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Hem Raj Vs. Basta Singh and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtHimachal Pradesh High Court
Decided On
Case NumberCivil Revn. No. 77 of 1976
Judge
Reported inAIR1987HP9
ActsEast Punjab Urban Rent Restriction Act, 1949 - Section 13; ;Evidence Act, 1872 - Sections 10 and 101-104
AppellantHem Raj
RespondentBasta Singh and anr.
Appellant Advocate Kailash Chand Sood, Adv.
Respondent Advocate Devinder Gupta, Adv.
DispositionPetition allowed
Excerpt:
- .....more partners. it is well settled that carrying on of a business in the lease-hold premises by the tenant in partnership with a stranger would not amount to subletting. the tenant, however, has to show that the partnership pleaded by him is real and genuine and not a mere subterfuge adopted to circumvent the provisions of the act. the crucial question which, therefore, would need our attention is whether the partnership between respondent 1 and surjan singh, father of respondent 2, as pleaded by the respondents is a genuine partnership and the business being carried on in the demised premises belongs to this partnership. i have no hesitation in saying that the answer to this question on the facts of this case as stand proved and admitted, can only be in the negative. 10. the partnership.....
Judgment:
ORDER

T.R. Handa, J.

1. In this revision petition filed under Section 15(5) of the East Punjab Urban Rent Restriction Act (Act No. III of 1949) (hereinafter called 'the Act'), the petitioner landlord has called in question the order dt. 11-3-1976 recorded by the District Judge, Shimla, exercising the power of Appellate Authority under the Act vide which the learned District Judge affirmed the order of the Rent Controller dt. 18-7-1973 dismissing the petition filed by the petitioner seeking ejectment of the respondents from the premises known as shop No. 57/1. The Mall, Shimla, under the tenancy of respondent 1.

2. Shri Basta Singh, respondent 1, is admittedly the tenant of the shop in question under the petitioner. The petitioner brought an action for ejectment of the respondents in respect of the said shop on the solitary ground that respondent 1 has sublet or otherwise transferred his rights under the lease in respect of the demised shop in favour of respondent 2.

3. The counter plea of the respondents was that respondent 1 had entered into a partnership with Shri Surjan Singh, the father of respondent 2, and it was the business of this partnership which was being run in the shop in dispute ever since the coming into existence of the partnership which is alleged to have been entered into in March 1959. They admitted that respondent 2 alone was attending to the business being run in the disputed premises but pleaded that he was doing so only in his capacity of a representative of his father. In other words the respondents while admitting that respondent 2 was in the control of the business being carried on in the shop in dispute claimed that this business was the partnership of respondent 1 and Shri Surjan Singh, father of respondent 2 and the running of such a business by respondent 2 did not involve any subletting. The respondents had taken some other objections also against the maintainability of the petition but the same do not survive at this stage and need not be referred to.

4. The controversy between the parties at this stage is restricted to issue No. 1 as framed by the Rent Controller and which is in the following language : --

Issue No. 1.-- Has respondent No. 1 sublet or transferred his rights under the lease to respondent No. 2?

5. Both the Rent Controller as also the Appellate Authority have found this issue against the petitioner. In returning their finding on this issue, the Rent Controller as also the Appellate Authority have accepted the plea of the respondents that the business run in the demised premises by respondent 2 is the partnership business of respondent No. 1 and Shri Surjan Singh, father of respondent 2 and that respondent 1 had not sublet or otherwise transferred his rights under the lease in favour of respondent 2.

6. The learned counsel appearing for the landlord has very vehemently attacked the above findings of the courts below. His short argument is that the conclusion drawn by the courts below in favour of the respondents are perverse and totally unsustainable on the proved rather admitted facts on the record. In support of his contention the learned counsel carried me through the evidence adduced in the case and especially that from the side of the respondents. The learned counsel on the opposite side simply adopted the line of reasoning advanced by the courts below.

