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Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.7258 OF 2009
(Arising out of SLP(C) No. 3660/2007)
Ms. Celina Coelho Pereira & Ors. ...Appellants
Versus
Ulhas Mahabaleshwar Kholkar & Ors. ...Respondents
JUDGEMENT
R.M. Lodha, J.
Leave granted.
2. Abilio Coelho Pereira - since deceased and now
represented by the present appellants, (for the sake of
convenience hereinafter referred to as ‘landlord’), made an
application on April 6, 1979 before the Rent Controller, Goa
North Division, Panaji for eviction of Mahabaleshwar
Ramchandra Colcar - since deceased and now represented by
the respondents - (hereinafter referred to as ‘tenant’) on the
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grounds of subletting and change of user, as provided in Goa,
Daman & Diu Buildings (Lease, Rent & Eviction) Control Act,
1968, (for short, ‘Act, 1968’). The landlord in the application for
eviction averred that a building situated at Stres Joao de
Castro, Panaji is owned by him; that one of the rooms on the
ground floor of the said building was let out to the tenant @
Rs.80/- per month on January 10, 1959 for grocery business;
that initially the lease was for a period of two years but later on
it was renewed from time to time and the last renewal was
made upto October 10, 1969; that on coming into force of Act,
1968 the tenant became statutory tenant; that the tenant
without permission or consent of the landlord has
transferred/sublet tenancy interest in the premises to Mandovi
Tours and Travels; that the transferee/sub-lessee is exclusively
running the business in the said rented premises and that no
grocery shop is being run by the tenant in the said premises.
3. The tenant traversed the application for eviction and
denied that he has transferred/sublet the premises to Mandovi
Tours and Travels or that the tenancy interest in the said
premises has been let out to the said partnership concern. The
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tenant’s defence in the written statement was that having
advanced in age, he was not doing good business in grocery
and he thought of starting the business of tours and travels
within the territory of Goa and, for this reason, he formed a
partnership in the name and style of M/s. Mandovi Tours and
Travels and took his son and daughter-in-law as his partners
along with one Smt. Kunda Wagh. The tenant further averred
that booking and reservation of passengers and tourists is
being done from the said premises by the firm and that the
possession of the premises continues to be with him
exclusively. An additional written statement was filed by the
tenant on September 25, 1979 but since nothing material turns
on that, it is not necessary to refer to the said additional written
statement.
4. During the pendency of the proceedings, an
application came to be filed by M/s. Mandovi Tours and Travels
through its partner Umesh Kolkar for its impleadment and
intervention but the said application came to be rejected on
September 15, 1984.
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5. It may be noticed here that the original tenant died
on May 18, 1986 and his legal heirs (present respondents)
were impleaded as respondents.
6. The Additional Rent Controller, Panaji Sub-Division,
Panaji-Goa recorded the evidence of the parties and, after
hearing them vide his order dated January 16, 1995 held that
ground of sub-letting was established and directed the present
respondents to vacate the subject premises and put the
landlord in possession within 30 days from the date of receipt of
the order.
7. The present respondents challenged the order of
eviction passed by the Additional Rent Controller in an eviction
appeal before the Administrative Tribunal, Goa. The original
landlord seems to have died during the pendency of appeal
and the present appellants who are his legal representatives
were brought on record.
8. The Administrative Tribunal, Goa, after hearing the
parties, dismissed appeal on December 24, 1998. Thus, the
eviction order passed by the Additional Rent Controller was
upheld by the Administrative Tribunal, Goa.
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9. The present respondents, not satisfied with the
concurrent orders, preferred writ petition under Article 227 of
the Constitution before the High Court of Bombay at Goa.
10. Vide judgment and order dated November 29, 2006,
High Court allowed the writ petition and set aside the
concurrent orders of eviction passed by the Additional Rent
Controller and the Administrative Tribunal. It is from this order
that the present appeal by special leave has been preferred by
the present appellants.
