M.V. Ramachandrasa Since Deceased Represented By Legal Heirs vs. M/S Mahendra Watch Company

1

REPORTABLE

IN THE SUPREME COURT OF INDIA
2026 INSC 348
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4353 OF 2026
[Arising out of SLP (C) No. 25957 of 2023]

SRI M.V. RAMACHANDRASA SINCE DECEASED
REPRESENTED BY LEGAL HEIRS … APPELLANT(S)

VERSUS

M/S. MAHENDRA WATCH COMPANY
REPRESENTED BY ITS PARTNERS
& ORS. … RESPONDENT(S)

J U D G M E N T

R. MAHADEVAN, J.
1. Leave granted.
2. This Civil Appeal is directed against the judgment and order dated
1
23.05.2023 passed by the High Court of Karnataka at Bengaluru in House Rent
Revision Petition No. 56 of 2017, whereby the High Court allowed the revision
petition preferred by Respondent Nos. 1 to 3 and set aside the order dated
2
14.07.2017 passed by the Chief Judge, Court of Small Causes, Bengaluru in
Signature Not Verified
Digitally signed by
POOJA SHARMA
Date: 2026.04.10
16:18:15 IST
Reason:
H.R.C. No. 63 of 2016. By the said order, the trial Court had allowed the

1
Hereinafter referred to as “the High Court”
2
Hereinafter referred to as “the trial Court”

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eviction petition and directed the respondents to vacate the schedule premises
and hand over vacant possession to the appellant (since deceased), within a
period of three months.
3. The appellants are the legal representatives of late Sri
M.V.Ramachandrasa, who originally initiated the rent control proceedings
before the trial Court. It is their case that the deceased appellant now represented
through his legal representatives, was a long-term lessee in respect of
immovable properties bearing Municipal New Nos. 22 to 33, situated at
Uttaradhi Mutt Lane, Chickpet, Bengaluru. The said lease was created by virtue
of a registered lease deed dated 02.02.1983 for a period of 55 years. Under the
terms of the lease, the deceased appellant was duly authorised to sub-lease the
whole or any portion of the property.
4. It is the further case of the appellants that Respondent No. 1,
M/s.Mahendra Watch Company, a partnership firm, became a tenant under the
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deceased appellant through its partner, Rajesh Kumar, Respondent No. 4, in
respect of premises viz. , Shop No.1, Ground Floor, Maruthi Plaza, Block C,
U.M. Lane, Chickpet, Bangalure, by virtue of a lease deed dated 22.02.1985
registered as Document No. 3669 / 1985. Subsequently, the landlord came to
be aware that Respondent Nos. 1 and 4 were no longer in possession of the
premises and that the business therein was being carried on by Respondent Nos.

3
Hereinafter referred to “the landlord”

3

2 and 3, namely Ashish M. Jain and Atul M. Jain, who were not parties to the
said lease agreement. Upon issuance of notice in this regard, the landlord
instituted H.R.C. No. 63 of 2016 under Sections 27(b)(ii), 27(d)(i)(ii) and 27(p)
of the Karnataka Rent Act, 1999, seeking eviction on the ground that
Respondent No. 1 had unlawfully sublet the premises and parted with
possession in favour of third parties without the consent of the landlord.
5. The trial Court, upon consideration of the pleadings and the oral as well
as documentary evidence on record, concluded that the persons in actual
occupation of the premises were strangers to the original tenancy and that the
tenant had unlawfully parted with possession in their favour. Pointing out that
the lease deed expressly prohibited sub-letting or parting with possession
without the consent of the landlord, the trial Court held that the respondents had
rendered themselves liable for eviction. Accordingly, by order dated
14.07.2017, the eviction petition was allowed and the respondents were directed
to vacate the premises and hand over vacant possession to the landlord.
6. Aggrieved thereby, the respondents preferred House Rent Revision
Petition No. 56 of 2017 under Section 46 of the Karnataka Rent Act, 1999
against the appellants herein, who are the legal representatives of the deceased
appellant / landlord. The High Court, by its impugned judgment dated
23.05.2023, allowed the revision petition and set aside the eviction order passed

4

by the trial Court. It is in these circumstances that the appellants have
approached this Court by way of the present appeal.
7. The learned Senior Counsel appearing for the appellants submitted that
the High Court has clearly transgressed the well-settled limits of its revisional
jurisdiction under Section 46 of the Karnataka Rent Act, 1999. The revisional
power is supervisory in nature and does not confer upon the High Court the
status of a court of first appeal. It was submitted that the High Court, instead of
confining itself to examining jurisdictional error, illegality, or perversity, has
proceeded to reappreciate the entire oral and documentary evidence and
substituted its own findings in place of those recorded by the trial Court. Such
an exercise is wholly impermissible in law.
7.1. Reliance was placed on the judgment of this Court in Hindustan
4
Petroleum Corporation Limited v. Dilbahar Singh , wherein, it was
categorically held that revisional jurisdiction under rent control statutes is
limited and cannot be equated with appellate jurisdiction. Interference is
warranted only where findings are perverse, based on no evidence, or suffer
from manifest illegality.
7.2. It was submitted that the trial Court, upon a comprehensive appreciation
of the evidence on record, returned well-reasoned findings of fact, and
categorically held that Respondent Nos. 2 and 3 failed to establish their status as

