Judgment :- 1. Appellant was the plaintiff in a suit for arrears of rent and recovery of possession of the plaint schedule property and other incidental reliefs. The property admittedly belongs to the plaintiff's family of which the plaintiff is the head. In 1929 the property was taken on lease by one Ramji Rao Kalaji Rao since deceased under Ext. A2. Ext. A2 permitted the construction of certain buildings and prohibited the construction of other types of buildings. After the expiry of the term of Ext. A2 Kalaji Rao executed another marupat Ext. A3 in 1932 By Ext. A3 he agreed to surrender the property on demand after demolishing the buildings and a petrol pump which he was allowed to construct. Pursuant to the lease deeds buildings have been constructed. Kalaji Rao assigned his tenancy to one Yacoob Cheerakkadan, father of the first defendant. Cheerakkadan attorned to the plaintiff and executed a marupat Ext. A4 dated 4-6-1946. The plaintiff issued a registered notice terminating the tenancy and brought the suit. Yacoob Cheerakkadan is dead and he is represented by bis legal representative defendant 1. Defendant 2 is an assignee of the rights of the tenant. Defendants 3 to 19 are sub-tenants. 2. The only defence that needs to be noted is the plea taken by the 2nd defendant claiming the protection of S.106, Land Reforms Act (Act I of 1964). The appellants sought to meet this plea contending that since the land was in the possession of sub-tenants and not of the 2nd defendant he was disentitled to claim the benefits of S.106. This contention was rejected by the courts below. The appellant challenges the decisions in this appeal. 3. A learned judge has referred the appeal to a Bench considering the importance of the question involved and the frequency with which it might arise. 4. The short question that falls to be decided is whether a tenant who otherwise satisfies the terms of S.106 loses its benefits if he has parted with possession in favour of sub-tenants. S.3(1) (iii) of the Act exempts from the provisions of Chapter II "leases of land or of buildings or of both specifically granted for industrial or commercial purposes". Chapter II by S.13 confers fixity of tenure upon tenants.
S.3(1) (iii) of the Act exempts from the provisions of Chapter II "leases of land or of buildings or of both specifically granted for industrial or commercial purposes". Chapter II by S.13 confers fixity of tenure upon tenants. The effect of S.3(1)(iii) is to deny tenants, hit by its terms the protection of fixity of tenure and other benefits laid down in Chapter II. S.106 was enacted in order to give some measure of protection to tenants of commercial or industrial premises. Starting with a non-obstante clause S.106 provides, so far as relevant, "where on any land leased for commercial or industrial purpose, the lessee has constructed buildings for such commercial or industrial purpose before the 20th May, 1967, he shall not be liable to be evicted from such land, but shall be liable to pay rent under the contract of tenancy, and such rent shall be liable to be varied every twelve years." The Explanation by clause (a) defines 'lessee' to include a legal representative or an assignee of the lessee. Sub-section (1A) provides that the lessor or the lessee might apply to the prescribed authority for varying the rent referred to in sub-section (1) and that thereupon the authority should take into consideration such matters as may be prescribed and pass such orders as it deems fit. We do not think it necessary to refer to the later provisions in the Section as they have little bearing on the question in dispute. Counsel for the appellant contended that although sub-section (1) does not in terms require that the lessee should be in possession to claim its benefit, the idea of possession is implicit from the expression that "he shall not be liable to be evicted from such land". Counsel argued that there can be no question of evicting a lessee who is not in possession. We are unable to accept this contention. Counsel did not argue, indeed he could not also argue that a lessee ceases to be a lessee when he creates sub-leases and goes out of possession. He remains the lessee with the residual leasehold and still liable to the landlord for the rent. This position is undisputed and is emphasised by subsection (1) which says that he "shall be liable to pay rent under the contract of tenancy," which is only between the landlord and tenant.
He remains the lessee with the residual leasehold and still liable to the landlord for the rent. This position is undisputed and is emphasised by subsection (1) which says that he "shall be liable to pay rent under the contract of tenancy," which is only between the landlord and tenant. It is also emphasised by the provisions of sub-section (1A) for it enables him and the lessor alone to apply to the prescribed authority for modification of the rent. While the assignee of the lessee is a'lessee' by virtue of clause (a) of the Explanation to sub-section (I) the sub-lessee is no lessee and is not liable to the lessor as there is no privity of estate or contract between. The appellant's contention could be accepted only on the premise that the second defendant is no tenant, but counsel for the appellant, as we understood him, was not prepared to take that stand, for the obvious reason that such a situation would leave the landlord with no lessee at all liable for rent and other covenants. Counsel had no answer to our query about the position of the lessee if he sub-leases a portion of the premises retaining the rest or if he is dispossessed by a stranger, thereby losing his possession. In these situations also the landlord's remedy against the tenant would be a suit or other proceeding for eviction, notwithstanding the sublease or the dispossession through trespass. It may be that where there is an assignment by the lessee the assignee would be liable to the lessor by privity of estate, in which event the lessee may possibly disqualify himself from claiming the benefits of S.106 for he has no rights left in the leasehold. However we express no concluded opinion on this latter aspect as it does not arise and as there is no absolute assignment in the present case by the lessee. With the sub-leases the lessee does not cease to be the lessee. This means that he remains liable for the contractual and statutory obligations to the lessor and to wit to put the lessor into possession of the property under S.108(q) on the determination of the lease. 5. Mamoo v. Asya, 1965 KLT.126, to which counsel for the appellant referred has no application for it was concerned only with the question whether a sub-lessee was entitled to the benefits of S 106.
5. Mamoo v. Asya, 1965 KLT.126, to which counsel for the appellant referred has no application for it was concerned only with the question whether a sub-lessee was entitled to the benefits of S 106. This Court held that he was not. So is Parameswaran Pillai v. Venkiteswara Prabhu,1974 KLT. 210. 6. In our view, the appellant's contentions for denying the benefit of S.106 to the second defendant are without merit and have been rightly rejected by the courts below. We dismiss the appeal but in the circumstances without costs.