Skip to content


Reliable Finance Corporation (P) Ltd. Vs. Clearing House and Agencies (P) Ltd. and ors. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtDelhi High Court
Decided On
Case NumberSecond Appeal Nos. 10 and 11 of 1974
Judge
Reported in26(1984)DLT431
ActsDelhi Rent Control Act, 1958 - Sections 14(l)
AppellantReliable Finance Corporation (P) Ltd.
RespondentClearing House and Agencies (P) Ltd. and ors.
Advocates: K.K. Mehra,; A.R. Lal and; S.S. Rana, Advs
Cases ReferredIn Stoning v. Abraham
Excerpt:
.....thereforee, there was no relations of landlord and tenant between reliable finance and them. m/s sobha singh have been using the premises in dispute since 1964. (7) on 13-6-1968 reliable finance also field a petition against clearing house for fixation of standard rent at rs. (8) the controller found that the cleaning house had parted with possession in favor of m/s sobha singh and hindustan steel corporation but he also held that clearing house was a direct tenant of tirath ram ahuja and was not a sub-tenant of reliable finance. (9) it was contended on behalf of reliable finance that clearing house no more existed and the exclusive possession remained with m/s sobha singh and it was a case of sub-letting. bubber further deposed that he lives in bombay as well as in delhi. lal further..........there was no sub-letting but there was parting with possession by clearing house in favor of m/s sobha singh and hindustan steel corporation, s s. bubber (r.w. 1) was a partner in both. these findings were challenged before the tribunal. the tirath ram ahuja leased out the premises to reliable finance corporation (p) ltd. upon the condition that the sub-tenants, namely, clearing house shall be the sub-tenant of reliable finance. (6) on 3-6-1968, reliable finance filed an eviction application against clearing house under 1. (b) of the proviso to s. 14(1) of the delhi rent control act 1958 on the ground that they have without consent in writing of reliable finance sub-let the premises to or parted with possession in favor of m/s h.s. sobha singh & sons, pashmina wool company and maj s......
Judgment:

M.L. Jain, J.

(1) Tirath Ram Ahuja is the owner of the property in dispute namely, municipal No. B-6, Asaf Ali Road, New Delhi. It was leased out to M/s Associated Tube Wells Ltd. who were authorised to and did sublet some of the portion to M/s Clearing House & Agencies (P) Ltd. In 1967 Associated Tubewells surrendered the tenancy in favor of Tirath Ram Ahuja. Thereafter on 1-6-1967 relationship of landlord and tenant between Reliable Finance and Clearing House.

(2) He found that the standard rent was Rs. 250.00 per month but dismissed the application for fixation of standard rent on the ground that it was barred by limitation under section 12 of the Delhi Rent Control Act, 1958.

(3) The learned Rent Control Tribunal dismissed the appeals on 19-10-1973. Hence these two second appeals. Sao No. 10/74 and Sao 11/74. The respondents have filed cross objections No. 526/74. All will be disposed of by this order.

(4) Sao Ii of 1974. The learned Tribunal was of the view that Reliable Finance became the landlord of Clearing House but it held that there was no sub-letting or parting with possession. According to section 109 and 115 of the Transfer of Property Act, Clearing House no doubt became the direct tenant of the owner Tirath Ram Ahuja but he had sent a letter to Clearing House asking them to pay rent to Reliable Finance. The Clearing House began to pay rent to Reliable Finance. The several letters that they wrote showed that the had unconditionally attorney to Reliable Finance. Thus, there was a relationship of landlord and tenant between Reliable Finance and Clearing House. I, thereforee, uphold the finding of the Tribunal in this regard.

(5) The Controller had found that there was no sub-letting but there was parting with possession by Clearing House in favor of M/s Sobha Singh and Hindustan Steel Corporation, S S. Bubber (R.W. 1) was a partner in both. These findings were challenged before the Tribunal. The Tirath Ram Ahuja leased out the premises to Reliable Finance Corporation (P) Ltd. upon the condition that the sub-tenants, namely, Clearing House shall be the sub-tenant of Reliable Finance.