4
(2014) 9 SCC 78

5

partners of the original tenant firm namely M/s. Mahendra Watch Company.
The documentary evidence relied upon by the respondents was found unreliable,
and significantly, no partnership deed or credible material was produced to
substantiate the claim that Respondent Nos. 2 and 3 were partners of the original
tenant firm. These are pure findings of fact and could not have been interfered
with by the High Court in the absence of perversity or patent illegality, which is
conspicuously absent in the present case.
7.3. It was further submitted that Clause 19 of the registered lease deed dated
22.02.1985 (Ex. P4) expressly prohibits sub-letting or transfer of the tenancy
rights, including sale of the business, without prior written consent of the
landlord. The respondents have failed to produce any document evidencing such
consent. The material on record clearly establishes that persons presently in
occupation, namely Respondent Nos. 2 and 3 have no lawful nexus with the
original tenancy. Their claim of deriving rights through an alleged partnership is
unsupported by any legally admissible document.
7.4. It was submitted that the respondents’ case rests on an alleged
reconstitution of the partnership firm. However, the so-called reconstitution
deed is unregistered and legally untenable; no original partnership deed was
produced; there is no documentary evidence to establish that Mohanlal, claimed
to be the father of Respondent Nos. 2 and 3, was ever a partner; RW-1
(Mohanlal) himself admitted that at the time of execution of the lease deed in

6

1985, there were five partners, yet, only Respondent No. 4 signed the lease
deed. As such, the trial Court rightly concluded that the respondents failed to
prove any valid induction into the partnership with the consent of the landlord.
7.5. It was further submitted that the reliance placed by the respondents on Ex.
R2 series (rent receipts) is wholly misplaced. The said receipts stand in the
name of the original tenant firm and do not confer any independent right upon
Respondent Nos. 2 and 3. In this regard, reference was made to the decision in
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S.R. Radhakrishnan v. Neelamegam , wherein, this Court held that mere
payment of rent or continuance in possession does not ipso facto confer the
status of a tenant.
7.6. It was submitted that the appellants have clearly established grounds for
eviction under Sections 27(2)(b)(ii) and 27(2)(p) of the Karnataka Rent Act,
1999 inasmuch as there has been unauthorised sub-letting / transfer of
possession; the terms of the lease deed have been violated; and the respondents
are in unlawful occupation without any legal right or privity of contract.
7.7. It was submitted that the High Court, without adverting to the above
material aspects and settled principles of law, has erroneously reversed the well-
reasoned judgment of the trial Court and set aside the eviction order. Therefore,
the impugned judgment suffers from serious legal infirmity and warrants
interference by this court.

5
(2003) 10 SCC 705

7

8. Per contra , the learned counsel appearing for the respondents at the out,
submitted that the present appeal is liable to be dismissed in limine as the
appellants have not approached this Court with clean hands and have in fact,
suppressed material particulars in the list of dates and events. It was contended
that the appellants have failed to place true and correct facts and therefore are
not entitled to any relief much less the discretionary relief under Article 136 of
the Constitution of India.
8.1. The learned counsel further submitted that the respondent firm,
represented by its partners, has been a lawful tenant in respect of the suit shop
since the year 1978, having acquired tenancy rights upon payment of goodwill
to the original owner, namely Shrimad Jagadguru Madhav Acharya Moola
Mahasamsthane, Uttaradhi Math, Bengaluru. It was submitted that
subsequently, the landlord obtained a long-term lease of the larger property
under a registered lease deed dated 02.02.1983 for a period of 55 years, taking
symbolic possession of tenanted portions and physical possession of vacant
portions. Upon such acquisition, he proposed redevelopment of the property and
assured all existing tenants, including the respondent firm, that they would be
accommodated in the newly constructed complex, while also offering temporary
alternate accommodation.
8.2. It was submitted that acting upon such assurance, the tenants vacated the
old premises, following which the landlord demolished the existing structure

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and constructed a new shopping complex. Upon completion, the respondent
firm was allotted a shop measuring 95 sq.ft. in place of the earlier 164 sq.ft. and
a registered lease deed dated 22.02.1985 was executed for a period of 53 years,
expiring on 22.02.2038. The agreed rent was fixed at Rs. 275/- per month with a
provision for periodic enhancement. Since then, the respondent firm has been in
continuous possession and has been carrying on business in the said premises
without interruption.
8.3. The learned counsel emphasised that the lease deed confers valuable and
enduring rights upon the respondent firm, including heritability, transferability
among partners and their heirs, and liberty to carry on business in partnership. It
was further submitted that the lease deed does not contain any forfeiture clause
attracting Section 111(g) of the Transfer of Property Act, 1882, and therefore,
the tenancy cannot be prematurely terminated. It was contended that the
respondent firm is entitled to peaceful possession and enjoyment of the premises
for the entire duration of the lease, and the eviction proceedings initiated during
the subsistence of such lease are wholly misconceived and not maintainable in
law.
8.4. The learned counsel further submitted that the allegation of subletting,
which forms the foundation of the eviction petition, is entirely baseless. It was
contended that the respondent firm has at no point sublet, assigned, or parted
with possession of the premises. The business has continuously been carried on

9

by the partners of the firm, and any change in the constitution of the partnership
does not amount to subletting. It was submitted that a partnership firm is not a
separate legal entity distinct from its partners, and the firm name is merely a
compendious description of the partners who carry on the business.
8.5. Reliance was placed on the judgments of this Court in Associated Hotels
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of India Ltd v. S.B. Sardar Ranjit Singh , Jagan Nath (D) through LRs v.
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Chander Bhan and another , and Mahendra Saree Emporium (II) v. G.V.
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Srinivasa Murthy , wherein it was held that subletting necessarily requires
parting with legal possession in favour of a third party and the mere use of
premises by others, including partners, does not constitute subletting so long as
the tenant retains legal possession. It was submitted that in the present case,
there is no evidence whatsoever to show that any third party has been put in
exclusive possession of the premises.
8.6. The learned counsel further contended that the burden of proving
subletting squarely lies upon the landlord, which burden has not been
discharged in the present case. In the absence of any material to establish
exclusive possession by a third party for consideration, no presumption of
subletting can arise. It was submitted that the High Court rightly appreciated the

