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CASE NO.:

Appeal (civil) 1680-1681 of 1999

PETITIONER:

Parvinder Singh

RESPONDENT:

Renu Gautam & Ors.

DATE OF JUDGMENT: 22/04/2004

BENCH:

R.C. LAHOTI, BRIJESH KUMAR & ARUN KUMAR.

JUDGMENT:

J U D G M E N T

R.C. Lahoti, J.

The suit premises consist of a shop bearing No.96/1, Lower

Bazar, Shimla, governed by the H.P. Urban Rent Control Act,

1987. The appellant is the landlord-cum-owner of the shop. It

was let out to late Vijay Gautam under an oral lease. On

31.12.1988, a partnership deed was signed between late Vijay

Gautam and Harbhajan Singh, the respondent No.3 herein. On

26.6.1991, Vijay Gautam died. The partnership stood dissolved

consequent thereupon. On 29.6.1991, another deed of

partnership was signed between respondent No.1, the widow of

late Vijay Gautam acting for herself and as guardian of

respondent No.2, the minor son of Vijay Gautam, on the one

hand and Harbhajan Singh, respondent No.3 on the other hand.

On 7.7.1992, appellant initiated proceeding for eviction of the

respondents from the shop alleging that the tenant Vijay Gautam

had sublet the premises to Harbhajan Singh which subletting has

been continued by the heirs \026 Respondent No.1 & 2, after the

death of Vijay Gautam. A ground of default in payment of rent

was also taken. The suit for eviction was dismissed by the

Controller and the dismissal was upheld by the appellate

authority as also by the High Court in civil revision. Feeling

aggrieved, the landlord has filed this appeal by special leave.

A perusal of the three judgments ___ impugned herein ___

shows that the ground for eviction for default in payment of rent

has been negatived by all the three Courts. So far as the ground

of subletting is concerned, the plea has not been gone into on

merits by any of the Courts because of the law laid down by a

two-Judges Bench of this Court in A.S. Sulochana Vs. C.

Dharmalingam, (1987) 1 SCC 180. In A.S. Sulochana's

case, the tenant was sought to be evicted on the ground of

subletting within the meaning of Section 10(2)(ii)(a) of Tamil

Nadu Buildings (Lease and Rent Control) Act, 1960. The facts

found therein were that the original landlord and tenant between

whom the lease was created had both died. No evidence, direct

or circumstantial, was available wherefrom it could be inferred if

the lease prohibited the tenant from creating a sub-tenancy or

whether the sub-tenancy was created by the tenant without the

written consent of the landlord. Under the Tamil Nadu Act, the

landlord could not succeed in evicting the tenant without

establishing that Section 10(2)(ii)(a) was violated. Thus, the

Court found that an inference as to creation of an unlawful sub-

tenancy within the meaning of Section 10(2)(ii)(a) of the Tamil

Nadu Act could not be drawn. However, the Court went on to

observe:-

"When the statute says the tenant who is

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sought to be evicted must be guilty of the

contravention, the court cannot say, 'guilt of

his predecessor in interest' will suffice. The

flouting of the law, the sin under the Rent Act

must be the sin of the tenant sought to be

evicted, and not that of his father or

predecessor in interest. Respondent inherited

the tenancy, not the sin, if any, of his father.

The law in its wisdom seeks to punish the

guilty who commits the sin, and not his son

who is innocent of the rent law offence. It

being a penal provision in the sense that it

visits the violator with the punishment of

eviction, it must be strictly construed."

A.S. Sulochana's case came up for the consideration of a

three-Judges Bench of this Court in Imdad Ali Vs. Keshav

Chand & Ors., (2003) 4 SCC 635, though in the context of

dealing with a ground for eviction under a local rent control law

of Madhya Pradesh. A.S. Sulochana's case was distinguished

and also adversely commented upon. The Court felt that in A.S.