7. It is true that in a case of this kind the initial onus always lies on the landlord to prove that the tenant had sublet, assigned or otherwise transferred his rights under the lease in favour of the alleged sub-tenant. While considering the nature of this onus, the courts must not, however, overlook the fact that it is by no means an easy task since direct evidence of subletting is seldom available. A sub-lease is a creation of an agreement between the tenant and the sub-tenant. The landlord for obvious reasons would be a complete stranger to such an agreement. It is also in the common interest of both the tenant and the sub-tenant that the nature of the transaction between them is kept a guarded secret and no trace of evidence reflecting the same allowed to leak out thereby exposing both of them to the risk of being evicted at the hands of the landlord. No prudent tenant is, therefore, expected either to enter into such an agreement or receive rent from his sub-tenant or pass receipt of such rent in the presence of others. The landlord placed in such a situation, can only prove the attending circumstances which should raise inference of such sub-letting or assignment. The landlord, therefore, in my view, would be deemed to have discharged the initial burden placed upon him, if he succeeds in showing that the tenant had parked with and handed over exclusive possession and control of the demised premises to the alleged sub-tenant. It is thereafter for the tenant to prove and explain the circumstances leading to such transfer of possession. The reason is obvious. The circumstances under and the terms on which the possession was transferred by the tenant are within his special knowledge and the burden of proving these circumstances, therefore, legitimately lies upon him. Reference in this connection may be made to the provisions of Section 10 of the Evidence Act. On the basis of this principle, once the landlord succeeds in establishing that the tenant has parted with and transferred possession of the demised premises in breach of the provisions of the Act, the only persons who can account for such transfer of possession are the tenant and his transferee. It, therefore, follows that in a situation of this kind the onus would rightly shift on to the tenant to show that the transfer of possession was not by way of subletting or assignment and that despite such transfer of possession, the tenant retains with him the legal right of possession. Where the tenant fails to so satisfy the court the landlord must be said to have established his plea.

8. Now in the instant case it appears to be the common case of the parties that dry cleaning business under the name and style of 'Capital Dry Cleaners' is being run in the premises in dispute. It is also an admitted position that respondent 2 alone is in the control of this business and in exclusive possession of the premises in dispute. Basta Singh, respondent 1, admittedly shifted from Shimla to Chandigarh and started his own independent business there long before the petitioner landlord brought his action for ejectment of the respondents. Shri Surjan Singh, father of respondent 2, and the alleged partner of respondent 1, never resided at Shimla during the relevant period. He has been residing in his village in Punjab. In these circumstances the possession of the premises in dispute admittedly stands transferred in favour of respondent 2 who alone is carrying on his business in these premises. The initial onus placed upon the petitioner landlord can, therefore, be safely said to have shifted on to the respondents and it is now for them to show that the tenant i.e. respondent 1 is a partner in the business being run by respondent 2 in the disputed premises and that in his capacity of a partner, he still retains legal possession over the premises and that it is not a case of subletting or assignment. The fate of this case would naturally depend upon the answer to the question as to what extent the respondents have succeeded in establishing their plea that respondent 1 is a partner in the business being carried on in the premises in dispute by respondent 2 under the name and style of Capital Dry Cleaners.

9. At this juncture it may be observed that respondent 1 was certainly entitled to carry on any business in the demised premises so long as it did not violate the terms of his tenancy and that he was also within his rights to carry on such business either by himself or by taking with him one or more partners. It is well settled that carrying on of a business in the lease-hold premises by the tenant in partnership with a stranger would not amount to subletting. The tenant, however, has to show that the partnership pleaded by him is real and genuine and not a mere subterfuge adopted to circumvent the provisions of the Act. The crucial question which, therefore, would need our attention is whether the partnership between respondent 1 and Surjan Singh, father of respondent 2, as pleaded by the respondents is a genuine partnership and the business being carried on in the demised premises belongs to this partnership. I have no hesitation in saying that the answer to this question on the facts of this case as stand proved and admitted, can only be in the negative.

10. The partnership deed Ex. R. 1 relied upon by the respondents purports to have been executed on 4-3-1959. As per this document Basta Singh, respondent No. 1, was already running his dry cleaning business at three different premises when this document was executed. These three premises were 57, The Mall, Shimla (the premises in dispute), 14 Lakkar Bazar, Shimla and 48, Middle Bazar, Shimla. Vide this partnership deed, Basta Singh respondent had taken Surjan Singh as a partner with him to run and share the profits and losses of the business being carried on in all these three premises. Both the partners were to be the working partners. The accounts of the partnership were to be regularly maintained and kept in the respective premises and made available to each partner for inspection. Both the partners were to share the profits and losses in equal shares. The profits and losses were to be divided between the partners every month.

