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SaifuddIn Hussainibhoy Siamwala and ors. Vs. the Burma Cycle Trading Co. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtChennai High Court
Decided On
Case NumberCivil Revn. Petn. No. 243 of 1965
Judge
Reported inAIR1968Mad154
ActsMadras Buildings (Lease and Rent Control) Act - Sections 10(3) and 10(2)
AppellantSaifuddIn Hussainibhoy Siamwala and ors.
RespondentThe Burma Cycle Trading Co.
Cases ReferredMr. Ramaswami Iyengar. In Tunstall v. Steigmann
Excerpt:
.....under madras act to entertain petition itself - held, petitioners being members of unregistered partnership firm cannot maintain petition. - - reference was made to sections 4, 5 and 6 of the partnership act as well. delivering the judgment of the federal court, observed as follows, at page 56 (of fcr at page 21 of air): clearly it is not proceeding in an ordinary court of law. as ormered lj pointed out if persons choose to conduct their operations through the medium of a limited company, with the advantages in respect of responsibility for debts thereby conferred they cannot really complain if they have to face some disadvantages also'.it is unnecessary to multiply authorities on this question. but this allegation as is disclosed by the sale deed cannot be considered..........namely that saleh bros. of which the petitioners purport to be partners is not a registered firm of partnership, and therefore the proceeding instituted by them under the madras buildings (lease and rent control) act for eviction being 'a legal proceeding'. cannot be so instituted by an unregistered partnership was not seriously raised.(2) in the appellate court, an application for stay of execution of the order of the rent controller was filed. in the affidavit in support thereof the respondent raised the contention that the petitioners have admitted that they are carrying on business in partnership and the partnership not being registered, the petition is not sustainable under s. 69(3) of the indian partnership act. to this, a counter affidavit was filed by one of the.....
Judgment:
ORDER

(1) The landlords are the petitioners before me. The petitioners filed an application under S. 10(3) and S. 10(2)(ii)(a) of the Madras Buildings (Lease and Rent Control) Act against the respondent and another on the ground that they required the premises bona fide for their own use, occupation and business and that the respondent, without the consent of the petitioners, sub-let a portion of the premises to one Dhandapani and Co., who was also impleaded in the lower courts. Before me, however, the question whether the respondent has sublet the premises has not been agitated and even the alleged sub-tenant has not been impleaded as a party to this petition. The respondent's contention was the petition is misconceived and denied that the petitioners are partners of the firm of 'Saleh Brothers' which pleading was evoked because of the allegations in paragraph 5 of the petition that 'the petitioners are carrying on the business under the name and style of Saleh Bros, at No. 6 Sembudos Street'. The respondent also contended that the premises in question is not suitable to the hardware business admittedly carried on by the petitioners in Sembudos street.

Incidentally the respondent also pleaded that the petitioner's requirement was not bona fide because they demanded a higher rent. One of the petitioners examined himself. He admitted in chief examination that the rent for the suit premises goes into the account of Saleh Bros., of which the petitioners are partners and that all the petitioners shared the profits. He also said in cross-examination that it is a registered partnership, but added that only two names of the petitioners are found in the certificate of registration issued by the Registrar of Firms and the names of the petitioners 3 and 4 are not to be found in the said certificate.

Several exhibits were filed, amongst which Ex. P. 4(a) is an extract from the day book of the firm of Saleh Bros. showing that petitioners 3 and 4 also participated in the profits. No doubt the sale deed pertaining to the suit property is in favour of all the four petitioners. When the case came up for hearing on 6-12-1963 before the Rent Controller the allowed the petition. It does not appear from the record that the objection which is now pressed into service vehemently by the learned counsel for the respondent namely that Saleh Bros. of which the petitioners purport to be partners is not a registered firm of partnership, and therefore the proceeding instituted by them under the Madras Buildings (Lease and Rent Control) Act for eviction being 'a legal proceeding'. cannot be so instituted by an unregistered partnership was not seriously raised.

(2) In the appellate Court, an application for stay of execution of the order of the Rent Controller was filed. in the affidavit in support thereof the respondent raised the contention that the petitioners have admitted that they are carrying on business in partnership and the partnership not being registered, the petition is not sustainable under S. 69(3) of the Indian Partnership Act. To this, a counter affidavit was filed by one of the petitioners wherein also there is an admission that all the four petitioners are interested in the business as such partners. In paragraph 5 of the counter affidavit filed by one of the petitioners Saifuddin Hoosainibhoy on 28-1-1964, stated 'As will be seen from the petition the application has been filed by all the four partners who are the landlords'. The appellate authority, by its order dated 12-3-1964 called for findings on the following points.

