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Shalimar Tar Products India Ltd. Vs. H.C. Sharma and ors. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtDelhi High Court
Decided On
Case NumberSecond Appeal No. 294 of 1972
Judge
Reported inILR1974Delhi389
ActsTransfer of Property Act, 1882 - Sections 107; Registration Act, 1872 - Sections 49
AppellantShalimar Tar Products India Ltd.
RespondentH.C. Sharma and ors.
Advocates: K.K. Bhatia and; H.D. Triyogi, Advs
Cases ReferredRama Vidya Bhushan Singh v. Ratiram
Excerpt:
.....lease deed creating tenancy for 5 years contained a term granting permission to tenant to sublet premises -- lease deed, held admissible in evidence to prove landlord's written consent to tenant to sublet premises.; that the written consent by the landlord to the tenant to sublet the premises does not require any particular form of stamp duty or registration and can be given even by a letter and may be given at any time either at, before of after the commencement of the lease. the consent is, thereforee, really a collateral matter and can be proved in evidence. an unregistered document can be produced in evidence to show the nature of possession, and accordingly the nature of the possession of the tenant could be shown to be holding under an unregistered lease coupled with a..........favor of r. c. abrol and company and (3) if there was such subletting, it had been made with the written consent of the landlord and so was not actionable.(5) in the petition for eviction in paragraph 14. it has been mentioned that the premises had been let out to the appellant tenant on 1st february 1956 which fact was admitted in the written statement of the tenant. with regard to notice, the plea in the petition for eviction contained in clause (b) paragraph 18 was that no notice was required and none was given. in the written statement it was admitted that ni) notice was given but it was denied that any such notice was not required to be given. in the amended written statement the appellant raised the specific plea that service of a notice under section 106 of the transfer of.....
Judgment:

B.C. Misra, J.

(1) This second appeal has been filed under setion 39 of the Delhi Rent Control Act of 1958 (hereinafter referred to as the Act) by the tenant company against the appellate order of the Rent Control Tribunal dated 7th October, 1972, by which he has affirmed the order of the Additional Controller dated 7th September, 1970, finally maintaining the order of eviction of the appellant on the ground of unlawful sub-letting mentioned in clause (b) of the proviso to sub-section I of Section 14 of the Act.

(2) The material facts of the case briefly stated arc that the appellant was inducted in the property in dispute which is situated at Connaught Place, New Delhi, as a tenant w.e.f. 1st February 1956 on a rent of Rs. 727.25 p.m. for a period of five years under a lease deed which was neither stamped nor registered. However, on the expiry of five years the lease was extended for another period of five years expiring on 31st of January, 1965 by exchange of letters. It appears that the respondent-landlords did not serve, a notice to quit but on 31st January 1967 they instituted a petition for eviction against the appellant on the grounds of unlawful sub-letting to R. C. Abrol & Company Pvt. Ltd., and another. That other is Turner Morrison and Company Pvt. Ltd. but it does not require my consideration since the Tribunal below has found that it was only the managing agent of the appellant and so there was no sub-letting in their favor and this finding has not been challenged. It is really the alleged sub-letting to the first named company namely, R. C. Abrol and Company Pvt. Ltd. that has been disputed in the appeal before me. The tenants in their reply to the petition denied the unlawful subletting and contended that the subletting had been done to R. C. Abrol & Company Pvt. Ltd. with the consent in writing as well as oral of the respondent-landlords and so the same was not unlawful or actionable. In the amended written statement dated 25th February 1968 they also pleaded the want of notice under section 106 of the Transfer of Property Act as a bar against the maintainability of the petition for eviction.

(3) Mr. P. K. Bahri the Additional Controller trying the petition decided the question of notice by an order dated 11th of April, 1968 and ie held that after the afflux of time contractual tenancy of the appellant had come to an end and the tenancy of the appellant was thereafter statutory and so no notice was necessary to terminate the same. Finally on the conclusion of the trial Shri P. K. Jain then Additional Controller found that the appellants had unlawfully sublet the premises in dispute in favor of R. C. Abrol and Company Pvt. Ltd., and so he passed the order for eviction. He also found that the Turner Morrison and Company had ceased to be the managing agent of the tenant-appellant and so there was unlawful subletting in their favor as well. Aggrieved by this order, the appellants appealed to the Rent Control Tribunal. He reversed the finding of the Controller in respect of subletting to Turner Morrison and Company. He. however, affirmed the finding in regard to unlawful subletting to R. C. Abrolpany Pvt. Ltd. In regard to notice he observed that since the tenantappellants had not filed an appeal against the order of the Additional Controller dated 11th April, 1968 determining the question of notice. the said order had become final and could not be challenged in appeal against the final order. Anyway the Tribunal considered the matter afresh and affirmed the finding of the Additional Controller that the tenancy of the appellant was statutory and so did not require termination.

