant
originally belong to Chitpur Golabari Company Limited (respondent No.2 H
228 SUPREME COURT REPORTS 12003] 3 S.C.R.

A herein). Between t!he period 1.l.1939 to 31.12.1951 Allenberry & Company
(respondent No.3 herein) was the contractual tenant of the original landlord.
On 12.8.1953 Allenberry & Co. (hereinafter shortly referred to as the tenant
gave a formal notice to the landlord expressing its intention to surrender the
tenancy and vacate the leased premises by 31.8.1953. The service of notice
to the landlord for surrender of the leased premises resulted in law in
B determination of the lease under Section 106 read with Section 111 of the
Transfer of Property Act. This legal position has been finally settled by the
Judgment of this Court in the case of Calcutta Credit Corporation ltd v.
Happy Homes Private limited [ 1968] 2 SCR 20. That was a case in respect
of other portion of the same building which was also in occupation of original
C tenant and was part of the !eased premises which were surrendered by the
tenant.

Despite the service of formal notice of surrender of tenancy by the
tenant, vacant possession of the suit premises was not handed over to the
landlord. The landlord, therefore, instituted suit No.1645of1954 on 28.5.1954
D for eviction of the tenant. The said suit w:is decreed on 27.4.1955 in terms
of a compromise under which the tenant vacated the suit premises and reserved
liberty to the landlord to take necessary legal steps for evicting sub-tenants
who had been inducted by the tenant. The three sub-tenants named in the·
compromise decree were Chowranghee Sales Bureau Pvt. ltd., Happy Homes
E Pvt. Ltd and Waldorf Restaurant (respondent No. I herein).

After obtaining the compromise decree of eviction against the tenant,
the landlord instituted three separate suits for eviction against the above-
named three sub-tenants. Separate decrees for eviction were obtained against
the two sub-tenants viz. Chowanghee Sales Pvt. Ltd. and Happy Home Pvt.
F ltd. The litigation in the case of Happy Homes Pvt. Ltd. came up to this
Court and the decree obtained by the landlord against it, was maintained by
the decision in the case of Happy Homes Pvt. Ltd (supra). This Court in the
case of Happy Homes Pvt. ltd. held that after service of notice of surrender
of tenancy by the tenant, its continuance in the leased premises was only as
a statutory tenant and not as a contractual tenant. This court held such statutory
G tenant had no right to sub-let the premises. The sub-tenant could not, therefore,
claim status of direct tenant under the landlord on the basis of the provisions
of Section 12 and 13 of the Act of 1950. At this stage, it is necessary to take
note of the relevant provisions of Section 13 of the Act of 1950.

"13. Sub-lease not be binding in certain cases--{ I) Notwithstanding
H anything contained in this Act, or in any other law of the time being
ARM GROUP ENTERPRISES LTD. v. WALDORF RESTAURANT [DHARMADHIKAR!,J] 229

in force, if a tenant inferior to the tenant of the first degree sub-lets A
in whole or in part the premises let to him except with the consent
of the landlord and of the tenart of a superior degree above him, such
sub-lease shall not be binding on such non-consentingfandlord, or on
such non-consenting tenant.

Explanation - In this sub-section. B
(a) "a tenant of the first degree" 'means a tenant who does not hold
under any other tenant ;

(b) "a tenant inferior to the tenant of the first degree" means a
tenant holding immediately or mediately uhder ·a tenant of the C
first degree ;

(c) "landlord" means the landlord of a tenant of the .first degree.

(2) Where any premises or any part thereof have 'been or has been
sub-let by "a tenant of the first degree" or by "a tenant inferior to
a tenant of the first degree", as defined in explanation to sub-section D
(I) and the sub-lease is binding on the landlord of such la~t mentioned
tenant, if the tenancy of such tenant in either case is lawfully
determined otherwise than by virtue of a decree in a suit obtained by
the landlord by reason of any of the grounds specified in clause (b)
of the proviso to sub-section (I) of section 12, the sub-lessee shall be E
deemed to be a tenant in respect of such premises or part, as .the case
may be, holding directly under the landlord of the tenant whose tenancy
has been determined, on tenns and conditions on which the sub-
lessee would have held under the tenant if the tenancy of the latter
had not been so determined :-
F
Provided that it shall be competent for the landlord, or any person
deemed under this section to be a tenant holding directly under the
landlord, to make an application to the Controller for fixing rent of
the premises or part thereof in respect of which such person is so
deemed to be a tenant and until the rent is fixed by the Controller on
such application such person shall be liable to pay to the landlord the G
same rent as was payable by him in respect of the premises or part
thereof, as the case may be to the tenant before the tenancy of the
tenant therein had been determined. The Controller in fixing the rent
shall not determine such rent at the rate which is beyond the limit

-
-,
fixed by paragraph (4) of Schedule A. The rent so fixed shall be H.
230 SUPREME COURT REPORTS (2003] 3 S.C.R.

