Om Prakash Vs. Suresh Kumar-30/01/2020

SUPREME COURT OF INDIA JUDGMENTS

Apart from the above, in our view lawyers are perceived to be their client’s agents. The law of agency may not strictly apply to the client lawyer’s relationship as lawyers or agents, lawyers have certain authority and certain duties. Because lawyers are also fiduciaries, their duties will sometimes be more demanding than those imposed on other agents. The authority agency status affords the lawyers to act for the client on the subject matter of the retainer. One of the most basic principles of the lawyer-client relationship is that lawyers owe fiduciary duties to their clients. As part of those duties, lawyers assume all the traditional duties that agents owe to their principals and, thus, have to respect the client’s autonomy to make decisions at a minimum, as to the objectives of the representation.

ACTS: Section 14(3)(c) of the Himachal Pradesh Urban Rent Control Act, 1987

COURT: High Court of Himachal Pradesh at Shimla

SUPREME COURT OF INDIA

Om Prakash Vs. Suresh Kumar

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Rajendra Diwan Vs. Pradeep Kumar Ranibala & Anr-10/12/2019

SUPREME COURT OF INDIA JUDGMENTS

State Legislature lacked legislative competence to enact Section 13(2) of the Rent Control Act. We, therefore, declare Section 13(2) of the Rent Control Act ultra vires the Constitution of India, null and void and of no effect.

SUPREME COURT OF INDIA

Rajendra Diwan Vs. Pradeep Kumar Ranibala & Anr.

[Civil Appeal No. 3613 of 2016]

[C.A. No. 10214 of 2016 and C.A. No. 3051 of 2017]

ACT: Section 13(2) of the Chhattisgarh Rent Control Act, 2011

FROM:Rent Control Tribunal at Raipur

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D. Sasi Kumar Vs. Soundararajan-23/09/2019

SUPREME COURT OF INDIA JUDGMENTS

RENT CONTROL: If as on the date of filing the petition the requirement subsists and it is proved, the same would be sufficient irrespective of the time-lapse in the judicial process coming to an end.

ACT: Sections 10(3)(a)(iii) and 14(1)(b) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960

SUPREME COURT OF INDIA

D. Sasi Kumar Vs. Soundararajan

[Civil Appeal Nos. 7546-7547 of 2019 arising out of SLP (Civil) Nos. 12365-66 of 2019]

A.S. Bopanna,J.

1. Leave granted.

2. The appellant herein was the petitioner before the Principal District Munsif/Rent Controller in the petition seeking eviction of the respondent therein. The said proceedings resulted in an appeal filed by the appellant herein before the Rent Control Appellate Authority (subCourt) which upheld the decision of the Rent Controller. Against the said concurrent orders the respondent herein approached the High Court of Judicature at Madras in the Civil Revision Petition. The High Court reversed the concurrent decisions, which is assailed by the appellant herein. Since the rank assigned to the parties is different in the various proceedings, for the sake of convenience and clarity the appellant herein who was the original petitioner before the Rent Control Court would be referred to as the ‘landlord’, while the respondent therein would be referred to as the ‘tenant’.

3. The brief facts are that the landlord contending to be the owner of the petition schedule premises had filed the petition under Sections 10(3)(a)(iii) and 14(1)(b) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (‘Act’, 1960′ for short) seeking for an order to direct the tenant to vacate and deliver the peaceful possession of the petition schedule property to the landlord. The manner in which the landlord had become the owner of the property based on a partition deed dated 24.02.1997 was referred. The tenant was in occupation of the premises for nonresidential purpose on a monthly rental of Rs.600/-.

The landlord contended that the premises is bonafide required by him for setting up a garment shop and in that regard had further contended that since the premises requires alterations to be made in that regard, the landlord also intended to demolish the existing structure and put up a construction suitable for his purpose. The tenant had appeared and opposed the said petition by filing his objection statement, denying the entire case of the landlord including his claim to ownership over the property as well as the jural relationship. It was contended that the intention of the landlord is only to secure higher rent and as such the claim cannot be considered as a bonafide requirement.

4. The Rent Control Court on having taken note of the rival contentions had framed two points for its consideration. The entire consideration revolved on the claim made by the landlord for own use and occupation as also the alternate premises available to the tenant. In order to establish the claim, the landlord examined himself as PW1 and marked the documents at Exhibits P1 to P5. The tenant, on the other hand, examined three witnesses and relied upon the documents at Exhibits R1 to R9. The Court of the Rent Controller on analysing the documents and the evidence of the parties arrived at the conclusion that the claim as put forth by the landlord is established and accordingly on allowing the petition had directed eviction of the tenant by granting two months time to vacate.

5. The tenant claiming to be aggrieved was before the Appellate Authority in the statutory appeal provided under Section 23 of the Act, 1960. The Appellate Authority having adverted to the contentions has reappreciated the oral as well as the documentary evidence. In that background making detailed reference to the legal position from the decisions cited before it had upheld the order dated 19.01.2011 passed by the Rent Control Court and had dismissed the appeal. Against such concurrent orders the tenant approached the High Court in the Civil Revision Petition. The High Court once again referring to the evidence and the conclusion reached by the courts below had differed from the same and accordingly allowed the petition by holding that the bonafide requirement as claimed by the landlord had not been proved. It is in that view the landlord claiming to be aggrieved is before this Court in this appeal.

6. Heard Shri R. Balasubramanium, learned senior counsel appearing for the landlord and Shri R. Gopalakrishnan, learned counsel for the tenant and perused the appeal papers.

7. At the outset it is to be taken note that the Civil Revision Petition before the High Court is not to be considered as in the nature of an appeal. The scope of consideration is only to take note as to whether there is any perversity in the satisfaction recorded by the original Court, namely, the Rent Controller and in that light as to whether the Appellate Authority under the statute has considered the aspect in the background of the evidence to arrive at the conclusion to its satisfaction. The reappreciation of the evidence in the Civil Revision Petition to indicate that another view is possible would not arise. To that extent, a perusal of the impugned order indicates that the High Court in fact has proceeded as if the entire evidence required reappreciation by it. In that background what is necessary to be taken note at this juncture is as to whether the Rent Controller has considered the matter in its correct perspective by satisfying himself of the bonafide claim, as required under Section 10(3)(e) of the Act, 1960 and the hardship if any to the tenant as contemplated under the proviso thereto.

8. In the instant case what is necessary to be taken note is that the tenant despite being in possession and knowing the ownership of the property and also paying the rent, has sought to urge a contention denying the jural relationship. The said aspect has been taken note by the Rent Controller and taking into consideration the partition deed dated 24.02.1997 and further taking into account the fact that the rent was being paid, has answered the said issue in favour of the landlord. Insofar as the requirement of the premises by the landlord the evidence as tendered has been taken note. In that regard the claim put forth is that the landlord intends to run a garment shop for which the premises is required and he also intends to demolish and reconstruct.

It is no doubt true that in an appropriate case when eviction is sought under Section 14(1)(b) of the Act, in proof thereof the approved plan for construction and financial capacity to construct is to be established. However, in the instant facts it is noticed that the eviction sought is not just for demolition and construction but is also for the bonafide use to set up a garment shop. The landlord, in that direction had also contended that the shop would require alteration and, in that view, he has decided to demolish and reconstruct. When that be the case even if not demolished and reconstructed the requirement of the premises is to run a garment shop even if it be by altering the premises to that extent. In that circumstance the eviction was also sought under Section 10(3)(a)(iii) of the Act, 1960.

