1. This is a landlords' revision application against the dismissal in two Courts so far as ejectment was concerned o a suit against respondent No. 1 Ramji Lal.
2. The property in suit consists of two shops, apparently adjacent shops; bearing No. 1371 situated in Bazaar Sita Ram, Delhi. There is no dispute that Ramji Lal respondent took these shops on rent from the applicants on an oral lease at a monthly rental of Rs. 23/14/- and that Ramji Lal took the premises in order to conduct in them a flour-grinding business. Due apparently to rationing the Hour-grinding business did not prosper and on the 9th of February 1949 Ramji Lal entered into a partnership agreement with one Kidar Nath to carry on a business of manufacture of ice-cream on the suit premises. The partnership deed between Ramji Lal and Kidar Nath which was attested as a witness by one of the four plaintiffs, said to be the one who managed their affairs, admittedly was a deed of partnership which provided for the sharing of profits and losses and the common carrying on of the business.
On the same day as this partnership agreement was executed between Ramji Lal and Kidar Nath both Ramji Lal and Kidar Nath executed a lease deed in favour of the present applicants. Although it was disputed at one stage that the landlords had not agreed to the premises being used for manufacture of icecream I think there can be no doubt that the landlords were consenting parties to the partnership between Ramji Lal and Kidar Nath and knew perfectly well that this partnership was for the purpose of manufacture of ice-cream and that they accepted Kidar Nath as tenant jointly with Ramji Lal with full knowledge of what use was proposed to be made of the premises.
3. The partnership between Kidar Nath and Ramji Lal, however, was short lived. On the 19 of February 1949, that is to say, after ten days only Kidar Nath transferred his rights to Ramji Lal. A note to this effect was made on the lease deed which had been executed in favour of the landlords and which in the suit later was produced by the landlords. On the 25th of February 1949 Ramji Lal and one Babu Lal executed what purported to be a partnership deed. This partnership deed, however, was not attested by any of the plaintiffs and no rent note or other document was executed by R'amji Lal & Babu Lal as had been done by Ramji Lal and Kidar Nath. The present suit was filed on the 20th of June 1949 and was for arrears of rent and for possession. The grounds for possession under Section 9 of the Delhi and Ajmer-Merwara Rent Control Act, 1947, were stated as follows :
1. That without the consent and authority of the plaintiffs and against the terms of the tenancy the defendant No. 1 has sub-let the shops to defendant No. 2 and has parted with possession of the shops and put defendant No. 2 in possession for illegal gains;
2. That the defendant has made material air terations in the premises and has fixed a heavy ice-cream making machine and two water taps and one Jafri causing damage to the building without the consent and authority of the plaintiffs; and
3. That the defendant has not paid rent and is not ready and willing to pay rent.
4. It may be mentioned here that defendant No. 2 is styled 'Bhagirath Ice Cream through Babu Lal Jain Proprietor'.
5. By reason of payment made into Court the third ground for eviction, namely non-payment of rent did not survive. The second ground of structural alterations made in the premises without the consent of the plaintiffs did not call for much notice once it was held that the plaintiffs had in the case of Kidar Nath agreed to the premises being used for the purpose of manufacture of ice-cream. The substantial question in the case was whether Ramji Lal had sub-let the premises or parted with their possession within the meaning of Section 9 (1) (b) (ii) of the Delhi and Ajmer-Mer-wara Rent Control Act. The trial Court held that the agreement between Ramji Lal and Babu Lal was an agreement of partnership, that there was no question of subletting, and all that Ramji Lal did was to take a partner in his ice-cream business. The suit so far as it related to possession therefore was dismissed.
In appeal the learned Senior Subordinate Judge, Delhi, also considered the two alterna- tives as to whether the agreement between Ramji Lal and Babu Lal was an agreement of partnership and whether there had been subletting by Ramji Lal to Babu Lal. The learned Judge considered that if the agreement was one of partnership then the plaintiffs were not entitled to possession. The learned Judge did not consider as he might have considered that a transfer by a tenant to a new partnership of which he happens to be a partner is a transfer to a different legal entity & such transfer might well give the landlord, when his consent has not been obtained, a cause of action under Section 9 (1) (b) (ii) of the Act. The learned Judge agreed with the trial Court that the agreement was one of partnership & that there wag no subletting and confirmed the decree of the trial Court.
6. In the present revision application by thelandlords the main force o argument has centred on the agreement of the 25th of February1949 between Ramji Lal and Babu Lal, andit is contended on behalf of the landlords thatthis was not a partnership. With this argumentI am disposed to agree. Under Section 4 of theIndian Partnership Act, 1932, 'partnership' isthe relation between persons who have agreedto share the profits of a business carried on byall or any of them acting for all. The agreement between Ramji Lal and Babu Lal is a verydifferent document from the earlier undoubtedpartnership deed between Ramji Lal and KidarNath. - -
The terms of the later agreement may be summarised as follows: (1) There was to be manufacture of ice-cream in the shops and the business was called 'Bhagirath Ice-Cream'. (2) Whatever machinery was to be used in that business was to be supplied at the expense of Babu Lal. (3) Ramji Lal. should have no concern in the profits and losses of the business. He was to be paid Rs. 300/- a month by Babu Lal on giving a receipt for that amount. (4) All electric bills and expenses were to be met by Babu Lal. (5) Rs. 1,800/- for six months was to be paid in advance to Ramji Lal, but thereafter for a period of four months Ramji Lal was not entitled to any further payment. (6) Rs. 300/- 'rent' for four months was to be adjusted against the Rs. 1,800/- paid to Ramji Lal. The Rs. 600/- balance was to remain with Ramji Lal up to the time the partnership was dissolved. (7) The period for business was to be eleven and a half months. (8) During this period of eleven and a half months it was not open to either party to dissolve the partnership. (9) On dissolution of partnership the electric meter connection and the shops were to revert to Ramji Lal.
