Tenant retains possession where a closely connected company is merely the firm's corporate reflection, not a sub-tenant.

A tenant does not sublet or part with possession merely because a closely connected private company operates from the same premises. The Supreme Court noted that the tenant-firm continued in occupation, the company was formed by the firm's partners, used the premises as its office, and functioned in a mutually arranged relationship with the firm. On those facts, the company was treated as the firm's alter ego or corporate reflection, so distinct legal personality alone was insufficient to show divestment of legal possession or creation of a sub-tenancy under Section 14(1)(b) of the Delhi Rent Control Act.

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Issues: Whether the tenant had sublet, assigned, or otherwise parted with possession of the premises within the meaning of Section 14(1)(b) of the Delhi Rent Control Act by permitting a closely connected private limited company to function from the same premises.

Analysis: The tenant-firm continued in occupation and did not efface itself. The private limited company was formed by the partners of the firm, had the same premises as its office, was registered therefrom, and functioned in a mutually arranged relationship with the firm. On the evidence, the company was the alter ego or corporate reflection of the partnership firm and the two were substantially identical for practical purposes. Mere distinct legal personality was insufficient to establish that the tenant had divested itself of legal possession or created a sub-tenancy.

Conclusion: There was no subletting, assignment, or parting with possession within the meaning of Section 14(1)(b) of the Delhi Rent Control Act, and the finding of eviction could not stand.

Ratio Decidendi: Where the tenant retains legal possession and the alleged transferee is merely its alter ego or corporate reflection, mere separate legal personality does not by itself constitute subletting or parting with possession.

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