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Manchharam Sobhrai and ors. Vs. Jamnadas Mulchand and anr. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtGujarat High Court
Decided On
Case NumberCivil Revn. Appln. No. 736 of 1971
Judge
Reported inAIR1976Guj47; (1975)GLR898
ActsBombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 - Sections 13(1) and 15
AppellantManchharam Sobhrai and ors.
RespondentJamnadas Mulchand and anr.
Appellant Advocate K.G. Vakharia, Adv.
Respondent Advocate J.M. Patel, Adv.
Cases Referred(Bom) (Uttamlal Muljibhai v. A. Hasan Elahi Noor Elahi
Excerpt:
.....he cited any decisions to support them. the partnership deed clearly shows that the defendants nos. none of the well settled propositions which the learned district judge has stated in his judgment can be applied to the instant case. this proposition does not hold good in all cases of business premises. - (1) notwithstanding anything contained in this act but subject to the provisions of section 15. a landlord shall be entitled to recover possession of any premises if the court is satisfied- (e) that the tenant has since die coming into operation of this act......filed against the defendants nos. 1 and 2 the present suit for recovering possession of the suit premises which consist of a shop situate at kodinar in the district of amreli. the plaintiffs alleged against the defendants three grounds of eviction. the first ground was that they require the suit premises reasonably and bona fide for their occupation. secondly they alleged that the defendant no. 1 was in arrears of rent for more than six months. thirdly they alleged that the defendant no.1, their tenant had unlawfully sub-let the suit premises to the defendant no. 2.2. the learned trial judge negatived all the grounds of eviction alleged by the plaintiffs against the defendant and dismissed the suit on merits.3. the plaintiffs appealed to the district court. the learned district.....
Judgment:
ORDER

1. The plaintiffs who are the landlords filed against the defendants Nos. 1 and 2 the present suit for recovering possession of the suit premises which consist of a shop situate at Kodinar in the District of Amreli. The Plaintiffs alleged against the defendants three grounds of eviction. The first ground was that they require the suit premises reasonably and bona fide for their occupation. Secondly they alleged that the defendant No. 1 was in arrears of rent for more than six months. Thirdly they alleged that the defendant No.1, their tenant had unlawfully sub-let the suit premises to the defendant No. 2.

2. The learned trial Judge negatived all the grounds of eviction alleged by the plaintiffs against the defendant and dismissed the suit on merits.

3. The plaintiffs appealed to the District Court. The learned District Judge negatived two of the three grounds of eviction alleged by the plaintiffs but upheld the plaintiff's contention that the defendant No. 1 had unlawfully sub-let the suit premises to the defendant No. 2. In that view of the matter the learned District Judge allowed the appeal and passed in favour of the Plaintiffs decree for possession.

4. It is that decree for possession which is called in question by the defendants in this Civil Revision Application.

5. Mr. Vakharia who appears for the defendants has contended that even on the facts found by the learned District Judge there cannot be any unlawful sub-letting. Mr. Patel who appears for the plaintiffs has not challenged the findings recorded by the learned District Judge on the question of the plaintiffs reasonable and bona fide requirement of the suit premises and on the question of the defendant No. 1 being in arrears of rent for more than six months. He has not assailed those findings for the purpose of supporting the decree under challenge.