A deemed to be the standard rent fixed under section 9".

As stated above, Happy Homes Pvt. Ltd. wa~ also one of the sub-
tenants found to have been inducted after surrender of tenancy by original
tenant Allenberry & Co. The sub-tenant sought protection against eviction in
execution of the compromise decree against the tenant on the ground that it
B had become direct tenant under the landlord in accordance with Section 13
of the Act of 1950. The above plea of sub-tenant Happy Homes Pvt. Ltd.,
was negatived by this Court by holding thus:-

"We are unable to agree with the contention raised by counsel for the
respondent. In our view, since a statutory tenant has merely a personal
c right to protect his possession, and has no estate or interest in the
premises occupied by him, he cannot convey an estate or interest
which he does not possess. A statory tenant by parting with possession
fortfeits the protection of the Act, and unless the statute expressly
provides or clearly implies otherwise, the person inducted by him
D cannot claim the protection of the Act. In our judgment, clause (c) of
Section 12(1) applies only to a case in which the tenant has an interest
in the estate which he could sub-let. Similarly, section 13 contemplates
a case in which a contractual tenant has sub-let the premises. If it be
held that the expression 'tenant' in section 13(2) and in clause (c) of
section 12( I) includes a statutory tenant, an estate or an interest in the
E demised premises would be conferred by him upon a transferee which
the tenant himself does not possess, and that a tenant who has acted
contrary to the provisions of clauses (m), (o) & (p) of section 108 of
the Transfer of Property Act, or has used the property for immoral
illegal purposes, or has committed acts of negligence and default
which may materially deteriorate the condition of the premises, or
F
has otherwise been guilty of conduct which is a nuisance or annoyance
to occupiers of adjoining or neigbouring premises including the
landlord, or has failed to pay rent exceeding two months and has
thereby incurred liability to forfeit the protection of the stature granted
to him by section 12(1) and whose right has been forfeited by due
G notices, may still sub-let the premises and the sub-lessee would then
be entitled t(I claim the right under section 13(2) on the determination
of the tenancy of the tenant.

Considered in the light of the scheme and object of the Act, the
expression ''tenant'' in clause (c) of section 12( I) or in sectiofi. 13(2)
H must, in our judgment, mean a contractual tenant alone and not a
ARM GROUP ENTERPRISES LTD. v. WALDORF RESTAURANT [DHARMADHIKARI, J.] 23 J

statutory tenant. The ·definition in section 2(11) of the expression A
"tenant" includes a statutory tenant. But the definition does not apply
if there is anything repugnant in the subject or context. A statutory
tenant has no interest or estate in the premises occupied by him, and
we are unable to hold that the Legislature without making an express
· provision to that effect intended to invest. him with power to induct B
. into the premises in his occupation a person who would be entitled
to claim the right and interest of. a contractual tenant. If the view
which has appealed to the High Court of Calcutta be .accepted, a
statutory tenant whose· right of occupation is determined by a notice.
to quit, becaust: of conduct which entails forfeiture of the protection
of the Act, may induct a sub-tenant so as to defeat the claim of the· C
landlord, and presumably a tenant sued in ejectment may also exercise
that privilege, for the right if granted would enure till a decree in
ejectment is passed. The Legislature has not made any such express
provision, and no provision to that effect which makes the right of
the landlord conferred by the Act to obtain a decree in ejectment
against his tenant illusory may be implied. D
- . Coming back to the facts of this case, after obtaining a decree of
compromise against the tenant, the landlord instituted a suit on 9.6.1956
against the firm for its eviction. The firm contested the suit by taking a plea
that before surrender by the tenant of its tenancy with effect from 31.8.1953
under statutory notice, the tenant had inducted on 1.7.1953 Eng Chick Wong E
being the soie proprietor of Waldorf Restaurant. Later on, the above-named
sole proprietor formed a partnership with two others viz. Wong Lee Si Moi
& Wulishih. The partnership firm comprising of three partners above named
was registered on 1.3.1954 i.e. much after the surrender of tenancy by the
tenant with effect from 31.8.1953. The suit instituted by landlord against the F
firm came to be decided after thirty six years of its institution. Learned Single
Judge of Calcutta High Court, sitting on Original Side, by judgment dated
25.8.1992 in Suit No.1546 of 1956, filed for eviction; held that the dispute
in the suit can be decided in proceedings .of execution of the compromise
decree. The suit was held as barred by provisions of Section 47 of the Code
of Civil Procedure. On the basis of judgment in the said suit of the Calcutta G
High Court. the landlord moved an application on 19.6.1993 for execution of
the compromise decree against the firm.

