Vinaykishore
Punamchandji Mundhada & ANR. Vs. Bhumi Kalptru & Ors. [2010] INSC 585
(5 August 2010)
Judgment
IN THE
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 6299 OF
2010 ARISING OUT OF SPECIAL LEAVE PETITION (C) NO. 2517 OF 2007 VINAYKISHORE
PUNAMCHAND MUNDHADA & ANR. ... APPELLANTS VERSUS
B.
SUDERSHAN REDDY, J.
1.
Leave granted.
2.
This appeal by special leave is directed against the final
judgment and order dated 20th September, 2006 passed in Writ Petition No. 1206
of 1996 by the High Court of judicature at Bombay, Nagpur Bench, Nagpur whereby
the High Court set aside the order dated 6.9.1995 passed by the reviewing
authority granting permission under 2 clause 13(3)(iii) of the C.P. & Berar
Letting of Houses and Rent Control Order, 1949 (hereinafter referred to as `the
Rent Control Order').
3.
The facts leading to filing of this appeal lie in a very narrow
compass. The appellants are the landlords of the suit premises. Respondent No.
4, Madankumar Govardhandas Pasari was inducted as a tenant in the year 1974 who
constituted a partnership firm under the name and style `Bhumi Kalpataru'
consisting of five partners and carried on business till 1991. The appellants
filed an application under clause 13(3)(i)(iii)(iv) and (vi) of the Rent
Control Order before the Rent Controller, Amravati against the original tenant
Messrs Bhumi Kalpataru and its Managing Partner Madankumar Govardhandas Pasari,
the respondent No.4 (since died) on the ground that Madankumar Govardhandas
Pasari dissolved the firm and clandestinely sub-let the suit premises to
respondent No.2 Jagdish Champalal Mundhada who deceptively gave similar name to
the partnership by prefixing the word `Shri' and it was known as `Shri Bhumi
Kalpataru' resembling the firm to whom the premises was let out in 3 the year
1974. The present occupiers of the suit premises being the sub-tenant, namely
the respondent No.1 firm `Shri Bhumi Kalpataru', its Managing Partner,
respondent No.2 and other partners, respondents 5 to 7 were duly impleaded as
party respondents. The simple case set up by the appellants before the Rent
Controller is that the original tenant firm `Bhumi Kalpataru' had sub-let the
suit premises without the sanction of the landlords and the sub-tenants carried
on the business under the name `Shri Bhumi Kalpataru' by prefixing commonly
used `Shri' to the original tenant firm `Bhumi Kalpataru'.
4.
The application was resisted by respondents No.1, 2, 5, 6 & 7
inter alia contending that they were recognized as the tenants of the suit
premises by the landlords by accepting rent amount from `Shri Bhumi Kalpataru'.
It was also their case that there was disruption of relationship of landlord
and tenant between the appellants and the original tenant. The original tenant
firm `Bhumi Kalpataru' and its Managing Partner, Madankumar Govardhandas Pasari
though duly served, did not enter their appearance and chose to remain absent
throughout.
5.
The Rent Controller upon appreciation of the material available on
record passed the necessary orders upholding the plea of sub-tenancy and
granted permission under clause 13(3)(iii) of the Rent Control Order. The
appellate authority, however, on the appeal filed by the respondents, reversed
the findings of sub-tenancy. The appellants preferred Review Petition under
clause 21(2)(a) of the Rent Control Order challenging the orders of the
appellate authority and the said Review Petition was allowed restoring the
order of the Rent Controller granting permission as prayed for by the
appellants.
6.
Shri Bhumi Kalpataru and its Managing Partner Jagdish Champalal
Mundhada filed Writ Petition No. 1206 of 1995 under Article 226/227 of the
Constitution of India before the High Court of judicature at Bombay, Nagpur
Bench, Nagpur challenging the order of the reviewing authority.
The other
partners were impleaded as respondents. The High Court, relying on the decision
in Bhairulal Sancheti1 allowed the writ petition. Hence this appeal.
1 1996
(2) Mh.L.J. 866 5
7.
Shri U.U. Lalit, learned senior counsel for the appellants
submitted that the High Court committed an error in interfering with the just
and reasonable orders passed by the reviewing authority. It was submitted that
the High Court committed a serious error in refusing to take into consideration
the settled principles of law that sub-letting and parting with the possession
by the tenant for consideration is to be inferred from the facts and
circumstances brought on record and it is not the requirement in law that it is
for the landlords to prove that parting of possession by the original tenant
was for actual consideration. Learned counsel for the respondent, Shri Satyajit
A. Desai submitted that landlords having accepted the rents for a period of
three years from the respondents without any demur, cannot be allowed to turn
down and contend that the premises was sub-let by the original tenant. It was
his submission that relationship of landlord and tenant came into existence
ever since the landlords accepted the rents from the respondents.