6
AIR 1968 SC 933
7
1988 (3) SCC 57
8
(2005) 1 SCC 481

10

evidence on record and applied the settled principles of law in setting aside the
eviction order.
8.7. It was also submitted that the partnership firm was reconstituted on
01.07.2000, prior to the coming into force of the Karnataka Rent Act, 1999, and
that the continuing partners, including Ashish M. Jain, have been carrying on
business in the suit premises before 31.12.2001. The appellants were fully aware
of the same, as rent was being regularly collected from the respondent firm. It
was contended that mere reconstitution of a partnership firm or induction of
partners does not amount to assignment or subletting, particularly when the firm
continues to retain possession and control over the premises.
8.8. The learned counsel submitted that the eviction petition is based on a
wholly illusory cause of action and has been filed by suppressing the existence
of the registered lease deed dated 22.02.1985. A meaningful reading of the
petition would demonstrate that the appellants have attempted to mischaracterise
the partners of the firm as sub-tenants, which is impermissible in law. It was
thus contended that the proceedings are an abuse of the process of court and
liable to be dismissed.
9. We have carefully considered the rival submissions and perused the
material available on record.

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10. The admitted position is that the appellants are the legal heirs of the
deceased appellant, Sri M.V. Ramachandrasa, who himself acquired leasehold
rights in respect of the property bearing Nos. 22 to 33 under a lease deed dated
02.02.1983 executed by Uttaradi Math represented by its Presiding Swamiji
through its power of attorney, for a period of 55 years with liberty to sub-let the
properties. It is not in dispute that after obtaining the said lease, the landlord
leased the premises to Respondent No. 1 represented by Respondent No. 4,
under a registered lease deed dated 22.02.1985 (Document No. 3669/1985) for a
period of 53 years. Clause 19 of the lease deed expressly restricts subletting
without prior written consent of the landlord. Since the actual and original
partner of Respondent No. 1 firm was not in occupation and possession of the
premises, the landlord preferred eviction petition before the trial Court. After
examining the oral and documentary evidence, the trial Court allowed the
petition and directed the respondents to vacate and hand over the possession of
the premises within a period of three months. However, the High Court allowed
the revision petition and set aside the eviction order. Therefore, the present
appeal at the instance of the appellants, who are the legal representatives of the
deceased appellant / landlord.
11. On the basis of the pleadings, the following issues arise for consideration
in the present appeal:

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(i) Whether the High Court was justified in interfering with the findings
of fact recorded by the trial Court while exercising its revisional
jurisdiction under Section 46 of the Karnataka Rent Act, 1999?
(ii) Whether the burden of proving unlawful sub-letting lies upon the
landlord, and if so, whether such burden has been duly discharged in
the present case?
(iii) Whether the alleged retirement of the original tenant – partner and
continuation of business by Respondent Nos. 2 and 3 constitutes a
mere reconstitution of partnership or amounts to unlawful sub-letting /
assignment under Sections 27(2)(b)(ii) and 27(2)(p) of the Karnataka
Rent Act, 1999?
Issue No. 1
12. Whether the High Court was justified in interfering with the findings of
fact recorded by the trial Court while exercising its revisional jurisdiction
under Section 46 of the Karnataka Rent Act, 1999?
12.1. At the outset, it must be noted that the scope of revisional jurisdiction
under Section 46 is well-settled and narrowly circumscribed. The provision
empowers the High Court to examine the legality, correctness or propriety of an
order; however, it does not confer appellate powers permitting reappreciation of

13

evidence or substitution of factual findings. For ease of reference, the said
provision reads as under:
“46. Revision.- (1) The High Court may, at any time call for and examine any
order passed or proceeding taken by the Court of Small Causes or the Court of
Civil Judge Senior Division referred to in items (i) and (ii) of clause (c) of
section 3 for the purpose satisfying itself as to the legality or correctness of
such order or proceeding and may pass such order in reference thereto as it
thinks fit.
(2) The District Judge may at any time call for and examine any order passed or
proceeding taken by the Court of Civil Judge Junior Division referred to in item
(iii) of clause (c) of section 3 for the purpose of such order or proceeding and
may pass such order in reference thereto as he thinks fit.
(3) The costs incidental to all proceedings before the High Court or the District
Judge shall be in the discretion of the High Court or the District Judge as the
case may be.

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12.2. In Rukmini Amma Saradamma v. Kallyani Sulochana and others , this
Court held that even where the statutory language appears wide, the revisional
court cannot act as a court of appeal and undertake a fresh evaluation of
evidence. It was categorically observed that the High Court cannot reappreciate
oral and documentary evidence under the guise of examining “propriety” as
doing so would obliterate the distinction between appellate and revisional
jurisdiction. The following paragraphs are pertinent:
“9. Notwithstanding the fact that Section 20 of the Act conferring revisional
jurisdiction of the High Court is widely worded, such a jurisdiction cannot be
converted into an appellate jurisdiction. This Court in Rai Chand Jain v.
10
Chandra Kanta Khosla has clearly pointed out the scope of such revisional
jurisdiction and has held that it cannot act as a second court of appeal.

