A. MAHALAKSHMI versus BALA VENKATRAM (D) THROUGH LR. & ANR. on 7 January 2020

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 24.04.2017 passed by the High Court of Judicature atEMadras in CRP (NPD) No. 2898/2013, by which the High Court hasallowed the said revision application preferred by the respondents herein– original defendants, the original plaintiff has preferred the presentappeal.

2. The facts leading to the present appeal in nutshell are as under:

FThat one Dr. Sanjeevi and his wife Mrs. Porkodi, the earlier ownerof the suit premises in question had executed a power of attorney dated01.11.2016 in the name of the appellant herein and in respect of the saidproperty. That by way of rental agreement dated 23.05.2007, the appellantlet out the premises in question to original respondent no.1 herein – BalaVenkatram (now dead and represented through legal heirs) for runningG‘Best Mark Super Market’ from June, 2007 to July, 2009 on a monthlyrent of Rs.11,000/-. That an advance amount of Rs.1,00,000/- was paidby way of security. That the rent was payable on 7[th] day of every Englishcalendar month. That the appellant – landlady filed an eviction suit onthe ground of sub-letting as well as on the ground of arrears of rent H

against the respondents herein – original defendants – Bala Venkatramand another under Sections 10(2)(i), 10(2)(ii)(a)(b) and 10(2)(iii) of theTamil Nadu Buildings (Lease and Rent Control) Act, 1960 (hereinafterreferred to as the ‘Act’) in the Court of District Munsiff, Pollachi.According to the landlady the rent was initially paid by original defendantno.1 – Bala Venkatram till October, 2007. It was the case on behalf ofthe landlady that upon default in payment of rent and noticing a changein the name as well as ownership of the shop in the tenanted premisesfrom ‘Best Mark Super Market’ to ‘Amutham Super Market’, she madeenquiries and discovered that not only there was a change in the namebut a complete change of hand from original defendant – Bala Venkatramto respondent no.2 – Shahu Hameed which also on the face of it was agross breach of the rent agreement. According to the landlady, the sub-letting was evident from the Certificate of Registration, Government ofTamil Nadu, Commercial Tax Department. Therefore, the landlady issueda legal notice to original defendant – Bala Venkatram pointing out thesaid breaches and called upon him to collect balance amount from theadvance payment deposited after adjusting the arrears of rent andhandover possession of the tenanted premises within 15 days failingwhich the appropriate legal action would be taken. There was no replyto the legal notice from respondent no.1 – original defendant no.1.Therefore, the landlady, the appellant herein, filed R.C.O.P. No. 4 of2008 for decree of eviction on the ground of sub-letting and arrears ofrent.

2.1 The suit was resisted by original defendant no.1 – the originaltenant by filing a written counter. It was stated that the landlady hasreceived the rent till December, 2007 and that the first respondent hasno necessity to get the permission from the landlady for running businessin any other name. It was the case on behalf of original respondent no.1– the original tenant that since the landlady was trying to evict therespondents, they filed O.S. No. 122/2008 for permanent injunction.According to the first respondent – the original tenant, they were running‘Amutham Super Market’ in the suit property. According to the originaltenant there were many branches, namely, ‘Amutham Jewellery,Amutham Foods, Amutham Electronics, Amutham Textiles etc.According to the original tenant since the respondents refused to givethe business in the name of the landlady, she filed eviction petition withan ulterior motive. A similar written counter was filed on behalf oforiginal respondent no.2 – sub-tenant.

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A2.2 That the learned Rent Controller dismissed the eviction petition.Aggrieved by the same, the landlady preferred R.C.A. No. 1 of 2012.That the learned Rent Control Appellate Authority allowed the appeal inpart. The learned Rent Control Appellate Authority passed the evictiondecree on the ground of sub-letting only and therefore allowed the petitionfiled under Sections 10(2)(i) and 10(2)(ii)(a)(b) of the Act. However,Bdismissed the petition filed under Section 10(2)(iii) of the Act – wastage& material alteration of the premises. That the original tenant – BalaVenkatram died. Therefore, the legal heirs of the original tenant – BalaVenkatram and the second respondent – sub-tenant preferred the revisionapplication before the High Court. That by the impugned judgment andCorder, the High Court has allowed the said revision application and hasquashed and set aside the eviction order passed by the Rent ControlAppellate Authority.