9. Since the tenant was running a metal shop, the fact that the premises was suitable for running a garment shop cannot be in dispute. That apart what is also to be kept in view is, apart from the bonafide requirement of the landlord the consideration relating to hardship of the tenant, even if kept in view, in the instant case the Rent Controller has referred to the cross-examination of the tenant who was examined as RW1 wherein he has admitted that he has two buildings as business places in addition to the business being run in the petition schedule premises. Though he states that one floor is used as a godown and the other is in the name of his wife, the fact remains that he is running the business in the other shop for the benefit of his family.

In that circumstance when the need of the landlord was weighed in the background of the fact that the tenant had another premises wherein he is carrying on the business the Rent Controller as a statutory authority under the Act was of the opinion that the evidence available on record would be sufficient and recorded the satisfaction as provided under Section 10(3)(e) of the Act, 1960 and arrived at the conclusion that the landlord requires the premises for his bonafide occupation. Such conclusion while being taken note by the Appellate Authority has also received a similar consideration. In that light the nature of findings as recorded by the High Court is not appropriate in the facts and circumstance of the present case.

10. It is no doubt true that as observed by the High Court the plan for construction and the financial capacity to construct has not been placed as evidence. However, as already indicated above, the nature of the requirement as stated by the landlord would be for running a garment shop which in any event could be run in the premises as it exists with minor alterations though the desire of the landlord is also to demolish and reconstruct. Therefore, in that circumstance the mere nonproduction of the approved plan or the documents to indicate financial capacity at this juncture cannot be held fatal in the instant facts. That apart as indicated above, the need of the landlord while being examined has been weighed in the background of the fact that the tenant owns two other premises and no hardship will be caused. Though the High Court has in that regard also recorded that no documentary evidence is placed, the fact of possession of alternate premises has been admitted by the tenant in his cross-examination. There can be no better proof than admission.

11. Further the High Court has also erroneously arrived at the conclusion that the bonafide occupation as sought should be not only on the date of the petition but it should continue to be there on the date of final adjudication of rights. Firstly, there is no material on record to indicate that the need as pleaded at the time of filing the petition does not subsist at this point. Even otherwise such conclusion cannot be reached, when it cannot be lost sight that the very judicial process consumes a long period and because of the delay in the process if the benefit is declined it would only encourage the tenants to protract the litigation so as to defeat the right. In the instant case it is noticed that the petition filed by the landlord is of the year 2004 which was disposed of by the Rent Controller only in the year 2011.

The appeal was thereafter disposed of by the Appellate Authority in the year 2013. The High Court had itself taken time to dispose of the Revision Petition, only on 06.03.2017. The entire delay cannot be attributed to the landlord and deny the relief. If as on the date of filing the petition the requirement subsists and it is proved, the same would be sufficient irrespective of the time-lapse in the judicial process coming to an end. This Court in the case of Gaya Prasad vs. Pradeep Srivastava, (2001) 2 SCC 604 has held that the landlord should not be penalised for the slowness of the legal system and the crucial date for deciding the bonafide requirement of landlord is the date of application for eviction, which we hereby reiterate.

12. Therefore, in the present facts the bonafide requirement as claimed by the landlord stands established. The learned counsel for the tenant as an alternative submission had sought for sufficient time to vacate and handover the vacant possession if the tenant was required to vacate the premises, which also needs to be addressed in the order.

13. In the result the order dated 06.03.2017 passed by the High Court in CRP (NPD) No. 3754/2013 and MP No. 1/2013 is set aside. The order dated 19.01.2011 passed by the Principal District Munsif/Rent Controller, Vellore, Vellore District in Rent Control Original Petition No.43/2004 is restored. Taking into consideration all aspects, the tenant is granted time till 31.01.2021 to vacate and handover vacant possession of the premises to the landlord subject to the undertaking being filed in four weeks, wherein it be undertaken to voluntarily vacate and handover possession on or before 31.01.2021, without creating any thirdparty rights or damage to the property. The rents shall also be paid without default.

14. Accordingly, the appeals are allowed with no order as to costs. All pending applications shall stand disposed of.

J. (R. BANUMATHI)

J. (A.S. BOPANNA)

New Delhi,

September 23, 2019

Rent Control Laws

INDIAN BANK Vs. NIPPON ENTERPRISES SOUTH AND OTHERS

SUPREME COURT OF INDIA JUDGMENTS

It is a settled position of law that once tenancy is created, a tenant can be evicted only after following the due process of law, as prescribed under the provisions of the Rent Control Act. A tenant cannot be arbitrarily evicted by using the provisions of the SARFAESI Act as that would amount to stultifying the statutory rights of protection given to the tenant….

SUPREME COURT OF INDIA

DIVISION BENCH

( Before : Kurian Joseph and Rohinton Fali Nariman, JJ. )

INDIAN BANK — Appellant

Vs.

NIPPON ENTERPRISES SOUTH AND OTHERS — Respondent

Civil Appeal Nos. 5610-5611 of 2011

Decided on : 17-02-2016

SARFAESI Proceedings

Cases Referred

Vishal N. Kalsaria Vs. Bank of India, (2016) 1 SCALE 172

Counsel for Appearing Parties

Dhruv Mehta, Sr. Adv., Himanshu Munshi, Durga Dutt and Manish Garani, Advocates, for the Appellant; S. Nanda Kumar, Parivesh Singh, R. Satish Kumar, M.S. Saran Kumar, P. Srinivasan, Baljeet S. Rathore and V.N. Raghupathy, Advocates, for the Respondent

JUDGMENT

Kurian Joseph, J.—1. The short issue to be decided in these appeals is whether the Appellant, who has been successful in the SARFAESI proceedings against the owner of the secured assets, automatically can have the same say as against the tenant in the premises.

2. That issue has been considered in the various Judgments of this Court and the latest one is in “Vishal N. Kalsaria v. Bank of India and Ors.” in Crl. Appeal No. 52 of 2016 decided on 20.01.2016, reported in , (2016) 1 SCALE 172 and at paragraph 30, this Court has observed as under:

It is a settled position of law that once tenancy is created, a tenant can be evicted only after following the due process of law, as prescribed under the provisions of the Rent Control Act. A tenant cannot be arbitrarily evicted by using the provisions of the SARFAESI Act as that would amount to stultifying the statutory rights of protection given to the tenant….

3. In view of the above, these appeals are dismissed. However, we make it clear that the dismissal of these appeals shall not stand in the way of the Appellant-Bank taking recourse to any remedy under any law for evicting the first Respondent.

No costs.


(2016) AllSCR 866 : (2016) 3 JT 46 : (2016) 3 Scale 378

Tenanted premises can be used for another purpose than agreed in absence of negative covenant-SC

SEPTEMBER 18, 2018: The petition for eviction filed by the Landlord under Section 13 of the Haryana Urban (Control of Rent and Eviction) Act, 1973 was dismissed by the Rent Controller. The judgment of the Rent Controller was affirmed in appeal by the Appellate Authority, Faridabad and in revision by the High Court of Punjab and Haryana at Chandigarh. Aggrieved thereby the landlord filed appeal befote the Supreme Court .