9
(1993) 1 SCC 499
10
(1991) 1 SCC 422

14

Therefore, the impugned order is liable to be set aside. Without prejudice to the
11
above, it is submitted that this Court in Aundal Ammal v. Sadasivan Pillai has
held that no second revision is permissible to the High Court either under
Section 115 of the Code or under Section 20 of the Act. The District Court has
exercised the revisional jurisdiction. Hence, the remit order in C.R.P. No. 1719
of 1985 is void and is illegal. If that remit order goes, what remains is only the
revisional order of the District Court, Kollam, confirming the appellate order
directing revision on the ground of bona fide need. Hence, the impugned order
calls for interference.”
“20. We are afraid this approach of the High Court is wrong. Even the wider
language of Section 20 of the Act cannot enable the High Court to act as a first
or a second court of appeal. Otherwise, the distinction between appellate and
revisional jurisdiction will get obliterated. Hence, the High Court was not right
in re-appreciating the entire evidence both oral or documentary in the light of
the Commissioner's report (Exts. C-1 and C-2 mahazar). In our considered
view, the High Court had travelled far beyond the revisional jurisdiction. Even
by the presence of the word “propriety” it cannot mean that there could be a re-
appreciation of evidence. Of course, the revisional court can come to a different
conclusion but not on a re-appreciation of evidence; on the contrary, by
confining itself to legality, regularity and propriety of the order impugned
before it. Therefore, we are unable to agree with the reasoning of the High
Court with reference to the exercise of revisional jurisdiction.”
12.3. The legal position stands conclusively settled by the Constitution Bench
of this Court in Hindustan Petroleum Corporation Ltd (supra) , wherein it was
held that revisional jurisdiction, though wider than that under Section 115 of the
Civil Procedure Code, 1908, remains qualitatively distinct from appellate
jurisdiction. The High Court cannot reassess or reanalyse evidence to arrive at a
different conclusion merely because another view is possible. Interference with
findings of fact is permissible only when such findings are perverse, based on
no evidence, suffer from misreading of evidence, or result in a miscarriage of
justice. The following paragraphs are apposite:

11
(1987) 1 SCC 183 : AIR 1987 SC 203

15

“28. Before we consider the matter further to find out the scope and extent of
revisional jurisdiction under the above three Rent Control Acts, a quick
observation about the “appellate jurisdiction” and “revisional jurisdiction” is
necessary. Conceptually, revisional jurisdiction is a part of appellate
jurisdiction, but it is not vice versa. Both, appellate jurisdiction and revisional
jurisdiction are creatures of statutes. No party to the proceeding has an inherent
right of appeal or revision. An appeal is continuation of suit or original
proceeding, as the case may be. The power of the appellate court is coextensive
with that of the trial court. Ordinarily, appellate jurisdiction involves rehearing
on facts and law but such jurisdiction may be limited by the statute itself that
provides for the appellate jurisdiction. On the other hand, revisional
jurisdiction, though, is a part of appellate jurisdiction but ordinarily it cannot be
equated with that of a full-fledged appeal. In other words, revision is not
continuation of suit or of original proceeding. When the aid of Revisional Court
is invoked on the revisional side, it can interfere within the permissible
parameters provided in the statute. It goes without saying that if a revision is
provided against an order passed by the Tribunal/appellate authority, the
decision of the Revisional Court is the operative decision in law. In our view, as
regards the extent of appellate or revisional jurisdiction, much would, however,
depend on the language employed by the statute conferring appellate
jurisdiction and revisional jurisdiction.”
“31. We are in full agreement with the view expressed in Sri Raja Lakshmi
12
Dyeing Works v. Rangaswamy Chettiar that where both expressions “appeal”
and “revision” are employed in a statute, obviously, the expression “revision”
is meant to convey the idea of a much narrower jurisdiction than that
conveyed by the expression “appeal”. The use of two expressions “appeal”
and “revision” when used in one statute conferring appellate power and
revisional power, we think, is not without purpose and significance.
Ordinarily, appellate jurisdiction involves a rehearing while it is not so in the
case of revisional jurisdiction when the same statute provides the remedy by way
of an “appeal” and so also of a “revision”. If that were so, the revisional power
would become coextensive with that of the trial court or the subordinate tribunal
which is never the case. The classic statement in Dattonpant Gopalvarao
13
Devakate v. Vithalrao Maruthirao Janagaval that revisional power under the
Rent Control Act may not be as narrow as the revisional power under Section
115 of the Code but, at the same time, it is not wide enough to make the High
Court a second court of first appeal, commends to us and we approve the same.
We are of the view that in the garb of revisional jurisdiction under the above
three rent control statutes, the High Court is not conferred a status of second

12
(1980) 4 SCC 259
13
(1975) 2 SCC 246

16

court of first appeal and the High Court should not enlarge the scope of
revisional jurisdiction to that extent.”
14
“33. Rai Chand Jain v. Chandra Kanta Khosla that follows Ram Dass v.
15
Ishwar Chander , also does not lay down that the High Court in exercise of
its power under the Rent Control Act may reverse the findings of fact merely
because on reappreciation of the evidence it has a different view on the
findings of fact. The observations made by this Court in Rai Chand Jain must
also be read in the context we have explained Ram Dass”
16
“36. The statement in M.S. Zahed v. K. Raghavan that under Section 50 of
the Karnataka Rent Control Act , the High Court is entitled to reappreciate the
evidence with a view to find out whether the order of Small Cause Court is
legal and correct must be understood in the light of the observations made
therein, namely, that revisional power cannot be equated with the power of
reconsideration of all questions of fact as a court of first appeal.”
“43. We hold, as we must, that none of the above Rent Control Acts entitles the
High Court to interfere with the findings of fact recorded by the first appellate
court/first appellate authority because on reappreciation of the evidence, its
view is different from the court/authority below. The consideration or
examination of the evidence by the High Court in revisional jurisdiction under
these Acts is confined to find out that finding of facts recorded by the
court/authority below is according to law and does not suffer from any error
of law. A finding of fact recorded by court/authority below, if perverse or has
been arrived at without consideration of the material evidence or such finding
is based on no evidence or misreading of the evidence or is grossly erroneous
that, if allowed to stand, it would result in gross miscarriage of justice, is open
to correction because it is not treated as a finding according to law. In that
event, the High Court in exercise of its revisional jurisdiction under the above
Rent Control Acts shall be entitled to set aside the impugned order as being not
legal or proper. The High Court is entitled to satisfy itself as to the correctness
or legality or propriety of any decision or order impugned before it as
indicated above. However, to satisfy itself to the regularity, correctness,
legality or propriety of the impugned decision or the order, the High Court
shall not exercise its power as an appellate power to reappreciate or reassess
the evidence for coming to a different finding on facts . Revisional power is not
and cannot be equated with the power of reconsideration of all questions of
fact as a court of first appeal. Where the High Court is required to be satisfied
that the decision is according to law, it may examine whether the order
impugned before it suffers from procedural illegality or irregularity.”