(4) The learned counsel for the appellant has raised three contentions before me namely : (1) the petition for eviction was not maintainable in the absence of a notice to quit determining the tenancy. C2) there was not subletting or parting of possession by the appellant tenant in favor of R. C. Abrol and Company and (3) if there was such subletting, it had been made with the written consent of the landlord and so was not actionable.

(5) In the petition for eviction in paragraph 14. it has been mentioned that the premises had been let out to the appellant tenant on 1st February 1956 which fact was admitted in the written statement of the tenant. With regard to notice, the plea in the petition for eviction contained in clause (b) paragraph 18 was that no notice was required and none was given. In the written statement it was admitted that ni) notice was given but it was denied that any such notice was not required to be given. In the amended written statement the appellant raised the specific plea that service of a notice under section 106 of the Transfer of Property Act was essential and the petition was in the absence of such notice not maintainable. The respondent landlords in their replication asserted that title tenancy of the respondent had been created before the Transfer of Property Act had been extended to Delhi and because the tenancy was for a fixed period after the expiry of which the tenant had become a statutory tenant and so was not entitled to any notice of termination of tenancy. The fact that the period of tenancy was fixed is borne out by the admissions contained in Exhibits R-9 and R-1O. Exhibit R-9 is a letter dated 11th September, 1965 written by the landlords to the tenants. In this letter it was stated that the premises had been let out originally for a period of five years i.e. from 1st February, 1956 to 31st January, 1961 and this period had been extended for another five years and would come to an end on 31st January, 1966 and the appellant company was asked if they wanted any further extension. Exhibit R-IO is the reply dated 14th September, 1966, but no agreement for further extension was eventually arrived at, but the fact that the tenancy was for a fixed period and had expired on 31st January, 1966 has not been disputed. This admission shows that the contractual tenancy stood determined by efflux of time on 31st January, 1966 under clause (a) of section 105 of the Transfer of Property Act. In Pooran Chand v. Motilal, Air 1964 Sc 46(1), it was laid down that upon the expiry of the period of lease fixed, the contractual tenancy came to an end and the tenant becomes a statutory tenant and as such no notice was necessary to be given to him under section 106 of the Transfer of Property Act determining the tenancy before filing a suit for eviction against the statutory tenant. This principle was reiterated by the Sc in Manujendra Dutt v. Purnedu Prosad Roy Chvwdhury and others, : [1967]1SCR475 . The High Court of Punjab and Haryana in Gainda Ram v. Vishnu, has also taken the same view. Consequently the petition for eviction against a statutory tenant cannot fail on the ground of want of notice to quit and the finding of the Tribunal on this point is unexceptionable.

(6) On this point the learned counsel for the appellant did not advance before me any argument based on Section 116 of the Transfer of Property Act which had been pressed by him before the Additional Controller without success, nor have they been pressed before the Rent Control Tribunal. The contention raised before the Tribunal was that the lease deed in this case was unstamped and unregistered and under section 107 of the Transfer of Property Act it could not create a tenancy for a period of more than one year and as such the tenancy should be deemed to be not for a period of five years but from month to month under section 106 of the Transfer of Property Act and as such notice to quit was an essential pre-condition to determine the lease. The fact that the lease was for a fixed period which has expired is not seriously disputed and from the letters Exhibit R-9 and R-IO the Tribunal and the Additional Controller have both inferred that the lease was for a period of five years and the same has expired. In order to arrive at this finding, we do not have to rely upon the original lease deed and so the question of its being inadmissible in evidence for want of proper stamp and registration does not arise for consideration in connection with the present point at issue. I am really not called upon to decide what was the period of the lease in the present case. The only question for determination is that the original lease was for a fixed period which has expired and so the contractual tenancy has come to an end. This finding can be recorded on the evidence on record without reference to the lease deed in dispute and there 3s nothing in Section 107 of the Transfer of Property Act or Section 49 of the Registration Act to prevent this finding being arrived at on the legal evidence on record. The finding of the Tribunal on the question is thereforee affirmed.