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Consequence of letting out premises to same tenant for limited periods more than once after expiry of each such period

In Smt. Ddhanwanti Versus D.D. Gupta (1986 3 S.C.C 1 it was held that obtaining permission for letting out the premises to the same tenant for limited periods more than once after expiry of each such period would not by itself be sufficient to prove that the premises were available for being let out for the indefinite period without actually showing the absence of the landlords’ intention to occupy the premises. It was held that such successive grants of permission were not vitiated.Continue Reading

If the Rent Controller is held not to be a “Court”, whether any private complaint would be maintainable in respect of statements falsely made before it?

(2011) 13 SCALE 137

(SUPREME COURT OF INDIA)

Iqbal Singh Narang and Others Appellant
Versus
Veeran Narang Respondent

(Before : Altamas Kabir and Surinder Singh Nijjar, JJ.)

Criminal Appeal No. 2225 of 2011 (Arising out of SLP (Crl.) No. 5625 of 2007) : Decided On: 30-11-2011

Criminal procedure Code, 1973—Sections 195 and 340—Perjury—Making of false statement in court of Rent Controller—Though Rent Controller discharges quasi-judicial functions, he is not a Court, as understood in conventional sense and he cannot make complaint under Section 340 Cr.P.C.—Complaint could be made by a private party in the proceedings—Rent Controller, being a creature of Statute, has to act within four corners of Statute and could exercise only such powers as had been vested in him by Statute—No reason to quash proceedings.

ORDER

Altamas Kabir, J—Leave granted.

2. On 3rd August, 1998, the Appellant No. 1 filed an Ejectment Application under Section 13 of the East Punjab Urban Rent Restriction Act, 1949, for eviction of the Respondent from the premises in question.

3. The said Respondent filed Crl. RBT Complaint No. 283/19.8.2003/2.8.2005 against the Appellants before the Illaqa Magistrate, under Sections 193, 420, 120B Indian Penal Code, for allegedly making false statements in judicial proceedings before the Rent Controller, Amritsar. The statement of the Complainant/Respondent was recorded before the Chief Judicial Magistrate. The Complainant/ Respondent also filed an application under Sections 193/420/425 Indian Penal Code before the Rent Controller-cum-J.M. First Class, Amritsar, in Rent Application No. 111 of 1998, which had been filed by the Appellant No. 1, in which allegations had been made that the Appellant No. 1 had made false statements therein. By order dated 14th March, 2005, the Rent Controller disposed of the application filed by the Complainant/Respondent in the rent proceedings upon holding that the complaint filed under Sections 193, 420, 425 Indian Penal Code was yet to be decided and there was, therefore, no question of initiation of any action against the Appellant on the basis of the complaint filed by the Complainant/Respondent. According to the Appellant, since the Respondent had not challenged the order of the Rent Controller on the Application dated 14th March, 2005, the same had attained finality.

4. Appearing in support of the Appeal, Ms. Indu Malhotra, learned Senior Advocate, contended that it was obvious from the number of applications moved by the Respondent before the Rent Controller that the same was merely a ploy to delay the proceedings and cause prejudice to the Appellant No. 1. The facts reveal that the Respondent had delayed the rent proceedings, which are pending since 1998, by filing vexatious and frivolous applications.

5. On 20th April, 2006, the Judicial Magistrate, First Class, Amritsar, after observing that no offence under Section 420 Indian Penal Code had been made out against the accused, issued summons against them to face trial under Section 193 read with Section 120B Indian Penal Code.

6. Ms. Malhotra submitted that the Appellant Nos. 1 and 2 appeared before the Judicial Magistrate, First Class, Amritsar, and were released on bail vide order dated 16th May, 2006. Subsequently, the Appellants filed Crl. Misc. No. 32515 of 2006 before the Punjab & Haryana High Court under Section 482 of the Code of Criminal procedure, 1973, for quashing of the complaint filed by the Respondent under Sections 193/120B Indian Penal Code pending before the Judicial Magistrate, First Class, Amritsar, as also the Summoning Order dated 24th April, 2006. By its impugned judgment and order, the High Court dismissed Crl. Misc. No. 32515 of 2006 filed by the Appellants on the ground that the Rent Controller is not a Court within the meaning of Section 195(1) Code of Criminal procedure. and held that a private complaint would be maintainable in case of false evidence being adduced or recorded before the Rent Controller. Ms. Malhotra submitted that the High Court had failed to consider the fact that the ejectment proceedings initiated by the Appellant No. 1 were still pending before the Rent Controller and a similar application had been dismissed on the ground that the proceedings were still going on and that the Court had not formed any opinion in the matter.

7. Having held that the Rent Controller is not a Court within the meaning of Section 195(1) Code of Criminal procedure., the learned Single Judge also held that private complaints would be maintainable in case of allegations of false evidence before the Rent Controller. The learned Judge observed that the concept of the Rent Controller being a Court was erroneous and hence the decision of the Division Bench of the High Court in Ram Krishan v. Santra Devi 1986 (1) P&H (DB) PLR 567 was per incuriam.

8. On the basis of the aforesaid findings, the High Court chose not to interfere with the order passed by the learned Magistrate taking cognizance of the offence alleged to have been committed by the Appellants under Section 193/120B Indian Penal Code and dismissed the Misc. Case No. 32515-M of 2006 filed by the Appellants herein.

9. On behalf of the Respondent it was urged that the order of the learned Single Judge, impugned in this appeal, was based on a judgment of this Court and hence it did not suffer from any irregularity or illegality. It was also urged that since the Rent Controller was not a Court, a complaint under Section 195 Code of Criminal procedure. in respect of false statements made before it, would be maintainable at the instance of a private party, notwithstanding the bar to filing of such complaint, except on a complaint in writing of that Court, by such officer of the Court, as that Court may authorize in writing in such regard. Learned counsel submitted that no interference was called for with the order of the High Court and the appeal was liable to be dismissed.

10. The question which, therefore, arises for consideration in this appeal is that even if the Rent Controller is held not to be a “Court”, whether any private complaint would be maintainable in respect of statements alleged to have been falsely made before it. While disposing of the Revisional Application filed by the Appellants, the learned Single Judge of the Punjab & Haryana High Court took note of a judgment of the said Court in Ishwar Chand Gupta v. Chander Shekhar and Anr. (2001) 1 RCR Cri 171, in which it had been held that the Rent Controller was not a Court and that a complaint would lie under Section 195 Code of Criminal procedure. in respect of statement made before the Rent Controller at the instance of a private party.

11. The aforesaid question has fallen for consideration in several cases before this Court and the consistent view which has been taken is that the Rent Controller, being a creature of Statute, has to act within the four corners of the Statute and could exercise only such powers as had been vested in him by the Statute.

12. In the decision rendered by this Court in Prakash H. Jain v. Marie Fernandes, (2003) 8 SCC 431, this Court held that the Competent Authority under the Maharashtra Rent Control Act, 1999, is at best a statutory authority created for a definite purpose and to exercise powers in a quasi-judicial manner, but its powers were strictly circumscribed by the very statutory provisions which conferred upon it those powers and the same could be exercised in the manner provided therefor and subject to such conditions and limitations stipulated by the very provisions of law under which the Competent Authority itself was created. The aforesaid observations were made by this Court in the context of the powers conferred on the Competent Authority appointed under the Maharashtra Rent Control Act, 1999, which included powers to condone the delay in the filing of the proceedings. It is in such circumstances that it was observed by this Court that the High Court had rejected the submissions made on behalf of the Appellant therein that since it had all the trappings of a Court, the Competent Authority was a Court in the eye of law and consequently possessed inherent powers to condone the delay. The High Court also rejected the said prayer upon observing that statutory authorities have to act within the powers conferred on them by Statute.