In order to frustrate attempt of the landlord to execute the decree, the
firm filed a counter suit on 3.8.1993 against the landlord seeking injunction
H
!
I

232 SUPREME COURT REPORTS [2003 j 3 S.C.R.

A to restrain it from executing the compromise decree against the firm.
By allowing the landlord's application under Order 7 Rule XI of the
Code of Civil Procedure, the court held that the suit was barred by Section
47 of the Code of Civil Produce and it was dismissed on 21.12.1995.

B The appeal preferred by the firm to the High Court was also dismissed.
The High Court also came to the conclusion that if the firm is claiming status
of direct tenant under the landlord by taking recourse to the provisions of
Section 13 of the Act of 1950, its remedy lay in raising appropriate objection
in course of execution of the decree in the executing court. A suit for the
purpose was held as not maintainable.
c
Against the judgment of the High Court, the firm filed a Special Leave
Petition to this Court which was withdrawn on 12.10.1988.

The judgments in two counter suits filed against each other by the
original landlord and the firm thus settle the legal position between the
D contesting parties that their remedies lay before the executing court.

The firm in order to frustrate the executing of compromise decree .. -
against it made a second attempt by filing an application on 15.3.1999 in the
trial court for setting aside the cnmpromise decree of eviction in Civil Case
No.1645 of 1954. n at application was dismissed by the Court on 4.8.1999.
E
On the side of the landlord the application for execution filed by it was
allowed by the learned Single Judgt' of Calcutta High Court on 20.4.2000.
Learned Single judge of the High Court came to the conclusion that the firm
came into existence on its registration under Partnership Act only on 1.3.1954
i.e. after the surrender of tenancy by the original tenant on 31.8.1953. In the
F opinion of the High Court, the registered partnership firm could not have
been inducted as a sub-!enant, as alleged on 1.7.1953, when as a matter of
fact on that date the Restaurant was only a proprietary concern of Eng Chick
Wong. The learned Single Judge therefore came to the conclusion that the
firm cannot claim status of a protected tenant directly under the landlord on
G the provisions of Serlion 13(2) of the Act of 1950. For better appreciation of
the ratio of the Judgment of the karned Single Judge, its relevant part deserves
to be reproduced:

"Jn tliose circumstances I would find, that there was no proof
whatsoever, before thi; Cou11, that Waldorf the present partnership
H firm had been inducted as a sub-tenant on 1.7. ! 953. It would also
ARM GROUP ENTERPRISES LTD. v. WALDORFRESTAURANT[DHARMADHIKARI,J] 233
appear to me, and not contended on behalf of Waldorf either, that the A
list of subtenants which had been furnished by Allenberry & Co. to
the plaintiff, if disclosed, would show that it had been inducted before
the tenancy of Allenberry & Co. had been terminated. The severe
allegation that Waldorf, which was before this court, had been
registered as a partnership firm on September 16, 1954, which would B
be subsequent to the termination of the tenancy, remained
uncontroverted. In its order dated September 25, 1997, the appellate
court in my view, had clearly adjudicated the question of direct tenancy
against Waldorf and the principles of res judicata would, I am afraid
prevent this question to be further urged in a Court of Law for fm1her
consideration. Waldorf, I would unhesitatingly hold, was a sub-tenant C
under Allenberry & Co. and made upon the termination of the tenancy
and making of the compromise decree dated April 27, l 955 in
accordance with the "Terms of Settlement", the decree was indeed
executable by the plaintiff against Waldorf. The plaintiff had been
prosecuting more than one litigation in this Court and since there was
no ma/a fide, on record, in the plaintiff so doing, I would conclude D
that the plaintiff had heen prosecuting the legal proceedings diligently,
and in good faith. The plaintiff was, therefore, entitled to rely on the
provisions contained in Section 13(2) of the Limitation Act, and this
execution application I am inclined to hold was not barred by the
laws of limitation. E
For those reasons there shall be an order in terms of prayers (a), (b ),
(c), (d), (e) and (f) of the Tabular Statement. Mr. Animesh Ghosal,
an advocate of this court is appointed receiver to comp!y with the
above directions. The receiver shall file a report of compliance with
copies to the parties within a period of four weeks from the date of F
receipt of the xerox of the signed copy of this order. The report shall
be kept in the records of this matter. The receiver shall be paid a
remuneration of 500 Gm by the decree holder at the time of the
service of the xerox of the signed copy of this judgment.

Aggrieved by the judgment of the learned Single judge the firm preferred G
an appeal to Division bench. The Division bench by the impugned judgment
delivered on 4.8.2000 allowed the appeal of the firm and set aside the judgment
of the learned Single Judge. After examining the entire facts and events in
the long course of litigation, the Divisjon bench came to the conclusion that
'by operation of law' Eng Chick V/ong either as the proprietorship concern H
..
234 SUPREME COURT REPORTS [2003] 3 S.C.R.