8.
Before adverting to the question as to whether the High Court
rightly interfered with the orders of the reviewing 6 authority, it may be just
and necessary to notice the relevant provision of C.P. & Berar Letting of
Houses and Rent Control Order, 1949 which runs as under:
13. (1)
No landlord shall, except with the previous written permission of the
Controller-- (a) give notice to a tenant determining the lease or determine the
lease If the lease is expressed to be determinable at his option; or (b) ......
(2)
.......
(3)
.......
(i)
........
(ii)
.......
(iii)
that the tenant has without the written permission of the landlord sub let the
entire house (premises) or any portion thereof;
(iv)
........
9.
It may be of some importance to note that the original tenant did
not join any issue with the landlords though he was impleaded as a party
respondent to the proceedings.
It is an
admitted fact that none of the partners of `Bhumi Kalpataru' including
respondent No.4 who constituted the 7 firm `Bhumi Kalpataru' are the partners
in the firm `Shri Bhumi Kalpataru'. It is not a case of reconstitution of the
firm where the original tenant continued to be a partner of such newly
reconstituted firm. It is clearly evident from the record and findings recorded
by the authorities that `Shri Bhumi Kalpataru' consists of altogether different
individuals and the Managing Partner thereof being Jagdish Champalal Mundhada.
It is also an admitted fact that there was no further agreement as such between
the appellants and the respondents recognizing `Shri Bhumi Kalpataru' and its
partners as the tenants. In such view of the matter, the authorities in clear
and categorical terms found that the respondents have been inducted into
possession of the premises by the original tenant without the required written
permission of the landlords. It is under those circumstances that the reviewing
authority came to the correct conclusion that the original tenant had no right
to transfer and part away with the possession of the premises to the
respondents without the required written permission from the landlords. None of
the respondents were the partners in the previous firm 8 that was constituted
by Madankumar Govardhandas Pasari known as `Bhumi Kalpataru'.
10.
It was absolutely an internal arrangement between an original
tenant and newly inducted one about which the landlord was never put on notice.
The mere acceptance of the rents from the newly constituted firm `Shri Bhumi
Kalpataru' on the facts and circumstances in the present case by itself cannot
lead to any inference that the landlords accepted the rents knowing fully well
as if they were accepting the rents from the sub-tenants. The "landlord
and tenant" relationship in the circumstances of this case cannot be
inferred as the word `Shri' was prefixed to the original tenanted firm `Bhumi
Kalpataru'.
The said
firm `Bhumi Kalpataru', in a clandestine manner became `Shri Bhumi Kalpataru'
by adding `Shri' in an innocuous manner to `Bhumi Kalpataru'. Once it is
clearly established that none of the previous partners of the `Bhumi Kalpataru'
continued to be the partners of the newly constituted firm, it becomes very
clear that `Shri Bhumi Kalpataru' is altogether a different firm consisting 9
of new partners who were inducted into possession by the previous tenant.
11.
That, clause 2(5) of the Rent Control Order defines the `tenant'
as under:
"'Tenant'
means any person by whom or on whose account rent is payable for a premises and
includes a sub-tenant and a person continuing in possession after the term of
his tenancy has expired".
12.
In our considered opinion, the expression `any person' means any
one lawfully inducted as a tenant into the premises and by whom or on whose
account rent is payable for the premises. It may include a sub-tenant inducted
as such into possession with the previous knowledge, consent and written
permission of the landlord.
Ors.2
held:
"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 2 (2004) 4 SCC 794 10 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 family as a
part of tax planning. There is no stranger brought on the premises. So long as
the 11 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. Tyagaraja
Mudaliyar v.