(7) The Tribunal in repelling the contention of the appellant has also observed that the question of notice had been decided against the appellants by the Additional Controller by and interlocutory order dated 11th April, 1968 and since the appellant had not appealed against the said order, it had become final and it cannot be challenged in appeal. Andley, C. J. in S.A-O. 30/69 Chambers Colours India Ltd. v. Trilokchand in a judgment delivered on 18th of May, 1973, has in connection with an appeal against an order under section 15(7) of the Rent Act been pleased to make some observations from which the appellants desire to derive an advantage. Reliance is also placed on Section 105 of the Code of Civil Procedure read with Section 38(3) of the Rent Control Act, and Satyadhvan Ghosal and others v. Smt. Deorajin Debi and another : [1960]3SCR590 .

(8) However, in the present appeal it is not necessary for me to decide this question and I prefer not to rest my decision on the finality of the previous order which had not been appealed against but I endorse the finding of the Tribunal on merits and repel the first contention of the appellant.

(9) This takes me to the consideration of the second contention. The plea of subletting was raised by the respondent landlords in the words that the premises had been sublet by the appellant tenant to R. C. Abrol and Company Pvt. Ltd. without obtaining the consent in writing of the landlord after 9th of June 1952 and that the said company has gone into liquidation and the official liquidator appointed by the Punjab High Court had taken possession of the portion let out to the company. There were allegations about Turner Morrison and Company Pvt. Ltd. also which as mentioned above need not detain my consideration. The defense raised in the written statement was contained in paragraph 13 in reply to paragraph 16 of the petition that the respondent tenant had sublet the accommodation to M/s. R. C. Abrol and Company Pvt. Ltd. after the landlords had consented to the same in writing as well as orally and that the said company had been in occupation of the part of the premises in dispute to the knowledge of the landlords for over Ii years. As an alternative to consent in writing the plea of acquiesencc and estoppel was also raised. Besides the above admissiocurrent finding of the Controller and the Tribunal are that the appellant tenants had sublet the premises to R.C. Abrol and Company Pvt. Ltd. This finding of fact is not open to challenge in second appeal in this Court. The finding is fully supported by the evidence Oh record and I do not find any cogent reasons to differ from it.

(10) The last contention requires serious consideration. The appellant tenants have set up a case of consent in writing. The consent is contained, however, in the unstamped and unregistered letter of lease deed dated 28th January. 1956. A signed copy of it is on page 141 and 143 of the record. There is no doubt that this document is not admissible in evidence. It requires a stamp of Rs. 90.00 besides ten times the penalty which had not been paid. Moreover it purports to create lease for a period of five years, and so under see. 17 (d) of the Registration Act, it will require compulsory registration and without registration its production as evidence of any transaction affecting the immovable property comprised therein will be legally invalid under section 49 of the Registration Act. However, lie proviso to section 49 permits the production of such documents as evidence of part performance or as evidence of any collateral transat ion not required to be registered. The question that arises for consideration is whether the written consent to sublet the premises contained in the unregistered document is a collateral purpose and the document can be produced in evidence to establish the same. The Judicial Committee observed in Varatha Pillai and another v. Jeevarathanammal. 46 Indian Appeals 285 at page 296 (5) that an unregistered document was admissible to prove the nature and the character of the possession thereafter held. This view was adopted by the Sc in Padma Vithoba Chakhavya v. Mohd. Miiltani and another Air 1963 SC 70 (6). It was also followed by the High Court of Allahabad in Ram Kishore v. Anibika Prasad Air 1966 All 515 (7). The High Court of Delhi inJ. N. Banerjee v. Sohan Lal Bhargava, : AIR1971Delhi243 has held that the purpose of the lease is a collateral matter and the unregistered deed can be received in evidence to show the same. In this decision, reliance was placed on another decision of the Sc in Rama Vidya Bhushan Singh v. Ratiram, Civil Appeal No. 460 of 1966 decided on 28th June, 1969, (9) for the view that an unregistered lease-deed is inadmissible as evidence of a transaction affecting an immovable property but it may be admitted as evidence of collateral facts or for any collateral purpose, that is, for any purpose other than that of creating, declaring, assigning, limiting or extinguishing a right to the immovable property. The written consent does not require any particular form or stamp duty or registration and can be given even by a letter and may be given at any time either at, before or after the commencement of the lease. As a matter of fact, under section 108 of the Transfer of Property Act, the lessee is entitled to sublet the premises subject to the limitations specified therein. The requirements of the written consent has assumed importance in view of clause (b) of the proviso to sub-section (1) of section 14 of the Rent Act under which a tenant, who has sublet the premises after 9th June, 1952, without a written consent of the landlord, becomes liable to eviction on the ground mentioned in the proviso. This consent is, thereforee, really a collateral matter and can be proved in evidence. Moreover, if in view of the authority of the Privy Council and the Sc, an unregistered document can be produced in evidence to show the nature of the peiscssion, it could be legistimately inferred that the nature of the possession of the tenant could be shown to be holding under an unregistered lease coupled with a right to sublet and so the landlord and the tenant both can show from the unregistered deed that the tenant had obtained a written consent of the landlord to sublet the premises. I hold that the document is. admissible in evidence to show such consent.

