HELPER
GIRDHIARBHAI V. SAIYED MOHMAD MIRASAHEB KADRI & ORS [1987] INSC 154 (6 May
1987)
MUKHARJI,
SABYASACHI (J) MUKHARJI, SABYASACHI (J) NATRAJAN, S. (J) CITATION: 1987 AIR
1782 1987 SCR (3) 289 1987 SCC (3) 538 JT 1987 (2) 599 1987 SCALE (1)1235
CITATOR
INFO : RF 1988 SC 852 (8)
ACT:
Bombay
Rents, Hotel & Lodging House Rates Control Act, 1947: ss. 13 and
29--Tenant--Eviction of on ground of sub- letting--Demised premises used for
partnership business--Lessee in legal possession-Held not enough to prove
subletting. High Court--Whether could reappraise evidence in revision.
Partnership
Act, 1932: ss. 4 & 6---Partnership--Determi- nation of--Whether mixed
question of law and fact.
HEADNOTE:
Sub-section
(2) of s. 29 of the Bombay Rents, Hotel and Lodging House Rates Control Act,
1947, as it stood at the relevant time, barred further appeal against any
decision in appeal under sub-s. (1), and instead conferred revisionary powers
on the High Court in such a case.
The
appellant-tenant was a partner in firm 'A' which was carrying on business of
manufacturing cloth in the suit premises. That business was closed on October
4, 1960 and a new firm 'B' came into being to run the business in manufacturing
and selling neon sign tubes. On October 13, 1960 a partnership deed was
executed by six persons as partners of the new firm. The document was silent as
to where the business was started. On or about October 24, 1960 another
partnership deed was executed by these six persons and the appellant and his
father with an agreement to share only profits to the extent of 3 paise in a
rupee. After the death of the appellant on February 1, 1961 a new partnership
deed was executed by the remaining seven partners with the same terms and
conditions.
The
respondent-landlord filed eviction suits against the appellant defendant
alleging that the premises which were leased to the appellant for manufacturing
cloth in the name of firm 'A' had been unlawfully sublet in major part to
defendants 2 to 5 who were running business in partnership for manufacturing
neon signs. The appellant contended that firm 'A' was not the tenant of the
suit premises, that his father was the original tenant with whom he had joined
in business as a partner in firm 'A', that the suit premises were to be used
for business and he 290 could use it for any business, that he had joined firm
'B' in partnership, that the suit premises was with him and defendants 2105 had
not acquired any tenancy rights in the suit premises, and that lie had filed a
civil suit to dissolve the partnership, and to take account which was later
decreed in his favour and affirmed in appeal.
The
trial court held that there was unlawful subletting, and decreed the suit for
possession. The appellate court, Court of Small Causes, found that the
appellant was only carrying on the business in partnership with defendants 2 to
5 in the name of firm 'B' in the suit premises, and held that there was no
subletting, change of user, and breach of terms of tenancy. The High Court in
revision on a reappraisal of evidence took the view that the partnership was a
camouflage and was never acted upon, and in fact and in reality the partnership
firm was a sub-tenant of the appellant.
In
the appeal by special leave it was contended for the appellant that there was a
genuine partnership which was acted upon and this finding of the appellate
court could not have been reversed by the High Court in revision under s. 29(2)
of the Act. For the respondents it was contended that the original first
partnership deed did not mention that the appellant or his father was a
partner, that it was in the second partnership deed that the appellant and his
father joined the firm, that there was a gap of time when there was user by the
partnership firm of the premises in question when the appellant was not a
member of the firm, which fact was not considered by the appellate court, and
that the partnership deed was a camouflage.
Allowing
the appeal,
HELD:
1. The High Court exceeded its jurisdiction under s. 29(2) of the Bombay Rents,
Hotel and Lodging House Rates Control Act, 1947 in reversing the view of the
appellate court. [305BC]
2.1
The distinction between an appeal and revision is a real one. A right to appeal
carries with it a right of re- hearing on law as well as fact, unless the
statute confer- ring the right to appeal limits the re-hearing in some way.
The
power to hear a revision is generally given to a superior court to ensure that
the principles of law have been correctly borne in mind, that the facts have
been properly appreciated and a decision arrived at taking all material and
relevant facts in mind, that the decision is such which a reasonable man could
have arrived at and which does not lead to a miscarriage of justice.