11. We heard Mr. Ranjit Kumar, learned senior counsel
for the appellants and Mr. S.G. Dessai, learned senior counsel
for the respondents at quite some length.
12. The Additional Rent Controller, after sifting the
evidence let in by the parties and the covenants of the
partnership deed, recorded his findings thus :
"It may be noted that from the covenants of the partnership
deed it was clear that the books of accounts had to be
maintained, statement for the purpose of income tax had to
be prepared etc. and instead of bringing this evidence into
record the respondent went on saying that he could not
produce the books of accounts as his father had told him
that the same were not maintained from the beginning. This
statement was made on the next date of hearing when on
the previous date he had promised to produce the same.
Further the power of attorney of the respondent mentioned
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that he was not able to say how much his wife received from
the share of the sales of the two tempos belonging to the
partnership firm even the files regarding the income tax
returns, the power of attorney of the respondent stated that
he was not aware whether any returns have been filed or
not. It is clear from this that none of the partners were
brought into the witness box. It is difficult to accept that this
partnership actually existed but it was a cover front for any
under-hand dealing with the said Balaji Lawande and
Netravalkar. It is to be noted that neither Balaji nor
Netravalkar came to depose as witnesses. As regards to the
point that the partnership was purely a family concern it was
difficult to accept when at the time of hearing different parties
of the same family engaged different advocates and
advances arguments on their behalf. Under no
circumstances, it was explained as to why Kunda Wagh was
taken as a partner when she could have easily been taken
as an employee as she was required for the purpose of
liaison and planning of tours."
13. The Additional Rent Controller, thus, held that the
case of the tenant that the partnership firm existed cannot be
accepted and that it was a cover for an underhand dealing
with Balaji Lawande and Netravalkar. The Additional Rent
Controller went on to hold :
".......Even if the authorities mentioned by the respondent in
their written arguments were to support the case of the
respondent, it is difficult to accept this proposition because in
the facts itself and the omission of the respondent to come
out with the truth the said authorities do not hold him at all.
Now considering all these aspects it is held that the
respondent has not performed his obligation specially with
reference to the authority mentioned above in RCJ 1993 Vol.
I page 292 to 295 in the case of Trilok Singh Vs. Bavanti
Prasad where it was mentioned in the judgment "Sub-letting
being clandestine affairs direct evidence cannot ordinarily be
available" have been complied by the respondent to justify
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the genuineness and the existence in practice of the said
partnership deed. It may be noted also that the ground taken
at later stage that two partners of the firm had become the
legal heirs of the respondent, the question of the application
of the section 2(p) i.e. the definition of the member of the
firm of the tenant becomes applicable after his death cannot
be accepted because proceedings were initiated well before
the death of the original respondent and it relates to the
events at the time of filing of this application. It may be noted
also that the evidence of the respondent was recorded
through his power of attorney and son Ulhas during the life
time and, therefore, the respondent cannot take shelter of
this provision now.
Under these circumstances, as the respondent has
failed to perform his obligation to prove that there had not
been an under hand sub-letting because in all such cases,
the sub-letting was always clandestine and, therefore, direct
evidence cannot be brought by the applicant and hence the
duty cast on the respondent."
14. The Administrative Tribunal also held that the
partnership - Mandovi Tours and Travels - was not a genuine
partnership and it was formed to cover up subletting of suit
premises. For recording this finding, the Administrative Tribunal
gave the following reasons:
"Admittedly, the appellants did not examine any of the
partners of the partnership firm before the Rent Controller.
However, the appellants examined one Shri Ulhas Kholkar
as a power of attorney for the original tenant. In fact, he
happens to be the son of the original tenant. According to
this witness, the appellants started the business in the suit
premises under the name and style M/s. Mandovi Tour &
Travels in February 1977 for conducting sight seeing tours.