14
(1991) 1 SCC 422
15
(1988) 3 SCC 131
16
(1999) 1 SCC 439

17

12.4. This principle has been consistently reiterated including in Thankamony
17
Amma and others v. Omana Amma N. and others , where this Court
disapproved reappreciation of evidence in exercise of revisional powers.
12.5. Applying the aforesaid principles, it is evident that the trial Court upon a
detailed appreciation of oral and documentary evidence, recorded specific
findings of fact. These included material discrepancies in the respondents’ case
inter alia inconsistencies regarding the dates relating to purchase and stamping
of stamp paper, non-production of the original partnership deed dated
01.03.2000, absence of proof of retirement of the original partner, and lack of
written consent from the landlord for induction of alleged partners. These
findings were based on the evidence on record and were neither shown to be
perverse nor vitiated by any illegality or procedural irregularity.
12.6. However, the High Court, while exercising jurisdiction under Section 46,
undertook a fresh analysis of the evidence, including depositions of PW-1
(M.R.Goverdhan) and RW-1 (Mohanlal), partnership documents, and rent
receipts, and arrived at independent factual conclusions. Such an exercise
clearly amounts to reappreciation of evidence, which is impermissible in
revisional jurisdiction.
12.7. It is also significant that the statutory scheme provides for an appeal
under Section 26 of the Karnataka Rent Act, 1999. Where the legislature has

17
(2020) 19 SCC 254

18

consciously created a separate appellate remedy, the revisional jurisdiction
cannot be expanded so as to substitute or bypass the appellate mechanism.
12.8. In view of the above, this Court is of the considered opinion that the
findings recorded by the trial Court were pure findings of fact based on proper
appreciation of evidence. No perversity, illegality, or jurisdictional error has
been demonstrated.
12.9. Accordingly, the High Court transgressed the limits of its revisional
jurisdiction by reassessing the evidence and substituting its own conclusions.
The impugned interference under Section 46 of the Karnataka Rent Act, 1999 is
therefore unsustainable in law as it effectively converts revisional jurisdiction
into appellate jurisdiction.
Issue No. 2
13. Whether the burden of proving unlawful sub-letting lies upon the
landlord, and if so, whether such burden has been duly discharged in the
present case?
13.1. It is a settled principle of law that the burden of proof lies upon the party
asserting a fact. In eviction proceedings founded on the ground of sub-letting,
the initial onus rests upon the landlord to establish that the tenant has parted
with possession of the tenanted premises in favour of a third party without
authority.

19

13.2. The jurisprudence on this issue is well crystallized. In Associated Hotels
of India Ltd v. S.B. Sardar Ranjit Singh (supra) , this Court held that the
landlord must first prove parting with possession. However, recognizing the
inherently clandestine nature of sub-letting arrangements, courts have evolved a
rule of evidence that once exclusive possession of a third party is established,
the burden shifts to the tenant to explain the nature of such possession.
13.3. This principle has been consistently reaffirmed in Joginder Singh Sodhi
18
v. Amar Kaur , and further authoritatively expounded by a three Judge Bench
in Mahendra Saree Emporium (II) v. G.V. Srinivasa Murthy (supra) , wherein
it was held that once a prima facie case of exclusive possession by a stranger is
made out, a presumption of sub-letting arises, thereby shifting the onus onto the
tenant.
19
13.4. In Ram Murti Devi v. Pushpa Devi and others , after considering the
earlier precedents, the Court reiterated that direct evidence of sub-letting is
seldom available, and the same can be inferred from surrounding circumstances,
particularly where exclusive possession of a third party is established. The
relevant paragraphs are extracted below for better appreciation:
“17. ……. This Court held in the above case that transaction of sub-letting in
their very nature are clandestine arrangements between tenant and sub-tenant
and there cannot be any direct evidence and even it is a matter of legitimate
inference. It was further held that burden of proof of establishing fact

18
(2005) 1 SCC 31
19
(2017) 15 SCC 230

20

although lies on the landlord but it may shift according to the weight of
evidence adduced by the party during the trial.
20
18. In Kala v. Madho Parshad Vaidya , again the Court held that the onus of
proof is on the landlord and if he establishes the parting of with the possession
in favour of third party, the onus would shift to the tenant to explain. In para 16
following has been explained: (SCC p. 577)
“16. … The onus to prove sub-letting is on the landlord and if he establishes
parting of with the possession in favour of a third party, the onus would shift
to the tenant to explain. In the instant case, however, the landlord did not
discharge the initial onus and although it was not required, yet, the tenant
explained how Appellant 2 had the permissive possession of the shop as its
Manager.”
19. This Court in Joginder Singh Sodhi v. Amar Kaur , had occasion to
consider various aspects of sub-letting. After noticing the various earlier
judgments of this Court, this Court reiterated the law in para 13 to para 17,
which are to the following effect: (SCC pp. 36-37)
“13. Regarding sub-letting, in our opinion, the law is well settled. It is
observed in the leading case of Associated Hotels of India Ltd. v. S.B.
Sardar Ranjit Singh that in a suit by the landlord for eviction of tenant on
the ground of sub-letting, the landlord has to prove by leading evidence that
(i) a third party was found to be in exclusive possession of the rented
property, and (ii) parting of possession thereof was for monetary
consideration.
14. The above principle was reiterated by this Court from time to time. In
21
Shama Prashant Raje v. Ganpatrao , the Court stated that on sub-letting,
there is no dispute with the proposition that the two ingredients, namely,
parting with possession and monetary consideration therefore have to be
established.
…..
16. The contention of the learned counsel for the appellant, however, is that
even if it is assumed that one of the ingredients of sub-letting was
established, the second ingredient, namely, parting of possession with
“monetary consideration” was not established. The counsel urged that
there is no evidence on record that any amount was paid either in cash or in
kind by Respondent 2 to Respondent 1. In the absence of such evidence sub-
tenancy cannot be said to be established and the landlady was not entitled
to get an order of eviction against the tenant.