[301H-302A; 303EF] 291
2.2
The Court must guard itself against permitting in the guise of revision
substitution of one view where two views are possible and the appellate court
has taken a particular view. If a possible view has been taken, the High Court
would be exceeding its jurisdiction to substitute its own view with that of the
courts below because it considers it to be a better law. The fact that the High
Court would have taken a different view is wholly irrelevant. Whether there was
a partnership or not is a mixed question of law and fact, depending upon the
varying circumstances in different cases. [303FG; 304E] Hari Shankar v. Rao
Girdhari Lal Chowdhiry, [1962] 1 Suppl. SCR 933; Puranchand v. Motilal, [1963]
Suppl. 2 SCR 906; Krishnawati v. Hans Rai, [1974] 2 SCR 524; Phiroze Bamanji
Desai v. Chandrakant M. Patel & Ors., [1974] 3 SCR 267; Bhai Chand Ratanshi
v. Laxmishankar Tribhavan, [1982] 1 Rent Control Journal 242; M/s Kasturbhai
Ramchand Panchal & Brothers and Others v. Firm of Mohanlal Nathubhai and
Others, AIR 1969 Gujarat 110 and Punamchandra Revashankar Joshi v. Ramjibhai
Maganlal. 7 Gujarat Law Reporter (1966) at page 807, referred to. In the
instant case, the 'Court of Small Causes considered the principles of law, evaluated
the evidence and held that there was in fact and in law a partnership. Such a
view was not an impossible one or a perverse one. Therefore, there was nothing
that could be done about such a view within the ambit and scope of the
revisional powers under s. 29(2) of the Act and the High Court could not have
substituted its own finding for the one reached by the appellate court.
[404H-305A; 304D]
3.
Whether the ingredients of partnership as embodied in the law of partnership
were there or not in a particular case must be judged in the fight of
principles applicable to partnership, that is (1) there must be an agreement
entered into by all the persons concerned, (2) the agreement must be to share
the profits of a business, and (3) the business must be carriedou by all or any
of the persons concerned acting for all. Sharing of profits and contributing to
losses are not the only elements in a partnership, existence of agency is
essential. [296FG; 304G; 304E] Chimanram Motilal and Another v. Jayantilal Chhaganlal
and another, AIR 1939 Bombay 410 and Mohammed Musa Sahib (dead) and Others v.
N.K. Mohammed Ghouse Sahib and Another, AIR 1959 Madras 379, referred to.
In
the instant case, judged by these principles it could not be said 292
unequivocally that there was no partnership. The partnership deeds gave the
appellant the right to share the profits' and made him an agent for certain
limited purposes of the firm and there was evidence that the partnership deeds
were acted upon. It is true that the bank accounts were not to be operated by
the appellant, that he was to be given a fixed percentage of profit
irrespective of profit and that he was not to share the losses. There is
nothing inherently illegal or improper in making provision of such a type. In
the eyes of law such a claim is really non-sequitur or neutral proving neither
the existence nor non-existence of a genuine firm. The appellant was to bring
in his asset being the tenancy of the premises in question for the user of the
partnership. Debiting the fixed amount payable to the appellant in the expenses
account is also not inconsistent with partnership. This is also not
inconsistent with treating the rent of the firm in the context of the total
expenditure of the firm. There was evidence of a suit of dissolution of the
partnership where none of the partners took the plea that it was a false or a
fictitious document. Though the decree in the dissolution suit was not binding
in these proceedings inter se between the parties as partners, it is a piece of
evidence which cannot be wholly ignored. All these factors were present before
the appellate court. These were reap- praised by the High Court. [304G; 298A;
297B; 298C; 297C; 301A; 298B]
4.
The partnership firm was carrying on business in the premises in question since
October 4, 1961. If there was such a partnership firm of which the appellant
was a partner as a tenant the same would not amount to subletting leading to
forfeiture of the tenancy, for there cannot be a sublet- ting, 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 sublease. [294FG; 305B]
Madras Bangalore Transport Co. (West) v. Inder Singh and others, [1986] 3 SCC
62; Mehta Jagjivan Vanechand v. Doshi Vanechand Harakhchand and others, (AIR
1972 Gujarat 6) and Gundalapalii Rangamannar Chetty v. Desu Rangiah and others,
(AIR 1954 Madras 182), referred to. CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 3551 of 1979.
From.
the Judgment and Order dated 20/21.8.1979 of the Gujarat High Court in C.R.
Appln. No. 1218 of 1977.
293
Dr. Shankar Ghosh, P.H. Parekh and Ayesh Misra for the Appellant. T.U. Mehta,
R.C. Bhatia and P.C. Kapur for the Respondents.