2.3 Feeling aggrieved and dissatisfied with the impugned Judgmentand order passed by the High Court in quashing and setting aside theDeviction decree on the ground of sub-letting, the landlady has preferred the present appeal.

3. Shri Aniruddha Joshi, learned Advocate appearing on behalf ofthe original plaintiff – landlady has vehemently submitted that in thefacts and circumstances of the case, the High Court has committed aEgrave error in quashing and setting aside the eviction decree on theground of sub-letting. Learned Advocate appearing on behalf of theappellant has vehemently submitted that the High Court has committeda grave error in holding that the landlady has not established and provedthe sub-letting by the original tenant in favour of respondent no.2 herein– sub-tenant.F

3.1 It is further submitted by the learned Advocate appearing onbehalf of the original plaintiff that the finding recorded by the High Courtthat the landlady has failed to establish and prove the sub-letting byoriginal respondent no.1 in favour of original respondent no.2 is contraryto the evidence on record. It is vehemently submitted that when the firstGappellate authority on appreciation of evidence specifically found thatthere was a sub-letting of the premises by original respondent no.1 infavour of original respondent no.2, the same was not required to beinterfered with by the High Court in exercise of its revisional jurisdiction.

3.2 It is further submitted by the learned Advocate appearing onbehalf of the original plaintiff that there were ample material/evidenceon record, such as, sales tax certificate, licence of the shop which stoodin the name of original respondent no.2 which establish and prove thesub-letting by the original tenant – respondent no.1 in favour of sub-tenant – original respondent no.2. It is submitted that the aforesaiddocuments/evidence on record have not at all been considered by theHigh Court.

3.3 It is further submitted by the learned Advocate appearing onbehalf of the original plaintiff that the High Court ought to haveappreciated that though the original tenant – respondent no.1 in his cross-examination set up a case that he was a partner in the business run byrespondent no.2, however, no document was placed on record to showthe partnership.

3.4 It is further submitted by the learned Advocate appearing onbehalf of the original plaintiff that as all the ingredients of sub-letting areestablished and proved by the landlady, such as, parting with possessionof the tenancy in favour of respondent no.2 with exclusive rights ofpossession and that such parting with possession has been done withoutthe consent of the landlady, the landlady filed an eviction petition.

4. The present appeal is vehemently opposed by Shri C.Paramasivam, learned Advocate appearing on behalf of the respondents.It is vehemently submitted on behalf of the respondents that as theappellant is not the owner of the suit premises and is only a power ofattorney holder of the owner of the premises, the eviction petition itselfis not maintainable. It is submitted that therefore the appellant cannotbe said to be a landlady and therefore the eviction petition at the instanceof the appellant is not maintainable.

4.1 Now so far as the impugned judgment and order passed bythe High Court is concerned, it is vehemently submitted by the learnedAdvocate appearing on behalf of the respondents that on appreciationof evidence and considering the fact that the appellant has failed toprove that respondent no.1 had sub-let the suit premises to the secondrespondent, the High Court has rightly set aside the order passed by theRent Control Appellate Authority.

4.2 It is further submitted by the learned Advocate appearing onbehalf of the respondents that even in the deposition/evidence of the AB

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Alandlady, it has come on record that respondent no.1 and respondentno.2 – Shahu Hameed were running the shop as partners. It is submittedtherefore that when both, respondent nos. 1 & 2 were running the shopas partners, there is no question of sub-letting. It is submitted thattherefore the High Court has rightly set aside the eviction decree on theground of sub-letting.B

5. In rejoinder and on the maintainability of the eviction petition bythe appellant, as objected by the respondents, learned Advocate appearingon behalf of the landlady has submitted that as such no such contentionwas raised in the written counter to the eviction petition. It is submittedthat no such issue was framed. It is submitted that as such in the writtenCcounter, they have not disputed the status of the appellant as landlady. Itis submitted that even otherwise and considering Section 2(6) of the Actand even considering the fact that lease deed was executed by theappellant in favour of respondent no.1, the appellant can be said to be alandlady/landlord and therefore the eviction petition at the instance ofDthe appellant would be maintainable.