A or as a partner of partnership firm became a tenant directly under Chitpur
Golabari Co. (original landlord). It further held that the landlord would be
entitled to bring a suit for eviction against the firm on the ground that as sub-
tenant, it was inducted unlawfully by the proprietor of Waldrof Restaurant
who had become tenant directly under the Act of 1950 but recourse to
B execution procee:dings was impermissible in law.

For better appreciation for the reasoning and conclusion of the Division
Bench, the relevant part of the Judgement needs to be reproduced :-

"Assuming for the sake of argument that by reason of reconstitution
of such firms, the original tenant went out of the said partnership firm
c and, thus, the possession of 1he present firm comprising of Charles
Mantosh, HIS Wen Wong and Mata Prasad Pandey became illegal,
but the same would be of no consequence inasmuch as, such action
on the part of the original sub-tenant namely, the proprietorship
concern of Waldorf Restaurant and/or partnership firm would at best
D result in creation of sub-tenancy. But there cannot be any doubt
whatsoever that by operation of law Eng Chick Wong either as
proprietorship concern or as a partner of partnership firm became a
tenant directly under Chitpur Goalbari. As against a tenani, the
landlord inter alia is entitled to file a suit for eviction on the ground
that a sub-tenancy has been created. But for the purpose, an
E application under section 47 of the CPC would not be maintainable
so as to enable the decree holder not only to evict the defendant but
also a tenant who had, by a legal fiction, become direct tenant under
him. A legal fiction as is well known must be given its full effect.

[Emphasis applied]
F
In these appeals learned counsel appearing for the appellant questions
the correctness of judgment of the Division Bench and supports judgment of
learned Single Judge. The main contention advanced is that the firm having
come into existence on its registration on 1.3.1954 i.e. after surrender of
tenancy by the tenant on 31.8.1953, it could not claim status of a tenant
G directly under the landlord by recourse to Section 13(2) of the Act of 1950.
It is submitted that adniitting the fact of entry of Eng Chick Wong in the
tenanted premises on 1.7.1953 for carrying on the bu~iness of Restaurant as
the sole proprietor, the firm, of which the sole proprietor subsequently became
a partner and which came into existence on 1.3.1954 on registration could
H not. on surrender of tenancy of the tenant, claim status of direct tenant under
ARM GROUP ENTERPRISES LTD v. WALDORF RESTAURANT IDHARMADHIKARl,.ll 235

the Act of 1950. The argument advanced is that the Division Bench failed to A
make a distinction between the claim of status of direct tenant by the sole
proprietor and the firm of which the sole proprietor subsequently became a
partner. Alternatively. it is submitted that the sole proprietor to whom the
tenant had sub-let the suit premises on 1.7.1953 having left India and ceased
to be a partner of the firm, the present firm comprising totally new partners
and in occupation of the disputed premises have absolutely no right, title or B
interest to resist execution of the decree obtained against the tenant. It is
submitted that with the tenant who has voluntarily surrendered the tenancy
and vacated the leased premises and the sub-tenant, meaning the erstwhile
proprietor, having lost possession of the premises, the present partners of th·~
firm (respondent no. I herein) in occupation through the erstwhile proprietor C
Eng Chick Wong, are also liable to be evicted in execution of the compromise
decree obtained against the tenant.

In reply to the argument advanced on behalf of the appellant, learned
counsel appearing for the firm laid much emphasis on the pleadings of the
appellant submitted in the courts below. By taking us through the pleadings D
it is pointed out that throughout in the long course of litigation in the counter
civil suits and the execution proceedings, at many places, averments have
been made stating that the 'Wa!dorf Restaurant' was inducted as a tenant on
l. 7.1953. On behalf of respondents, learned counsel argues that the above
averments in the pleadings of the appellant in the courts below amount to E
admission that Waldorf Restaurant in either of the capacities as 'proprietor
concern' or 'partnership firm', came into. possession of the suit premises as
a sub-lessee on l. 7.1953 prior to the surrender of tenancy by the tenant on
31.8.1953.

The conclusion of the Division bench is thus supported on the ground F
that the firm presently in occupation has become a direct tenant under the
landlord after surrender of tenancy by the original tenant and has a protection
against eviction under the Act of 1950.

It is also contended that the compromise decree under which the tenant
has already surrender the tenancy and vacated the premises, is not executable G
against the firm as sub-tenant as the latter has become direct tenant under Act
of 1950. It is submitted that the remedy of the landlord is to institute a fresh
suit on grounds, if available to them, under the provisions of West Bengal
Premises Tenancy Act, 1997.

We have considered the arguments advanced by learned counsel I-I
236 Sl~PRL\1E COllRl REPURIS 12003 J J S.C.R.

A appearing for the contesting partie>. Before dealing with the main contention
raised. we may dispose of two prdiminary grounds on plea of res judicatu
and limitation to which reference has been made in the judgment of the High
Court.

