TaxTMI 
TaxTMI 
2009 (10) TMI 999
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....;). The landlord in the application for eviction averred that a building situated at Stres Joao de Castro, Panaji is owned by him; that one of the rooms on the ground floor of the said building was let out to the tenant @ Rs. 80/- per month on January 10, 1959 for grocery business; that initially the lease was for a period of two years but later on it was renewed from time to time and the last renewal was made upto October 10, 1969; that on coming into force of Act, 1968 the tenant became statutory tenant; that the tenant without permission or consent of the landlord has transferred/sublet tenancy interest in the premises to Mandovi Tours and Travels; that the transferee/sub-lessee is exclusively running the business in the said rented premises and that no grocery shop is being run by the tenant in the said premises. 3. The tenant traversed the application for eviction and denied that he has transferred/sublet the premises to Mandovi Tours and Travels or that the tenancy interest in the said premises has been let out to the said partnership concern. The tenant's defence in the written statement was that having advanced in age, he was not doing good business in grocery and he....
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....at the present appeal by special leave has been preferred by the present appellants. 11. We heard Mr. Ranjit Kumar, learned senior counsel for the appellants and Mr. S.G. Dessai, learned senior counsel for the respondents at quite some length. 12. The Additional Rent Controller, after sifting the evidence let in by the parties and the covenants of the partnership deed, recorded his findings thus: It may be noted that from the covenants of the partnership deed it was clear that the books of accounts had to be maintained, statement for the purpose of income tax had to be prepared etc. and instead of bringing this evidence into record the respondent went on saying that he could not produce the books of accounts as his father had told him that the same were not maintained from the beginning. This statement was made on the next date of hearing when on the previous date he had promised to produce the same. Further the power of attorney of the respondent mentioned that he was not able to say how much his wife received from the share of the sales of the two tempos belonging to the partnership firm even the files regarding the income tax returns, the power of attorney of the ....
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....nce of the respondent was recorded through his power of attorney and son Ulhas during the life time and, therefore, the respondent cannot take shelter of this provision now. Under these circumstances, as the respondent has failed to perform his obligation to prove that there had not been an under hand sub-letting because in all such cases, the sub-letting was always clandestine and, therefore, direct evidence cannot be brought by the applicant and hence the duty cast on the respondent. 14. The Administrative Tribunal also held that the partnership - Mandovi Tours and Travels - was not a genuine partnership and it was formed to cover up subletting of suit premises. For recording this finding, the Administrative Tribunal gave the following reasons: Admittedly, the appellants did not examine any of the partners of the partnership firm before the Rent Controller. However, the appellants examined one Shri Ulhas Kholkar as a power of attorney for the original tenant. In fact, he happens to be the son of the original tenant. According to this witness, the appellants started the business in the suit premises under the name and style M/s. Mandovi Tour & Travels in Febru....
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....ly 10% share. The partner Smt. Kunda J. Vagh who is stranger has 30% shares. As discussed above, the said partnership is found not to be genuine partnership and it was formed to cover up the sub-letting of the suit premises. This being the position, it is difficult to hold that the appellants still have a control over the suit premises. I am, therefore, satisfied that the appellants have parted with the possession of the suit premises to the said Mandovi Tours and Travels. The appellants have failed to prove that the said partnership was a genuine partnership. 16. Insofar as High Court is concerned, two errors are apparent from its judgment. In the first place, High Court erred in holding that the tenant wanted to examine one of the partners, Umesh Mahabaleshwar Kholkar but he was not permitted by the Rent Controller. This is factually incorrect inasmuch as there is nothing on record that even remotely suggests that the tenant wanted to examine one of the partners Umesh Mahabaleshwar Kholkar. What appears from record is that an application came to be filed by M/s. Mandovi Tours and Travels through its partner Umesh Kholkar for its impleadment and intervention but the said applic....
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.... the Delhi Rent Control Act, 1958 providing for eviction on the ground of subletting, this Court in the case of Jagan Nath (Deceased) through LRs. v. Chander Bhan and Ors. (1988) 3 SCC 57 held: The question for consideration is whether the mischief contemplated under Section 14(1)(b) of the Act has been committed as the tenant had sublet, assigned, or otherwise parted with the possession of the whole or part of the premises without obtaining the consent in writing of the landlord. There is no dispute that there was no consent in writing of the landlord in this case. There is also no evidence that there has been any subletting or assignment. The only ground perhaps upon which the landlord was seeking eviction was parting with possession. It is well settled that parting with possession meant giving possession to persons other than those to whom possession had been given by the lease and the parting with possession must have been by the tenant; user by other person is not parting with possession so long as the tenant retains the legal possession himself, or in other words there must be vesting of possession by the tenant in another person by divesting himself not only of phys....
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....t assign, nor did he underlet. He was constantly on the premises himself and kept the key of them. He did business of his own as well as business of the company. In my view he allowed the company to use the premises while he himself remained in possession of them. This position was also accepted in Vishwa Nath v. Chaman Lal AIR 1975 Del. 117 wherein it was observed that parting with possession is understood as parting with legal possession by one in favour of the other by giving him an exclusive possession to the ouster of the grantor. If the grantor had retained legal possession with him it was not a case of parting with possession. The court also reiterated that to prove sub-tenancy, two ingredients have to be established, firstly, the tenant must have exclusive right of possession or interests in the premises or part of the premises in question and secondly, the right must be in lieu of payment of some compensation or rent. 23. In the case of G.K. Bhatnagar (Dead) By LRs. v. Abdul Alim (2002) 9 SCC 516 this Court held as follows: A conjoint reading of these provisions shows that on and after 9-6-1952, sub-letting, assigning or otherwise parting with the p....