Sulochana's case the Division bench was influenced by the

opening clause of the relevant provision in Tamil Nadu Act which

begins with "a landlord who seeks to evict his tenant" so as to

hold that the facts constituting the ground for eviction should be

referable to the present tenant and not to his predecessor who

had already died. The Court further held in Imdad Ali's case:-

"It matters not whether such default is made

by the original tenant or by his successor

inasmuch as the successor-in-interest of the

original tenant continues to be a tenant within

the meaning of the provisions thereof. By

reason of death of the original tenant, a new

tenancy is not created. A successor-in-interest

of a tenant holds his tenancy right subject to

rights and obligations of his predecessor. He

does not and cannot claim a higher right than

his predecessor. It is now well settled that a

person by reason of inheritance or assignment

does not derive any better title than his

predecessor, and, thus, the right which the

original tenant did not possess cannot be

passed on to his successor."

In Imdad Ali's case, the three-Judges Bench opined that

the law laid down in A.S. Sulochana's case was not applicable

for interpreting a provision in M.P. Accommodation Control Act

1961. The Bench also said ___ "We do not subscribe to the

general observations made in A.S. Sulochana's case and to the

said extent it cannot be held to have laid down a good law and is

overruled accordingly".

The relevant provision of the H.P. Act reads as under:-

"14.(1) xxx xxx xxx

(2) A landlord who seeks to evict his

tenant shall apply to the Controller for a

direction in that behalf. If the controller, after

giving the tenant a reasonable opportunity of

showing cause against the applicant, is

satisfied__

xxx xxx xxx

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(ii) that the tenant has after the

commencement of this Act without the written

consent of the landlord__

(a) transferred his rights under the lease

or sublet the entire building or rented land or

any portion thereof, or

xxx xxx xxx

the Controller may make an order directing the

tenant to put the landlord in possession of the

building or rented land and if the Controller is

not so satisfied he shall make an order

rejecting the application:

xxx xxx xxx"

Tenancy is a heritable right unless a legal bar operating

against heritability is shown to exist. Thus, the one who inherits

tenancy rights also inherits the obligations incurred by the

deceased tenant alongwith the rights which he had. It is difficult

to accept a proposition that on death of the tenant his heirs

inherit only rights and not obligations. If that be so, then the

heirs would not be liable to pay any arrears of rent which were

not paid by the deceased-tenant.

The judgments of the Controller, the appellate authority

and the High Court which proceed on A.S. Sulochana's case

cannot now be sustained and deserve to be set aside.

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

subletting or parting with possession of the tenancy premises by

the tenant. Rent control laws usually protect the tenant so long

as he may himself use the premises but not his transferee

inducted into possession of the premises, in breach of the

contract or the law, which act is often done with the object of

illegitimate profiteering or rack renting. To defeat the provisions

of law, a device is at times adopted by unscrupulous tenants and

sub-tenants of bringing into existence a deed of partnership

which gives the relationship of tenant and sub-tenant an

outward appearance of partnership while in effect what has

come into existence is a sub-tenancy or parting with possession

camouflaged under the cloak of partnership. Merely because a

tenant has entered into a partnership he cannot necessarily be

held to have sublet 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, may be 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 the transaction not permitted by law, the Court is not

estopped from tearing the veil of partnership and finding out the

real nature of transaction entered into between the tenant and

the alleged sub-tenant.

A person having secured a lease of premises for the

purpose of his business may be in need of capital or finance or

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someone to assist him in his business and to achieve such like

purpose he may enter into partnership with strangers. Quite

often partnership is entered into between the members of any

family as a part of tax planning. There is no stranger brought on

the premises. So long as the premises remain in occupation of

the tenant or in his control, a mere entering into partnership

may not provide a ground for eviction by running into conflict

with prohibition against subletting 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 sublets 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 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 Vs. Vedathanni, AIR 1936 PC 70 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 tenant

in favour 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.

Shri Gourab Banerjee, the learned senior counsel for the

appellant, submitted that all the relevant evidence and material

are available on record and both the parties have adduced the

necessary evidence. All that is needed to be done is its

appreciation and to draw inferences. In such circumstances and

keeping in view the period of time for which the proceedings

have already remained pending, we deem it proper to remand

the matter to the appellate authority for hearing and decision

afresh.

Accordingly, the appeals are allowed. The judgments of

the High Court and the Appellate Authority are set aside. The

case is remanded to the Appellate Authority to hear and decide

the appeal afresh after hearing the parties and to record a

finding on the availability of ground for eviction under Section

14(2) of H.P. Urban Rent Control Act, 1987 and then decide the

appeal finally. The costs shall abide the result.