This witness was cross-examined by the respondents. From
the trend of the cross examination of this witness, it is clear
that the partnership was not at all acted upon and it only
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remained as a paper document. He has admitted that the
Mandovi Tours and Travels has not maintained any books of
accounts from the inception. It was suggested to this witness
that there are no account books as partnership business
does not exist at all which suggestion was denied by this
witness. It was also suggested to this witness that the suit
premises are in exclusive possession of Sitakant Netravalkar
and Balaji Lawande which suggestion was also denied by
this witness. His wife happens to be one of the partners but
he does not know what income his wife receives from the
partnership business. In his cross-examination, he has also
stated that he cannot say as to who shall retain the premises
in case the partnership was dissolved. As per clause 7 of the
Partnership Deed, it was necessary for the partnership firm
to open bank account in the name of firm to be operated by
second and third party jointly. As per clause 8 of the
partnership deed the accounting year of the partnership was
from Ist April ending on 31st March every year and the first
sets of books were required to be closed on 31.3.1978. As
per clause 9 of the partnership deed, it was necessary to
keep proper books of accounts and which were required to
be completed on 31st March every year. However, it is
pertinent to note that the appellants have not brought any
evidence on record to show that they have opened a bank
account in the name of the firm. The appellants have also
not brought any evidence on record to show that books of
accounts were maintained by the partnership firm. In my
view, therefore, the evidence on record clearly establishes
that the said partnership was not at all a genuine partnership
and it was created only to circumvent the provisions of the
Rent Control Act."
15. The Administrative Tribunal also held that the tenant
did not hold any control over the suit premises and though his
case was that to do travel business, a firm Mandovi Tours and
Travels was constituted but failed to prove that Mandovi Tours
and Travels was a genuine partnership. This is what the
Administrative Tribunal said :
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"In the present case before me the original tenant had
only 10% share. The partner Smt. Kunda J. Vagh who is
stranger has 30% shares. As discussed above, the said
partnership is found not to be genuine partnership and it was
formed to cover up the sub-letting of the suit premises. This
being the position, it is difficult to hold that the appellants still
have a control over the suit premises. I am, therefore,
satisfied that the appellants have parted with the possession
of the suit premises to the said Mandovi Tours and Travels.
The appellants have failed to prove that the said partnership
was a genuine partnership."
16. Insofar as High Court is concerned, two errors are
apparent from its judgment. In the first place, High Court
erred in holding that the tenant wanted to examine one of the
partners, Umesh Mahabaleshwar Kholkar but he was not
permitted by the Rent Controller. This is factually incorrect
inasmuch as there is nothing on record that even remotely
suggests that the tenant wanted to examine one of the
partners Umesh Mahabaleshwar Kholkar. What appears from
record is that an application came to be filed by M/s. Mandovi
Tours and Travels through its partner Umesh Kholkar for its
impleadment and intervention but the said application was
rejected on September 15, 1994. The fact of the matter is that
the said order never came to be challenged by M/s. Mandovi
Tours and Travels. Secondly, the High Court failed to advert to
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the question whether the firm M/s. Mandovi Tours and Travels
was a genuine partnership firm or was a camouflage to cover
up the mischief of subletting. Though, the Administrative
Tribunal as well as the Additional Rent Controller have
recorded a specific finding that the partnership M/s. Mandovi
Tours and Travels was not genuine partnership and it was
created with an intention to circumvent the provisions of Act,
1968, but the High Court did not go into this aspect on the
ground that there was no specific pleading to this effect in the
application for eviction.
17. Section 22(2)(b)(i) of the Act,1968 which is relevant
for the present appeal reads thus :
"22. Grounds for eviction. - (1)..............
(2) If the Controller, after giving the tenant a
reasonable opportunity of showing cause
against the application, is satisfied -
(a).........................................................
(b) that the tenant has without the written
consent of the landlord -
(i) transferred his right under the
lease or sub-let the entire building
or any portion thereof, or"
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18. In the case of Associated Hotels of India Ltd., Delhi
v. S.B. Sardar Ranjit Singh1, this 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.