The agreement is in Urdu. The original of this agreement was not available. Babu Lal was called as a witness to produce it by the plaintiffs and when he appeared he stated that the original had been mislaid. Babu Lal was not formally examined on oath although obviously he was a most material witness as to what was actually done in pursuance of this agreement, and this omission to examine Babu Lal is typical of the omission by both parties to lead oral evidence on material points in the case.
7. The term of the agreement whereby Ramji Lal was to have no interest in profits and no concern in losses is enough to take the agreement out of the definition of 'partnership'. It is perfectly true that in a partnership there may be an agreement for payment to a partner a fixed sum in lieu of his share of profits, but to be a partnership under the Act this payment must be a payment of profits. The clear intention of the parties to this document appears to me to have been that Babu Lal was to have use of the premises to carry on a business of his own. The document was not registered and to operate as a lease delivery of possession to Babu Lal was essential under Section 107 of the Transfer of Property Act. On this point there is no oral evidence whatever. As already mentioned, Babu Lal was not examined by either party, the one of the four plaintiffs examined said nothing whatever about Babu Lal's possession, and the defendant Ramji Lal was never asked in cross-examination whether he handed over possession to Babu Lal or even as to who was in possession following his agreement with Babu Lal. In this state of affairs it seems quite impossible to hold that a lease in law was effected by Ramji Lal in favour of Babu Lal, and the case of subletting therefore must fall to the ground for this reason alone.
8. Much argument before me has centered upon whether the arrangement between Ramji Lal and Babu Lal, if made effective according to the terms of the agreement, amounted to more than a licence. It is suggested that failing proof of partnership the arrangement between Ramji Lal and Babu Lal must be an arrangement of assignment or of subletting or of parting with possession such as to give the landlords a cause of action under Section 9 (1) (b) (ii) of the Act, and reliance is placed on a dictum of Mr. Justice Kapur in a case -- 'Hira Lal v. Gian Singh & Co.', a report of which appears in 53 Pun L R 278. In that case the tenants' plea was that there was no parting with possession as the same partnership although apparently with added partners was doing business on the premises. The learned Judge finding that no partnership was proved and that certain of the defendants had nothing to do with the original defendant firm said that in the particular circumstances it was clear that it became a case of assignment or parting with possession under Section 9 (1). (b) (ii) of the Delhi and Ajmer-Merwara Rent Control Act. Clearly this statement related to the particular facts and is not to be taken as laying down any general principle of law, and it is, I think, unfortunate that Law Reporters should seek to find principles of law in decisions which obvjously are authorities only for their particular facts.
The ground for eviction in Section 9 (1) (b) (ii) of the Delhi & Ajmer-Merwara Rent Control Act, namely that the tenant has 'assigned, sublet, or otherwise parted with the possession of the whole of the premises' is an expression from a common covenant in leases in England. In -- 'Chaplin v. Smith', (1926) 1 K. B. 198 the landlord claimed possession of certain land with buildings and stabling thereon for breach of a covenant not to assign or underlet or part with possession of the premises or any part thereof. He had assigned his business which was of a motor garage proprietor to a company of which he was the managing director. He carried on the business of the company on the premises which were stated to be its re-gistered address. He kept the key of the premises in his possession. Later a second company was formed, of which the lessee was the managing director, and which took over the business, assets and liabilities of the first company.
In negotiating for this transfer the lessee stipulated that he should remain in possession as actual tenant. It was held by the Court of Appeal that no interest in the demised premises had passed to the companies or either of them, and that there had been no breach of the lessee's covenant not to part with possession of the premises or any part thereof. It was pointed out by Bankes, L. J., at page 206 of the report that it is possible in law for a man to permit another to occupy and at the same time to remain him-self in possession, and the dictum was approved that a lessee who retains the legal possession of premises at all material times does not commit a breach of a covenant against parting with possession by allowing other people to use the premises. This decision is sufficient authority that (ii) it is not every transaction by the lessee with a third party which must amount to a transfer, subletting or parting with possession.
9. In the present case it may well be thatRamji Lal & Babu Lal intended that possessionand effective possession of the premises shouldpass from Ramji Lal to Babu Lal, but in theabsence of evidence it is quite impossible tocome to the conclusion that this intention wascarried out. In these circumstances I think thefinding must be that the plaintiffs-landlords havefailed to establish that there was subletting orparting with possession of the premises so asto give them a cause of action to evict thelessee under Section 9 (1) (b) (ii) of the Act.
10. For these reasons therefore I dischargethe rule in this case. In the circumstances Ithink the parties should bear their own coststhroughout.