Skip to content


Kanahiya Lal Balkishan Dass Vs. Labhu Ram - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtDelhi High Court
Decided On
Case NumberS.A.O. No. 110-D of 1962 and S.A. No. 105 of 1967, from order of Pritam Singh Rent Control, Tribunal
Judge
Reported inAIR1971Delhi219
ActsDelhi Rent Control Act, 1958 - Sections 2, 9 and 9(3); Partnership Act, 1932 - Sections 4 and 45
AppellantKanahiya Lal Balkishan Dass
RespondentLabhu Ram
Appellant Advocate Radhey Mohan Lal and; Arun Mohan, Advs
Respondent Advocate B.K. Jaggi, Adv.
Cases ReferredIn K. Devarajulu Naidu v. C. Ethirajavathi Thayaramma
Excerpt:
.....section 14(1) proviso clause (b)-'sub-letting'--what is not,; where premises were leased out to a partnership firm and on its dissolution the premises were allotted to one of the erstwhile partners : . held, that the allotment in question did not amount to sub-letting. ; (ii) delhi rent control act (1958) - section 9--application for fixation of standard rent by a partner of the firm who was, on its dissolution, allotted the premises--competency of. ; that where a partner of a firm was, on its dissolution, allotted the premises, he became a tenant of the premises and as such was entitled to apply for fixation of standard rent.; (iii) landlord & tenant--premises let out to a firm--liability for rent--right of landlord to recover rent from partnres--contract act - section 43. ; where..........respondent in s.a. o. 110-d of 1962 is labhu ram while that in r.s.a. 105 of 1967 is firm gokal chand jagan nath through jagan nath partner. the two appeals are being decided by a common judgment as the submission of the learned counsel for the parties is that common question of the law and fact arise in the two cases and the decision is one is bound to impinge upon the decision in the other.2. the brief facts of the cases are that the appellants are the owner-landlords of the premises in dispute comprising shop no. 3659, pahari dhiraj, saddar bazar, delhi. the premises were let out by the appellants to firm gokal chand jagan nath through jagan nath on 1-1-1957 at a monthly rent of rs. 290.00. the firm, gokal chand jagan nath, was subsequently dissolved on 13-4-1959 and the lessee.....
Judgment:

H.R. Khanna, C.J.

1. This judgment would dispose of S.A. O. 110-D/1962 and R.S.A. 105 of 1967. Both the appeals have been filed by M/.s. Kanhiya Lal Balkishan Dass. The respondent in S.A. O. 110-D of 1962 is Labhu Ram while that in R.S.A. 105 of 1967 is firm Gokal Chand Jagan Nath through Jagan Nath partner. The two appeals are being decided by a common judgment as the submission of the learned counsel for the parties is that common question of the law and fact arise in the two cases and the decision is one is bound to impinge upon the decision in the other.

2. The brief facts of the cases are that the appellants are the owner-landlords of the premises in dispute comprising shop No. 3659, Pahari Dhiraj, Saddar Bazar, Delhi. The premises were let out by the appellants to firm Gokal Chand Jagan Nath through Jagan Nath on 1-1-1957 at a monthly rent of Rs. 290.00. The firm, Gokal Chand Jagan Nath, was subsequently dissolved on 13-4-1959 and the lessee rights of the premises in dispute fell to the share of Labhu Ram respondent. Labhu Ram filed an application under Section 9 of the Delhi Rent Control Act, 1958 for fixation of standard rent on the allegation that the agreed rent was excessive. The appellant-landlord admitted that the shop in dispute had been let out to firm Gokal Chand Jagan Nath, but alleged that there was no relationship of landlord and tenant between the parties. Plea was also taken that the ship had been sublet to Labhu Ram without the written permission of the appellants-landlords as such the application of Labhu Ram was not maintainable.

3. The Additional Controller after hearing the parties came to the conclusion that Labhu Ram was a partner of firm Gokal Chand Jagan Nath and on dissolution of that firm he became a tenant by operation of law. The application for fixation of standard rent as such was held to be maintainable. The appellants went up in appeal, but the decision of the Additional Controller was affirmed by learned Rent Control Tribunal. S.A. O. 110-D of 1962 is directed against when the appeal came up for hearing before Dua, C.J., the learned Chief Justice directed that it be disposed of by a larger Bench.