So far as the plea of res j11d1cutu is concerned. we find that since both
B the landlord and the firm. had filed cross suits against each other and in both
the courts came to a common conclusion that the parties should litigate their
rights in execution proceedings and nothing was decided on merits of rights
and claims of the parties. such a plea is no longer available to the parties
against each other in the execution proceedings.

c As regards the bar of limitation, it was not rightly pressed on behalf of
the firm. As both the parties had instituted suits against each other, the
appellants cannot be held to be lacking in bonu /ides in restoring to the
remedy of suit. The long period >pc:uc in the suit deserves to be condoned.
Under Section 14 of the Limitation Act, the period spent in prosecuting civil
D proceedings bonu fide and with due diligence is liable to be excluded in
computing the period of limitation for the suit or the application. On the
question of limitation see the following observations of this Court in the case
of Roshan /al Kuthuliu and Ors. v. R.B. ft,fohan Singh Oberoi. (1975] 4 SCC
628.

E ''27. Certainly, Section 14 is wide enough to cover periods covered
by execution proceedings (See 1959 SCR 811 at 818 After alt 1
).

Section 47 itself contemplates transmigration of souls as it were of
execution petitions and suits. The substantial identity of the subject-
matter of the lis is a pragmatic test. Moreover, the defects that will
attract the provision are not merely jurisdictional strictly so called but
F others more or less neighbours to such deficiencies. Any circumstance
legal or factual, which inhibits entertainment or consideration by the
court of the dispute on the merits, comes within the scope of the
section and a liberal touch must inform the interpre!Mion of the
Limitation Act which deprives the remedy of one who has a right See
G [ 1971] 2 SCR 397 at 40 I'. In the Associated Hotels case (i.e. the very
lis in its earlier round on the execution side) <his Court pointed out
(1961] I SCR 259 at 272 1 that the quesuon was one of initial
jurisdiction of the court to entertain the proceedings. Thus in this
very matter, the obstacle was jurisdictional and the exclusionary
operation of Section 14 of the Limitation Act was attracted".
H
ARM GROUP ENTERPRISES LTD. v. WALDORF RESTAURANT [DHARMADHIKARI,J.] 23 7

We now take up for consideration the hotly contested issue between the A
parties on the alleged claim of the firm to the status of direct tenant under
the landlord on the basis of provisions of Section 13 of the Act of 1950. The
provisions of Sections 12 & 13 were construed in the light of the scheme of
Act of 1950 by this Court in the case of Indra Kumar Karnani v. Atul
Chandra Patitundi, [1965] 3 SCR 329. This Court in that case held that B
consent of landlord is not required for creating sub-tenancy by the "tenant of
the first degree". Consent oflandlord, however, is held to be necessary where
the sub-tenant defined in the Act as "tenant inferior to the tenant of the first
degree" creates a sub-tenancy. In the case of creation of sub-tenancy by the
"tenant of the first degree," the sub-tenant, even on termination of tenancy
of the "tenant of the first degree," becomes 'direct tenant' under the landlord C
and is thus protected, meaning thereby that he can be evicted only on proof
of any of the grounds under the provisions of Section 12. of Act of 1950.

For better appreciation of the ratio of decision in the case of Indra
Kumar Karnani, (supra) we would reproduce the relevant part of it :-
D
"It is manifest that section 13( I) makes a distinction between the two
classes of sub-tenancies, namely, (I) sub-tenancy created by a tenant
of the first degree, and (2) sub-tenancy created by "a tenant inferior
to the tenant of the first degree" by which is meant a tenant holding
immediately or mediately under a tenant of the first degree. So far as
the second class of sub-tenancy is concerned, the sub-section enacts E
that the sub-letting will not be binding upon the landlord or on the
tenant of the superior degree unless each of them has consented to
the transaction of sub-lease. There is no express provision in section
13(1) that a sub-lease of the !st class requires previous consent of the

- landlord or that in the absence of such constant the sub-lease shall not
be binding upon the non-consenting landlord. Section 13(2) refers to
both the classes of sub-leases and states that if the sub-lessee shall be
F

deemed to be a tenant in respect of the premises demised to him if
the tenancy of such tenant is lawfully determined under the provisions
of the Act otherwise than by virtue of a decree in a suit obtained by
the landlord by reason of any of the grounds specified in clause (h) G
of the proviso to sub-section(!) of section 12. In the case of second
class of sub-lease, i.e., sub-leases created by a tenant inferior to the
tenant of the 1st degree also the sub-lessee will acquire the status of
a tenant as mentioned in the statute but in this class of sub-leases the
rights of the tenant are conferred on the sub-lessee only if the sub- H
238 SUPREME COURT REPORTS (2003 J 3 S.C.R.