19. The aforesaid legal position was also noticed by this
Court in the case of Smt. Krishnawati v. Hans Raj2.
20. In Helper Girdharbhai v. Saiyed Mohmad
Mirasaheb Kadri & Others3, 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.
21. While dealing with the mischief contemplated under
Section 14(1)(b) of the Delhi Rent Control Act, 1958 providing
1
AIR 1968 SC 933
2
(1974) 1 SCC 280
3
(1987) 3 SCC 538
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for eviction on the ground of subletting, this Court in the case of
Jagan Nath (Deceased) through LRs. vs. Chander Bhan And
Ors.4 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"
22. 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
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(1988) 3 SCC 57
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Premises (Control of Rent and Eviction) Act, 1950, fell for
consideration in Gopal Saran vs. Satyanarayana5. 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. v. 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 Foa 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 v. Desu Rangiah (AIR
1954 Mad 182) were approved by this Court in which the
legal position in Jackson v. Simons [(1923) 1 Ch 373) were
relied upon. The Madras High Court had also relied on a
judgment of Scrutton L.J. in Chaplin v. Smith [(1926) 1 KB
198] at page 211 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.
This position was also accepted in Vishwa Nath v. Chaman
Lal (AIR 1975 Del. 117) 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
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(1989) 3 SCC 56
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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.
23. In the case of G.K. Bhatnagar (Dead) By LRs. v.
Abdul Alim6, this Court held as follows :
"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 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."
24. A three-Judge Bench of this Court in Parvinder
Singh v. Renu Gautam and Others7 commented upon the
device adopted by tenants many a time in creating partnership
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(2002) 9 SCC 516
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(2004) 4 SCC 794
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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, 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.
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
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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........."
25. In yet another decision, a three-Judge Bench of this
Court in Mahendra Saree Emporium (II) v. G.V. Srinivasa
Murthy8 considered earlier decisions, few of which have been
referred above, while dealing with a matter relating to
subletting 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"
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(2005) 1 SCC 481
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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 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 v. Hans Raj [(1974) 1 SCC 289]
reiterating the view taken in Associated Hotels of India Ltd.
v. S.B. Sardar Ranjit Singh [(1968) 2 SCR 548] this Court so
noted the settled law: (SCC p. 293, para 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
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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
(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 v. 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 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
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[(2004) 4 SCC 794] 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, 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"."
26. In Vaishakhi Ram and Others v. Sanjeev Kumar
Bhatiani9, one of us (Tarun Chatterjee, J.), in a case of
subletting under Section 14(1)(b) of Delhi Rent Control Act,
held:
"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;
(2) such sub-letting or assigning or parting with
the possession has been done without obtaining the
consent in writing of the landlord."
.............."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,
9
(2008) 14 SCC 356
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then the onus is shifted to the tenant to prove that it was not
a case of sub-letting."
27. In Nirmal Kanta (Dead) Through LRs. v. Ashok
Kumar and Another10 , 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 sub-tenancy 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 subletting 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
10
(2008) 7 SCC 722
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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 subletting.
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.
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(v) Initial burden of proving subletting 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.
29. The main question that falIs to be determined in
the present case is: is High Court justified in non-suiting the
landlord on the ground that he has not pleaded that business of
the firm M/s. Mandovi Tours and Travels is not conducted by its
partners, but by Balaji Lawande and Netravalkar and that
tenant has parted with the premises by subletting the same to
these two persons under the garb of deed of partnership by
constituting a bogus firm? In our judgment, the answer have to
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be in negative. In the plaint, the landlord averred that the
tenant has sub-let the premises to M/s. Mandovi Tours and
Travels, a partnership concern, without his permission and that
the sub-lessee has been exclusively running the business in
the rented premises although he has not pleaded specifically
that the premises have been sublet to Balaji Lawande and
Netravalkar but such lack of pleading cannot be held to be
fatal. It has to be kept in mind that a transaction such as
sub-letting by tenant which is not permissible under lease
may be outwardly a deceptive arrangement and landlord
may not come to know of true facts. The pleadings in such
matters ought not to be construed too technically. The true
test, as has been repeatedly said, is to see whether the other
side has been taken by surprise or prejudiced.