(6) On 3-6-1968, Reliable Finance filed an eviction application against Clearing House under 1. (b) of the proviso to S. 14(1) of the Delhi Rent Control Act 1958 on the ground that they have without consent in writing of Reliable Finance sub-let the premises to or parted with possession in favor of M/s H.S. Sobha Singh & Sons, Pashmina Wool Company and Maj S. Khanna. Pashmina Wool Company and Khanna did not care to appear. S.S. Bubber filed a reply on behalf of Cleaning House and M/s Sobha Singh. They pleaded that they are not sub-tenants but by virtue of section 115 of the Transfer of Property Act were tenants of Tirath Ram Ahuja. thereforee, there was no relations of landlord and tenant between Reliable Finance and them. It was also pleaded that Clearing House was a private limited concern of which S.S. Bubber was the Managing Director. The said Bubber was also the Managing Partner of M/s Sobha Sing. M/s Sobha Singh have been using the premises in dispute since 1964.

(7) On 13-6-1968 Reliable Finance also field a petition against Clearing House for fixation of standard rent at Rs. 1500.00 per month. At present it was Rs. 40.00 per month.

(8) The Controller found that the Cleaning House had parted with possession in favor of M/s Sobha Singh and Hindustan Steel Corporation but he also held that Clearing House was a direct tenant of Tirath Ram Ahuja and was not a sub-tenant of Reliable Finance. He .therefore, dismissed the eviction petition on the ground that there was no Tribunal reversed these findings. The case of Clearing House in the written statement was that M/s Sobha Singh were using the premises as their licenses since 1964. According to the witness Shri Inder Mohan Sachdev (A W-4), C.R. George. Manager of Clearing House, M/s Sobha Singh and Hindustan Steel Corporation was present in the premises when he went for spot inspection as a local commissioner appointed by the court. He had found forms of M/S Sobha Singh hanging and their machines and other staff members were present in the premises. Shri S.S. Bubber (RW-1) was the director of respondent No. I i e. Clearing House and was also a partner of M/s Sobha Singh. The Tribunal held that they were sort of sister concerns and there was no question of transfer of interest by Clearing House in favor of M/s Sobha Singh. The case of Hindustan Steel Corporation was not pressed before the Tribunal perhaps because they are not a party at any stage of the case.

(9) It was contended on behalf of Reliable Finance that Clearing House no more existed and the exclusive possession remained with M/S Sobha Singh and it was a case of sub-letting. The learned Tribunal rejected the contention that Clearing House had ceased to exist. It also rejected the contention that Clearing House was doing no business in the premises.

(10) It was further contended by Reliance Finance that Clearing House or M/s Sobha Singh did not produce their account books which could throw light on the question involved and, thereforee, presumption should be raised against them, that M/s Sobha Singh were paying tent to Clearing House. The learned Tribunal held that there was nothing to show that entries in the account books could throw light on the point in controversy. and non-production of account books is not of much consequence. The circumstance that Shri Bubber Director of Clearing House was also a partner of M/S Sobha Singh goes a long way to show that the possession of M/s Sobha Singh was only that of a licensee. It was for the landlord to prove that the tenent had parted with the legal possession of the premises. So, long as the Lesser retains the legal possession he cannot commit a breach of the law by allowing other people to use the premises. There must be a vesting of possession by the tenant in another person. The more user by other person is not parting with possession. So long as the tenant retains the legal possession, that is he retains the right to claim possession from the occupant, it would not be possible to say that the tenant had parted with possession, though the occupant may have been given the exclusive use, if the tenant has a right to disturb the possession at any time, he cannot be said to have parted with the possession. To divest the right to possession is necessary in order to invoke the ground of parting with possession. The learned Tribunal was of the view that Clearing House had not divested itself of legal right to possession. M/s Sobha Singh was in the premises at the sweet will and pleasure of the Clearing House. M/s Sobha Singh could not claim right to possession of the premises as against the Clearing House and thereforee, there was no parting with possession.

