DAVESH NAGALYA (D) & ORS. versus PRADEEP KUMAR (D) THR. LRS. AND ORS. on 10 August 2021

1. The challenge in the present appeal is to an order passed by theHigh Court of Uttarakhand in Review Application No.105/2008 on23.04.2008 wherein the factum of death of Pradeep Kumar, theBsuccessor-in-interest of Tika Ram - the tenant, was not considered. Theargument of the appellant was that the partnership between PradeepKumar and Subhash Chand, Respondent No.4 herein has come to anend automatically on the death of Pradeep Kumar on 21.05.2004.Therefore, tenancy also has come to an end in view of Section 12 (2) ofCU.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act,1972[1]. It may be stated that during the pendency of the present appeal,Subhash Chand, another partner, who was allowed to enter intopartnership with Pradeep Kumar by the District Magistrate also died on25.6.2014.

D2. The legal heirs of Pradeep Kumar and Subhash Chand wereserved with notice in the Special Leave Petition which led to the presentCivil Appeal. An application was filed by the appellant to implead thelegal heirs of Subhash Chand namely, Amit Goyal son of late Shri SubhashChand and Smt. Swati Goyal daughter of Shri Subhash Chand. Noticeof the said I.A. Nos. 23917, 23920 and 23921 of 2019 was ordered to beEissued on 26.02.2020. As per the office report, notice was issued to theproposed legal heirs of the deceased Respondent No.4. The servicewas effected on the proposed legal heirs as per tracking report of thepostal authorities. It is thereafter, on 28.07.2021, the application forsubstitution of the legal heirs of Respondent No. 4 was allowed. ButFnone has put an appearance on behalf of the legal heirs of RespondentNo.4.

3. Brief facts leading to the present appeal are that an applicationwas filed by Pradeep Kumar in July 1982 before the Court of RentControl and Eviction Officer, Dehradun, the District Magistrate, in termsGof the Act. In such application, Pradeep Kumar, the successor-in-interestof tenant Tika Ram averred that Subhash Chand was a divorcee andhad no children and was willing to devote full time in the said proposedbusiness of sale of milk, curd, ghee and butter. The application washowever opposed by the landlord. It was inter alia averred that after H1 Hereinafter referred to as the “Act”

death of Tika Ram, he had left behind 8 legal heirs who were joint tenantsin the disputed property. It was stated that Subhash Chand was a sub-tenant and that he was involved in demolition, changing the structureand making furniture for last two months. Shri Pradeep Kumar has putsuch person in possession of the property. It is also averred that SubhashChand has been doing the business of milk products in Dehradun andthat the application has been filed in order to only cover the sub-tenancy.It was argued that Pradeep Kumar had put such person in possession ofthe shop who was not a member of their family and thus property wouldbe deemed to be vacant under Section 12(2) of the Act. However, theDistrict Magistrate permitted Subhash Chand to be inducted as a partneron 15.11.1982. It was thereafter, on 19.11.1982, a written partnershipdeed was signed between Pradeep Kumar and Subhash Chand, a copyof which is annexed herewith as P-4. Clause 6 of the said PartnershipDeed states that all provisions of the Partnership Act would be applicable.

4. The landlord challenged the order passed by the DistrictMagistrate before the learned District Judge. Such revision petition wasdismissed on 12.12.1983. Further challenge before the High Court throughWrit Petition also remained unsuccessful vide order dated 10.10.2007.The appellant challenged the said order by way of Special Leave Petitionbefore this Court but the same was dismissed on 10.01.2008. It isthereafter, the appellant filed an application for review before the HighCourt inter alia on the ground that pursuant to the death of the tenant,Pradeep Kumar i.e., one of the partners of the firm, the partnershipdoes not survive in view of Section 42(c) of the Partnership Act. Section42(c) reads as under:

“42. Dissolution on the happening of certain contingencies.—Subject to contract between the partners a firm isdissolved,—

(a) xxxxxxxxx(b) xxxxxxxxx

(c) by the death of a partner

(d) xxxxxxxxx”

5. Such review was dismissed vide order impugned in the presentappeal on the ground that the petitioners have entirely set up a new caseand the grounds urged are different from that of the writ petition. As on A

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Arecord, both the partners, i.e. Pradeep Kumar and Subhash Chand haddied on 21.05.2004 and 25.06.2014, respectively. Hence, now theargument is that in terms of Section 42(c), the partnership stands dissolvedby law. There is no clause in the partnership deed which permits thelegal heirs of the deceased partners to continue with the partnershipfirm. Therefore, by operation of law, the partnership has come to anBend.

6. Though learned counsel for the appellant raised an argumentthat approval of the District Magistrate, an Executive Authority, to seekpermission to sublet or admit a partner was against the principle ofseparation of powers between the executive and judicial or quasi-judicialCfunctions, however we need not examine the said question in the presentappeal.

7. The relevant provisions of the Act read as under:

“-12. Deemed vacancy of building in certain casesD(1)A landlord or tenant of a building shall be deemed to haveceased to occupy the building or a part thereof if- (a) he has substantially removed his effects therefrom; or (b) he has allowed it to be occupied by any person who is nota member of his family; orE

(c) in the case of a residential building, he as well as membersof his family have taken up residence, not being temporaryresidence, elsewhere.