A lease is binding upcr. the landlord. In enacting section I 3( I) and (2)
of the 1950 Act the legislature has deliberately made a distinction
between the two classes of sub-tenancies and provided that in the
case of sub-lease of the first class, namely, sub-leases created by a
tenant of the first degree. the sub-lessee will acquire the status of the
tenant in respect of the premises demised, though the sub-lease is not
B binding upon the landlord according to the agreement of lease. The
legi:;Jature has further provic.ed that in the case of sub-lease of the
second class the sub-lessee will acquire the status of a tenant of the
premises only if the sub-lease is binding upon the "landlord" as
defined 1111 section 13( I). h follows that in the case of sub-letting by
c a tenant of the first degree no consent of the landlord to sub-letting
by tenant of the first degree is required as a condition precedent for
acquisition by the sub-leassee of the tenant's right but in the case of
sub-letting by a tenant inferior to the tenant of the first degree the
consent of the landlord and also of the tenant of the superior degree
above him to the subletting is necessary ifthe sub-lessee is to acquire
D the rights of the tenant contemplated by section 13(2).

In the present case. the firm with totally new partners excluding the
erstwhile sole proprietor is claiming status of a direct tenant under the Act
of 1950 and resisting execution of the compromise decree against it.

E Waldorf Restaurant is merely a trade name. It is not a legal person and
has no existent independent of the proprietor who initially carried on business
in that trade name in the suit premises as sub-tenant and later on by joining
as partner of the firm registered in the same trade-name. The present firm

-
(comprising totally new partners) has not disputed the fact that on 1.7.1953
F the tenant (Allenberry & Co.) had sub-let the >uit premises to Eng Chick
Wong as sole proprietor of the Waldorf Restaurant.

On this undisputed fact. the erstwhile sole proprietor of the Waldorf
Restaurant namely Eng Chick Wong could alone claim status of a direct
tenant under the landlord on termination of tenancy of the original tenant.
G The crucial question, however, is whether the present partnership firm, in
which the erstwhile proprietor Eng Chick Wong was a partner and has now
ceased to be so, can claim direct tenancy in its favour under the landlord on
surrender of tenancy by Allenberry & Co. As we have noted above. the
tenancy was surrendered on 31.8.1953 and as has been held by this Court in
H the case of another sub-tenant Happ1· Homes Pvt. Ltd (supra), after surrender
ARM GROUP ENTERPRISES LTD. v. WALDORF RESTAURANT [DHARMADHIKARI, l] 239

of tenancy by the tenant, sub-tenant induct~d by a statutory tenant cannot A
claim status of a direct tenant under the Act of 1950. In the present case, on
1.7.1953 the firm had not become a sub-tenant. The firm (respondent No.I
herein) therefore, cannot claim status of a direct tenant under the landlord
and seek protection of the Act of 1950.

Learned counsel appearing for the appellant have placed before us a B
chart to show how the partnership of the firm went on continuously changing
with retirement of partner one after the other and entry of new partners. It is
not necessary to go into details of the various changes in the constitution of
the firm. The fact, however, is not disputed that when the firm was first
registered on 1.3.1954, the partnership firm comprised Eng Chick Wong as C
- the erstwhile sole proprietor of the business with two other partners joining
him viz. Hsi Wen Wong and Wu Li Shih. Sometime in the year 1958, the two
above named partners retired and Eng Chick Wong continued as partner with
a new partner Philip Wing Hui Wu. In the year 1963, again the two above-
named partners were joined by three new partners. In December 1991 Eng
Chick Wong ceased to be a partner and the partnership consisted of only D
three other partners. In the present partnership firm, there are now three new
partners Hsi Wen Wong, Mata Parasad Pandey and Charles Mantosh.

The appellant in the courts below sought discovery of all partnership
agreements correspondence exchanged between Waldorf and Allenberry
relating to formation of the sub-tenancy and relevant facts regarding E
constitution and re-constitution as also registration of the firm in the name of
Waldorf Restaurant. These documents, if produced would even disclosed as
to the actual point of time when the proprietor also has been inducted actually
as sub-tenant. The finn, formally by its reply, refused to supply copies of
partnership agreement and other relevant information sought as above. It F
took a plea that it was their internal affair and plaintiff can have no concern
with it. The tenanted premises were sub-let to the sole proprietor of a business
concern, who later on with other two individuals constituted a partnership
firm. Whether in such a situation, the tenanted premises held by him in as
erstwhile sole proprietor, would become a partnership property or not would
depend upon the terms of the partnership agreement. The burden to prove as G
to when the sub-tenancy was created and that the suit premises which were
sub-let to the proprietor, on his forming a partnership firm, became property
of the firm, was squarely on the firm which is resisting the execution
proceedings and seeking to claim a benefit in the fonn of a statutory protection.
The firm has deliberately withheld from disclosure the details as to the initial H
240 SUPREME COURT REPORTS· [2003) 3 S.C.R.