(11) Moreover, the written consent given by clause 14 of the unregistered deed has been reproduced in further correspondence between the parties namely Exhibits A.10 and A. 11 and the said letters can in any event be used to establish the alleged consent. This consent I is in the following terms:-

'THElesr.ee undertake;- not to sublet the premises to any other party without a written permission of the Lesser and that the lessee's contractors M/s. R. C. Abrol and Company will have the premises with the permission of the Lesser.'

(12) The argument of the respondent-landlord is that this permission had been given only to M/s. R. C. Abrol and Company, who were the lessees contractors, for use of the premises as a license and it does not amount to a written permission to sublet. I am unable to accept this contention of the landlord. The prohibition in the term is that the lessee will not sublet without the permission and as an exception to the same the permission of the Lesser is granted to the lessee's contractors M/s. R. C. Abrol and Company to share the premises. It is, thereforee, legitimate to hold that this is a permission in writing from the landlord to the tenants to sublet the premises to M/s. R.C. Abrol and Company. If the premises were only intended to be used by the said company as a licensee and not as sub-tenant, its use did not require any permission from the landlord and the exception would not find any mention in the document, nor will it be placed in juxta position of the undertaking not to sublet the premises to any other party without a written permission. Moreover, no objection was ever raised by the respondent to the subletting of the premises to R. C. Abrol and Company. Considered from any point of view, I am of the view that this was a written permission expressly given by the landlord to sublet the premises to R. C. Abrol and Company and not only for their using it as a licensee.

(13) Unfortunately, the difficulties for the appellant arise from the tact that the party which is in possession of a part of the premises as a sub-tenant is not the old proprietary concern-M/s. R. C. Abrol and Company, but by a new legal entity viz. incorporated company known as M/s. R. C. Abrol and Company Private Limited. It is established on record that this company had been incorporated sometime in 1957 after the commencement of the tenancy. It is trite to state that an incorporated company is a different legal person from the persons who are its members and this company is a distinct legal entity from the previous sole proprietary concern. Obviously, there never was any consent in writing of the landlords to sublet the premises to the said incorporated company. In Pooran Chand's case (supra) and South Asia Industries Private Limited v. S- Sarup Singh. : [1965]3SCR829 ,(10) it has been held that the permission'in writing must be specific. These authorities do not lay down and so I do not hold that a permission cannot be general; it will depend on the construction of the particular permission. It may be given to generally sublet the premises or may be confined to some particular sub-tenant. In the present case the permission was confined to the sole proprietary concern and it was never given to the incorporated company. As a matter of fact, the respondent-landlords have been objecting to the possession of the premises by the incorporated company vide Exhibit A-10. It may be legally possible for the appellants to show by adequate legal evidence on record that the veil of the incorporated company may be pierced to show that the incorporated company was not a different legal person but the sole proprietary concern, only taking a new shape and name and it has really continued with the same old rights and liabilities as the proprietary concern had and there was no legal or factual change in the identity of the sub-tenant and substantially it is the same. But unfortunately, this has neither been raised as a plea nor has been established on the record. I have, thereforee, no material to hold that the incorporated company was not a different person from the sole proprietary concern.

(14) As a result) I endorse the findings of the Rent Control Tribunal and find no force in the appeal and dismiss it. The Rent Control Tribunal left the parties to bear their respective costs and so there will be no order as to costs in this Court as well. The tenant wilt have one month's time to vacate.


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