Vedathanni,
AIR 1936 PC 70 : 63 IA 126 is an authority for the proposition that oral
evidence in departure from the terms of a written deed is admissible to show
that what is mentioned in the deed was not the real transaction between the
parties but it was something different. A lease of immovable property is
transfer of a right to enjoy such property. Parting with possession or control
over the tenancy premises by the tenant in favour 12 of a third person would
amount to the tenant having "transferred his rights under the lease" within
the meaning of Section 14(2)(ii)(a) of the Act".
observed
that "by a unilateral action of the tenant of surrendering his right of
tenancy in favour of a third party by delivering possession of the tenanted
premises to the said third party, no new tenancy is created which may legally
bind the landlord. By mere acceptance of rent for the tenanted premises
tendered by the tenant in the name of the registered society, neither a new
tenancy nor a valid sub-tenancy in favour of the said registered society has
been created." It is said in clear and categorical terms that "the Rent
Act is a special statute governing and regulating tenancy and sub-tenancy. Such
provisions in the special statute supersede the general law of tenancy if the
provisions of the special statute are incompatible with the general law of
tenancy". It is observed that "mere knowledge of the landlord about
occupation of the tenanted premises by the said 3 (1996) 11 SCC 728 13
registered society and acceptance of rent for the tenanted premises tendered by
the tenant in the name of the registered society, will not create a sub-tenancy
unless induction of a sub-tenant is made with the written consent of the
landlord. Even if the landlord has accepted payment of the rent for the
disputed premises .... Such acceptance of rent will not constitute legal and
valid sub-tenancy ...... Consequently, landlord will not be estopped from
claiming eviction of unauthorized sub- tenant along with the tenant for
indulging in inducting sub-tenant without lawful authority". (emphasis by
us) 15.We are not impressed by the submission made by the learned counsel for
the respondents that unless payment of consideration was established as a fact
between the tenant and sub-tenant, the application under the provisions of the
Rent Control order filed by the landlord cannot be allowed. Is it possible for
any landlord to establish the actual agreement or understanding between the
tenant and the person to whom the possession of the premises is delivered? It
is well settled that sub-tenancy or sub-letting comes into existence when the
tenant 14 voluntarily surrenders possession of the tenanted premises wholly or
in part and puts another person in exclusive possession thereof without the
knowledge of the landlord. In all such cases, invariably the landlord is kept
out of scene rather, such arrangement whereby and whereunder the possession is
parted away by the tenant is always clandestine and such arrangements take
place behind the back of the landlord. It is the actual physical and exclusive
possession of the newly inducted person, instead of the tenant, which is
material and it is that factor which reveals to the landlord that the tenant
has put some other person into possession of the tenanted property. It would be
impossible for the landlord to prove, by direct evidence, the arrangement
between the tenant and sub-tenant. It would not be possible to establish by
direct evidence as to whether the person inducted into possession by the tenant
had paid monetary consideration to the tenant. Such arrangement which may have
been made secretly, cannot be proved by affirmative evidence and in such
circumstances, the Court is required to draw its own inference upon the facts
of the case proved at the 15 enquiry. Delivery of exclusive possession by the
tenant to a stranger to the landlord and without the prior permission of the
landlord is one dominant factor based on which the Court could infer as to
whether the premises was sub-let.
16. What
remains for our consideration is as to whether the High Court properly
understood the ratio of the decision in Bhairulal (supra). In the said case,
the High Court clearly held that on the basis of the evidence of the landlord
himself, it was not possible to say that the tenant has parted with legal
possession of the portion of the premises in question to the alleged
sub-tenant. On the other hand, it was apparent that though the alleged sub-
tenant has been working on the sewing machine located in the premises where the
tenant himself has been carrying on his business in clothes in the disputed
premises. The High Court in the said decision clearly held that mere use by
other person is not parting with possession so long as tenant retains the legal
possession himself. We fail to appreciate as to how the ratio of the said
judgment is applicable to the fact situation on hand.
17. The
case on hand clearly demonstrates that it is not a case of any reconstitution
of the existing firm by the tenant whereby the original tenant continued to be
a dominant partner of such newly constituted firm and retained legal possession
of the premises. That would be a different situation where the original tenant
retains the legal possession of the premises as the tenant without parting away
the possession of the premises or any part thereof to a stranger. On the other
hand, this is a clear case where the original tenant parted away with legal
possession by inducting altogether a new firm into possession of which the
original tenant is not even a partner and such parting away with the possession
was without the knowledge and consent and much less the written permission from
the landlords. Thus the ratio of Bhairulal has no application to the case on
hand.
18.Before
parting with the case we are constrained to observe that the High Court
practically substituted the findings for that of the authorities by reappreciating
the evidence available on record, which is impermissible in a 17 proceeding
under Article 226/227 of the Constitution of India.
19.For
the aforesaid reasons, we find it difficult to sustain the impugned judgment of
the High Court. The same is accordingly set aside.
20.The
appeal is allowed with costs.
...............................................J. (B. SUDERSHAN
REDDY)
................................................J. (SURINDER
SINGH NIJJAR)
NEW DELHI,
AUGUST 05, 2010.
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