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....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. 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 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 posses....
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....b-letting. Under Section 21(1)(f) of the old Act, the phraseology employed is quite wide. It embraces within its scope sub-letting of the whole or part of the premises as also assignment or transfer in any other manner of the lessee's interest in the tenancy premises. The exact nature of transaction entered into or arrangement or understanding arrived at between the tenant and alleged sub-tenant may not be in the knowledge of the landlord and such a transaction being unlawful would obviously be entered into in secrecy depriving the owner-landlord of the means of ascertaining the facts about the same. However still, the rent control legislation being protective for the tenant and eviction being not permissible except on the availability of ground therefore having been made out to the satisfaction of the court or the Controller, the burden of proving the availability of the ground is cast on the landlord i.e. the one who seeks eviction. In Krishnawati v. Hans Raj (1974) 1 SCC 289 reiterating the view taken in Associated Hotels of India Ltd. v. S.B. Sardar Ranjit Singh (1968) 2 SCR 548 this Court so noted the settled law: (SCC p. 293, para 6) The onus to prove sub-letting....
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....tenant had entered into a partnership and the firm was carrying on business in the tenancy premises. This Court held that if there was a partnership firm of which the appellant was a partner as a tenant, the same would not amount to sub-letting leading to forfeiture of the tenancy; for there cannot be a sub-letting unless the lessee parted with the legal possession. The mere fact that another person is allowed to use the premises while the lessee retains the legal possession is not enough to create a sub-lease. Thus, the thrust is, as laid down by this Court, on finding out who is in legal possession of the premises. So long as the legal possession remains with the tenant the mere factum of the tenant having entered into partnership for the purpose of carrying on the business in the tenancy premises would not amount to sub-letting. In Parvinder Singh v. Renu Gautam (2004) 4 SCC 794 a three-Judge Bench of this Court devised the test in these terms: (SCC p. 799, para 8) 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 ....
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....ession of the demised premises for a monetary consideration, the creation of a sub-tenancy and/or the allegation of sub-letting stands established. 28. The legal position that emerges from the aforesaid decisions can be summarised thus: (i) In order to prove mischief of subletting as a ground for eviction under rent control laws, two ingredients have to be established, (one) parting with possession of tenancy or part of it by tenant in favour of a third party with exclusive right of possession and (two) that such parting with possession has been done without the consent of the landlord and in lieu of compensation or rent. (ii) Inducting a partner or partners in the business or profession by a tenant by itself does not amount to subletting. However, if the purpose of such partnership is ostensible and a deed of partnership is drawn to conceal the real transaction of sub-letting, the court may tear the veil of partnership to find out the real nature of transaction entered into by the tenant. (iii) The existence of deed of partnership between tenant and alleged sub-tenant or ostensible transaction in any other form would not preclude the landlord from bri....
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.... taken by surprise or prejudiced. 30. If the purpose of constituting partnership by the tenant is ostensible and a deed of partnership is drawn to conceal the real transaction of subletting in a given case, the court may be required to tear the veil of partnership to find out the real nature of transaction entered into by the tenant and in such circumstances the evidence let in by the landlord cannot be ignored on the ground that there is some variance between pleading and proof. In a case such as the present one, the rule of secundum allegata et probata is not strictly applicable as the tenant cannot be said to have been put to any prejudice. 31. The High Court, as the discussion in impugned judgment shows, has been too technical in construing the pleadings of the case overlooking the fact that plea of sub- letting has been set up by landlord in the plaint and there has been full and critical examination of the evidence by the Additional Rent Controller as well as the Administrative Tribunal. The Additional Rent Controller and the Administrative Tribunal cannot be said to have misdirected themselves either on law or on facts. Both Authorities found as a fact that Mandovi Tou....
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....nce was not meant to circumvent statutory law. It is settled law that the jurisdiction under Article 227 could not be exercised "as the cloak of an appeal in disguise. 34. The aforesaid two decisions and few other decisions, namely, Chandavarkar Sita Ratna Rao v. Ashalata S. Guram (1986) 4 SCC 447; State of Maharashtra v. Milind and Ors. (2001) 1 SCC 4; Ranjeet Singh v. Ravi Prakash (2004) 3 SCC 682 came to be considered by this Court in the case of Shamshad Ahmad and Ors. v. Tilak Raj Bajaj (Deceased) through LRs. and Ors. (2008) 9 SCC 1 and this Court held: Though powers of a High Court under Articles 226 and 227 are very wide and extensive over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction, such powers must be exercised within the limits of law. The power is supervisory in nature. The High Court does not act as a court of appeal or a court of error. It can neither review nor reappreciate, nor reweigh the evidence upon which determination of a subordinate court or inferior tribunal purports to be based or to correct errors of fact or even of law and to substitute its own decision for that of the inferior court or tr....