A Tenant Cannot Defeat Rent Law by Unlawfully Subletting to a Multinational Company: Bombay High Court Dismisses Writ Petitions Challenging Eviction Decrees

“The Exemption Under Section 3(1)(b) of Maharashtra Rent Control Act Is Not a Shield for Illegal Sub-Tenants”— In a significant judgment  Justice N. J. Jamadar of the Bombay High Court decisively ruled that a multinational company in unlawful possession of premises cannot invoke the Rent Act exemption to nullify an eviction decree. Dismissing two writ petitions filed by Sud Chemie India Pvt. Ltd., the Court observed:

“The exemption is qua the premises let or sub-let lawfully. Allowing unlawful sub-letting to invoke exemption would render the protections of the Rent Act meaningless.”

The Court was dealing with petitions challenging the executability of eviction decrees passed by the Court of Small Causes, on the basis that the premises had been sub-let to a multinational entity and therefore stood exempt under Section 3(1)(b) of the Maharashtra Rent Control Act, 1999.

But the Bombay High Court made it clear that a tenant cannot, by unlawful subletting to an MNC, render the Court functus officio or destroy its jurisdiction.

The original eviction suits were filed by Kotak & Company Ltd. against the unknown heirs of two deceased tenants—Abbas Lalji and Aziz Lalji—and Sud Chemie India Pvt. Ltd., who was found in exclusive possession of the premises. The premises in question were located on the third floor of Navsari Building, D.N. Road, Fort, Mumbai, and were originally let out decades ago.

The tenancy was terminated after allegations of non-user and unauthorised subletting. The landlord claimed that after the deaths of the tenants, no heirs came forward, and that Sud Chemie, a multinational company, had illegally occupied the premises without consent, thereby violating statutory tenancy conditions. The Court of Small Causes decreed eviction on January 6, 2025, and issued warrants for possession.

Instead of appealing the decree, Sud Chemie filed applications under Section 151 CPC, claiming the decree was a nullity because the premises were allegedly exempt under Section 3(1)(b).

Rejecting the challenge, Justice Jamadar stated: “The defendant now seeks to turn around and say that the Rent Act does not apply, after having claimed its protection during trial. This volte-face undermines the judicial process.”

Referring to the company’s earlier stance before the trial court, the Court noted: “In paragraph 17 of the written statement, the defendant categorically stated that it was entitled to protection under the provisions of the Rent Control Act, 1999.”

Having denied subletting, denied exclusive possession, and claimed protection under the Act, Sud Chemie was now trying to argue that the Rent Act did not apply at all—a position the Court found to be fundamentally dishonest.

“A party that has consciously elected to take the benefit of a statute cannot, after the decree, claim that the statute does not apply.”

On Section 3(1)(b) and Lawful Letting:

The petitioner argued that the Rent Act does not apply to premises let or sub-let to multinational companies, and hence the Court of Small Causes had no jurisdiction. But Justice Jamadar firmly rejected this reasoning, holding:

“The exemption under Section 3(1)(b) is not a licence for illegal occupation. It contemplates premises lawfully let or sub-let to the specified entities.”

The Court further warned that accepting the petitioner's argument would lead to absurd consequences:

“If unlawful subletting to a multinational company is allowed to create an exemption under Section 3(1)(b), tenants would simply sublet premises when an eviction suit is imminent to defeat jurisdiction.”

Such a construction, the Court observed, would not only defeat the statutory purpose, but encourage fraudulent conduct.

On Jurisdiction of the Small Causes Court:

Emphasizing that the suit was primarily against the tenant, and the sub-tenant was only impleaded as an unauthorised occupant, the Court said:

“The jurisdiction of the Small Causes Court to adjudicate landlord-tenant disputes is not ousted merely because a sub-tenant happens to be a multinational company.”

The Court further held:

“Since the jural relationship between the plaintiff and the original tenant was beyond the pale of controversy, the suit was perfectly maintainable, and the Court had exclusive jurisdiction to try it.”

The decree passed on grounds of non-user, unlawful subletting, and bona fide requirement, was found to be valid and executable.

On Executing Court's Powers:

The Court reiterated the well-established principle:

“The executing court may refuse to execute a decree only when it finds an inherent lack of jurisdiction in the court that passed the decree—not merely because of debatable questions of law or fact.”

Citing the Supreme Court’s rulings in Hira Lal Patni v. Kali Nath and Sunder Dass v. Ram Prakash, the Court underlined: “An eviction decree can only be declared a nullity where the subject matter was wholly foreign to the court’s jurisdiction—not where a litigant changes position post-facto.”

Holding that there was no inherent lack of jurisdiction, and that the petitioners were barred from taking contradictory stands, the Bombay High Court concluded:

“The validity of the decree... cannot be questioned on the ground of inherent lack of jurisdiction.”

The Court dismissed both writ petitions, discharged the rule, and upheld the execution of the eviction decree.

Date of Decision: August 5, 2025