(11) These findings are under challenge in this appeal. There is an objection to this. It is that no appeal lies under section 39 of the Delhi Rent Control Act, 1958 unless some substantial question of law is involved, while the question in this appeal is that of fact only. In Smt. Krishnawanti v. Hans Raj 1975 R. C.J. , it was held that the basic facts and the ultimate conclusions arrived from them are questions of fact and, thereforee, the Tribunal's findings cannot be disturbed. In Vinod Kumar v. Ajit Singh Ahluwalia and others 1969 R.C.J. 218 (SC.) it was observed that under section 39 of the Act, the High Court was incompetent to re-assess the evidence afresh. On a question of fact it was bound by the decision of the Tribunal. But it seemed settled that the High Court can r.-examine the matter if there is an error of law in arriving at the finding or the finding was based on no evidence or was arbitrary, unreasonable or perverse. Mr. Mehra, contended that the findings of the court below were perverse and against the record.

(12) The question that has to be determined first is whether there was subletting in favor of M/s Sobha Singh. He contends that it was so. In the eviction application Para 19, it was said that Maj. S. Khanna was an employee of Associated Tubewells. He sub-let the premises to Clearing House which was his own concern. Then he sold the controlling interest in Clearing House. This was a device to pass on the sub-lease to the new owners of Clearing House. They did no substantial business and further sub-let the premises to M/s Sobha Singh and others. SL. Saluja (AW-1) deposed that there was only a board of Clearing House on the premises and they were doing no business. The entire business was carried on by M/S Sobha Singh. Shri inder Mohan Sachdeva, (AW-4) a local commissioner appointed by the court reported vide Ex. AW-4/1, that there were sign boards of Maj. S. Khanna, Pashmina Wool Company and Clearing House and M/s Sobha Singh but there was no staff of Clearing House except their manager C.V. Geroge who was also the manager of M/s Sobha Singh.