20
(1998) 6 SCC 573
21
(2000) 7 SCC 522

21

17. We are unable to appreciate the contention. As observed by this Court in
22
Bharat Sales Ltd. v. LIC , sub-tenancy or sub-letting comes into existence
when the tenant gives up possession of the tenanted accommodation, wholly
or in part, and puts another person in exclusive possession thereof. This
arrangement comes about obviously under a mutual agreement or
understanding between the tenant and the person to whom the possession is
so delivered. In this process, the landlord is kept out of the scene. Rather,
the scene is enacted behind the back of the landlord, concealing the overt
acts and transferring possession clandestinely to a person who is an utter
stranger to the landlord, in the sense that the landlord had not let out the
premises to that person nor had he allowed or consented to his entering
into possession of that person, instead of the tenant, which ultimately
reveals to the landlord that tenant to whom the property was let out has
put some other person in possession of that property. In such a situation, it
would be difficult for the landlord to prove, by direct evidence, the contract
or agreement or understanding between the tenant and the sub-tenant. It
would also be difficult for the landlord to prove, by direct evidence, that the
person to whom the property had been sub-let had paid monetary
consideration to the tenant. Payment of rent, undoubtedly, is an essential
element of lease or sub-lease. It may be paid in cash or in kind or may have
been paid or promised to be paid. It may have been paid in lump sum in
advance covering the period for which the premises is let out or sub-let or it
may have been paid or promised to be paid periodically. Since payment of
rent or monetary consideration may have been made secretly, the law does
not require such payment to be proved by affirmative evidence and the
court is permitted to draw its own inference upon the facts of the case
proved at the trial, including the delivery of exclusive possession to infer
that the premises were sub-let.”
(emphasis in original)
20. A three-Judge Bench in Mahendra Saree Emporium (2) v. G.V. Srinivasa
Murthy , had occasion to consider the question of sub-letting (sub-tenancy) and
question of burden of proof. In para 16, the Court had elaborated the concept of
sub-letting and laid down the following: (SCC pp. 490-91)
“16. .......... 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

22
(1998) 3 SCC 1

22

property. A presumption of sub-letting may then be raised and would amount to
proof unless rebutted.”
21. From the pronouncements of this Court as noticed above, following
statement of law can be culled out:
21.1. In a suit by the landlord for eviction of the tenant on the ground of sub-
letting the landlord has to prove by leading evidence that:
(a) A third party was found to be in exclusive possession of the whole or part of
rented property.
(b) Parting of possession thereof was for monetary consideration.
21.2. The onus to prove sub-letting is on the landlord and if he has established
parting of possession in favour of a third party either wholly or partly, the onus
would shift to the tenant to explain.
21.3. In the event, possession of the tenant wholly or partly is proved and the
particulars and the instances of the transactions are found acceptable, in
particular facts and circumstances of the case, it is not impermissible for the
court to draw an inference that the transaction was entered with monetary
consideration. It may not be possible always to give direct evidence of monetary
consideration since such transaction of sub-letting are made between the tenant
and sub-tenant behind the back of the landlord.
22. In each case, the proof of sub-letting/sub-tenancy thus, has to be established
on the parameters of law, as laid down in the above cases. Whether, in
particular facts and circumstances the landlord has successfully discharged the
burden of proving sub-tenancy depends on pleading and evidence in each case.”

13.5. Thus, the legal position that emerges is that the landlord discharges the
initial burden by establishing (i) exclusive possession of a third party, and (ii)
absence of the original tenant from possession. Upon such proof, a presumption
of sub-letting arises, and the onus shifts to the tenant to demonstrate that such
possession is lawful and not in the nature of sub-tenancy.

23

13.6. Applying the aforesaid principles, it is evident that the landlord has
successfully discharged the initial burden. The lease deed recognizes only
Respondent No. 4 as the tenant. Respondent Nos. 2 and 3 are not parties to the
lease and therefore, cannot claim any independent tenancy rights. The material
on record clearly establishes that the original tenant is no longer in possession,
and Respondent Nos. 2 and 3 are in exclusive occupation of the premises. This
finding has been categorically recorded by the trial Court. In such
circumstances, the landlord has successfully proved exclusive possession of
third parties thereby discharging the initial burden and giving rise to a
presumption of unlawful sub-letting.
13.7. The burden, therefore, shifted upon the respondents to rebut the said
presumption. However, the respondents have failed to discharge this burden. No
cogent or reliable evidence has been adduced to establish the existence of a
valid partnership, reconstitution deed, lawful induction, or consent of the
landlord to such arrangement. In the absence of such evidence, the possession of
Respondent Nos. 2 and 3 remains unexplained and unlawful. As held in
Joginder Singh Sodhi, direct proof of monetary consideration is not
indispensable and may be legitimately inferred from the surrounding
circumstances, particularly where exclusive possession is established without
lawful explanation.