The
Judgment of the Court was delivered by Sabyasachi Mukharji, J. Whether the
appellant herein and his father had sublet the premises in question in or about
1960 in terms of section 13(1)(e) of the Bombay Rents, Hotel and Lodging House
Rates Control Act, 1947 (hereinafter called the 'Rent Act') is' the question
involved in this appeal by special leave from the judgment and order of the
High Court of Gujarat dated 21st of August, 1979.
In
order to decide this question, it is necessary to decide the scope and ambit of
section 29(2) of the Rent Act.
To
decide this, facts must be referred to. The appellant claimed to be the tenant
in respect of the two premises which are quite adjacent to each other, one of
which is involved in this appeal. The respondent is the landlord of the two
premises and these were situated at Raikhad Ward, Ahmedabad. The respondent had
alleged in the two suits that the appellant was his tenant in the suit premises
which were leased out to him and before him his father, for conducting the business
in the name of Ahmedabad Fine & Weaving Works and according to the terms of
tenancy suit premises were leased for manufacturing cloth in the name of
Ahmedabad Fine & Weaving Works. The respondent had further alleged that the
appellant No. 1 had closed the business and he was not using the said premises
for the purpose for which it was let to him. It was the case of the appellant
that in respect of the suit premises he was carrying on his business with
respondents Nos. 2, 4 and 5 in the name of respondent No. 2, M/s. Bharat Neon
Signs (hereinafter referred to as respondent No. 2).
We
are concerned in this appeal with only one of the premises which was involved
in Suit No. 553 of 1969. It is not in dispute and it never was that the
premises was being used by Bharat Neon Signs firm being the defendant No. 2 in
the original suit. At the time of the institution of the suit the defendants
Nos. 2 to 5 were admittedly the partners. The present appellant who was the
original defendant No. 1 claimed to be a partner. The main controversy was
whether the appellant had sublet the premises to defendant No. 2, Bharat Neon
Signs or 294 whether he being a partner of the said firm had permitted the said
firm to use the premises in question. It is clear from the evidence on record
that the partnership firm had undergone metamorphosis from time to time and
again ever since the year 1960. The firm Bharat Neon Signs first originated on
4th of October, 1960. As many as six persons were named in the partnership
firm, on or about 4th of October, 1960 and they had executed a deed of
partnership on 13th of October, 1960 which is Exhibit-114 on the record. The
said partnership deed records six persons who were to run the business in
manufacturing and selling Bharat Neon Signs tubes. However, the document is
silent as to where the business was started. On or about 24th of October, 1960
another partnership deed being Exhibit-69 came to be executed among the six
persons and the father of the appellant Girdharlal. The document is Exhibit-69
and is signed by the father of the appellant and the appellant himself also. It
may be mentioned that the partnership deed Exhibit-114 was executed by six
persons and at that stage the appellant or his father were not partners in the
firm. But thereafter when the partnership deed Exhibit-69 was executed the
appellant and his father joined the firm with an agreement to share profits
only and their share was fixed at 0.03 paise in a rupee. There is a third
partnership deed Exhibit-70 which showed that the deceased tenant Girdharlal
had died on 1st of February, 1961 and so by the remaining seven partners with
same terms and conditions, a new partnership deed being Exhibit-70 was executed
on 22nd September, 1961. At this time the share of the appellant was fixed at
0.03 paise in a rupee to share the profits only. In 1965 some partners retired
and the remaining four partners executed a fresh partnership deed Exhibit-117
on 1st April, 1965. This last partnership deed was executed by the appellant
and original defendants Nos. 3, 4 and 5.
The
main question in issue in this appeal as well as before the High Court in
revision was whether there was a genuine partnership at the appellant was a
partner. It is true that since after 4th of October, 1960 the partnership firm
was carrying on business in the premises in question. It is well settled that
if there was such a partnership firm of which the appellant was a partner as a
tenant the same would not amount to subletting leading to the forfeiture of the
tenancy. For this proposition see the decision of the Gujarat High Court in the
case of Mehta Jagjivan Vanechand v. Doshi Vanechand Harakhchand and others,
A.I.R. 1972 Gujarat 6.
Thakkar,
J. of the Gujarat High Court, as the learned Judge then was, held that the mere
fact that a tenant entered into a partnership and allowed the premises being
used for the benefit of partnership does not constitute assignment or
subletting in favour of the partnership firm entitling a landlord to recover
possession. This view is now concluded by the decision of this Court in Madras
Bangalore Transport Co. (West) v. Inder Singh and others, [1986] 3 S.C.C. 62.