(13) The case in the written statement of the respondents was that M/s Sobha Singh have been using the premises since March 1964, as licensee.of Clearing House. S.S. Bubber (RW-1) deposed that no rent was paid by M/s Sobha Singh to Clearing House. He has got the keys of the premises. He had nothing to do with Pashmina Wool Company which was the concern of Maj-S. Khanna Pashmina Wool Company never used the premises in occupation of Clearing House. Clearing House displayed their goods in the show room. M/s Sobha Singh did hot sell goods nor did they do any other work except liason work. Some machinery of M/s Sobha Singh was displayed in these premises. Some times the machines coming from Bombay were temporarily brought to the premises in dispute. C.V. George was drawing emoluments from Clearing House and M/s Sobha Singh S.S. Bubber further deposed that he lives in Bombay as well as in Delhi. In the year 1966 Clearing House did some clearing work. They have done some other development work which he did not want to disclose. Associated Tube wells write on 8th May 1964 a letter (Ex. R-1) to Clearing House that they have no objection to the use of the premises being allowed by Clearing House to the other concerns, provided that the same is not sublet to create new sub-tenants of the company. They have no objection to their boards being displayed outside. This letter was written by Maj. Khanna when M/s Sobha Singh was given permission for the use of the premises in 1964-65. He denied the suggestion that the books of account of M/S Sobha Singh will show any rent being paid to Clearing House. If transactions are done between M/S Sobha Singh and Clearing House, Commission is paid but if no transaction is done then no commission is paid. He could not give the details of any transactions done by Clearing House. Clearing work was done in 1966. Since the end of March 1967, no clearing and forwarding work has been done. Mr. Mehra, thereforee, urged that the finding that Clearing House was doing work is not justified by the record. As a matter of fact, Clearing House had no work and if the accounts books were produced it could be established that Clearing House had given over possession of the premises exclusively to M/s Sobba Singh in consideration of rent. For this proposition Mr. Mehra relied upon Chidambaram Pillai Sivarama Pillai and another v.Chidambaram Pillai Aundy Pillai and others A.I.R. 1981 TC 87. In this case the account books were not produced nor was any satisfactory Explanationn given for their non-production. It was held that the court was entitled to draw every presumption to the disadvantage of the defendants. In Official Receiver Palghat District, v. Kulingal lay's son Krishnan Perihanam Amsons and Desom,Chowghat Taluk, : AIR1965Ker156 , it was observed that non-production of his own account books by a party when called upon to do so, entitled the court under section 114 of the Evidence Act to draw an inference that if the account books were produced, they will not support the case of the respodent. To the same: effect are observation in Toolaram and another v. Beenraj and others A.IR 1957 Raj. 256 Dr. Harish Chandra Ray v. K.C. Singh, : AIR1977Ori76 and Midnapur Zamindari Co. Ltd. v. Kumar Naresh Narayan and others 1925 P.C. 93 On the other hand, Mr. Lal has cited Ramanathan Chettiar v. M. Ar. Viswanathan Air 1941 P.C. 43. In that case the defendant had own affidavit denied that he had the documents in question with him. This was acquiesced in by the plaintiff. It was held that this negatived the allegation of deliberate withholding of account books on the part of the defendant, and no adverse inference could be drawn against him from the non-production of the account books. Mr. Lal further pointed out that at no time Reliable Finance gave notice or asked for production of the relevant account books. The case of Clearing House and M/s Sobha Singh has been that there was no question of paying rent by M/s Sobha Singh to Clearing House. thereforee, they were not called upon to produce the account books. As a matter of fact they could not know what account books should be produced. M/s Sobha Singh paid no rents. If any adverse inference was to be drawn for non-production of accounts, then the Clearing House should have served a notice for production of the drawn account books. In the absence of such a notice no adverse inference can be drawn against Clearing House on the mere statement made in cross-examination by S.S. Bubber (RW-1) denying the suggestion that the account books show any rent being paid by M/s Sobha Singh to Clearing House S.S. Bubber has categorically denied that any rent was paid to Clearing House by M/s Sobha Singh.

(14) I have considered this aspect. Though between parties to the suit, it is against sound practice to with hold from the court the written evidence which will throw light upon the facts relied upon by a party. The defendants cannot rely upon the doctrine that it is no part of their duty to produce their books unless called upon to do so. Murugesam v. Gnane Air 1917 P.C. 6 and Hiralal v. Badkulal Air 1953 S.C. 1413 thereforee, I cannot accept the abstract proposition of Mr. Lal. But here the position is different. In eviction cases the burden is on the petitioners and respondents specially M/s Sobha Singh cannot be accused of withholding the account books as all along their case has been that they were not under lessees and could not be expected to throw open all their accounts to exposure before their adversaries. It is not reasonable or just to draw any adverse inference against them. Similarly no adverse inference can be drawn against them because the Clearing House did not cross-examine S.L. Saluja (A W-l) on his statement that M/s Sobba Singh was paying rent to Clearing House. Saluja cannot be believed simply because of this omission. The learned Tribunal was, thereforee, justified in holding that the non-production of the account books on their own by the respondents is not going to affect the decision of the case. The Controller was also of the view that M/S Sobha Singh were not paying any rent to Clearing House.

(15) The only question, thereforee, that, now has to be determined is whether the Clearing House has otherwise parted with the possession. Mr. Mehra pointed out that the Local Commissioner has reported on 2-9-1967 that Clearing House was doing no work and as a matter of fact, K.. Form w.e.f. 14-11-1964 of the employees of M/s Sobha Singh was lying with the steno typist in one of the cabins. This form is maintained under the Shops and Establishments Rules. That shows that the possession of the premises was with M/s Sobha Singh. Clearing House had no business therein ; they had no staff, and no K forms and there was no telephone. There was only a letter dated 6-6-1967 of D.E.S.U. written to Clearing House which cannot prove that Clearing House was in occupation of the premises. It proves that Clearing House had parted with possession in favor of M/s Sobha Singh who were an identity apart from Clearing House. But this question can be answered only if we understand what parting with possession means. This expression has been lifted from a British statute and was bound to receive the same construction which it had received there. The respondents admitted in their written statement that M/s Sobha Singh were a licensee of Clearing House. Now the sole question is when does a license becomes parting with possession and what is the position in this case.