'1. Are all the petitioners the partners in the firm of Saleh Bros.?

2. Is a single petition against two different tenants maintainable?

3. Is the premises occupied by the first respondent in the petition suitable for the business of the landlord?

4. Do the landlords own other buildings in the City of Madras?'

Fresh evidence was again let in on such remand by the appellate authority and there was an admission by one of the petitioners that petitioners 3 and 4 (sisters) are not shown as partners in the register of firms and that even in the register of firms and that even in the partnership deed only the first and the second petitions are shown as partners. This aspect namely, that the register of firms kept by the Registrar of Firms does disclose only the names of petitioners 1 and 2 as partners thereto is not in dispute. The Rent Controller who was called upon to give a finding on the points raised as above found that petitioners 1 and 2 only are partners of the firm of Saleh Bros. and the other two are not. We are not in this petition concerned with the findings given on points 2 and 3 referred to above.

(3) When the case again came up before the appellate authority, the learned Chief Judge of the Court of Small Causes, accepted the findings of the Rent Controller, but held that the petition need not be dismissed on the ground that an unregistered partnership has filed the petition, as, according to him, the cause of action has arisen to the petitioners apart from a contract, and, in fact, by virtue of the provisions of the Madras Buildings (Lease and Rent Control) Act 1960. The learned Chief Judge of the Court of Small Causes, however, held that even though all the partners shared in the profits of the firm that by itself was not sufficient, in his opinion to confer on all the four petitioners herein the status of partners in that firm. He considered however the question of maintainability of the petition by all the for petitioners herein when the premises was actually required for the use of a firm in which two of the petitioners only are partners. While distinguishing the case reported in Sha Rikhadas Amritlal v. Venkatasubbiah Chetty 1964 2 MLJ 132 he held as follows:

'It is not as if that all the landlords want eviction for the purpose of a business in which all of them are partners with others. On the other hand, in the instant case respondents 3 and 4 herein are not partners in Saleh Bros. and as far as they are concerned they required the building for the purpose of a business which they are not carrying on. I, therefore, hold that S. 10(3)(a)(iii) will not apply Consequently this petition is not maintainable'.

He however, held that with regard to the bona fides there is sufficient evidence to show that the firm of Saleh Bros is ordered to be evicted from No. 6 Sembudos Street, G. T. Madras by its landlords and he agreed with the findings of the Rent Controller that the requirement is bona fide. In the result, however he dismissed the petition as not being maintainable. Against this order of the court of Small Causes this revision petition has been filed.

(4) Sri D. Ramaswami Aiyangar, appearing for the tenant (sic landlord?) urged before me the following points. The petitioners are carrying on the business for the common benefit of all and for the furtherance of mutual interest and this by itself cannot meant that they are partners in the business. The signing of cheques, the administration of the firm are only in the hands of the first two petitioners. The idea of partnership is foreign to the petition. Saleh Bros. is merely a trading style and the enquiry whether petitioners 3 and 4 are partners of the firm of Saleh Bros. does not arise on the pleading and should not have been allowed to be raised. The contract of tenancy in the case is between the petitioners on the one hand and the respondent on the other.

In considering the expressions 'landlord' and 'own' appearing in the Madras Buildings (Lease and Rent Control) Act, petitioners 3 and 4 may be ignored and their rights need not be considered at all as two of the petitioners are admittedly landlords and they do own the premises in question. The property does not belong to the partnership. In the alternative it was argued that even if petitioners 3 and 4 are deemed by a fiction to be partners, they are in fact dependants on petitioners 1 and 2 and that therefore the petition is maintainable and the lower court having found that the requirement is bona fide the petition has to be ordered. Reference was made to Sections 4, 5 and 6 of the Partnership Act as well.