24

13.8. Accordingly, this Court holds that the burden of proving unlawful sub-
letting initially lay upon the landlord, which has been duly discharged by
establishing exclusive possession of third parties and absence of the original
tenant. The burden thereafter shifted to the respondents, who have failed to
rebut the presumption by adducing cogent evidence. Consequently, unlawful
sub-letting stands proved.
Issue No. 3
14. Whether the alleged retirement of the original tenant – partner and
continuation of business by Respondent Nos. 2 and 3 constitutes a mere
reconstitution of partnership or amounts to unlawful sub-letting / assignment
under Sections 27(2)(b)(ii) and 27(2)(p) of the Karnataka Rent Act, 1999?
14.1. The law governing sub-letting through the device of partnership is well-
settled and no longer res integra . In Amar Nath Agarwalla v. Dhillon
23
Transport Agency , this Court reiterated that a partnership firm is not a
separate legal entity but merely a compendious name for its partners, and that
sub-letting necessarily involves parting with legal possession. The following
paragraphs are pertinent:
24
“8. In Murlidhar v. Chuni Lal this Court had repelled the contention that the
old firm and the new firm being two different legal entities, the occupation of the
shop by the new firm was occupation by the legal entity other than the original

23
(2007) 4 SCC 306
24
1969 Ren CR 563 : 1970 Ren CJ 922 (SC)

25

tenant and such occupation proved sub-letting. Repelling the contention this
Court held:
“This contention is entirely without substance. A firm, unless expressly
provided for the purpose of any statute which is not the case here, 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. Here the firms have a common partner. Hence the occupation
has been by one of the original tenants.”

25
9. In Mohammedkasam Haji Gulambhai v. Bakerali Fatehali this Court
observed: (SCC p. 618, para 13)
“There is absolute prohibition on the tenant from sub-letting, assigning or
transferring in any other manner his interest in the tenanted premises.
There appears to be no way around this subject of course if there is any
contract to the contrary between the landlord and the tenant. In a
partnership where the tenant is a partner, he retains legal possession of
the premises as a partnership is a compendium of the names of all the
partners. In a partnership, the tenant does not divest himself of his right
in the premises. On the question of sub-letting etc. the law is now very
explicit. There is prohibition in absolute terms on the tenant from sub-
letting, assignment or disposition of his interest in the tenanted premises.”

14.2. This position has been comprehensively analysed in Celina Coelho
26
Pereira (Ms) and others v. Ulhas Mahabaleshwar Kholkar and others ,
wherein the Court, after considering earlier precedents, distilled the governing
principles. The following paragraphs are pertinent:
27
“17. In Helper Girdharbhai v. Saiyed Mohmad Mirasaheb Kadri 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 tenant does not amount to sub-
letting. 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.

25
(1998) 7 SCC 608
26
(2010) 1 SCC 217
27
(1987) 3 SCC 538

26

18. 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 sub-letting,
28
this Court in Jagan Nath v. Chander Bhan held: (SCC p. 61, para 6)
“6. The question for consideration is whether the mischief contemplated
under Section 14(1)(b) of the Act has been committed as the tenant had sub-
let, 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 sub-letting 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.”
19. The question whether the tenant has assigned, sub-let 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
29
consideration in Gopal Saran v. Satyanarayana . This Court held: (SCC pp. 69-
70, para 16)
“16. … 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
30
decision of this Court in Shalimar Tar Products Ltd. v. H.C. Sharma
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 SCC p.

28
(1988) 3 SCC 57
29
(1989) 3 SCC 56
30
(1988) 1 SCC 70

27

77, para 16 of the Report to the treatise of Foa on Landlord and Tenant, 6th
Edn., at p. 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 the covenant.’
In para 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
31
Gundalapalli Rangamannar Chetty v. Desu Rangiah were approved by
32
this Court in which the legal position in Jackson v. Simons were relied
upon. The Madras High Court had also relied on a judgment of Scrutton,
33
L.J. in Chaplin v. Smith at p. 211 of the Report where it was said:
‘He did not assign, nor did he under-let. 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.’
34
This position was also accepted in Vishwa Nath v. Chaman Lal Khanna
wherein it was observed that parting with possession is understood as parting
with legal possession by one in favour of the other by giving him an exclusive
possession to the ouster of the grantor. If the grantor had retained legal
possession with him it was not a case of parting with possession.”
The Court also reiterated that to prove sub-tenancy, two ingredients have to be
established, firstly, the tenant must have exclusive right of possession or interests
in the premises or part of the premises in question and secondly, the right must be
in lieu of payment of some compensation or rent.
35
20. In G.K. Bhatnagar v. Abdul Alim this Court held as follows:(SCC p. 518,
para 5)
“5. A conjoint reading of these provisions shows that on and after 9-6-1952,
sub-letting, assigning or otherwise parting with the possession of the whole
or any part of the tenancy premises, without obtaining the consent in
writing of the landlord, is not permitted and if done, the same provides a
ground for eviction of the tenant by the landlord. However, inducting a

31
AIR 1954 Mad 182
32
(1923) 1 Ch 373 : 1922 All ER Rep 583
33
(1926) 1 KB 198 (CA)

34
AIR 1975 Del 117
35
(2002) 9 SCC 516

28

partner in his business or profession by the tenant is permitted so long as
such partnership is genuine. If the purpose of such partnership may
ostensibly be to carry on the business or profession in partnership, but the
real purpose be sub-letting of the premises to such other person who is
inducted ostensibly as a partner, then the same shall be deemed to be an act
of sub-letting attracting the applicability of clause (b) of sub-section (1) of
Section 14 of the Act.”
36
21. A three-Judge Bench of this Court in Parvinder Singh v. Renu Gautam
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: (SCC pp. 799-800, paras 8-9)
“8. 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, maybe 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.
9. 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

36
(2004) 4 SCC 794

29

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.”
22. In yet another decision, a three-Judge Bench of this Court in Mahendra Saree
Emporium (II) v. G.V. Srinivasa Murthy considered earlier decisions, few of
which have been referred to above, while dealing with a matter relating to sub-
letting of the premises within the meaning of Section 21(1)(f) of the Karnataka
Rent Control Act, 1961 and observed as follows: (SCC pp. 490-92, para 16)
“16. 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 sub-tenant. 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