6. We have heard the learned Counsel for the respective partiesat length. We have also perused the impugned judgment and order passedby the High Court. We have considered and appreciated the entireevidence on record, more particularly the rental agreement as well asEdeposition of original respondent no.1 – Bala Venkatram.

6.1 At the outset, it is required to be noted that the suit premiseswas leased in favour of original respondent no.1 – original tenant – BalaVenkatram pursuant to the rental agreement dated 23.05.2007 executedby the appellant herein. Therefore, the rental agreement was betweenFthe appellant and original defendant no.1 – Bala Venkatram. Defendantno.1 was put in possession as a tenant pursuant to the aforesaid rentalagreement dated 23.05.2007 executed by the appellant in favour oforiginal defendant no.1 – original tenant – Bala Venkatram. Therefore,as such, it would not be open for the respondents to deny the status ofthe appellant as a landlady. Therefore, the original respondents cannotGchallenge the authority of the appellant to file an eviction petition. Evenotherwise, considering Section 2(6) of the Act and considering the factthat respondent no.1 was paying the rent to the appellant pursuant to theaforesaid rental agreement dated 23.05.2007, the appellant can be saidto be the landlord/landlady and therefore the eviction petition at theHinstance of the appellant would be maintainable. At this stage, it is required to be noted that as such no such objection was raised eitherbefore the High Court and/or before the Rent Control authorities. Bethat as it may, as observed hereinabove, the appellant can be said to bethe landlady even within the definition of Section 2(6) of the Act andtherefore the eviction petition at the instance of the appellant would bemaintainable.

6.2 Now so far as the merits of the case are concerned, at theoutset, it is required to be noted that the landlady filed a suit for evictionmainly on the ground of arrears of rent as well as on the ground of sub-letting. The Rent Controller dismissed the eviction petition. However,the Rent Control Appellate Authority passed the eviction decree on theground of sub-letting and arrears of rent which has been upset by theHigh Court by the impugned judgment and order. Therefore, the shortquestion which is posed for consideration of this Court is, whether in thefacts and circumstances of the case, the High Court is justified in settingaside the eviction decree on the ground of sub-letting and arrears ofrent?

7. It is not in dispute that in the rental agreement dated 23.05.2007,the suit premises was let out to respondent no.1 – the original tenant forrunning ‘Best Mark Super Market’ for a period of two years from June,2007 to July, 2009. However, it has been found that in the suit premises,respondent no.2 was running the business in the name of ‘AmuthamSuper Market’ and the original tenant was confronted with the sameand was served with a legal notice, initially original respondent no.1 –tenant did not respond to the legal notice. However, before the RentControl Authority, it was the case on behalf of respondent No.1 – BalaVenkatram that because of the old age he was not in a position to managethe affairs of the shop and that is why he has handed over the possessionof the shop to Shahu Hameed – original respondent no.2 through a generalpower of attorney. It was also the case on behalf of the original tenantthat on the basis of an oral agreement, he and Shahu Hameed wererunning the business as partners. However, in the cross-examination,the original tenant has specifically admitted that in the bank accounts ofthe firm – Amutham Super Market, Shahu Hameed is shown as theowner of the shop. He has also admitted that licence for the shop is alsoin the name of Shahu Hameed. He has also specifically admitted thatShahu Hameed is running the shop as the owner. He has also specificallyadmitted that he is not in possession of any document to show that he is A

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Arunning the shop. He has also specifically admitted that he has handedover the shop to Shahu Hameed through a power of attorney. He hasalso specifically admitted that the application/sales tax certificate inrespect of the suit property is registered in the name of Shahu Hameed.He has also specifically admitted that the bank accounts are maintainedby Shahu Hameed in the capacity of owner of the shop. Thus, from theBdeposition of original respondent no.1 – the original tenant and the material/evidence on record, we are of the opinion that this is a clear case of sub-letting. All the ingredients suggesting sub-letting are established andproved. As such, the High Court has not at all discussed the evidence onrecord including even the deposition of original respondent no.1 – theCoriginal tenant.