13. The same views were also expressed by this Court in Om Prakash v. Ashwani Kumar Bassi, (2010) 9 SCC 183, wherein it was held that in the absence of a specific power being vested in the Rent Controller, it being a creature of statute, it could only act in terms of the powers vested in it by the Statute and could not, therefore, entertain an application under Section 5 of the Limitation Act for condonation of delay, since the Statute did not vest him with such power.

14. The aforesaid decisions of this Court establish that though the Rent Controller discharges quasi- judicial functions, he is not a Court, as understood in the conventional sense and he cannot, therefore, make a complaint under Section 340 Code of Criminal procedure. Consequently, as held by the High Court, a complaint could be made by a private party in the proceedings.

15. In addition to the above, we also see no reason to quash the proceedings in which the Appellants herein had been summoned under Section 193/420/120B Indian Penal Code. The Appeal is, accordingly, dismissed. The interim orders passed earlier are vacated.

The legal position of sub-tenant under Indian Law

  1. In the case of Associated Hotels of India Ltd., Delhi vs. S. B. Sardar Ranjit Singh, AIR 1968 SC 933,Apex Court held that when eviction is sought on the ground of subletting, the onus to prove subletting is on the landlord. It was further held that if the landlord prima facie shows that the third party is in exclusive possession of the premises let out for valuable consideration, it would then be for the tenant to rebut the evidence.
  2. In Helper Girdharbhai vs. Saiyed Mohmad Mirasaheb Kadri and Others, (1987) 3 SCC 538, this Court held that in a case where a tenant becomes a partner of a partnership firm and allows the firm to carry on business in the demised premises while he himself retains legal possession thereof, the act of the landlord does not amount to subletting. It was held that whether there is genuine partnership or not must be judged in the facts of each case in the light of the principles applicable to partnership.
  3. While dealing with the mischief contemplated under Section 14(1)(b) of the Delhi Rent Control Act, 1958 providing for eviction on the ground of subletting, this Court in the case of Jagan Nath (Deceased) through LRs. vs. Chander Bhan and others, (1988) 3 SCC 57, held:

    “The question for consideration is whether the mischief contemplated under Section 14(1)(b) of the Act has been committed as the tenant had sublet, assigned, or otherwise parted with the possession of the whole or part of the premises without obtaining the consent in writing of the landlord. There is no dispute that there was no consent in writing of the landlord in this case. There is also no evidence that there has been any subletting or assignment. The only ground perhaps upon which the landlord was seeking eviction was parting with possession. It is well settled that parting with possession meant giving possession to persons other than those to whom possession had been given by the lease and the parting with possession must have been by the. tenant; user by other person is not parting with possession so long as the tenant retains the legal possession himself, or in other words there must be vesting of possession by the tenant in another person by divesting himself not only of physical possession but also of the right to possession. So long as the tenant retains the right to possession there is no parting with possession in terms of clause (b) of Section 14(1) of the Act. Even though the father had retired from the business and the sons had been looking after the business, in the facts of this case, it cannot be said that the father had divested himself of the legal right to be in possession. If the father has a right to displace the possession of the occupants, i.e., his sons, it cannot be said that the tenant had parted with possession”

  4. The question whether the tenant has assigned, sublet or otherwise parted with the possession of the whole or any part of the premises without the permission of the landlord within the meaning of Section 13(1)(e) of the Rajasthan Premises (Control of Rent and Eviction) Act, 1950, fell for consideration in Gopal Saran vs. Satyanarayana, (1989) 3 SCC 56, This Court held :

    “sub-letting means transfer of an exclusive right to enjoy the property in favour of the third party. In this connection, reference may be made to the decision of this Court in Shalimar Tar Products Ltd. vs. H.C. Sharma ((1988) 1 SCC 70) where it was held that to constitute a sub-letting, there must be a parting of legal possession, i.e., possession with the right to include and also right to exclude others and whether in a particular case there was sub-letting was substantially a question of fact. In that case, a reference was made at page 77 of the report to the Treatise of Goa on Landlord and Tenant, 6th edn., at page 323, for the proposition that the mere act of letting other persons into possession by the tenant, and permitting them to use the premises for their own purposes, is not, so long as he retains the legal possession himself, a breach of covenant. In paragraph 17 of the report, it was observed that parting of the legal possession means possession with the right to include and also right to exclude others. In the last mentioned case, the observations of the Madras High Court in Gundalapalli Rangamannar Chetty vs. Desu Rangiah (AIR 1954 Mad 182) were approved by this Court in which the legal position in Jackson vs. Simons ((1923) 1 Ch 373) were relied upon. The Madras High Court had also relied on a judgment of scrutton L.J. in Chaplin vs. Smith ((1926) 1 KB 198) of the report where it was said :

    He did not assign, nor did he underlet. He was constantly on the premises himself and kept the key of them. He did business of his own as well as business of the company. In my view he allowed the company to use the premises while he himself remained in possession of them.

     

  5. A three-Judge Bench of this Court in Parvinder Singh vs. Renu Gautam and others, (2004) 4 SCC 794 commented upon the device adopted by tenants many a time in creating partnership as a camouflage to circumvent the provisions of the Rent Control Act. The following observations are worth noticing :

    “The rent control legislations which extend many a protection to the tenant, also provide for grounds of eviction. One such ground, most common in all the legislations, is sub-letting or parting with possession of the tenancy premises by the tenant. Rent control laws usually protect the tenant so long as he may himself use the premises but not his transferee inducted into possession of the premises, in breach of the contract or the law, which act is often done with the object of illegitimate profiteering or rack-renting. To defeat the provisions of law, a device is at times adopted by unscrupulous tenants and sub-tenants of bringing into existence a deed of partnership which gives the relationship of tenant and sub-tenant an outward appearance of partnership while in effect what has come into existence is a sub-tenancy or parting with possession camouflaged under the cloak of partnership. Merely because a tenant has entered into a partnership he cannot necessarily be held to have sub-let the premises or parted with possession thereof in favour of his partners. If the tenant is actively associated with the partnership business and retains the use and control over the tenancy premises with him, may be along with the partners, the tenant may not be said to have parted with possession. However, if the user and control of the tenancy premises has been parted with and deed of partnership has been drawn up as an indirect method of collecting the consideration for creation of sub-tenancy or for providing a cloak or cover to conceal a transaction not permitted by law, the Court is not estopped from tearing the veil of partnership and finding out the real nature of transaction entered into between the tenant and the alleged sub-tenant.