6. The defendant No. 1 Manchharam Sobhraj is admittedly the tenant. The plaintiffs alleged that the defendant No. 3 - M/s. Manchharam. Shobhraj and Co. consisting of three partners including the defendant No. 1 was a sub-tenant. The learned District Judge has dealt with this aspect of the case in paragraphs 12 and 13 of his judgment. He has rightly stated in his judgment that if a tenant takes a partner in the firm it does not amount of unlawful sub-letting. Having stated this rinciple correctly it appears to me that he has erred in its application to the facts of the instant case He has further stated in his judgment that 'if a tenant walks out leaving the premises to a stranger who carries on his business' or 'if a tenant walks out allowing a third party to carry on his business under a sham or camouflage partnership with the tenant' or 'if the tenant takes a certain person as a partner and gives him exclusive possession of a part of the premises' or 'if a tenant gives exclusive possession of the premises to a third party under an agreement of conducting the business which business is started by the third party and the tenant has nothing to do with the profit or loss of the business' he can be said to have sub-let the suit premises. In support of the propositions quoted above, though the learned District Judge has stated that they are all well-settled, he has neither given reasons to justify them nor has he cited any decisions to support them. However, it is true that if a tenant walks out of the suit premises and leaves the suit premises to a stranger who carries on his own business, it may lead to an inference that the tenant has sub-let his premises to a sub-tenant. That is so because it is a stranger who carries on his own business which shows that the tenant who has left the premises to him is no longer interested in those premises. Similarly, if a tenant walks out of the premises in his possession and allows a third party to carry on his own business under sham or camouflage partnership with the tenant it may amount to an act of unlawful sub-letting by the tenant if the camouflage partnership has been entered into for the purpose of screening the act of unlawful sub-letting. Similarly, if a tenant has parted with possession of his premises and put his another partner in exclusive possession thereof, it will amount to an act of unlawful sub-letting because such an act connotes a transfer of legal interest in the premises from the tenant to someone else. Similarly, if a third party is allowed by a tenant to carry on his own business in the premises it may lead to an inference of unlawful sub- letting because the tenant who has no interest in the profit and loss of business can be said to be no longer interested in the premises.

7. Let us see how the learned District Judge has applied these propositions to the instant case. There is a registered Partnership deed, Ex. 54 entered into by three partners constituting the firm of M/s. Manchharam Shobhraj and Co. Defendant No. 1 the tenant himself is one of them. Vishandas Jethalal and Chijandas Trilokchand are two other partners. It is a registered partnership deed. There is nothing to show that the registered partnership deed represents a sham and camouflage transaction to screen the act of unlawful sub-letting. The registered partnership deed, Ex. 54 shows that the tenant-defendant No. 1 is entitled to a share of 33 1/3 paise in a rupee. This recital in the partnership deed shows that the defendant No. 1 the tenant actually shares the 'profit and loss of the firm to the aforesaid extent. There is no evidence on record to show that though the partnership deed contains this recital the defendant No. 1 actually has not been sharing profit and loss of the firm at all or to the aforesaid extent. The partnership deed clearly shows that the defendants Nos. 1. 2, and 3 have been carrying on business in the suit premises. It is extremely difficult to say under these circumstances that the defendant No. 1 has left the premises to a third party or to a stranger to enable him to carry on his own business there. None of the well settled propositions which the learned District Judge has stated in his judgment can be applied to the instant case. The principal fact which has appealed to the learned District Judge is that the family of the defendant No. 1 has been residing not at Kodinar but at Gondal. He has also taken into account the fact that the defendant No. 1 has been residing at Gondal. The learned District Judge seems to have overlooked the fact that in case of partnership business it is not necessary for all the partners to remain physically present at the place of business. Anyone or more of the partners can carry on the business with all sharing the profit and loss of the business. Therefore, if one of the partners to whom the premises have been leased out resides at a place other than the place where the premises in question are situate, it cannot lead to the inference, much less the necessary inference, that he has parted with possession of his premises in favour of his other partners. The next fact which the learned District Judge has taken into account is that the two other partners are not related to the defendant No. 1. It is immaterial whether they are related to the defendant No. 1 or not. A partnership firm can be constituted by any persons irrespective of whether they are related to each other or not. I am unable to agree with him when he states that since the defendant No. 1 has left the town of Kodinar and gone to Gondal with his family he can be presumed to have transferred his interest in the suit premises to his other partners. This proposition does not hold good in all cases of business premises. It may or may not be so. Unless. therefore, there is evidence on record to show that the defendant No. I has transferred his interest in the suit premises to his two other partners it is extremely difficult to come to the conclusion that he has sub-let them to his other two partners.

8. In order to show that the defendant No. 1 has unlawfully sub-let the suit premises to his two partners it must be shown that he has transferred legal possession to them. A tenant cannot be his own sub-tenant. Therefore, in order to prove sub-letting in a case of this type it must necessarily be shown that the tenant has transferred, legal possession of his premises to his other partners to his exclusion.