8. Sub-letting means transfer of an exclusive right to enjoy theproperty in favour of the third party. To constitute a sub-letting, theremust be a parting of legal possession, i.e., possession with the right toinclude and also right to exclude others. Sub-letting, assigning or otherwiseDparting with the possession of the whole or any part of the tenancypremises, without obtaining the consent in writing of the landlord, is notpermitted and if done, the same provides a ground for eviction of thetenant by the landlord. When the eviction is sought on the ground ofsub-letting, the onus to prove sub-letting is on the landlord. As held bythis Court in the case of Associated Hotels of India Limited v. S.B.ESardar Ranjit Singh, AIR 1968 SC 933, if the landlord prima facieshows that the third party is in exclusive possession of the premises letout for valuable consideration, it would then be for the tenant to rebutthe evidence. At the same time, as held by this Court in the case of G.K.Bhatnagar v. Abdul Alim, (2002) 9 SCC 516 and Helper GirdharbhaiFv. Saiyed Mohmad Mirasaheb Kadri, (1987) 3 SCC 538, where atenant becomes a partner of a partnership firm and allows the firm tocarry on business in the premises while he himself retains the legalpossession thereof, the act of the tenant does not amount to sub-letting.It is further observed and held that however inducting the partner in his business or profession by the tenant is permitted so long as suchGpartnership is genuine. It is further observed that if the purpose of suchpartnership is ostensible in carrying on business or profession in apartnership but the real purpose in sub-letting such premises to suchother person who is inducted ostensibly as a partner then the same shallbe deemed to be an act of sub-letting. After considering catena of H

decisions of this Court on sub-letting, in the case of Celina CoelhoPereira v. Ulhas Mahabaleshwar Kholkar, (2010) 1 SCC 217, thisCourt has summarised in paragraph 25 as under:

”25. The legal position that emerges from the aforesaid decisionscan be summarised thus :

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

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

(iii) The existence of deed of partnership between tenant andalleged sub-tenant or ostensible transaction in any other formwould not preclude the landlord from bringing on record materialand circumstances, by adducing evidence or by means of cross-examination, making out a case of sub-letting or parting withpossession in tenancy premises by the tenant in favour of a thirdperson.

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

(v) Initial burden of proving subletting is on landlord but once heis able to establish that a third party is in exclusive possession ofthe premises and that tenant has no legal possession of the tenantedpremises, the onus shifts to tenant to prove the nature of occupationof such third party and that he (tenant) continues to hold legalpossession in tenancy premises.

(vi) In other words, initial burden lying on landlord would standdischarged by adducing prima facie proof of the fact that a party A

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Aother than tenant was in exclusive possession of the premises. Apresumption of sub-letting may then be raised and would amountto proof unless rebutted.”

9. Applying the law laid down by this Court in the aforesaiddecisions to the facts of the case on hand and on appreciation of evidenceBon record, we are of the opinion that there is no genuine partnershipbetween respondent no.1 and respondent no.2. Respondent no.1 hascome out with a case of partnership only to get out from the allegation ofsub-letting. The exclusive possession of the suit premises is withrespondent no.2. Respondent no.2 is running the business in the suitpremises as an owner. Sales Tax Certificate and the licence are in theCname of respondent no.2. The bank accounts are in the name ofrespondent no.2 and respondent no.2 is exclusively dealing with the bankaccounts. Under the circumstances, a clear case of sub-letting hasbeen made out. The High Court has committed a grave error in settingaside the decree of eviction on the ground of sub-letting.

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10. In view of the above and for the reasons stated above, thepresent appeal is allowed. The impugned judgment and order passed bythe High Court is set aside and the judgment and decree passed by theRent Control Appellate Authority is hereby restored. There shall be adecree on the ground of sub-letting. Respondents to handover theEpeaceful possession of the suit premises to the appellant herein within aperiod of three months from today on filing usual undertaking before thisCourt and on payment of full arrears of rent within a period of fourweeks from today.

FAnkit Gyan

Appeal allowed.

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