(2) In the case of non-residential building, where a tenant carryingFon business in the building admits a person who is not a memberof his family as a partner or a new partner, as the case may be,the tenant shall be deemed to have ceased to occupy thebuilding.

25. Prohibition of sub-letting.-

G(1)No tenant shall sub-let the whole of the building under histenancy.

(2) The tenant may, with the permission in writing of the landlordand of the District Magistrate, sub-let a part of the building.

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Explanation.- For the purposes of this section-

(i) Where the tenant ceases, within the meaning of clause (b) ofsub-section (1) or sub-section (2) of Section 12, to occupy thebuilding or any part thereof, he shall be deemed to have sub-letthat building or part;

(ii) Lodging a person in a hotel or a lodging house shall not amountto sub-letting.”

8. In terms of Section 41 of the Act, U.P. Urban Buildings(Regulation of Letting, Rent and Eviction) Rules, 1972 have beenpublished on 1.7.1972. Every landlord had to give notice of the vacancyin writing to the District Magistrate, if a building had fallen vacant underSection 15 of the Act. Under Section 16 of the Act, District Magistratehas been authorized to pass an order in respect of user of such building.Rule 10 deals with allotment procedure of a building which has fallenvacant. Sub-Rule 6 is relevant for the purpose of present appeal, whichreads thus:

“6. A person who is deemed to have ceased to occupy a buildingwithin the meaning of Section 12(1)(b), or who is evicted underSection 21 by virtue of being a tenant referred to in Explanation(1) of Section 21(1) shall not be allotted that or any other residentialbuilding and a person who is deemed to have ceased to occupy abuilding within the meaning of Section 12(2), shall not be allottedthat or any other non-residential building for a period of two yearsfrom the date of such eviction or deemed cessation, as the casemay be:

Provided that-

(a) if the District Magistrate is satisfied in a case referred to inSection 12(2) that the admission of partner or new partner isbona fide transaction and not a mere cover for sub-letting,he shall, if any application had been made in that behalf beforethe admission of such partner or new partner, allot the non-residential building in question afresh to the newly constitutedor re-constituted firm.

(b) ………………………………….”

9. The learned Counsel for the appellants relied upon the judgmentof this Court in Kunhayammed and Others v. State of Kerala and A

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AAnother[2] that the summary dismissal of the special leave petition doesnot bar the remedy of review as the same is permissible under law. InKhoday Distilleries Ltd. v. Sri Mahadeshwara Sahakara SakkareKarkhane Ltd.[3], this Court re-iterated the principles of law as under:

“26.2xxxxxx

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(iv) An order refusing special leave to appeal may be a non-speaking order or a speaking one. In either case it does not attractthe doctrine of merger. An order refusing special leave to appealdoes not stand substituted in place of the order under challenge.All that it means is that the Court was not inclined to exercise itsCdiscretion so as to allow the appeal being filed.

(v) If the order refusing leave to appeal is a speaking order i.e.gives reasons for refusing the grant of leave, then the order hastwo implications. Firstly, the statement of law contained in theorder is a declaration of law by the Supreme Court within theDmeaning of Article 141 of the Constitution. Secondly, other thanthe declaration of law, whatever is stated in the order are thefindings recorded by the Supreme Court which would bind theparties thereto and also the court, tribunal or authority in anyproceedings subsequent thereto by way of judicial discipline, theSupreme Court being the Apex Court of the country. But, thisEdoes not amount to saying that the order of the court, tribunal orauthority below has stood merged in the order of the SupremeCourt rejecting the special leave petition or that the order of theSupreme Court is the only order binding as res judicata insubsequent proceedings between the parties.

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(vi) Once leave to appeal has been granted and appellatejurisdiction of the Supreme Court has been invoked the orderpassed in appeal would attract the doctrine of merger; the ordermay be of reversal, modification or merely affirmation.

(vii) On an appeal having been preferred or a petition seekingGleave to appeal having been converted into an appeal before theSupreme Court the jurisdiction of the High Court to entertain areview petition is lost thereafter as provided by sub-rule (1) ofOrder 47 Rule 1 CPC.

2 (2000) 6 SCC 359H3 (2019) 4 SCC 376

26.3. Once we hold that the law laid down in Kunhayammed[Kunhayammed v. State of Kerala, (2000) 6 SCC 359] is to befollowed, it will not make any difference whether the reviewpetition was filed before the filing of special leave petition or wasfiled after the dismissal of special leave petition. Such a situationis covered in para 37 of Kunhayammed case [Kunhayammedv. State of Kerala, (2000) 6 SCC 359]”.