The
trial court in the instant appeal held that there was subletting. It accordingly
decreed the suit for possession instituted by the landlord. The suit, inter
alia, was filed by the landlord on the ground of subletting. There was an
appeal before the Court of Small Causes, Bombay and by judgment and order
delivered by the Court of Small Causes, Bombay on 18th of August, 1977, it was
held that the learned Trial Judge had erred in passing a decree for possession
on the ground of subletting, change of user and breach of terms of tenancy. In
the premises, the appeal was allowed. It may be mentioned that the respondent
No. 1 is the landlord of two premises which were quite adjacent as mentioned
before.
The
respondent-plaintiff had alleged in both the suits that the appellant was his
tenant in the suit premises which were leased to him for conducting his
business in the name of Ahmedabad Fine & Weaving Works, and according to
the terms of tenancy suit, the suit premises were leased for manufacturing
cloth in the name of Ahmedabad Fine & Weaving Works.
The
landlord had alleged that the appellant had closed that business and he was not
using the premises in question for the purpose for which it was let to him. It
was further alleged by the landlord that the appellant had unlawfully sublet
the major part of the premises in question of both the suits to defendant Nos.
2 to 5 in the original suit and these defendants were running business in
partnership for manufacturing of neon signs in the name of Bharat Neon Signs.
It was further alleged that the appellant had also unlawfully sublet one room
of the suit premises to defendant No. 6 in Suit No. 553 of 1969 who was
residing in that room.
For
the purpose of the Suit No. 553 of 1969 with which the appeal is concerned, it
is relevant to state that the appellant had raised the contention that
Ahmedabad Fine & Weaving Works was not the tenant of the suit premies but
the suit premises was tenanted by the father of the appellant Girdharlal
Chimalal in 1938 and he was the original tenant of the premises and appellant
subsequently joined the business of his father as a partner and the name of the
partnership firm was Ahmedabad Fine Weaving Works. He has stated further that
the suit premises were to be used for business and he could use it for any
business and he joined in partnership with Defendants Nos. 2 to 5 somewhere in
1961 to prepare neon signs and the defendants Nos. 2 to 5 were his partners and
doing business in the suit premises. He contended further that the suit
premises was with him and the 296 defendants Nos. 2 to 5 had not acquired any
tenancy rights in the suit premises. It is further stated that he had filed a
civil suit to dissolve the partnership and to take account and his suit was
pending in City Civil Court. It may be mentioned that by the time the revision
petition came to be decided by the High Court the suit had been decreed in his
favour directing a dissolution of the said partnership and directing taking of
the accounts. There was an appeal filed from that decree and that appeal was
also dismissed and disposed of affirming the decree for the dissolution of the
partnership, inter se between the parties being the partners of the said firm.
These facts were accepted that there was a partnership. As mentioned
hereinbefore the learned trial Judge consolidated both the suits and in the
instant suit being No. 553 of 1969 with which this appeal is concerned, it was
held by the learned trial Judge that there was unlawful subletting. There was a
decree for possession.
This
was set aside in appeal. The Appellate Court so far as the material for the
present appeal is concerned held that there was no subletting and there was
only carrying on of the business in partnership with defendants Nos. 2 to 5 in
the name of Bharat Neon Signs. Therefore, the first question that had to be
decided by the Appellate Court being the Court of Small Causes, Bombay and if a
revision lay before the High court was whether there was any genuine
partnership. The partnership deeds were there, the appellant was not to share
in the losses. The Court of Small Causes came to the conclusion on an analysis
of the evidence before it and the terms of the three partnership deeds referred
to hereinbefore that there was a genuine partnership in law which was acted
upon. The High Court in revision reversed that finding. The first question
therefore, is, whether the High Court could do so in the facts of this case and
second- ly whether the High Court was right in so doing.