    A person having secured a lease of premises for the purpose of his business may be in need of capital or finance or someone to assist him in his business and to achieve such like purpose he may enter into partnership with strangers. Quite often partnership is entered into between the members of any family as a part of tax planning. There is no stranger brought on the premises. So long as the premises remain in occupation of the tenant or in his control, a mere entering into partnership may not provide a ground for eviction by running into conflict with prohibition against sub-letting or parting with possession. This is a general statement of law which ought to be read in the light of the lease agreement and the law governing the tenancy. There are cases wherein the tenant sub-lets the premises or parts with possession in defiance of the terms of lease or the rent control legislation and in order to save himself from the peril of eviction brings into existence, a deed of partnership between him and his sub-lessee to act as a cloak on the reality of the transaction. The existence of deed of partnership between the tenant and the alleged sub-tenant would not preclude the landlord from bringing on record material and circumstances, by adducing evidence or by means of cross-examination, making out a case of sub-letting or parting with possession or interest in tenancy premises by the tenant in favour of a third person. The rule as to exclusion of oral by documentary evidence governs the parties to the deed in writing. A stranger to the document is not bound by the terms of the document and is, therefore, not excluded from demonstrating the untrue or collusive nature of the document or the fraudulent or illegal purpose for which it was brought into being. An enquiry into reality of transaction is not excluded merely by availability of writing reciting the transaction………”

     

  6. In yet another decision, a three-Judge Bench of this Court in Mahendra Saree Emporium (II) vs. G. V. Srinivasa Murthy, (2005) 1 SCC 481 considered earlier decisions, few of which have been referred above, while dealing with a matter relating to sub-letting of the premises within the meaning of Section 21(1)(f) of Karnataka Rent Control Act, 1961 and observed as follows :

    “The term “sub-let” is not defined in the Act – new or old. However, the definition of “lease” can be adopted mutatis mutandis for defining “sub-lease”. What is “lease” between the owner of the property and his tenant becomes a sub-lease when entered into between the tenant and tenant of the tenant, the latter being sub-tenant qua the owner-landlord. A lease of immovable property as defined in Section 105 of the Transfer of Property Act, 1882 is a transfer of a right to enjoy such property made for a certain time for consideration of a price paid or promised. A transfer of a right to enjoy such property to the exclusion of all others during the term of the lease is sine qua non of a lease. A sub-lease would imply parting with by the tenant of the right to enjoy such property in favour of his subtenant. Different types of phraseology are employed by different State Legislatures making provision for eviction on the ground of sub-letting. Under Section 21(1)(f) of the old Act, the phraseology employed is quite wide. It embraces within its scope sub-letting of the whole or part of the premises as also assignment or transfer in any other manner of the lessee’s interest in the tenancy premises. The exact nature of transaction entered into or arrangement or understanding arrived at between the tenant and alleged sub-tenant may not be in the knowledge of the landlord and such a transaction being unlawful would obviously be entered into in secrecy depriving the owner-landlord of the means of ascertaining the facts about the same. However still, the rent control legislation being protective for the tenant and eviction being not permissible except on the availability of ground therefor having been made out to the satisfaction of the Court or the Controller, the burden of proving the availability of the ground is cast on the landlord i.e. the one who seeks eviction. In Krishnawati vs. Hans Raj ((1974) 1 SCC 289) reiterating the view taken in Associated Hotels of India Ltd. vs. S. B. Sardar Ranjit Singh ((1968) 2 SCR 548) this Court so noted the settled law (SCC p. 293, para 6) :

    “(The onus to prove sub-letting is on the landlord. If the landlord prima facie shows that the occupant who was in exclusive possession of the premises let out for valuable consideration, it would then be for the tenant to rebut the evidence.”

    Thus, in the case of sub-letting, the onus lying on the landlord would stand discharged by adducing prima facie proof of the fact that the alleged sub-tenant was in exclusive possession of the premises or, to borrow the language of Section 105 of the Transfer of Property Act, was holding right to enjoy such property. A presumption of sub-letting may then be raised and would amount to proof unless rebutted. In the context of the premises having been sub-let or possession parted with by the tenant by adopting the device of entering into partnership, it would suffice for us to notice three decisions of this Court. Murlidhar vs. Chuni Lal (1970 Ren CJ 922) is a case where a shop was let out to a firm of the name of Chuni Lal Gherulal. The firm consisted of three partners, namely, Chuni Lal, Gherulal and Meghraj. This partnership closed and a new firm by the name of Meghraj Bansidhar commenced its business with partners Meghraj and Bansidhar. The tenant-firm was sought to be evicted on the ground that the old firm and the new firm being two different legal entities, the occupation of the shop by the new firm amounted to sub-letting. This Court discarded the contention as “entirely without substance” and held that a partnership firm is not a legal entity; the firm name is only a compendious way of describing the partners of the firm. Therefore, occupation by a firm is only occupation by its partners. The two firms, old and new, had a common partner, namely, Meghraj, who continued to be in possession and it was fallacious to contend that earlier he was in possession in the capacity of partner of the old firm and later as a partner of the new firm. The landlord, in order to succeed, has to prove it as a fact that there was a sub-letting by his tenant to another firm. As the premises continued to be in possession of one of the original tenants, Meghraj, then by a mere change in the constitution of the firm of which Meghraj continued to be a partner, an inference as to sub-letting could not be drawn in the absence of further evidence having been adduced to establish sub-letting. In Helper Girdharbhai vs. Saiyed Mohd. Mirasaheb Kadri ((1987) 3 SCC 538) the tenant had entered into a partnership and the firm was carrying on business in the tenancy premises. This Court held that if there was a partnership firm of which the appellant was a partner as a tenant, the same would not amount to sub-letting leading to forfeiture of the tenancy; for, there cannot be a subletting unless the lessee parted with the legal possession. The mere fact that another person is allowed to use the premises while the lessee retains the legal possession is not enough to create a sub-lease. Thus, the thrust is, as laid down by this Court, on finding out who is in legal possession of the premises. So long as the legal possession remains with the tenant the mere facturn of the tenant having entered into partnership for the purpose of carrying on the business in the tenancy premises would not amount to sub-letting. In Parvinder Singh vs. Renu Gautam ((2004) 4 SCC 794) (Para 8) a three-Judge Bench of this Court devised the test in these terms (SCC p. 799, para 8) :

    “If the tenant is actively associated with the partnership business and retains the use and control over the tenancy premises with him, may be along with the partners, the tenant may not be said to have parted with possession. However, if the user and control of the tenancy premises has been parted with and deed of partnership has been drawn up as an indirect method of collecting the consideration for creation of subtenancy or for providing a cloak or cover to conceal a transaction not permitted by law, the Court is not estopped from tearing the veil of partnership and finding out the real nature of transaction entered into between the tenant and the alleged sub-tenant”.”

     

  7. In Nirmal Kanta (Dead) Through L.Rs. vs. Ashok Kumar and another, (2008) 7 SCC 722, this Court held thus :

    “What constitutes sub-letting has repeatedly fallen for the consideration of this Court in various cases and it is now well-established that a sub-tenancy or a sub-letting comes into existence when the tenant inducts a third party stranger to the landlord into the tenanted accommodation and parts with possession thereof wholly or in part in favour of such third party and puts him in exclusive possession thereof. The lessor and/or a landlord seeking eviction of a lessee or tenant alleging creation of a sub-tenancy has to prove such allegation by producing proper evidence to that effect. Once it is proved that the lessee and/ or tenant has parted with exclusive possession of the demised premises for a monetary consideration, the creation of a subtenancy and/or the allegation of sub-letting stands established.”

    28. The legal position that emerges from the aforesaid decisions can be summarised thus :

    (i) In order to prove mischief of sub-letting as a ground for eviction under rent control laws, two ingredients have to be established, (one) parting with possession of tenancy or part of it by tenant in favour of a third party with exclusive right of possession, and (two) that such parting with possession has been done without the consent of the landlord and in lieu of compensation or rent.

    (ii) Inducting a partner or partners in the business or profession by a tenant by itself does not amount to sub-letting. However, if the purpose of such partnership is ostensible and a deed of partnership is drawn to conceal the real transaction of sub-letting, the Court may tear the veil of partnership to find out the real nature of transaction entered into by the tenant.

