Delve into the detailed legal analysis of assignment and ratification in property law through a recent court case summary. The court’s scrutiny of the applicability of Section 26 of the Maharashtra Rent Control Tenancy Act 1999 and Section 52 of the Transfer of Property Act sheds light on the complexities of property transactions. The case explores the nuances of tenant assignments, landlord consent, and the legal implications of ratification. Understanding the court’s interpretation of these legal principles is essential for anyone dealing with property law matters.
Facts
- The High Court upheld the order passed by the Court of Small Causes at Bombay
- The order in Execution Application No.386/2016 was affirmed
- The application filed by the appellant under Order XXI Rule 97 of the Code of Civil Procedure was rejected
- The application for recall was also rejected
- The appellant claims ignorance of the litigation.
- One Akhtar Habibullah Shaikh transferred his rights to the appellant after receiving the total cost and consideration.
- The plaintiff filed a civil suit against respondent Nos. 2-4 which was decreed with costs.
- The plaintiff levied execution by filing Execution Application No. 386 of 2016.
- The Appellate Court decreed the suit and possession was not handed over.
- The 3rd defendant transferred tenancy rights by a rent receipt dated 01.12.2006.
- The appellant came into possession of the premises via an agreement dated 24 January 2014.
- The 3rd defendant (landlord) also assigned leasehold rights to the appellant on the same date.
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Arguments
- The appellant has been non-suited due to unlawful assignment of lease and failure to register the assignment.
- Arguments are made regarding the applicability of Section 26 of the Maharashtra Rent Control Tenancy Act 1999 and Section 52 of the Transfer of Property Act.
- A review petition was filed but dismissed by the High Court.
- Counsel for the appellant argues that the bar of Section 26 would not apply based on a judgment of the Bombay High Court.
- The appellant’s transactions were impacted by the provisions of Section 52 of the Transfer of Property Act.
- Learned counsel for the plaintiff supported the impugned Judgment.
- Non-parties having independent rights and being sought for dispossession are entitled to have their rights investigated and adjudicated under Order 21 Rules 98 and 101.
- The decree obtained by the plaintiff is alleged to be collusive in nature.
- Allegations are made that the appellant’s claim lacks bona fides and that they have neither rights nor possession of the property.
- Originally, the Trial Court had dismissed the suit filed by the plaintiff.
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Analysis
- An assignment by the tenant can be ratified by the landlord if no explicit contract states otherwise.
- The alleged assignment by the so-called tenant in favor of the appellant is prohibited under Section 26.
- The case set up by the appellant regarding the landlord’s possession contradicts the agreement with the tenant claiming possession.
- The appellant’s case of paying a substantial amount to the ‘lawful tenant’ is deemed illegal under Section 26 of the Act.
- Without ratification and in the absence of a contrary contract, the alleged transfer by the ‘lawful tenant’ cannot be valid.
- Section 52 of the Transfer of Property Act may not apply in this case due to the illegal nature of the alleged transfer.
- The appellant has not made a convincing case for interference with the impugned judgments.
- The appellant’s argument about the inapplicability of Section 52 as an absolute bar is legally untenable.
- Ratification presupposes knowledge of the act being ratified, making further arguments unnecessary.
- The location of the premises within the amended law’s scope affects the validity of the tenancy.
- The case of the landlord ratifying the tenancy of the appellant does not hold up in court scrutiny.
- The assignment in favor of the appellant may not be affected by Section 52 or Order 21 Rule 102 if certain conditions are met.
- A specific legal framework applies to tenancies governed by the Act regarding subletting or assignment.
- The appellant’s arguments based on the amended Section 52 were not raised in the lower courts.
- The appellant relies on a tenancy or assignment by the ‘lawful tenant’ on January 24, 2014, subject to any contrary contract.
- Section 26 of the Act states that, despite any other law in force, a tenant cannot sublet, transfer, give on license, or assign their interest in the premises without the landlord’s consent.
- However, the landlord can allow the tenant to sublet or transfer with a contract to the contrary.
- Section 108(B)(j) of the Transfer of Property Act allows a lessee to transfer their interest with the landlord’s permission.
- The Bombay Amendment Act, 1939 allows for notice of pendency of a suit to restrict transfer of property during legal proceedings.
- Failure to register the lease does not invalidate the tenancy document.
- Section 55 of the Act mandates the registration of lease agreements, placing the responsibility on landlords.
- Ratification differs from consent.
- Consent is an express or implied agreement to waive the right to avoid an act, and precedes the transaction.
- Ratification involves the subsequent conduct of the principal to approve an act done by an agent lacking authority, making it effectively the principal’s own.
- For valid ratification, the person ratifying must have knowledge of all the material facts in the case.
- Effective ratification requires the conscious knowledge of the act beyond the agent’s authority having been done, and a conscious agreement to be bound by it through overt act or acquiescence.
- Ratification principle is based on the approval by a person of the act of another with full knowledge of the act.
- Acts done by one person on behalf of another without knowledge or authority may be ratified or disowned by the principal.
- If acts are ratified, they will have the same effects as if they were performed by the principal’s authority.
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Decision
- The court held that the defendant’s conduct amounted to interference with contractual relations.
- The defendant was aware of the existing contracts and intentionally disrupted them.
- Such interference caused economic harm to the plaintiff.
- The court found the defendant liable for intentional interference with contractual relations.
Case Title: SHABBIR MOHAMMAD SAYED Vs. NOOR JEHAN MUSHTER SHAIKH (2022 INSC 784)
Case Number: C.A. No.-005039-005040 / 2022