Whether
there was a partnership or not may in certain cases be a mixed question of law
and fact, in the sense that whether the ingredients of partnership as embodied
in the law of partnership were there in a particular case or not must be judged
in the light of the principles applicable to partnership. The first question,
therefore, is what is a partnership? That has to be found in section 4 of the
Indian Partnership Act, 1932, it says "Partnership is the relation between
persons who have agreed to share the profits of a business carried on by all or
any of them acting for all" (Emphasis supplied). Section 6 of the said Act
reiterates that in determining whether a group of persons is or is not a firm,
or whether a person is or is not a partner in a firm, 297 regard shall be had
to the real relation between the par- ties, as shown by all relevant facts
taken together. The following important elements must be there in order to
establish partnership, (1) there must be an agreement entered into by all
parties concerned, (2) the agreement must be to share profits of business; and
(3) the business must be carried on by all or any of the persons concerned
acting for all. The partnership deeds were there entitling the petitioner to
share in the partnership. It is true that in the partnership deeds the bank
accounts were not to be operated by the appellant, and further that
irrespective of the profit the clause of the partnership deed provided that
there should be a fixed percentage of profit to be given to the
partner-appellant No. 1. The appellant was not to share the losses. But there
is nothing illegal about it. The appellant was to bring his asset being the
tenancy of the premises in question for the user of the partnership. All these
tests were borne in mind by the Court of Small Causes, Bombay in the appeal
from the decision of the learned trial Judge. The Appellate Court had
considered the partnership deeds. One point was emphasised by Mr. Mehta,
learned counsel appearing for the respondents, that the original first
partnership deed did not mention the appellant or his father as a partner. It
was in the second partnership deed that the appellant and his father joined the
firm. The firm started as emphasised by Mr. Mehta on 4th of October, 1960 and
it was only on the 24th of October, 1960 the second partnership deed was
-executed. Therefore, it was emphasised that there was a gap of time when there
was user by the partnership firm of the premises in question when the appellant
was not a member of the firm. It was emphasised that this aspect was not
considered by the Court of Small Causes and the High Court, therefore, was
justified in interfering with the findings of the Court of Small Causes. We are
unable to agree. These deeds were there, the partners were cross- examined,
there was no specific evidence as to from what date the firm started functioning
from the particular premises in question. Secondly, it was emphasised by Mr.
Mehta that the partnership deed was a camouflage. It is evident from the
sales-tax registration and other registration certificates and licences under
the Shops and Establishments Act that the partnership was registered in the
name of the appellant and the appellant was also indicated as a partner.
It
was so in the Income Tax returns and assessments. There- fore, it was submitted
that the Court of Small Causes com- mitted an error of law resulting in
miscarriage of justice.
It
was submitted by Mr. Mehta that once it was accepted that the partnership deed
was a mere camouflage the other subsequent acts and conducts were merely
ancillary and were put in a formal way. But the question is from the three
deeds itself which were examined in detail by the Court 298 of Small Causes and
which were re-examined by the High Court could it be said unequivocally that
there was no partner- ship. The deeds gave the appellant the right to share the
profits and made him agent for certain limited purposes of the firm and there
was evidence that the partnership deeds were acted upon. There was evidence of
suit of dissolution of the partnership where none of the partners took the plea
that it was a false or a fictitious document. Though the decree in the
dissolution suit was not binding in these proceedings, inter se between the
parties as partners it is a piece of evidence which cannot be wholly ignored.
All these factors were present before the Court of Small Causes.
These
were reappraised by the High Court. One point was emphasised by Mr. Mehta that
in the partnership deed which is not necessary to recite the terms, the
petitioner was completely excluded in operating the bank accounts etc.
There
is nothing inherently illegal or improbable making a provision of such a type.
In the eye of law, such a clause is really non-sequitur or neutral proving
neither the existence nor non-existence of a genuine firm.
The
first partnership deed which is Exhibit-114 is dated 13th October, 1960. It
recited that the partnership firm should be presently started at Ahmedabad and
the same should later be started in another city. In this the appellant was not
a partner. Exhibit-69 at page 136 of Volume-II of the paper-book is a
partnership deed wherein Girdharlal the father of the Appellant No. 1 and the
appellant No. 1 joined as partners. It recited that the partnership started
from 4th of October, 1960 at Ahmedabad. It was registered in the name of 7th
and 8th partners, Girdharlal who was the appellant and his father. It was
recited that the work of the partnership would be done by the parties of the
fourth, fifth, sixth, seventh and eighth as per advice and instructions of the
first, second and third. All the work had been done by some of the partners of
which appellants were not parties and that they had to do the said work as per
instructions of the other partners. Clauses 6 and 7 of the said partnership
deed recited inter alia as follows:
"6.
The year of accounts of our partnership shall be Aso Vadi 30th day i.e. Diwali
and the first account year is decided to be the Aso Vadi 30th day of Samvat
Year 2017.
While
settling accounts at the close of the year, 33% amount from the sum which may
remain as net profit after deducting all expenditures, viz interest, discount,
rent of the shop, rent of the godown, insurance, brokerage, travelling, telegrams,
postage, salaries of employees, etc. shall 299 be carried to Reserve Fund and
thereafter, in the sum that remains as net profit, the shares of us the
partners have been fixed as under:- Rs. Np.