    (iii) The existence of deed of partnership between tenant and alleged sub-tenant or ostensible transaction in any other form would not preclude the landlord from bringing on record material and circumstances, by adducing evidence or by means of cross-examination, making out a case of sub-letting or parting with possession in tenancy premises by the tenant in favour of a third person.

    (iv) If tenant is actively associated with the partnership business and retains the control over the tenancy premises with him, may be along with partners, the tenant may not be said to have parted with possession.

    (v) Initial burden of proving sub-letting is on landlord but once he is able to establish that a third party is in exclusive possession of the premises and that tenant has no legal possession of the tenanted premises, the onus shifts to tenant to prove the nature of occupation of such third party and that he (tenant) continues to hold legal possession in tenancy premises.

    (vi) In other words, initial burden lying on landlord would stand discharged by adducing prima facie proof of the fact that a party other than tenant was in exclusive possession of the premises. A presumption of sub-letting may then be raised and would amount to proof unless rebutted.

     

  8. In State through Special Cell, New Delhi vs. Navjot Sandhu alias Afshan Guru and others, (2003) 6 SCC 641 this Court explained the power of the High Court under Article 227 thus :

    “Thus the law is that Article 227 of the Constitution of India gives the High Court the power of superintendence over all Courts and Tribunals throughout the territories in relation to which it exercises jurisdiction. This jurisdiction cannot be limited or fettered by any Act of the State Legislature. The supervisory jurisdiction extends to keeping the subordinate Tribunals within the limits of their authority and to seeing that they obey the law. The powers under Article 227 are wide and can be used, to meet the ends of justice. They can be used to interfere even with an interlocutory order. However the power under Article 227 is a discretionary power and it is difficult to attribute to an order of the High Court, such a source of power, when the High Court itself does not in terms purport to exercise any such discretionary power. It is settled law that this power of judicial superintendence, under Article 227, must be exercised sparingly and only to keep subordinate Courts and Tribunals within the bounds of their authority and not to correct mere errors. Further, where the statute bans the exercise of revisional powers it would require very exceptional circumstances to warrant interference under Article 227 of the Constitution of India since the power of superintendence was not meant to circumvent statutory law. It is settled law that the jurisdiction under Article 227 could not be exercised “as the cloak of an appeal in disguise”.”

    The aforesaid two decisions and few other decisions, namely, Chandavarkar Sita Ratna Rao vs. Ashalata S. Guram, (1986) 4 SCC 447; State of Maharashtra vs. Milind and others (2001) 1 SCC 4, Ranjeet Singh vs. Ravi Prakash, (2004) 3 SCC 682, came to be considered by this Court in the case of Shamshad Ahmad and others vs. Tilak Raj Bajaj (Deceased) through L.Rs. and others, (2008) 9 SCC 1 and this Court held :

    “Though powers of a High Court under Articles 226 and 227 are very wide and extensive over all Courts and Tribunals throughout the territories in relation to which it exercises jurisdiction, such powers must be exercised within the limits of law. The power is supervisory in nature. The High Court does not act as a Court of appeal or a Court of error. It can neither review nor re-appreciate, nor re-weigh the evidence upon which determination of a subordinate Court or inferior Tribunal purports to be based or to correct errors of fact or even of law and to substitute its own decision for that of the inferior Court or Tribunal. The powers are required to be exercised most sparingly and only in appropriate cases in order to keep the subordinate Courts and inferior Tribunals within the limits of law.”

 

Sub-tenancy under the West Bengal Premises Tenancy Act 1997

West Bengal Premises Tenancy Act 1997

26. Creation and termination of sub-tenancy to be notified. – (1) Where after the commencement of this Act, any premises is sublet, either in whole or in part, by the tenant with the previous consent in writing or the landlord, the tenant and every sub-tenant to whom the premises is sublet, shall give notice to the landlord in the prescribed manner of the creation of the sub-tenancy within one month from the date of such subletting and shall, in the prescribed manner, notify the termination of such subtenancy within one month of such termination.

(2) Where before the commencement of this Act, the tenant has, with or without the consent of the landlord, sublet any premises either in whole or in part, the tenant and every sub-tenant to whom the premises has been sublet, shall give notice to the landlord of such subletting in the prescribed manner [within two years of the commencement of this Act] and shall, in the prescribed manner, notify the termination of such sub-tenancy within one month of such termination.

(3) Where in any case referred to in sub-section (2), there is no consent in writing of the landlord, and the landlord denies that he gave any oral consent, the Controller shall, on an application made to him in this behalf either by the landlord or by the sub-tenant within two months of the date of receipt of the notice of subletting by the landlord or the issue of the notice by the sub-tenant, as the case may be, by order, declare that the interest of the tenant in so much of the premises as has been sublet shall cease and that the sub-tenant shall become a tenant directly under the landlord from the date of the order. The Controller shall also fix the rents payable by the tenant and the sub-tenant to the landlord from the date of the order. Rent so fixed shall be deemed to be the fair rent for the purposes of this Act.


Court Cases

  1. In the case of Associated Hotels of India Ltd., Delhi vs. S. B. Sardar Ranjit Singh, AIR 1968 SC 933, Apex Court held that when eviction is sought on the ground of subletting, the onus to prove subletting is on the landlord. It was further held that if the landlord prima facie shows that the third party is in exclusive possession of the premises let out for valuable consideration, it would then be for the tenant to rebut the evidence.
  2. In Helper Girdharbhai vs. Saiyed Mohmad Mirasaheb Kadri and Others, (1987) 3 SCC 538, this Court held that in a case where a tenant becomes a partner of a partnership firm and allows the firm to carry on business in the demised premises while he himself retains legal possession thereof, the act of the landlord does not amount to subletting. It was held that whether there is genuine partnership or not must be judged in the facts of each case in the light of the principles applicable to partnership.
  3. While dealing with the mischief contemplated under Section 14(1)(b) of the Delhi Rent Control Act, 1958 providing for eviction on the ground of subletting, this Court in the case of Jagan Nath (Deceased) through LRs. vs. Chander Bhan and others, (1988) 3 SCC 57, held:“The question for consideration is whether the mischief contemplated under Section 14(1)(b) of the Act has been committed as the tenant had sublet, assigned, or otherwise parted with the possession of the whole or part of the premises without obtaining the consent in writing of the landlord. There is no dispute that there was no consent in writing of the landlord in this case. There is also no evidence that there has been any subletting or assignment. The only ground perhaps upon which the landlord was seeking eviction was parting with possession. It is well settled that parting with possession meant giving possession to persons other than those to whom possession had been given by the lease and the parting with possession must have been by the. tenant; user by other person is not parting with possession so long as the tenant retains the legal possession himself, or in other words there must be vesting of possession by the tenant in another person by divesting himself not only of physical possession but also of the right to possession. So long as the tenant retains the right to possession there is no parting with possession in terms of clause (b) of Section 14(1) of the Act. Even though the father had retired from the business and the sons had been looking after the business, in the facts of this case, it cannot be said that the father had divested himself of the legal right to be in possession. If the father has a right to displace the possession of the occupants, i.e., his sons, it cannot be said that the tenant had parted with possession”
  4. The question whether the tenant has assigned, sublet or otherwise parted with the possession of the whole or any part of the premises without the permission of the landlord within the meaning of Section 13(1)(e) of the Rajasthan Premises (Control of Rent and Eviction) Act, 1950, fell for consideration in Gopal Saran vs. Satyanarayana, (1989) 3 SCC 56, This Court held :“sub-letting means transfer of an exclusive right to enjoy the property in favour of the third party. In this connection, reference may be made to the decision of this Court in Shalimar Tar Products Ltd. vs. H.C. Sharma ((1988) 1 SCC 70- where it was held that to constitute a sub-letting, there must be a parting of legal possession, i.e., possession with the right to include and also right to exclude others and whether in a particular case there was sub-letting was substantially a question of fact. In that case, a reference was made at page 77 of the report to the Treatise of Goa on Landlord and Tenant, 6th edn., at page 323, for the proposition that the mere act of letting other persons into possession by the tenant, and permitting them to use the premises for their own purposes, is not, so long as he retains the legal possession himself, a breach of covenant. In paragraph 17 of the report, it was observed that parting of the legal possession means possession with the right to include and also right to exclude others. In the last mentioned case, the observations of the Madras High Court in Gundalapalli Rangamannar Chetty vs. Desu Rangiah (AIR 1954 Mad 182) were approved by this Court in which the legal position in Jackson vs. Simons ((1923) 1 Ch 373) were relied upon. The Madras High Court had also relied on a judgment of scrutton L.J. in Chaplin vs. Smith ((1926) 1 KB 198) of the report where it was said :He did not assign, nor did he underlet. He was constantly on the premises himself and kept the key of them. He did business of his own as well as business of the company. In my view he allowed the company to use the premises while he himself remained in possession of them.