9. It has been held by the Supreme Court in Her Highness Maharani Mandalsa Devi v. M. Ramnarayan Private Ltd. 68 Bom LR 31 = (AIR 1965 SC 1718) that the legal fiction contained in Order XXX of the Civil Procedure Code, 1908, permits a partnership firm to sue or be sued in the firm name as if it is a corporate body. But the legal fiction must not be carried too far. For some purposes the law has extended a limited personality to a firm but, it has been observed by the Supreme Court, the firm is not a legal entity. The persons who are individually called partners are collectively called a firm and the name under which their business is carried on is called the firm name. A suit by or in the name of a firm is thus really a suit by or in the name of all its partners. So also a suit against the firm is really a suit against all the partners of the firm. The decree passed in the suit, though in form against the firm, is in effect against all the partners. This decision of the Supreme Court makes it quite clear that a partnership firm is not a legal entity different from its partners. It is only a convenient way of suing several partners in the name of the firm as if they are a corporate body. Therefore, when the plaintiffs allege that the defendant No. 1 has sub-let the suit premises to M/s. Manchharam Shoobraj & Co., it means that he has sub-let them to himself and to other partners.

10. It has been held by Mr. Justice Thakkar in Mehta Jagjivan Vanechand v. Doshi Vanechand Harakhchand, 12 Guj LR 487 = (AIR 1,972 Gui 6) that sub-letting postulates two distinct persons the head-tenant and the sub-tenant and that the rights and obligations of these two persons are different. One cannot be one's own sub-tenant. If the transaction of taking in partners constitutes sub-letting, the tenant will be the head tenant and he himself along with his two partners will be the sub-tenant. This is not a sound legal proposition. A tenant by no stretch of imagination can be his own subtenant. It has been further held by the learned Judge that unless it can be posited that the original tenant's entire interest is extinguished and that of someone else to the exclusion of the original tenant is created, it cannot be contended that there has been an assignment. He has further held, that a tenant cannot split up the interest retain a part of it and transfer the remainder to his partners. Merely because a tenant continues to carry on the business in the same shop in which he had been doing earlier, but takes in two partners, the legal possession of the shop does no change the hands. According to the learned Judge, legal possession is concept which must be distinguished from the physical occupation or user. One who occupies or uses a premises is not necessarily in legal possession of the premises even if the partners of the firm attend the shop and do business along with the tenant it cannot be said that they are in legal possession of the shop. I am in complete agreement with the principles laid down by laid Judge. Applying the aforesaid principles the only conculsion at which one can arrive is that there has been no sub-letting in the instant case because there is on evidance what so ever to show that the defandant No.1 Manchharam Sobharaj the tenant has transferred illegal possession of the suit premises to his two partners Vishandas Jethalal and Chijan das Trilokchand the question of his transferring legal possession of the suit premises to his two partners and retting a part there of cannot arise as been laid down by the learned Judge in the aforesaid decision.

11. Mr. Patel has tried to support the decree by citing two decisions. The first decision is that of the Nagpur High Court in Tansukhdas Chhayanlal v. Smt. Shambai. AIR 1954 Nag 160. It has been laid down in that decision by a Division Bench of that Court that where in the first instance 'A' alone was the tenant of the premises and he allowed other persons to enter into partnership along with himself to carry on business in those premises the partnership which 'A' entered into alone with the third parties was a personality in law distinct from that of 'A' himself. Therefore according to the learned Judges. 'A' thus brought himself within the purview of the law prohibition sub-letting except with the permission of the landlord. He was therefore. liable to ejectment on the ground of unauthorised sub-letting. The first part of the proposition laid down in the aforesaid decision appears to me to be running contrary to the principle laid down by the Supreme Court in Maharani Mandalsa Devi's case (AIR 1965 SC 1718) (supra). The second part of the proposition laid down by the learned Judges in that decision is the logical extension of the first part. Since I am unable to accept the first part of the said proposition the principle laid down in that decision cannot be applied for the reasons stated above to the facts of the instant case.

12. The next decision which Mr. Patel has cited before me is Nemi Chand v. Abdul Hakim. 1970 Ren CJ 338 (Madh Pra). This decision is rendered by a learned Single Judge of the K P. High Court. It has been laid dawn in that decision that if a person takes accommodation on rent and without the permission of the landlord shares the possession extending over a part or whole of it with a newcomer he certainly comes within the mischief of Section 12(1) (b) of Madhya Pradesh Accommodation Control Act 1961 Section 12 (1) (b) of Madhya Pradesh Accommodation Control Act. 1961 upon which the aforesaid decision is based is different in language from Section 13(1)(e) of the Bombay Rent Act with which I am concerned. Section 12 (1) (b) of the said Madhya Pradesh Act provides as follows -

'(1) Notwithstanding anything to the contrary contained in any other law or contract. no suit shall be filed in any Civil Court against a tenant for his eviction from any accommodation except on one or more of the following grounds only namely.