4. R.S.A. 105 of 1967 arises out of a suit for recovery of rent of Rs.1,134,00 brought by the landlord appellants for the period prior to 30-4-1964 for the premises in dispute. The rent for the period which was beyond the period of limitation was given up and the amount of Rs. 1,134.00 as representing rent for three years only was claimed.

5. The above suit was contested by the defendant firm. It was pleaded on its behalf that though there came premises in dispute on 1-1-1957 the defendant firm had thereafter been dissolved on 13-4-1959. According to the defendant firm, as a result of dissolution of the partnership the premises in dispute were allotted to Labhu Ram and as such the liability to pay rent was that of Labhu Ram alone. Notice was that dissolution of partnership was also stated to have been served upon the landlord plaintiffs. The following issues were framed in the case:-

'(1) Whether Shri Labhu Ram is a necessary party to the suit?

(2) Whether the defendant is not a subsisting tenant of the plaintiff? If so, to what effect?

(3) To what amount and from when the plaintiff is entitled?'

The trial court decided issue No. (1) against the defendant firm. Issue No. (2) was held that there was no relationship of landlord and tenant between the plaintiffs and the defendant firm in view of the dissolution of the partnership and the allotment of the premises in dispute to Labhu Ram. Issue No. (3) was held to be redundant in view of the finding on issue No. (2). In the result the plaintiff suit was dismissed. On appeal the learned Additional District Judge affirmed the finding of the trial court on issue No. (2) and dismissed the appeal R.S.A. 105 of 1967 is directed against the judgment and decree of the Additional District Judge. At the time this appeal was admitted it was directed that it should be heard with S.A. O. 110-D of 1962.

6. We have heard Mr. Radhey Mohan Lal on behalf of the appellants and Mr. Jaggi on behalf of the respondent in S.A. O. 110-D of 1962 as well as Mr. Jagdish Kumar on behalf of the respondent firm in R.S.A. 105 of 1967, and are of the opinion that there is no substance in the contention advanced on behalf of the appellants' behalf in R.S.A. 105. So far as S.A. ) 110-D of 1962 is concerned, the first contention of Mr. Radhey Mohan Lal is that assuming that Labhu Ram was a partner of firm Gokul Chand Jagan Nath he might have been inducted as such in that firm after 1-1-1957, the date of the commencement of the tenancy, and before 13-4-1959, the date of the dissolution of the firm. This submission essentially involves questions of fact, and the order of the Rent Control Tribunal as also that of the Additional Controller show that no such point was raised before them. As such we are not prepared to entertain this plea involving questions of fact for the first time in second appeal.

7. Mr. Radhey Mohan Lal argues that even if Labhu Ram was a partner of firm Gokal Chang Jagan Nath the allotment of the premises in dispute of him on the dissolution of the firm should be held to amount to subletting The learned counsel in this context has emphasised the fact that the original tenant of the premises was firm Gokal Chand Jagan Nath. There is no force in the above contention. A firm, it is well known, is a compendious name of the partners constituting the firm. According to Section 4 of the Indian Partnership Act, 1932, persons who have entered into partnership with one another are called individually `partners' and collectively `a firm'. It would thereforee, follow that when firm Gokal Chand Jagan Nath took the premises in dispute on rent from the appellants, Labhu Ram who was one of the partners of the firm became along with the other partners a tenant in the premises. Subletting essentially entails the induction of a third person into the premises. The allotment of the shop to one of the partners of the firm, which was the tenant of the premises, upon its dissolution cannot amount to subletting.

We are fortified in this conclusion by a Bench decision (Andley and Tatachar, JJ) of this Court in Smt. Saraswati Devi v. L. Gian Chand, 1970 Ren Cr 874 (Delhi). It was held in that case that where premises were leased out to a partnership firm and one of the partners left the firm and a new partner entered the firm, it did not amount to subletting. In Murli Dhar v. Chuni La,, 1970 Rcj 922 (SC), it was held by their Lordships of the Supreme Court that the firm name was only a compendious way of describing the partners of the firm was the same as occupation by its partners. The Court held that where the old and new firms had a common partner, the occupation by the new firm of a premises shall be taken to be the occupation by the old tenant as the common partner will be considered to be in possession all through in his individual capacity. In Ram Viuchar v. Daulat Ram Mohan Das, 1967, Delhi Lr 223, a Division Bench of the Punjab High Court (Mahajan and Kapur, JJ.) held that there would be no subletting of the premises if the firm consisting of 6 to 10 partners was no longer in possession of the premises and a firm consisting of 4 partners, who were also partners of the first firm, was in possession.