1.
Ratanlal Jivabhai. 0 - 16
2.
Manubhai Lalbhai. 0 - 16
3.
Keshavlal Mulchand. 0 - 05
4.
Kantilal Bhogilal. 0 - 10
5.
Virchand Keshavji. 0 - 23
6.
Satyapal Jeshal. 0 - 24
7.
Girdharlal Chimanlal. 0 - 03
8.
Helper Girdharlal. 0 - 03 ----------------- 0-100 i.e. Re. 1/-
7.
While settling accounts at the close of the year, if the sum less than Rs. 1500
falls to the 0-03 shares of the partners of the seventh and eighth parts, the
amount falling short has to be debited towards the head of expenditure and Rs.
1500 (fifteen hundred only) have to be paid in full to each of them two, and in
those circumstances or if there be loss, the parties of the seventh or eighth
parts have not been held liable therefore; and in the year or' losses, it has
been decided to pay Rs. 1500 (fifteen hundred only) to each of them, after
debiting the same towards the head of expenditure and in the year of losses
nothing has to be carried to the 'Reserve Fund' and the loss has to be borne by
us to parties first to sixth parts in the following proportion:-
1.
Ratanlal Jivabhai 0 - 17
2.
Manubhai Lalbhai 0 - 17
3.
Keshavlal Mulchand 0 - 05
4.
Kantilal Bhogilal 0 - 11
5.
Virchand Keshavji 0 - 25
6.
Satyapal Jeshal 0 - 25 0-100 i.e. Re. 1/- 300 Clause 8 empowered the operating
of the bank accounts by partners other than the appellant and his father. We
find intrinsically nothing improbable. It is embodied in the deeds the
functioning of the partnership. The third partner- ship which is dated 22nd of
September, 1961 also indicates as parties of sixth part the name of the
appellant. The relevant portion of the partnership deed reads as follows:-
"To wit, the parties of the first to sixth parts out of us, deceased Khristi
Girdharbhai Chimanlal and Shah Virchand Keshavji had jointly started the
business of manufacturing and selling Neon Signs Tubes, in partnership in
Ahmedabad from 4.10.1960, in the name and style of Bharat Neon Signs.
However,
on account of the death of Khristi Girdharbhai Chimanlal on 1.2.61 and other
reasons, the said partnership was dissolved from 8.9.61. Thereafter, we the
parties from the first to seventh part have, after purchasing at its cost
price, all the debts and dues, goods, stock etc., together with goodwill of the
dissolved partnership, started manufacturing and selling of Neon Signs Tubes in
partnership from 9.9.61. We, the parties of all the seven parts execute the
deed of the said partnership to-day i.e. 22.9.61. The terms and conditions thereof
are as under:- (1) The entire work of our partnership has to be carried out in
the name of "Bharat Neon Signs." (2) The work to be carried out by
our partnership is of manufacturing and selling Neon Signs Tubes and of
obtaining orders therefore.
(3)
Whatever moneys that may be required to be invested in our partnership, are to
be invested by the parties of the first, second, third, fourth and seventh
parts out of us and the interest at the rate of 71/2 per cent per annum has to
be paid for the moneys that may be invested in this partnership." We are
of the opinion that these were evidence that these terms were acted upon. There
was nothing intrinsically wrong in law in constituting a partnership in the
manner it was done. It was contended by Mr. Mehta that there was no agency;
reading the partnership deeds as we have read that conclusion does not emanate
from position 301 appearing debiting the fixed amount payable to the appellant
in the expenses account which also is not inconsistent with partnership. This
is also not inconsistent with treating the rent of the firm in the context of
the total expenditure of the firm.
In
any event all these factors were considered by the Court of Small Causes
bearing in mind the correct legal principles. The High Court on a reappraisal
of these very evidence came to the conclusion that the partnerships were
camouflages and were not acted upon and in fact and in reality the partnership
firm was a sub-tenant of the appellant herein.
The
question is, can the High Court do so in law. The power of the High Court to
revise the order is contained in section 29(2) of the Bombay Rent Act as
applicable at the relevant time to Gujarat, The said provision reads as follows:
"29(2)
no further appeal shall lie against any decision in appeal under sub-section
(1) but the High Court may, for the purpose of satisfying itself that any such
decision in appeal was according to law, call for the case in which such
decision was taken and pass such order with respect thereto as it thinks fit."
The ambit and power of revision generally and in particular with respect to the
provisions with which we are concerned have from time to time come up for
consideration by this Court. This Court in Hari Shankar v. Rao Girdhari Lal
Chowdhury, [1962] 1 Suppl. SCR. 933 had to consider section 35(1) of the Delhi
& Ajmer Rent Corntrol Act, 1952. The said section reads as follows:-
"35(1) The High Court may, at any time, call for the record of any case
under this Act for the purpose of satisfying itself that a decision made
therein is according to law and may pass such order in relation thereto as it
thinks fit." It was held in the majority judgment by HidayatuIIah, J.
as
the learned Chief Justice then was, that though section 35 of the Delhi and
Ajmer Rent Control Act was worded in general terms but it did not create a
right to have the case re-heard. This Court emphasised that the distinction
between an appeal and revision is a real one. A right to appeal carries with it
right of re-heating on law as well as fact, unless the statute conferring the
right to appeal limits the re-hearing in some 302 way. The power to hear a
revision is generally given to a superior court so that it may satisfy itself
that a particular case is decided according to law. The expression "ac-
cording to law" in section 35 of the said Act referred to the decision as
a whole, and was not to be equated to errors of law or of fact simpliciter.
This Court was of the view that what the High Court could see is that there has
been no miscarriage of justice and that the decision was according to law in
the sense mentioned. Kapur, J. who delivered a separate judgment, however,
observed that the power under section 35(1) of the said Act of interference by
the High Court is not restricted to a proper trial according to law or error in
regard to onus of proof or proper opportunity of being heard. It is very much
wider than that, when in the opinion of the High Court the decision is
erroneous on the question of law which affects the merits of the case or
decision was manifestly unjust the High Court is entitled to interfere. The
revisional authority could ensure that there was no miscarriage of justice and
the principles of law have been correctly borne in mind, the facts had been
properly comprehended in that light. If that was done in a particular case then
the fact that the revisional authority or the High Court might have arrived to
a different conclusion is irrelevant. This view had also been expressed in the
decision of this Court in Puranchand v. Motilal, [1963] Supp. 2 S.C.R. 906.
This principle was reiterated in Krishnawati v. Hans Raj, [1974] 2 S.C.R. 524
which was dealing with section 39(2) of the Delhi Rent Control Act, 1958 in
second appeal.
It
was observed that under section 39(2) of the said Act, the High Court could
interfere in second appeal only if there was a substantial question of law. In
that case, the question whether the appellant was legally married no finding
was necessary in the eviction suit. It was sufficient for the rent court to
proceed on the finding that the appellant and S were living together as husband
and wife, whether they were legally married or not. It was further held that
whether there was subletting was not a mixed question of law and fact. In
Phiroze Bamanji Desai v. Chandrakant M. Patel & Ors., [1974] 3 SCR 267 the
question involved was whether there was reasonable and bona fide requirement of
premises for personal use and occupation as also the question of greater
hardship under the Bombay Rent Act and the ambit and scope of the power of
Section 29(3) of the said Act with which we are concerned came up for
consideration. Bhagwati, J. as the learned Chief Justice then was, referred
with approval the observations of Hidayatullah, J. referred to hereinbefore in
Hari Shankar's case (supra). Bhagwati, J.
observed
that the ambit of section 35(1) of the Delhi & Ajmer Rent Control Act which
fell for consideration in Hari Shanker's case (supra) was the same as section
29(3) of the Bombay Rent Act and therefore, he expressed the opinion that the
303 High Court could interfere only if there was miscarriage of justice due to
mistake of law.
We
must take note of a decision in the case of M/s Kasturbhai Ramchand Panchal
& Brothers and Others v. Firm of Mohanlal Nathubhai and Others, AIR 1969
Gujarat 110, upon which the High Court had placed great reliance in the
judgment under appeal. There the learned judge relying on section 29(2) of the
said Act held that the revisional power with which the High Court was vested
under section 29(2) was not merely in the nature of jurisdictional control. It
extended to corrections of all errors which would make the decision contrary to
law. The legislature, the learned Judge, felt, further empowered High Court in
its revisional jurisdiction to pass such order with respect thereto as it
thought fit. The power according to the learned Judge was of the widest
amplitude to pass such orders as the Court thought fit in order to do complete
justice. He dealt with the human problem under section 13(2) of Bombay Rent Act
considering the relative hardships of the landlord and the tenant and to arrive
at a just solution he was of the opinion that the court should have such wide
field. The jurisdiction of High Court is to correct all errors of law going to
the root of the decision which would, in such cases, include even perverse
findings of facts, perverse in the sense that no reasonable person, acting
judicially and properly instructed in the relevant law could arrive at such a
finding on the evidence on the record. In this view in our opinion the ambit of
the power was expressed in rather wide amplitude. As we read the power, the
High Court must ensure that the principles of law have been correctly borne in
mind. Secondly, the facts have been properly appreciated and a decision arrived
at taking all material and relevant facts in mind. It must be such a decision
which no reasonable man could have arrived at. Lastly, such a decision does not
lead to a miscarriage of justice. We must, however, guard our- selves against
permitting in the guise of revision substitution of one view where two views
are possible and the Court of Small Causes has taken a particular view. If a
possible view has been taken, the High Court would be exceeding its
jurisdiction to substitute its own view with that the courts below because it
considers it to be a better view. The fact that the High Court would have taken
a different view is wholly irrelevant. Judged by that standard, we are of the
opinion that the High Court in this case had exceeded its jurisdiction.
In
the case of Punamchandra Revashankar Joshi v. Ramjib- hai Maganlal, Gujarat Law
Reporter (1966) at page 807, the Gujarat High Court after dealing with the
Gujarat Amendment Act (XVIII) of 1965 304 observed that the Legislature has not
intended to equate the ambit of the power with the one exercised in an appeal.
The authority vested in the High Court under the amendment still remained only
in the domain of the jurisdiction and power of revision and no further. The
amending provision, therefore, only related to procedure and not to any rights
of the parties.
This
Court in the case of Bhai Chand Ratanshi v. Laxmishanker Tribhavan, [1982] 1
Rent Control Journal 242 observed that where lower courts applied their minds
properly in deciding a matter under section 13(2) of the Bombay Rent Act, the
High Court could not substitute its own finding for the one reached by the
courts below, on a reappraisal of evidence under section 29(2) of the Act as
substituted by the Gujarat Act 18 of 1965. This Court reiterated that although
the High Court had wider power than that which could be exercised under section
115 of C.P.C., yet its revisional power could only be exercised for a limited
purpose with a view to satisfying itself that the decision was according to
law. The High Court could not substitute its own finding for the one reached by
the courts below on a reappraisal of evidence.
In
the instant case the basic question is whether keeping in background the
partnership deeds referred to herein- before and the facts that came to light,
was there partner- ship or not. Sharing of profits and contributing to losses
were not the only elements in a partnership, existence of agency was essential
and whether there was a partnership or not is a mixed question of law and fact,
depending upon the varying circumstances in different cases. This view was
reiterated by Chief Justice Beaumont, in Chimanram Motilal and another v.
Jayantilal Chhaganlal and another, A.I.R.
1939
Bombay 410. Ramaswami, J. in Mohammed Musa Sahib (dead) and others v. N.K.
Mohammed Ghouse Sahib and another, A.I.R. 1959 Madras 379 observed that whether
the relation of partnership between two or more persons does or does not exit must
depend on the real intention and contract of the par- ties and not merely on
their expressed intention. He also referred to section 4 of the Partnership Act
about the principles of partnership namely, (1) there must be agreement entered
into by all the persons concerned; (2) the agreement must be to share the
profits of a business; and (3) the business must be carried on by all or any of
the persons concerned acting for all. In the instant case judged by the
aforesaid principles, it is possible to hold that there was a partnership of which
the appellant was a partner. The Court of Small Causes considered these
principles, evaluated the evidence and held that there was in fact and in law a
partnership. Such a view was not an impossible one or a perverse one.
305
If that was so, there was nothing that could be clone about such a view, within
the ambit and scope of the power of section 29(2) of the Rent Act. We may
mention that in Gundalapalli Rangamannar Chetty v. Desu Rangiah and others,
A.I.R. 1954 Madras 182, Subba Rao, J. as the learned Chief Justice then was,
held that there cannot be a subletting, unless the lessee parted with legal
possession. The mere fact that another is allowed to use the premises while the
lessee retains the legal possession is not enough to create a sub-lease.
In
the light of the aforesaid principles and the facts that have emerged, we are
of the opinion that the High Court exceeded its jurisdiction under section
29(2) of the Rent Act. We are further of the opinion that the Court of Small
Causes was right in the view it took and it was a possible view to take. In the
result the appeal is allowed and the judgment and order of the Gujarat High
Court dated 21st of August, 1979 are set aside. The order and judgment of the
Court of Small Causes Ahmedabad dated 18th of August, 1977 are restored. The
suit for possession is accordingly dismissed. The appellant herein is entitled
to the costs throughout.
P.S.S.
Appeal allowed.
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