10. The argument of the learned counsel for the appellant is thatsubsequent events consequent to the order passed by the DistrictMagistrate had to be taken into consideration. The High Court howeverfailed to take into consideration death of one of the partners leading todeemed vacation of the premises. The appellant relied upon the judgmentof this Court in Pasupuleti Venkateswarlu v. The Motor & GeneralTraders[4] wherein it has been held as under:

“4. We feel the submissions devoid of substance. First about thejurisdiction and propriety vis-à-vis circumstances which come intobeing subsequent to the commencement of the proceedings. It isbasic to our processual jurisprudence that the right to relief mustbe judged to exist as on the date a suitor institutes the legalproceeding. Equally clear is the principle that procedure is thehandmaid and not the mistress of the judicial process. If a fact,arising after the lis has come to court and has a fundamentalimpact on the right to relief or the manner of moulding it, is broughtdiligently to the notice of the tribunal, it cannot blink at it or beblind to events which stultify or render inept the decretal remedy.Equity justifies bending the rules of procedure, where no specificprovision or fairplay is not violated, with a view to promotesubstantial justice- subject, of course, to the absence of otherdisentitling factors or just circumstances. Nor can we contemplateany limitation on this power to take note of updated facts to confineit to the trial Court. If the litigation pends, the power exists, absentother special circumstances repelling resort to that course in lawor justice. Rulings on this point are legion, even as situations forapplications of this equitable rule are myriad. We affirm theproposition that for making the right or remedy claimed by theparty just and meaningful as also legally and factually in accordwith the current realities, the Court can, and in many cases must, AB

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Atake cautious cognizance of events and developments subsequentto the institution of the proceeding provided the rules of fairnessto both sides are scrupulously obeyed. On both occasions the HighCourt, in revision, correctly took this view. The later recovery ofanother accommodation by the landlord, during the pendency ofthe case, has as the High Court twice pointed out, a materialBbearing on the right to evict, in view of the inhibition written intoSection 10(3) (iii) itself. We are not disposed to disturb this approachin law or finding of act.”

11. Therefore, the subsequent event of death of Pradeep Kumarbeing relevant was bound to be taken into consideration by the HighCCourt in the review petition.

12. The appellant also relied upon the judgment of this Courtreported as Harish Tandon v. Addl. District Magistrate, Allahabad,U.P and Others[5] interpreting Section 12(2) and 25 of the Act. It washeld as under:

D“17. When sub-section (2) of Section 12 provides that whenevera tenant carrying on business in a building admits a person, who isnot a member of his family, as a partner, the tenant shall be deemedto have ceased to occupy the building, full effect has to be givento the mandate of the Legislature. There is no escape from theconclusion that such tenant has ceased to occupy the building. NoEdiscretion is left to the court to enquire or investigate as to whatwas the object of such tenant while inducting a person as partnerwho was not the member of his family. It can be said that theaforesaid statutory provision requires the court to come to theconclusion that by the contravention made by the tenant, suchFtenant has ceased to occupy the building. The framers of the Acthave not stopped only at the stage of Section 12(2) but have furtherprovided in Section 25, Explanation (i) another legal fiction sayingthat where the tenant ceases to occupy the building within themeaning of sub-section (2) of Section 12 “he shall be deemed tohave sub-let that building or part”. In view of the three deemingGclauses introduced in sub-section (2) of Section 12, sub-section(4) of Section 12 and Explanation (i) to Section 25, no scope hasbeen left for the courts to examine and consider the facts andcircumstances of any particular case, as to what was the object DAVESH NAGALYA (D) & ORS. v. PRADEEP KUMAR (D)THR. LRS. AND ORS. [HEMANT GUPTA, J.]

of admitting a person who is not the member of the family, aspartner and as to whether, in fact, the premises or part thereofhave been sub-let to such person.

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25. The framers of the Act have clearly expressed their intentionin Sections 12, 20 and 25 while protecting the tenant from evictionexcept on the grounds mentioned in Section 20, that after thedeath of the original tenant his heirs will be deemed to be holdingthe premises as joint tenants and for any breach committed byany of such joint tenants, all the heirs of the original tenant have tosuffer. They cannot take a plea that unless the grounds for evictionmentioned in sub-section (2) of Section 20 are establishedindividually against each one of them, they cannot be evicted fromthe premises in question.”

13. We find that the order of permitting Subhash Chand as partnerwith Pradeep Kumar has come to an end by efflux of time and operationof law. In terms of Section 42(c) of the Partnership Act, partnershipstands dissolved by death of a partner. One of the partners i.e., PradeepKumar died on 21.05.2004. The High Court has not taken note of suchfact in the review petition and failed to take into consideration thesubsequent events which were germane to the controversy. SubhashChand, the other partner also died during the pendency of appeal on25.06.2014. It was represented to the District Magistrate by PradeepKumar that Subhash Chand is a divorcee and has no children but suchassertion was not found to be correct as he had two children, a son anda daughter who were impleaded as his legal heirs.

14. Therefore, with the death of both partners and not having anyclause permitting continuation of the partnership by the legal heirs, thenon-residential tenanted premises is deemed to be vacant in law as thetenant is deemed to have ceased to occupy the building. In view thereof,the order passed by the High Court in Review Application dated23.04.2008 is set aside.

15. The Civil Appeal is thus allowed and the tenant is deemed tocease to occupy the premises in question. Consequently, the tenantedproperty has fallen vacant as well. The appellants may take recourse toremedy as may be available to them and may proceed in accordancewith law and the provisions of the Act.