(5) Mr. V. K. Thiruvenkatachari, appearing for the respondent stated that the Madras Buildings (Lease and Rent Control) Act, 18 of 1960 is a self-contained Act and therefore its provisions are to be the sole guide in respect of proceedings taken under it. He took me through the oral and documentary evidence in the case, the purport of which has already been referred to by me. His main contentions were that the petition is not maintainable, since the proceeding initiated by the petitioners being a legal proceeding and the petitioners having constituted themselves to be the partners of firm and that firm not having been registered under the Indian Partnership Act, such a legal proceedings is not maintainable under S. 69(3) of the Indian Partnership Act. He also contended in the alternative that the requirement of the premises by two of the petitioners who are actually on record as partners of the firm of Saleh Bros. cannot be deemed to be a requirement for the occupation of all the four petitioners and thus supported, but in a different way, the finding of the lower court that the petition is not maintainable under section 10(3)(a)(iii) of the Madras Buildings (Lease and Rent Control) Act.

(6) I shall now consider the respective contentions of the learned counsel for the petitioners and the respondent. There are candid admissions by one of the partners of the firm of Saleh Bros. that all the petitioners are partners in the firm. A partnership, though often called a contract, is a relation resulting from a contract. Regard should be had to the real intention between the parties. Section 6 of the Partnership Act prescribes the test to determine whether a group of persons are partners in the eye of law. In fact, it enables all the relevant facts to be taken into consideration to find out whether the group of persons do or not constitute a partnership firm. Lindlay on Partnership, 12th Edn., at page 52 observes as follows:--

'The main rule to be observed in determining the existence of a partnership, a rule which has been recognised ever since the case of Cox. v. Hickman (1860) 8 H. L. C. 268, is that regard must be paid to the true contract and intention of the parties as appearing from the whole facts of the case.'

The above principle has been so expressed in section 6 of the Indian Partnership Act, 9 of 1932. On a fair reading of the documentary evidence and on appreciation of the oral evidence and admissions of one of the petitioners, it cannot be disputed that all the four petitioners before me are partners of the firm of Saleh Bros. and it is this partnership which is asking for itself, in this legal proceeding the possession of the premises in the occupation of the respondent for a business which is being carried on by them as above. If, therefore, the four petitioners before me are partners in the eye of law, though two of them only are shown in the register of firms as partners it has to be considered whether this petition can be maintained under the Madras Buildings (Lease and Rent Control) Act 18 of 1960. This leads on to the consideration whether a petition for eviction under the Madras Buildings (Lease and Rent Control) Act 18 of 1960 is a proceeding to enforce a right arising out of a contract within the meaning of Section 69(3) of the Indian Partnership Act.

The Federal Court had occasion to consider the question whether action under Section 46 of the Indian Income-tax Act, 11 of 1922, is covered by the phrase 'other legal proceeding' within the meaning of Section 171 of the Indian Companies Act of 1913. In Governor General in Council v. Shiromani Sugar Mills Ltd Spens C. J. delivering the judgment of the Federal Court, observed as follows, at page 56 (of FCR at page 21 of AIR):

'Clearly it is not proceeding in an ordinary court of law. But we see no reason why in British India no 'legal proceeding' can be taken otherwise than in an ordinary court of law, or why a proceeding taken elsewhere than in ordinary court of law, provided it be taken in a manner prescribed by law and in pursuance of law or legal enactment cannot properly be described as a 'legal proceeding' '.

(7) The Supreme Court in J. Chandra Gupta v. Kajaria Trades (India) Ltd., : [1964]8SCR50 had to consider the import of the expression 'other proceeding' in Section 69(3) of the Partnership Act, and observed as follows:--

'In our judgment, the words 'other proceeding' in sub-section (3) must receive their full meaning untrammelled by the words 'a claim of set-off'. The later words neither intend nor can be construed to cut down the generality of the words 'other proceeding'. The sub-section provides for the application of the provisions of sub-sections (1) and (2) to claims of set-off and also to other proceedings of any kind which can properly be said to be for enforcement of any right arising from contract except those expressly mentioned as exceptions in sub-section (3) and sub-section (4)'.

Incidentally the question arises whether, 'other proceeding' referred to in Sec. 69(3) in the instant case is one to enforce a right arising from a contract. There cannot be any dispute that the right that is sought to be enforced by the petitioners in this case does arise under a contract between themselves as landlords and the respondent as the tenant. No doubt, the Madras Buildings (Lease and Rent Control) Act 18 of 1960 intervenes and provides for certain special procedure for the enforcement of such rights. But that would not militate against my holding that the proceeding in question is one to enforce a right arising from a contract.

(8) Thus, it is the accepted principle in law that no proceeding can be instituted by an unregistered partnership against any person. There is therefore a totality of ban on the institution of such proceedings. The words 'other proceeding' in Section 69(3) is elastic enough so as to include within its fold a petition under the Madras Buildings (Lease and Rent Control) Act 18 of 1960, by the partners of such an unregistered firm for the possession of the premises from the tenant for their own occupation. I have already held that the petitioners before me cannot dispute that they are not partners carrying on the business of Saleh Bros. It is so stated in paragraph 5 of the petition itself. The petitioners being members of an unregistered partnership firm, cannot therefore maintain this petition. I do not agree with the reasoning of the learned Chief Judge, Court of Small Causes, that the proceeding in the instant case is not one in which the cause of action is based on any contract. I, therefore, hold that there is absence of jurisdiction on the part of the tribunals constituted under Act 18 of 1960, to entertain the petition itself. As on this essential jurisdictional fact the lower court has come to an erroneous conclusion, the finding that the petition is maintainable in the above circumstances has to be set aside even though I am exercising revisional jurisdiction.

(9) The above conclusion of mine is sufficient to dismiss this revision petition. But one other contention raised by the respondent in the lower court and which found favour with the learned Chief Judge of Court of Small Causes, was that as two and not all the four of the landlords are carrying on business of their own, it cannot be said that the requirement of the premises as if all the four landlords do require the premises for a business of their own is tenable. Mr. Ramaswami Aiyangar appearing for the petitions before me sated that as two of the petitioners are admittedly landlords and their requirement of the premises in question is found to be bona fide it would not matter whether two other petitioners who are also impleaded in the petition, since they are co-owners of the property are not actually carrying on business and they do not require the premises for a business of their own. I am unable to agree with this extreme contention put forward by Mr. Ramaswami Iyengar. In Tunstall v. Steigmann, 1962 2 Q B 593 their Lordships held that a limited company and the individual or individuals forming the company were separate legal entities however complete the control might be by one or more of the individuals over the company. Danckwerts L. J. in the above case observes as follows:--

'................. the personality of those in control of the company was only of be regarded as material in special circumstances such as a state of war and only as indicating the nature of the company without really departing from the principles that a limited company incorporated under the Companies Act is a distinct legal entity differing from the individuals who hold the shares in the company or control it through the mechanism of the Companies Act. As Ormered LJ pointed out if persons choose to conduct their operations through the medium of a limited company, with the advantages in respect of responsibility for debts thereby conferred they cannot really complain if they have to face some disadvantages also'. It is unnecessary to multiply authorities on this question. The facts of the case in 1964 2 MLJ 132 are entirely different from the facts in the instant case. Though no doubt two of the partners only are in charge of the partnership firm and the other two are only beneficially interested therein. I am unable to agree with the contention of Sri Ramaswami Aiyangar that the idea of partnership is foreign to the petition filed in this case. No, doubt the petitioners are the co-owners of the premises. But this allegation as is disclosed by the sale deed cannot be considered independently and de hors the other evidence in the case and indeed the admissions of one of the petitioners in the witness box as well as in affidavit sworn to by him. It appears to me that the requirement of the premises is by the unregistered partnership firm consisting of the four petitioners herein. The argument that the other two sisters that is petitioners 3 and 4 should be deemed to be dependent on petitioners 1 and 2 and therefore their requirement should be considered as bona fide, taken along with the established bona fide requirement of petitioners 1 and 2 is a contention which is devoid of merit. The expression used in the relevant section of Act 18 of 1960 is 'landlord'. On a shifting of the evidence in this case I have come to the conclusion that the landlords of the premises in question though prima facie are the four petitioners before me, but in reality and in the eye of the law it is an unregistered partnership which owns the premises. Therefore it is the requirement of an unregisteded partnership that has to be considered in this case. It cannot equally be disputed that the sisters that is petitioners 3 and 4 are not carrying on any business of their own. In such circumstances, the finding of the Chief Judge Court of Small Causes that as far as petitioners 3 and 4 are concerned, their requirement of the building in question is for purposes of a business which they are not carrying on is well founded. Therefore, under S. 10(3)(a)(iii) of Act 18 of 1960 it cannot be said that all the petitioners are entitled to the possession of the building within the meaning of the above section. In this view I agree with the finding of the learned Chief Judge, Court of Small Causes that the petition is not maintainable on this ground.

(10) No other contention was raised before me by the learned counsel for the petitioners. As the petition is not maintainable on both the grounds dealt with by me as above this revision petition is dismissed, but in the peculiar circumstances of this case, there will be no order as to costs.

(11) Revision dismissed.


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