30. If the purpose of constituting partnership by the
tenant is ostensible and a deed of partnership is drawn to
conceal the real transaction of subletting in a given case, the
court may be required to tear the veil of partnership to find out
the real nature of transaction entered into by the tenant and in
such circumstances the evidence let in by the landlord cannot
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be ignored on the ground that there is some variance between
pleading and proof. In a case such as the present one, the
rule of secundum allegata et probata is not strictly applicable
as the tenant cannot be said to have been put to any prejudice.
31. The High Court, as the discussion in impugned
judgment shows, has been too technical in construing the
pleadings of the case overlooking the fact that plea of sub-
letting has been set up by landlord in the plaint and there has
been full and critical examination of the evidence by the
Additional Rent Controller as well as the Administrative
Tribunal. The Additional Rent Controller and the
Administrative Tribunal cannot be said to have misdirected
themselves either on law or on facts. Both Authorities found as
a fact that Mandovi Tours and Travels was not a genuine
partnership and it was formed to cover up the subletting of the
suit premises. They also found as a fact that the partnership
having not been found to be genuine partnership, it was difficult
to hold that the tenant continued to have a control over the suit
premises. These findings recorded by the Administrative
Tribunal as well as the Additional Rent Controller are based on
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the consideration of evidence on record. In any case, it cannot
be said that the aforesaid view of the Rent Control Authorities is
not a possible view.
32. In Bathutmal Raichand Oswal v. Laxmibai R. Tarta
And Another11, this Court held :
"The High Court cannot in guise of exercising its
jurisdiction under Article 227 convert itself into a
court of appeal when the Legislature has not
conferred a right of appeal and made the decision of
the subordinate court or tribunal final on facts."
33. In State through Special Cell, New Delhi v. Navjot
Sandhu alias Afshan Guru And Others12 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
11
(1975) 1 SCC 858
12
(2003) 6 SCC 641
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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"."
34. The aforesaid two decisions and few other
decisions, namely, Chandavarkar Sita Ratna Rao v. Ashalata
S. Guram13 , State of Maharashtra v. Milind & Ors.14, Ranjeet
Singh v. Ravi Prakash15, came to be considered by this Court in
the case of Shamshad Ahmad & Ors. v. Tilak Raj Bajaj
(Deceased) through LRs. And Others16 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 reappreciate, nor reweigh 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
13
(1986) 4 SCC 447
14
(2001) 1 SCC 4
15
(2004) 3 SCC 682
16
(2008) 9 SCC 1
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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."
35. In light of the aforesaid legal position concerning
jurisdiction of the High Court under Article 227, which the High
Court failed to keep in mind, it must be held that in the facts
and circumstances of the case and the findings recorded by the
Additional Rent Controller as well as the Administrative
Tribunal, High Court was not justified in interfering with the
concurrent orders of eviction based on the ground of sub-
letting in exercise of its power under Article 227 of the
Constitution of India.
36. The submission of the learned senior counsel for
the respondents that the powers of the Rent Controller under
the Act, 1968 are exercisable like that of courts of Mamlatdars
under the Goa, Daman and Diu the Mamlatdar’s Court Act,
1966 and that onus never shifted to the tenant is devoid of any
substance and is noted to be rejected.
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37. For the foregoing reasons, the appeal must be
allowed and is allowed. The judgment dated November 29,
2006 passed by the High Court is set aside. The parties will
bear their own costs.
........................J
(Tarun Chatterjee)
........................J
(R. M. Lodha)
New Delhi
October 30, 2009.
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