A creation of sub-tenancy and various agreements of partnership entered into
bet,veen the partners from time to time \vhich would have shown the nature
of partnership and as to the rights, if any, acquired by it in this regard. There
is no evidence to prove that the tenanted premises of which the sole proprietor
Fng Chick Wong was the sub-tenant, became the asset or property of the firm
B from the year 1954 when the partnership was registered .

. Under Section 14 of the Partnership. Act .1932,.· in the absence of an
agreement to the. contrary, property exclusively be!onging l? a person, on his
entering into partnership with others, does not become a property of the
partnership merely because it is used for the.business of the partnership. Such
C . property will become property of the partnership only if there is an agreement
- express or implied - that the property was, under the agreement of the
partnership, to be treated as the property of the partnership. See decision of
this Court in the case of Arjun Kanoji T,ankar v. Santaranz Ka.noji·Tankar,.
(1969) 3 sec 555 at paragraphs 13 &. 14.

D The reasoning adopted by the Division Bench is erroneous that sub-
tenancy is . created both for.theproprietary
. concern
.
and the partnership
'
firm
merely bec~use the trad~ name in \\''hich the business was'_ continued. remains
the same i.e. Waldorf Restaurant. The reasoning adopted tiy Division Bench
which has. been supported by learned counsel appearing for the firm, is
obviously misconceived in law and proceeded upon misdirection on facts. As
E · we have·stated above. Waldorf Restaurant is merely a trade name. It is not·
a legal entity independent of proprietor of the business carried on in that
name and the partnership -firm which came into existence later on. Sub-
tenancy was created in favour of Eng Chick Wong. as the sole proprietor. In
the absence of disclosure of the partnership agreement, to which the proprietor ·
F "·as a partyy it is not ascertainable \vhether tenanted premises were.brought
as assets into the business of the firm by the erstwhile sole proprietor.The
Division Bench is also wrong in assuming that there could have been a sub-
letting by the sole proprietor to the partnership firm and even in that case the
firm will have status of a sub-tenant and protection under the Act of 1950.
We have already noted above that under the Act of 1950 only the "tenant
G inferior to the tenant of the first degree" can claim protection as -~direct
tenant' unJer the landlord. A sub-tenant of a "tenant inferior to the tenant of
first degree" does not have any such status or protection under the Act of
1950. There is neither evidence nor a case set up by either of the parties that
the. erstwhile proprietor had sub-let the premises to the present firm. The
H . provisions of Act of 1950 do not permit, without consent of the landlord,
ARM GROUP ENTERPRISES LTD. v. WALDORFRESTAURANT [DHARMADHIKARl,J] 24 J

creation of sub-tenancy by a sub-tenant or in other words "tenant inferior to A
the tenant of the first degree".

In the aforesaid situation, claim for status of direct tenant and protection
under Act of 1950 could if at all have been claimed only by Eng Chick Wong
as the sole proprietor of the business concern by substantiating the necessary
conditions precedent including the point of time when he became one such, B
I in the background of the notice of surrender of tenancy by the tenant. After
'
I Eng Chick Wong had walked out of the tenanted premises ceasing to have
any concern, connection or interest in the firm and left India, the present
partners of the firm, who are in occupation of the business premises have no
right in presenti to resist their dispossession under the decree obtained against C
the tenant. Along with the tenant who has already surrendered the tenancy
and vacated the leased premises and the sub-tenant having aiready lost
possession of the leased premises, the present firm with its new partners who
claim to be in occupation through the sub-tenant have no right to resist the
execution of the decree.
D
The Division Bench of the High Court has wrongly assumed creation
of sub-tenancy by the proprietor in favour of the partnership finn. The erstwhile
proprietor of the business himself became one of the partners of the firm.
Such an act on his part was sub-letting or not would depend upon the terms
of the partnership deeds, which were withheld from disclosure to the court
despite a lawful demand therefore. Mere carrying on by the ten.ant a partnership E
business as partner in the leased premises, no doubt, does not per se amount
to sub-letting unless it is shown that he withdrew his control of the leased
pren1ises and parted with the possession of the property and thereby
surrendered his individual tenancy rights in favour of the partnership firm.
See Helper Girdharbhai v. Saiyed Mohd. Mirasaheb Kadri. AIR (I 987) SC F
1782 particularly the following observations in paragraphs 5 & 19 at pages
1784 and 1790 :-

"5 ..................... lt is well settled that if there was such a partnership
firm of which the appellant was a partner as a tenant the same would
not amount to subletting leading to the forfeiture of the tenancy. For G
this proposition see the decision of the Gujarat High Court in the case
of Mehta Jagjivan Vanechand v. Doshi Vanechand Harakhchand,
AIR ( 1972) Guj.6. Thakkar, J. of the Gujarat High Court as the learned
Judge then was, held that the mere fact that tenant entered into a
partnership and allowed the premises being used for the benefit of
partnership does not constitute assignment or subletting in favour of H
242 SUPREME COURT REPORTS [2003] 3 S.C.R.