(b) that the tenant has whether before or after the commencement of this Act unlawful1y sub-let, assigned or otherwise parted with the possession of the whole or anv part of the accommodation for consideration or otherwise:'

Section 13(1)(e) of the Bombay 'Rent Act provides as follows:-

'(1) Notwithstanding anything contained in this Act but subject to the provisions of Section 15. a landlord shall be entitled to recover possession of any premises if the Court is satisfied- (e) that the tenant has since die coming into operation of this Act. unlawfully sub-let the whole or part of the Premises or assigned or transferred in any other manner his interest therein'

Section 12 (1) (b) of the said M. P. Act provides for eviction of a tenant not on1v on the around of unlawful sub-letting or assignment but also on the around of his having 'parted with the possession of the whole or any part of the accommodation for consideration or otherwise.' It is quite probable that the expression 'possession' used in Section 12 (11 (b) may not necessarily mean legal possession but may mean actual or physical possession. Even if a person other than a tenant has been gratuitously occupation the premises let out to a tenant he is likely to fall within the mischief of Section 12 (1) (b) of the said Madhya Pradesh Act That is not the scheme of Section 13(1)(e) of the Bombay Rent Act. I am, therefore unable to apply the principle laid down by the Madhya Pradesh High Court in the aforesaid decision to the fact of the present', case.

13. The last argument which Mr. Patel has raised before me is that Civil Revision Application No. 868 of 1968 (Guj) in which a similar point arise has been referred by MT. Justice S. N. Patel to a Division Bench and that therefore. I should refer this Civil Revision Application to a Division Bench for deciding the question which has been raised before me. If that Civil Revision Application had still been pending. I would have certainly referred this Civil Revision Application to a Division Bench but that Civil Revision Application has been decided by Mr. Justice D. P. Desai and Mr. Justice Surti on llth Februarv. 1974 the judgment delivered by that Division Bench shows that the contention which has been raised before me was not raised in it before the Division Bench and has therefore not been decided. Under the aforesaid circumstances I see no reason to refer this Revision Application to a Division Bench.

14. In Civil Revision Application No. 1204 of 1951 (Bom) (Uttamlal Muljibhai v. A. Hasan Elahi Noor Elahi) decided by Chief Justice Chagla on 29th July 1952 it has been laid down that the Rent Act does not prevent a tenant who has taken on rent business premises from taking partners in his business and carrying on a partnership business. It has also been held in that decision that there is no restriction against a tenant allowing the use of his premises to his partners for carrying on a business in which he has a share alone with his partners. Therefore as long as the right of occupancy as a monthly tenant in respect of the premises remains with the tenant and does not form part of the assets of the partnership firm there cannot be said to be any sub-letting. Different considerations will certainly prevail if the tenancy rights have been amalgamated in the pool of partnership assets and all partners am entitled to a share therein upon the dissolution of the partnership. It has also been held in that decision that even it the rent of the premises let to a tenant in payable under the deed of partnership, by the partnership firm of which the tenant is a partner it does not amount to un lawful sub-letting but it is mere1v a matter of partnership accounts. Such a provision does not constitute any transfer sub-letting or assignment of any interest in the premises within the meaning of Sections, 13(1)(e) and 15 of 'the Bombay Rent Act.

15. In view of the aforesaid reasons, sons I am of the opinion that unless there is evidence to show that a tenant has transferred legal possession to his partners with whom he has been constituting a partnership firm he cannot be said to have unlawfully sublet assigned or transferred us interest in the premises within the meaning of section 13(1)(e) and section 15 of the Bombay Rent Act. In the instant case there is no such evidence whatsoever. I am therefore unable to uphold the decree for possession passed by the learned District Judge on this ground.

16. In the result. I allow the Civil Revision Application set aside the decree for possession passed by the learned District Judge and dismiss the plaintiff's suit. Rule is made absolute with costs

17. Petition allowed


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