11. The respondents' own evidence shows that this partnership deed was never acted upon and that the partnership mentioned therein remained on paper only. In fact this partnership deed was never intended to be acted upon. Neither Basta Singh, responent 1 nor Surjan Singh, the father of respondent 2, was available at Shimla to run the business of this partnership when the so-called deed of partnership Ex. R. 1 was executed. As per Ajit Singh, respondent No. 2, who was examined in Court on 27-4-1971, Basta Singh, respondent 1, was carrying on his dry cleaning business at Chandigarh for the last 14 years, which means since about 1957 much prior to the execution of the partnership deed Ex. R. 1 Similarly, we find from the evidence of Shri Puran Chand (RW. 1) that Surjan Singh is an illiterate agriculturist and was residing in his village Ghoga for the fast 20 years i.e. since about 1950. He too was not in a position to run this business. The partnership deed does not contemplate if the partnership business was to be carried on through some other agency. On the other hand it specifically provides that both the partners would work diligently and honestly for this business. In case it was a genuine partnership, a provision must have been made for the running of this business in the absence of both the partners.

12. The partnership deed next provides that accounts of the partnership business would bemaintained and kept at all the three premises for inspection by either partner. No such accounts, however, were admittedly maintained. One could appreciate this omission in case both the partners were actually attending to the partnership business in which case they could be presumed to be knowing the actual state of affirs and dividing the profits and losses regularly. In the instant case, however, when admittedly neither partner was taking interest in the running of the business, one fails to appreciate as to how they could know about the profits and losses of the business in the absence of any accounts.

13. Again, in terms of the partnership deed, the partners were to divide the profits and losses between them every month. The sharing of profits and fossess between the partners is in fact one of the essential ingredients of partnership. In the instant case we find that neither any account of such profits and losses was maintained nor the same were ever divided between the alleged partners.

14. As earlier observed, the partnership relied upon by the respondents and which is alleged to have come into existence vide partnership deed Ex. R. 1 pertains to the business which was supposed to be carried on in three different premises. There is not the least suggestion if the partners ever shared the profits of the business carried on in the other two premises. Even with respect to the profits of the business carried on in the premises in dispute there is no satisfactory evidence to show if the same were ever divided between the partners. Basta Singh, respondent 1, stated that he used to settle accounts pertaining to this business with Surjan Singh on each occasion when he visited Shimla. It is totally un-understandable as to how these two partners could settle accounts and divide profits of a business about which they had absolutely no knowledge and more especially when neither of them was in possession and control of such profits. It is not the case of the respondents that respondent 2 who was actually controlling this business ever rendered any account to the partners or handed over the profits to them. Surjan Singh, the alleged partner of respondent 1 was not examined though admittedly he was available ' at Shimla during the trial. Again, whereas according to Basta Singh, respondent 1, the accounts were settled and profits were divided at Shimla, Ajit Singh, respondent 2, stated that the profits were distributed whenever he visited the village. The conclusion is thus irresistible that no profits of the business carried on in the premises in dispute by respondent 2 were ever divided between respondent 1 and his alleged partner Surjan Singh.

15. It thus looks legitimate to conclude that the partnership between respondent 1 and Surjan Singh which is alleged to have been created vide partnership deed Ex. R. 1 was never acted upon and that the business being run in the premises in dispute under the trade name of Capital Dry Cleaners is not the business of any such partnership. This is the business of respondent 2 alone who is admittedly running it all by himself and respondent No. 1 has no interest therein. The only conclusion which, therefore, can be drawn in a situation of this type is that respondent 1 has either sublet or transferred his rights under the lease in respect of the premises in question in favour of respondent 2 thereby rendering himself liable for ejectment under the Act.

16. For the foregoing reasons I allow this revision petition, quash the orders of the Rent Controller and the Appellate Authority and direct the respondents to put the petitioner in possession of the premises in dispute, namely, 57/1 The Mall, Shimla, forthwith.


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