A the partnership firm entitling a landlord to recover possession. This
view is now concluded by the decision of this Court in Madras
Bangalore Transport Co.(West) v. lnder Singh, (1986] 3 SCC 62 :
AIR (1986) SC 1564.

B
"19 .................... Wit may mention that in Gunadalapalii Rangamannar
Chell}' v. Desu Rangiah, AIR ( 1954) Mad 182, Subba Rao, J. as the
learned Chief Justice then was, held that there cannot be a subletting,
unless the lessee parted with legal possession. The mere fact that
another is allowed to use the premises while the lessee retains the
c legal possession is not enough to create a sub-lease.

Two additional grounds urged on behalf of the firm now remain for
decision. It is emphatically argued that in the pleadings of the appellant
before the High Court in earlier litigation, there is admission that Waldorf
Restaurant entered the leased premises as sub-tenant. It is argued that this
D admission is binding on the appellant. We have been taken through relevant
parts of the pleadings. It is true that at several places in the pleadings there
is mention of alleged unlawful entry of Waldrof Restaurant in the leased
premises. As we have found above, Waldorf Restaurant was being run in the
leased premises firstly, as sole proprietary concern in the year 1953 and
E subsequently after surrender of tenancy by the tenant as a partnership concern
froni 1954.

We have also held that Waldorf Restaurant is merely a trade name. It
is nqt a legal entity. The legal entities or the legal persons are the 'proprietor'
and the 'partnership firm'. Mere averment in the pleadings of the appellants
F that 'use of the leased premises by Waldorf Restaurant was a wrongful entry'
and that too by way of reference to the claims made by the firm in the
variQus proceedings cannot be an admission of the fact that the firm came
into possession of the premises prior to the surrender of the lease by the
tenimt. There can be no admission on a question of law to be held as binding
on the appellant. All the more so when the said fact is one which has to be
G necessarily and properly established by the firm, as a condition precedent to
claim the cover of statutory protection under the Tenancy Act.

Last ground urged is that the compromise decree on its own terms is
not executable because the tenant, on the date of the compromise decree, had
already vacated the premises. On a closer scrutiny of the terms of the
H compromise decn~e. we do not find any merit in the submission that it is not
ARM GROUP ENTERPRISES LTD. v. WALDORF RESTAURANT [DHARMADHIKARl,J.] 243

executable against the sub-tenant. We have traced the history of the litigation. A
The tenant surrendered the lease with effect from 31.8.1953 by a notice but
called to vacate it on the due date. Landlord was therefore required to tile a
·suit against the tenant on the basis of the notice for surrender of tenancy.
\ During pendency of the suit the tenant entered into a compromise and in
terms thereof vacated the leased premises. As against the sub-tenants, which B
I the tenant had inducted during subsistence of tenancy, one of the terms of
the compromise decree reserved liberty to the landlord to take necessary
legal steps for their eviction. The landlord thereafter instituted independent
suit for eviction of the sub-tenant. In that suit, the Court held that the remedy
of the landlord is to execute the compromise decree. The firm as sub-tenant,
had tiled a counter suit seeking declaration of its status as direct tenant under C
Act of 1950 and protection thereunder. In the counter suit of the sub-tenant,
the Court took the same view that the remedies of the parties lay in execution
proceedings. The Judgment rendered in the counter suit of the sub-tenant i.e.
the firm was challenged in this court in special leave petition but it was
withdrawn. The Judgment rendered in the counter suit as also the other
rendered in the suit tiled by the landlord against the sub-tenant, have attained D
finality. It is only after the landlord failed in obtaining eviction decree in the
suit filed by it that it moved an applicatio~ for execution of the compromise
decree. One of the terms of the compromise decree which reserved right to
the landlord to take necessary legal steps to evict the sub-tenants, makes the
decree executable to that extent. It cannot therefore be urged by the finn that E
the compromise decree on its terms is not executable.

Thus we find that the tenant - Allenberry & Co. has surrendered the
tenancy and vacated the leased premises. Eng Chick Wong the sole proprietor
of the proprietary concern Waldorf Restaurant, to whom the premises were
sublet prior to the surrender of tenancy has also vacated the premises and left F
India. The possession of the leased premises has been left with the firm
through its partners who must vacate the premises on extinguishment of the
rights of the tenant and the sub-tenant.

Consequently, we allow these appeals. The impugned judgment dated
4.8.2000 of the Division Bench of the High Court of Calcutta is set aside and G
that of the learned Single Judge dated 20.4.2000 is restored. Since respondent
No. I has dragged on the litigation for such a long period, the appellant
would also be entitled to full costs incurred in courts below and in this Court.
The counsel fee shall be allowed as per rules.
N.J. Appeals allowed. H