     

  5. A three-Judge Bench of Supreme Court in Parvinder Singh vs. Renu Gautam and others, (2004) 4 SCC 794 commented upon the device adopted by tenants many a time in creating partnership as a camouflage to circumvent the provisions of the Rent Control Act. The following observations are worth noticing: “The rent control legislations which extend many a protection to the tenant, also provide for grounds of eviction. One such ground, most common in all the legislations, is sub-letting or parting with possession of the tenancy premises by the tenant. Rent control laws usually protect the tenant so long as he may himself use the premises but not his transferee inducted into possession of the premises, in breach of the contract or the law, which act is often done with the object of illegitimate profiteering or rack-renting. To defeat the provisions of law, a device is at times adopted by unscrupulous tenants and sub-tenants of bringing into existence a deed of partnership which gives the relationship of tenant and sub-tenant an outward appearance of partnership while in effect what has come into existence is a sub-tenancy or parting with possession camouflaged under the cloak of partnership. Merely because a tenant has entered into a partnership he cannot necessarily be held to have sub-let the premises or parted with possession thereof in favour of his partners. If the tenant is actively associated with the partnership business and retains the use and control over the tenancy premises with him, may be along with the partners, the tenant may not be said to have parted with possession. However, if the user and control of the tenancy premises has been parted with and deed of partnership has been drawn up as an indirect method of collecting the consideration for creation of sub-tenancy or for providing a cloak or cover to conceal a transaction not permitted by law, the Court is not estopped from tearing the veil of partnership and finding out the real nature of transaction entered into between the tenant and the alleged sub-tenant.A person having secured a lease of premises for the purpose of his business may be in need of capital or finance or someone to assist him in his business and to achieve such like purpose he may enter into partnership with strangers. Quite often partnership is entered into between the members of any family as a part of tax planning. There is no stranger brought on the premises. So long as the premises remain in occupation of the tenant or in his control, a mere entering into partnership may not provide a ground for eviction by running into conflict with prohibition against sub-letting or parting with possession. This is a general statement of law which ought to be read in the light of the lease agreement and the law governing the tenancy. There are cases wherein the tenant sub-lets the premises or parts with possession in defiance of the terms of lease or the rent control legislation and in order to save himself from the peril of eviction brings into existence, a deed of partnership between him and his sub-lessee to act as a cloak on the reality of the transaction. The existence of deed of partnership between the tenant and the alleged sub-tenant would not preclude the landlord from bringing on record material and circumstances, by adducing evidence or by means of cross-examination, making out a case of sub-letting or parting with possession or interest in tenancy premises by the tenant in favour of a third person. The rule as to exclusion of oral by documentary evidence governs the parties to the deed in writing. A stranger to the document is not bound by the terms of the document and is, therefore, not excluded from demonstrating the untrue or collusive nature of the document or the fraudulent or illegal purpose for which it was brought into being. An enquiry into reality of transaction is not excluded merely by availability of writing reciting the transaction………”

     

  6. In yet another decision, a three-Judge Bench of Supreme Court in Mahendra Saree Emporium (II) vs. G. V. Srinivasa Murthy, (2005) 1 SCC 481 considered earlier decisions, few of which have been referred above, while dealing with a matter relating to sub-letting of the premises within the meaning of Section 21(1)(f) of Karnataka Rent Control Act, 1961 and observed as follows :“The term “sub-let” is not defined in the Act – new or old. However, the definition of “lease” can be adopted mutatis mutandis for defining “sub-lease”. What is “lease” between the owner of the property and his tenant becomes a sub-lease when entered into between the tenant and tenant of the tenant, the latter being sub-tenant qua the owner-landlord. A lease of immovable property as defined in Section 105 of the Transfer of Property Act, 1882 is a transfer of a right to enjoy such property made for a certain time for consideration of a price paid or promised. A transfer of a right to enjoy such property to the exclusion of all others during the term of the lease is sine qua non of a lease. A sub-lease would imply parting with by the tenant of the right to enjoy such property in favour of his subtenant. Different types of phraseology are employed by different State Legislatures making provision for eviction on the ground of sub-letting. Under Section 21(1)(f) of the old Act, the phraseology employed is quite wide. It embraces within its scope sub-letting of the whole or part of the premises as also assignment or transfer in any other manner of the lessee’s interest in the tenancy premises. The exact nature of transaction entered into or arrangement or understanding arrived at between the tenant and alleged sub-tenant may not be in the knowledge of the landlord and such a transaction being unlawful would obviously be entered into in secrecy depriving the owner-landlord of the means of ascertaining the facts about the same. However still, the rent control legislation being protective for the tenant and eviction being not permissible except on the availability of ground therefor having been made out to the satisfaction of the Court or the Controller, the burden of proving the availability of the ground is cast on the landlord i.e. the one who seeks eviction. In Krishnawati vs. Hans Raj ((1974) 1 SCC 289) reiterating the view taken in Associated Hotels of India Ltd. vs. S. B. Sardar Ranjit Singh ((1968) 2 SCR 548) this Court so noted the settled law (SCC p. 293, para 6) :“(The onus to prove sub-letting is on the landlord. If the landlord prima facie shows that the occupant who was in exclusive possession of the premises let out for valuable consideration, it would then be for the tenant to rebut the evidence.”