30

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
37
eviction. In Krishnawati v. Hans Raj reiterating the view taken in
Associated Hotels of India Ltd. v. S.B. Sardar Ranjit Singh this Court so
noted the settled law: ( Hans Raj case , SCC p. 293, para 6)
‘ 6. … [T]he 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 v. Chuni Lal 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

37
(1974) 1 SCC 289

31

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 v. Saiyed Mohmad Mirasaheb Kadri 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 sub-letting 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 factum 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 v. Renu Gautam a
three-Judge Bench of this Court devised the test in these terms: (SCC p. 799, para
8)
‘8. … If the tenant is actively associated with the partnership business and
retains the use and control over the tenancy premises with him, maybe 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.’ ”
38
23. In Vaishakhi Ram v. Sanjeev Kumar Bhatiani , one of us (Tarun Chatterjee,
J.) in a case of sub-letting under Section 14(1)(b) of the Delhi Rent Control Act,
held: (SCC pp. 360 & 362, paras 15 & 21)
“15. … A plain reading of this provision would show that if a tenant has sub-
let or assigned or otherwise parted with the possession of the whole or any
part of the premises without obtaining the consent in writing of the landlord,
he would be liable to be evicted from the said premises. That is to say, the
following ingredients must be satisfied before an order of eviction can be
passed on the ground of sub-letting:
(1) the tenant has sub-let or assigned or parted with the possession of the
whole or any part of the premises;

38
(2008) 14 SCC 356

32

(2) such sub-letting or assigning or parting with the possession has been done
without obtaining the consent in writing of the landlord.
…
21. It is well settled that the burden of proving sub-letting is on the landlord
but if the landlord proves that the sub-tenant is in exclusive possession of the
suit premises, then the onus is shifted to the tenant to prove that it was not a
case of sub-letting.”
39
24. In Nirmal Kanta v. Ashok Kumar this Court held thus: (SCC p. 727, para
16)
“16. 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 sub-
tenancy and/or the allegation of sub-letting stands established.”
25. 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 the 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 the 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

39
(2008) 7 SCC 722

33

parting with possession in tenancy premises by the tenant in favour of a third
person.
(iv) If the 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 the 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 the
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 the landlord would stand discharged
by adducing prima facie proof of the fact that a party other than the tenant was in
exclusive possession of the premises. A presumption of sub-letting may then be
raised and would amount to proof unless rebutted.”

14.3. From the above decisions, the essence of the law is that:
(i) sub-letting requires parting with legal possession, i.e., transfer of the right to
exclusive possession;
(ii) mere induction or retirement of partners does not amount to sub-letting so
long as the tenant retains control and legal possession;
(iii) courts are entitled to lift the veil of partnership where it is used as a device
to conceal an impermissible transfer; and
(iv) once exclusive possession of a third party is established, the burden shifts to
the tenant to prove that the arrangement is bona fide.
Thus, the determinative test is whether the original tenant continues to retain
legal possession and control over the premises.

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14.4. It is not in dispute that Respondent No. 4 alone was the original tenant
under the lease. The material on record indicates that he retired from the
business around the year 2000. Significantly, no legally admissible evidence has
been produced to establish either the factum of such retirement in accordance
with law or that he continued to retain legal possession or control thereafter.
14.5. The respondents have failed to produce the original partnership deed, any
duly proved retirement deed, or any document evidencing continuity of the
original tenant firm. The alleged reconstitution deed (Ex. R3), apart from being
unregistered, has not been proved in accordance with law and is shrouded in
doubt. There is also no material to show that Respondent Nos. 2 and 3 were
partners in the original tenant firm. Their induction into possession is, therefore
not traceable to the original tenancy.
14.6. On the contrary, the material on record, including the cross-examination
of RW-1, clearly demonstrates that the original tenant has ceased to have any
role in the business or the premises, and that Respondent Nos. 2 and 3 are in
exclusive possession and control. This satisfies the test of parting with
possession, both in fact and in law, as explained in Jagan Nath v. Chander
Bhan.
14.7. Once such exclusive possession by third parties is established, the burden
shifts to the respondents to prove that the arrangement is a genuine partnership

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and not a device to conceal sub-letting. The respondents have failed to discharge
this burden by producing any cogent or reliable evidence.
14.8. The mere fact that rent receipts may continue in the name of the original
tenant does not advance the respondents’ case, as it is legal possession and
control and not the formality of rent payment, which is determinative.
14.9. In the present case, the original tenant has clearly divested himself of
legal possession, and Respondent Nos. 2 and 3, who are strangers to the
tenancy, are in exclusive occupation of the premises without the consent of the
landlord. The so-called reconstitution is nothing but a cloak to conceal an
unlawful transfer of possession, warranting lifting of the veil.
14.10. Accordingly, the arrangement cannot be regarded as a bona fide
reconstitution of partnership. It squarely amounts to unlawful sub-letting /
assignment within the meaning of Section 27(2)(b)(ii) of the Karnataka Rent
Act, 1999. Further, the continued occupation by Respondent Nos. 2 and 3
without any lawful right, attracts Section 27(2)(p) of the Act. The respondents
are, therefore, liable to eviction.

15. For the reasons aforesaid, the Civil Appeal is allowed. The judgment and
order dated 23.05.2023 passed by the High Court in House Rent Revision
Petition No. 56 of 2017 is set aside and the order dated 14.07.2017 passed by
the trial Court in H.R.C. No. 63 of 2016 directing eviction of the respondents

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from the schedule premises is restored. The respondents are granted three
months’ time from today to vacate and handover vacant possession of the
premises to the appellants. There shall be no order as to costs.

16. Pending application(s), if any, shall stand disposed of.

………….…………………………J.
[AHSANUDDIN AMANULLAH]



.…………………………J.
[R. MAHADEVAN]
NEW DELHI;
APRIL 10, 2026.