(16) In a very lucid judgment Sachar, J. in Shri Gurdial Singh v. Shri Brij Kishore and others 1970 R.C.J. 1001 had held that what to be seen in each case is whether the tenant has totally effaced himself and whether the possession of the third person is exclusively in his own right and to the ouster of the lessee. Though a person may be absent from the premises at a time yet if he has an intention to return to them, it may fairly be said that he is still actually in possession and, thereforee, entitled to be protected. If a lessee retains legal possession at all times he does not commit a breach of the covenant against parting with the possession by allowing other people to use the premises. A covenant against the parting with the possession is not broken by sharing the possession with another. It is quite possible in law that a man can permit anyone to occupy and at the same time remain in possession. Where the tenant remained in control of each of the companies and the facts shows that he was really and easily carrying on the business of others at his own premises which remained his from first to last, then he cannot be said to have parted with possession. The mere act of letting other persons into the possession by the tenant and permit them to use the premises for their own purposes is not, so long as he retains the legal possession himself, a breach of the covenant. In Stoning v. Abraham (1931) 1 Cr 470 it was observed that a lessee cannot be said to part with the possession of any part of the premises unless his agreement with the licensee wholly ousts him from the legal possession that part. If there is anything in the nature of a right to concurrent user, there is no parting with possession. Retention of a key may be a negative indicium but nothing short of a complete exclusion of the grantor or licensor from the legal possession for all purposes amounts to parting with possession. The fact that the agreement is in form of a license is immaterial as a license may give the licensee so exclusive a right to the legal possession to a part with possession. It is not the law that no sooner does any as to amount person other than a Lesser occupy a premises it must be held that the tenant has parted with the possession of the demised premises. To my mind it is all a question of fact.

(17) Considering all the circumstances of this case there is no doubt Clearing House and M/s Sobha Singh are two different entities and M/s Sobha Singh are a licensee but as found by the learned Tribunal the legal possession was always retained by Clearing House. I uphold the finding of the learned Tribunal and reject this appeal. There shall be no costs. Cross objection stand disposed of accordingly. S.A.O. No. 10 of 1974

(18) As regards the fixation of standard rent, an application for that purpose under section 12 of the Delhi Rent Control Act, 1958 could be made by the landlord within two years from the date on which the premises were let to the tenant against whom the application is made. The Controller may entertain the application after the expiry of the said two years, if the application was prevented by sufficient cause from filing the application in time. The case of Clearing House is that premises were let out to them in 1961. Shri Bubber appeared as a witness and said that Clearing House was in occupation since 1961. It was urged that the premises will be deemed to have been let out in June 1967 to Clearing House and consequently the application filed by Reliable Finance was within limitation. The learned Tribunal held that the premises are let on the date when the right in the premises is created and the possession delivered. The possession was delivered long before Reliable Finance became the landlord. By the change of the landlord no new tenancy would come into effect. The application for standard rent was thus clearly barred by time. The appellant field an application under section 12 for condensation before the Tribunal but it dismissed that application. The application should have been made to the Controller. What apart it is said in the application for condensation that the delay occurred on account of fraud played on them by the opposite party. But that ground was misconceived. The period of two years will be counted from the date Clearing House became a sub-tenant in 1961 of the Associated Tubewells. A sub-tenant is a tenant under section 2(b) of the Act. The period cannot be counted from 1967. The application being barred by time, there is no need to examine the quantum of standard rent however unreasonably low it may be. The appeal has no force and is dismissed. No costs.


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