    Thus, in the case of sub-letting, the onus lies on the landlord would stand discharged by adducing prima facie proof of the fact that the alleged sub-tenant was in exclusive possession of the premises or, to borrow the language of Section 105 of the Transfer of Property Act, was holding right to enjoy such property. A presumption of sub-letting may then be raised and would amount to proof unless rebutted. In the context of the premises having been sub-let or possession parted with by the tenant by adopting the device of entering into partnership, it would suffice for us to notice three decisions of this Court. Murlidhar vs. Chuni Lal (1970 Ren CJ 922) is a case where a shop was let out to a firm of the name of Chuni Lal Gherulal. The firm consisted of three partners, namely, Chuni Lal, Gherulal and Meghraj. This partnership closed and a new firm by the name of Meghraj Bansidhar commenced its business with partners Meghraj and Bansidhar. The tenant-firm was sought to be evicted on the ground that the old firm and the new firm being two different legal entities, the occupation of the shop by the new firm amounted to sub-letting. This Court discarded the contention as “entirely without substance” and held that a partnership firm is not a legal entity; the firm name is only a compendious way of describing the partners of the firm. Therefore, occupation by a firm is only occupation by its partners. The two firms, old and new, had a common partner, namely, Meghraj, who continued to be in possession and it was fallacious to contend that earlier he was in possession in the capacity of partner of the old firm and later as a partner of the new firm. The landlord, in order to succeed, has to prove it as a fact that there was a sub-letting by his tenant to another firm. As the premises continued to be in possession of one of the original tenants, Meghraj, then by a mere change in the constitution of the firm of which Meghraj continued to be a partner, an inference as to sub-letting could not be drawn in the absence of further evidence having been adduced to establish sub-letting. In Helper Girdharbhai vs. Saiyed Mohd. Mirasaheb Kadri ((1987) 3 SCC 538) the tenant had entered into a partnership and the firm was carrying on business in the tenancy premises. This Court held that if there was a partnership firm of which the appellant was a partner as a tenant, the same would not amount to sub-letting leading to forfeiture of the tenancy; for, there cannot be a subletting unless the lessee parted with the legal possession. The mere fact that another person is allowed to use the premises while the lessee retains the legal possession is not enough to create a sub-lease. Thus, the thrust is, as laid down by this Court, on finding out who is in legal possession of the premises. So long as the legal possession remains with the tenant the mere facturn of the tenant having entered into partnership for the purpose of carrying on the business in the tenancy premises would not amount to sub-letting. In Parvinder Singh vs. Renu Gautam ((2004) 4 SCC 794) (Para 8) a three-Judge Bench of this Court devised the test in these terms (SCC p. 799, para 8) :

    “If the tenant is actively associated with the partnership business and retains the use and control over the tenancy premises with him, may be along with the partners, the tenant may not be said to have parted with possession. However, if the user and control of the tenancy premises has been parted with and deed of partnership has been drawn up as an indirect method of collecting the consideration for creation of subtenancy or for providing a cloak or cover to conceal a transaction not permitted by law, the Court is not estopped from tearing the veil of partnership and finding out the real nature of transaction entered into between the tenant and the alleged sub-tenant”.”

     

  7. In Nirmal Kanta (Dead) Through L.Rs. vs. Ashok Kumar and another, (2008) 7 SCC 722, Supreme Court held thus :“What constitutes sub-letting has repeatedly fallen for the consideration of this Court in various cases and it is now well-established that a sub-tenancy or a sub-letting comes into existence when the tenant inducts a third party stranger to the landlord into the tenanted accommodation and parts with possession thereof wholly or in part in favour of such third party and puts him in exclusive possession thereof. The lessor and/or a landlord seeking eviction of a lessee or tenant alleging creation of a sub-tenancy has to prove such allegation by producing proper evidence to that effect. Once it is proved that the lessee and/ or tenant has parted with exclusive possession of the demised premises for a monetary consideration, the creation of a subtenancy and/or the allegation of sub-letting stands established.”28. The legal position that emerges from the aforesaid decisions can be summarised thus :

    (i) In order to prove mischief of sub-letting as a ground for eviction under rent control laws, two ingredients have to be established, (one) parting with possession of tenancy or part of it by tenant in favour of a third party with exclusive right of possession, and (two) that such parting with possession has been done without the consent of the landlord and in lieu of compensation or rent.

    (ii) Inducting a partner or partners in the business or profession by a tenant by itself does not amount to sub-letting. However, if the purpose of such partnership is ostensible and a deed of partnership is drawn to conceal the real transaction of sub-letting, the Court may tear the veil of partnership to find out the real nature of transaction entered into by the tenant.

    (iii) The existence of deed of partnership between tenant and alleged sub-tenant or ostensible transaction in any other form would not preclude the landlord from bringing on record material and circumstances, by adducing evidence or by means of cross-examination, making out a case of sub-letting or parting with possession in tenancy premises by the tenant in favour of a third person.

    (iv) If tenant is actively associated with the partnership business and retains the control over the tenancy premises with him, may be along with partners, the tenant may not be said to have parted with possession.

    (v) Initial burden of proving sub-letting is on landlord but once he is able to establish that a third party is in exclusive possession of the premises and that tenant has no legal possession of the tenanted premises, the onus shifts to tenant to prove the nature of occupation of such third party and that he (tenant) continues to hold legal possession in tenancy premises.

    (vi) In other words, initial burden lying on landlord would stand discharged by adducing prima facie proof of the fact that a party other than tenant was in exclusive possession of the premises. A presumption of sub-letting may then be raised and would amount to proof unless rebutted.

     

  8. In State through Special Cell, New Delhi vs. Navjot Sandhu alias Afshan Guru and others, (2003) 6 SCC 641 Supreme Court explained the power of the High Court under Article 227 thus :

    “Thus the law is that Article 227 of the Constitution of India gives the High Court the power of superintendence over all Courts and Tribunals throughout the territories in relation to which it exercises jurisdiction. This jurisdiction cannot be limited or fettered by any Act of the State Legislature. The supervisory jurisdiction extends to keeping the subordinate Tribunals within the limits of their authority and to seeing that they obey the law. The powers under Article 227 are wide and can be used, to meet the ends of justice. They can be used to interfere even with an interlocutory order. However the power under Article 227 is a discretionary power and it is difficult to attribute to an order of the High Court, such a source of power, when the High Court itself does not in terms purport to exercise any such discretionary power. It is settled law that this power of judicial superintendence, under Article 227, must be exercised sparingly and only to keep subordinate Courts and Tribunals within the bounds of their authority and not to correct mere errors. Further, where the statute bans the exercise of revisional powers it would require very exceptional circumstances to warrant interference under Article 227 of the Constitution of India since the power of superintendence was not meant to circumvent statutory law. It is settled law that the jurisdiction under Article 227 could not be exercised “as the cloak of an appeal in disguise”.”

    The aforesaid two decisions and few other decisions, namely, Chandavarkar Sita Ratna Rao vs. Ashalata S. Guram, (1986) 4 SCC 447; State of Maharashtra vs. Milind and others (2001) 1 SCC 4, Ranjeet Singh vs. Ravi Prakash, (2004) 3 SCC 682, came to be considered by this Court in the case of Shamshad Ahmad and others vs. Tilak Raj Bajaj (Deceased) through L.Rs. and others, (2008) 9 SCC 1 and this Court held :

    “Though powers of a High Court under Articles 226 and 227 are very wide and extensive over all Courts and Tribunals throughout the territories in relation to which it exercises jurisdiction, such powers must be exercised within the limits of law. The power is supervisory in nature. The High Court does not act as a Court of appeal or a Court of error. It can neither review nor re-appreciate, nor re-weigh the evidence upon which determination of a subordinate Court or inferior Tribunal purports to be based or to correct errors of fact or even of law and to substitute its own decision for that of the inferior Court or Tribunal. The powers are required to be exercised most sparingly and only in appropriate cases in order to keep the subordinate Courts and inferior Tribunals within the limits of law.”