In K. Devarajulu Naidu v. C. Ethirajavathi Thayaramma, : AIR1950Mad25 , one of the two partners after dissolution of the firm assigned to the other partner the interest of the partnership in the premises which had been taken on lease by the firm. It was held By Rajamannar C.J. and Mack, J. that the above assignment did not amount to breach often convenient prohibiting an assignment of the lease without the consent of the Lesser and as such the landlord was not entitled to eviction on that ground.

8. Lastly it has been argued in S.A. O. 110-D of 1962 that Labhu Ram alone could not maintain an application for fixation of standard rent. In this respect we find that according to Section 9 of the Delhi Rent Control Act, 1958, the Controller shall, on an application made to him in this behalf either by the landlord or by the tenant in the prescribed manner, fix standard rent of the premises. Labhu Ram, as stated above, became a tenant of the premises when firm Gokal Chand Jagan Nath took the same on rent. As such Labhu Ram was entitled to apply for fixation of standard rent. Nothing has been brought to our notice as makes it imperative that all the persons who took the premises on rent should join as petitioners in an application under Section 9 of the said Act. S/A. O. 110-D of 1962 is consequently liable to be dismissed.

9. So far as R.S.A. 105 of 1967 is concerned, Mr. Radhey Mohan Lal submits that the appellants let out the premises to firm Gokal Chand Jagan Nath. All the partners of that firm consequently became liable for the rent of the premises till such time as the possession of the premises was surrendered back to the landlord. The dissolution of the firm, according to Mr. Radhey Mohal Lal, would not affect the right of the appellants to claim rent of the premises from the persons who were partners of the firm before its dissolution. The above stand has been controverter by Mr. Jagdish Kumar, but in our opinion there is considerable force in the submissions of the appellants in this respect. The appellants on 1-1-1957 let out the premises to firm Gokal Chand Jagan Nath. As such the liability of pay rent of the premises was that all the partners of the firm. The fact that the partners mutually decided to dissolve the firm and to allot the premises to Labhu Ram alone would not absolve them of their liability for rent vis a vis the landlords. There is nothing to show that the landlords gave their assent to the arrangements by which the premises in dispute were allotted to Labhu Ram.

It may be that if the rent of the premise is realised by the landlords from a partner other than Labour Ram, he may have a claim against Labhu Ram for being reimbursed in view of the terms of dissolution, but the fact would not affect the right of the landlord to recover the rent from the partners of the firm. According to Section 43 of the Indian Contract Act when two or more persons make a joint promise, the promise may in the absence of express agreement to the contrary compel any one or more of such joint promisors to perform the whole of the promise. What is the effect of a change in the firm on its liabilities qua the third parties has been discussed on pages 44 and 324 of Law of Partnership by Lindley, Twelfth Edition. It is stated on page 44:-

'Another most important consequence of the principle, that on any change amongst the persons composing a partnership there is in fact a new partnership, and not a mere continuation of the old one, is that although, upon a change in a firm, it may be agreed between the members of the old and new firms that the rights and obligations of the old shall devolve upon the new partners, this has no effect upon third parties unless they accede to it/'

Again on page 324 the learned author has observed:- 'So as regards changes occasioned by the retirement of a partner, it has been already shown that the retirement of a partner in no way affects his rights against or obligations to strangers in respect of past transactions.'

10. We are, thereforee, of the view that the finding of the Courts below on issue No. (2) was not correct. R.S. A. 105 of 1967 must consequently be allowed.

11. In the result S.A. O. 110-D of 1962 is dismissed, but R.S.A. 105 of 1967 is accepted. As in the latter appeal the courts below did not decide issue No. (3) in view of the finding on issue NO. (2) the case is remanded to the trial court for decision in accordance with law. Keeping in view all the circumstances, we leave the parties to bear their own costs in both the appeals. The parties are directed to appear in the trial court on 27th February, 1971.

12. Appeal dismissed; connected

13. appeal allowed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //