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N. Sivanandam Vs. Tribuvendas Vendraven Bros., by Power of Attorney Agent K. Govindarajulu and ors. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtChennai High Court
Decided On
Reported in(1969)1MLJ644
AppellantN. Sivanandam
RespondentTribuvendas Vendraven Bros., by Power of Attorney Agent K. Govindarajulu and ors.
Cases ReferredRangamannar Chetty v. Rangiah
Excerpt:
- .....took up the matter in revision under section 25 of the act to the district court, coimbatore. the learned district judge was of the view that under exhibit b-3, there was a totality of transfer of leasehold interest by the petitioner to the partnership firm and held that according to the recitals of the partnership deed it was the partnership that has become entitled to be exclusively in possession of the suit premises from the date on which it was constituted and that there is nothing to show that the petitioner was retaining any control over the building. he relied upon the decision of the nagpur high court in tansukhdas v. shambai a.i.r. 1954 nag. 160. he also adverted to the other features of the case and ultimately held that the order of both the rent controller and the appellate.....
Judgment:

T. Ramaprasada Rao, J.

1. The tenant is the petitioner in this Civil Revision Petition. Proceedings were initiated by the landlord respondent under Section 10 (2) (ii) (a) of the Madras Buildings (Lease and Rent Control) Act, 1960, hereinafter referred to as the Act, for evicting the petitioner on the ground that he has sublet the premises to respondents 2 and 3 in this petition. The petitioner was carrying on business in the suit premises in rice and other grains. He along with the 3rd respondent and others who were not eo nomine parties to these proceedings entered into a partnership on 14th September, 1962, and the name and style of the partnership business was T. V. Veerappa Chettiar and Company, which is the 2nd respondent in this petition. The first respondent filed the above application for eviction on the only ground that the petitioner has sublet the premises by associating himself with others as partners and for forming a partnership firm in the premises without the written consent of the first respondent.

2. It would be convenient at this stage to refer to the terms of partnership formed on 14th September, 1962. There were five partners of whom the petitioner and the 3rd respondent were two amongst them. The vilasam of the partnership was ' T. V. Veerappa Chettiar and Co.' The petitioner was to be the working partner and he had no obligation to contribute capital. The petitioner was to render his wholetime attention to the partnership business and inter alia he obligated himself not to do any other business during the subsistence of the partnership. One other stipulation was that the rent for the suit premises of which the petitioner Was the tenant, was to be paid from the partnership funds.

3. As already stated, the above partnership started by the petitioner, 3rd respondent and others under the name and style of the 2nd respondent, started functioning from 19th September, 1962. P. W. 1 who was the attorney of the first respondent states the rental receipts for the subsequent months were issued in the name of the petitioner even though the first respondent knew about the alleged sub-tenant. There is evidence that the rents were so paid by the petitioner in the months of October and November, 1962. The petitioner who examined himself as R.W. 1 would state that he was doing business in rice and other grains in the suit premises and that he joined others in the said business because he needed financial help. He also speaks to the dissolution of the firm on 18th November, 1962. The Rent Controller, on the above evidence and other materials placed before him, came to the conclusion that there is absolutely nothing to indicate that the petitioner parted with the exclusive and legal possession of the petition premises. The appellate authority came to a similar conclusion and was of the view that there was no substitution of the tenancy in favour of the partnership and the partnership deed, Exhibit B-3, does not evidence anything other than that the first respondent took partners for carrying on the business which was carried on by him before. Both the Rent Controller and the appellate authority relied upon the decision of Subba Rao, J., in Rangamannar Chetty v. Rangiah : AIR1953Mad61 . The first respondent took up the matter in revision under Section 25 of the Act to the District Court, Coimbatore. The learned District Judge was of the view that under Exhibit B-3, there was a totality of transfer of leasehold interest by the petitioner to the partnership firm and held that according to the recitals of the partnership deed it was the partnership that has become entitled to be exclusively in possession of the suit premises from the date on which it was constituted and that there is nothing to show that the petitioner was retaining any control over the building. He relied upon the decision of the Nagpur High Court in Tansukhdas v. Shambai A.I.R. 1954 Nag. 160. He also adverted to the other features of the case and ultimately held that the order of both the Rent Controller and the appellate authority was not in accordance with law and allowed the revision petition. As against this, the tenant has come up to this Court in revision under 'section 115 of the Code of Civil Procedure.

4. Mr. V. P. Raman, learned Counsel for the petitioner, contended that a reprobe into the materials on record and the documentary evidence before it was unjustified as the findings of the Rent Controller and appellate authority arc clear and within the purview of law. His contention is that Exhibit B-3, which is the main sheet anchor in this case for either party, does not disclose and much less establish that there has been a totality of a surrender of the leasehold interest by the petitioner to the partnership firm. He relied upon the ratio in Rangamannar Chetty v. Rangiah : AIR1953Mad61 . He also referred to me by way of analogy to the case reported in Devarajulu v. Thayaramma : (1949)2MLJ423 . That was a case where one of two partners after dissolution of partnership assigned to the other partner, the interest of the partnership , in the premises which had been taken on lease by the partners. It was held by a Division Bench of this Court that it does not amount to a breach of a covenant prohibiting an assignment of a deed without the consent of the lessor. He also invited my attention to the decision of Rajamannar, C.J., in Sasivarna Thevar v. Ponnu (1957) 1 M.L.J. 158, wherein the eminent Judge expressed his approval to the four conditions laid by Rajagopala Iyengar, J., under which a revisional authority would be entitled to interfere with findings of a Subordinate Judge. The learned Counsel for the petitioner contends that the learned District Judge ought not to have disturbed the concurrent findings of the Rent Controller and the appellate authority.

5. Sri V. Rajagopalachari contending contra argued that there are telling circumstances in this case which afford an indicia to sustain the order of the learned District Judge. In particular he would submit that the stipulation enabling the partnership to pay the rents of the suit premises, the absence of any controlling interest in the partnership on the part of the petitioner, the interdict on the petitioner not to do any other business, are by themselves, sufficient to take away the case from the ratio of Subba Rao, J., in Rangamannar Chetty v. Rangiah : AIR1953Mad61 . and that therefore the petitioner is liable to be evicted. Strong reliance was placed by the learned Counsel on Associated Hotels of India Ltd. v. R. N. Kapoor : [1960]1SCR368 and Radhakishan v. Data Ram (1961) A.L.J. 827. In the main the argument was that the circumstances of the case connote a total substitution of a new tenant by an overt act on the part of the petitioner which was admittedly without the written consent of the first respondent. This, the learned Counsel would say, tantamounts to surrender of exclusive possession of leasehold interest and extinction of such interest in the original tenant and these being violative of the express provisions of the Act, the petitioner should suffer eviction. He also invited my attention to the decision in Panduranga v. Maruli : [1966]1SCR102 , and submitted that the Court cannot while exercising jurisdiction under Section 115, correct errors of fact however gross they may be or even errors of law.

6. I shall now advert to the last of the contentions of the learned Counsel for the respondent. No doubt it is well established that the High Court, while exercising jurisdiction under Section 115, Civil Procedure Code, cannot correct a bare error of law or a mis-judgment of the lower Court on a question of fact, since such a decision was rendered by the Subordinate Court in the exercise of its jurisdiction. It is also equally well established that if for the purpose of exercise of such jurisdiction by the Courts below, a jurisdictional fact has to be found and if in the course of such an investigation the subordinate Court wrongly decides on the existence or otherwise of a jurisdictional fact, then the consequential decision rendered by the Subordinate Court in question is susceptible to interference at the level of the High Court exercising revisional powers under Section 115, Civil Procedure Code. In the instant case it is no doubt true that the District Court was exercising revisional jurisdiction under Section 25 of the Act which is indeed wider in scope and content than that envisaged in Section 115, Civil Procedure Code. Nevertheless Rajagopala Iyengar, J., has very rightly circumscribed the limits of a revisional authority acting under similar circumstances under the Madras Buildings (Lease and Rent Control) Act, (XXV of 1949). Under the Act of 1949 the powers of the Court exercising revision jurisdiction under Section 12 (b) therein arc in pari materia with the powers exercisable by the District Court under Section 25 of the Act. The learned Judge said:

The only proper way of defining the relative jurisdiction of the appellate and revisional authorities constituted under the Madras Buildings (Lease and Rent Control) Act is to hold that while an appellate authority is entitled to examine every question of fact and law dealt within, or arising out of, an order of the Rent Controller, a revisional authority, while undoubtedly can interfere with questions of law, where the Rent Control Act or any provision has been misconstrued, cannot normally interfere with findings of fact unless (a) there were no other materials on which such a finding could be based; or (b) the finding has been reached by a consideration of irrelevant or inadmissible matter; or (c) it is so perverse that no reasonable person could have reached that conclusion; or (d) the finding had been reached by an erroneous understanding of the law applicable to the matter. To hold that a revisional authority could interfere with findings of fact of an appellate authority without regard to these limitations would be to convert a revision into a regular appeal and to obliterate the distinction between appeals and revisions which the Act has taken care to provide.

7. The above passage was quoted with approval by Rajamannar, C.J., in Sasivarna Thevar v. Ponnu (1987) 1 M.L.J. 158.

8. The learned District Judge in this case while differing from the concurrent findings of the Tribunals of the lower hierarchy, found for himself certain facts so as to vest in him the jurisdiction to decide and in particular enquired for himself whether the act of the petitioner can be characterised as sub-letting. But for the finding of such jurisdictional fact by him, the learned District Judge could not have ordered eviction. Whilst finding such a jurisdictional fact he acted erroneously by misunderstanding the law applicable in the matter. Indeed the finding has been reached by a consideration of irrelevant matter. In such circumstances the High Court is not bereft of authority even though it is acting under Section 115, Civil Procedure Code. I am unable, therefore, to accept the contention of the learned Counsel for the respondent that the order of the learned District Judge cannot be set aside in exercise of revisional jurisdiction of this Court.

9. The learned District Judge placed considerable importance on three factors on which the arguments of the learned Counsel for the respondent rested in this Court. The first circumstances is that the partnership as an entity obliged itself to pay the rent instead of the petitioner. Factually, however, in this case it was the petitioner who had paid the rents even after the formation of the firm and until its dissolution. Be that as it may, whether the stipulation of payment of rent by the petitioner tantamounts to substitution of the original tenant is the question. A partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. This enterprise resulting out of such a co-ordinated relationship between persons is called a partnership firm. A partner is the agent of the firm for the business of the firm. Such being the incidence of the partnership, an agreement between the partners that the payment of rent should be channelised through the partnership docs not mean that the petitioner is substituting the control over the leasehold interest in the suit premises in another. In this case there is no evidence as was the case in Radhakishan v. Data Ram (1961) A.L.J. 827, wherein it was obvious that what was done by the tenant in admitting a third party to partnership was making him a partner in the tenancy as such. A fair reading of Exhibit B-3 does not lead to the conclusion that the vested leasehold right of the petitioner in the premises has ever been divested by reason of the stipulation that the partnership has to pay the rents.

10. The second stipulation that was pressed into service by the learned Counsel for the respondent was that the petitioner has no controlling interest in the partnership. It is to be noted that the petitioner constituted himself' as the working partner of the firm and obliged himself to devote his whole-time attention therein. I do not agree with the extreme contention that only persons such as managing partner or a financial partner can be characterised as having a controlling interest in a partnership firm. The word ' controlling ' is relative in scope and it has to be understood with reference to the nature of interest undertaken by a partner in a firm. The decision in Chaplia v. Smith L.R. (1926) 1 K.B. 198, referred to in Rangamannar Chetty v. Rangiah : AIR1953Mad61 , was quoted by the learned Counsel for the petitioner in support of his argument. Therein the person assigned his business to a company of which he was the managing director and in which he had a controlling interest. In those circumstances it was held that there was no sub-letting. The learned Counsel for the respondent distinguished this case by pointing out that in the instant case, no such controlling interest is seen. When a person obliges himself to work for the firm only and has indeed precluded himself from doing other business, during the subsistence of the partnership (which is the third stipulation referred to above), the only irresistible conclusion is that he has a substantial interest in the partnership business. In this view, I am unable to agree that the three circumstances culled out by the learned Counsel for the respondent and adverted to by the learned District Judge to find the jurisdictional fact arc sufficient to disturb the concurrent findings of the Rent Controller and the appellate authority.

11. Another important aspect of the case which prompted the learned District Judge to reverse the decision of the appellate authority was that according to him, the circumstances justify an inference that possession of the suit property was taken by the partnership firm to the exclusion of the petitioner. I am afraid that this finding of the learned District Judge is hit by conditions (b), (c) and (d) prescribed by Rajagopala Ayyangar, J., referred to above. No case has been made out by the landlord to bring home such extinction of such lease-hold interest on the part of the petitioner. The recitals in Exhibit B-3, cannot prompt a reasonable person to reach that conclusion. The finding of the learned District Judge that there was a substitution of tenancy in favour of the partnership has been reached by an erroneous understanding of the law of partnership applicable to this matter. Strong reliance was placed upon the decision in Radhakishan v. Data Ram (1961) A.L.J. 827. That was a case where the learned Judge repeatedly found that the intention of the tenant in creating a partnership was to induct a partner in the tenancy and share in the tenancy. They found such an intention and finally observed at p. 830:

No hard and fast rule can be laid down as to whether in all cases of partnership the admission of another partner to the joint possession of the shop will or will not amount to sub-letting. Each case will depend upon its own facts.

12. My attention was drawn to the decision in Associated Hotels of India Ltd. v. R. N. Kapoor : [1960]1SCR368 . In that case the Court was concerned with laying down the Jaw relating to the distinguishing features of a lease in contradistinction to a licence. I do not think that in that case, Subba Rao, J., (as he then was in the Supreme Court) desired to whittle down or depart from the rule pronounced by him in Rangamannar Chetty v. Rangiah : AIR1953Mad61 . On the other hand, he observed as follows:

At one time it was thought that the test of exclusive possession was infalliable and if a person was given exclusive possession of a premises, it would conclusively establish that he was a lessee. But there was a change and the recent trend of judicial opinion is reflected in Errington v. Errington (1951) 1 All E.R. 149, wherein Lord Denning reviewing the case-law on the subject summarizes the result of his discussion thus at page 155:The result of all these cases is that, although a person who is let into exclusive possession is, prima facie, to be considered to be tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy.

12. The Court of Appeal again in Cobb v. Lane (1952) 1 All E.R. 1199, considered the legal position and laid down that the intention of the parties was the real test for ascertaining the character of a document. At page 1201, Somervell, L.J., stated:.the solution that would seem to have been found is, as one would expect that it must depend on the intention of the parties.

13. Denning, L.J., said much to the same effect at page 1202:

The question in all these cases is one of intention : Did the circumstances and the conduct of the parties show that all that was intended was that the occupier should have a personal privilege with no interest in the land'.

14. It is therefore fairly clear that the matter has to be adjudged on the intention of the parties. The learned District Judge did not bear this in mind, but re-discussed the evidence, did not apply the correct law and ultimately found a fact, thus vesting in himself jurisdiction to order eviction. The decision in Rangamannar Chetty v. Rangiah : AIR1953Mad61 , is still applicable to the facts of the case. In my opinion, the only circumstances that the partnership should pay the rent does not take the instant case away from the ratio in Rangamannar Chetty v. Rangiah : AIR1953Mad61 , which is as follows:

There cannot be a sub-letting unless the lessee parted with legal possession. The mere fact that another is allowed to use the premises while the lessee retains the legal possession is not enough to create a sub-lease. To create a lease or sub--lease a right to exclusive possession and enjoyment of the property should be conferred on another. Taking in other partners in his business by a lessee will not by itself constitute sub-letting and the lessee is not liable to eviction under the provisions of Madras Act (XXV of 1949).

I am therefore unable to agree with the contentions of the learned Counsel for the respondent that the order of the District Judge is well founded. This Civil Revision Petition is therefore allowed with costs and the decision of the learned District Judge is set aside.


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