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REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1327    OF 2017 (Arising out of SLP(C) No. 16096 of 2012)

MUNSHI LAL ..APPELLANT                     VERSUS

SMT. SANTOSH & ORS. ..RESPONDENTS                                

O R D E R

1. Leave granted. 2. This  appeal  has  been  filed  by  the  landlord against the judgment and order of the High Court of Delhi in CM (M) No. 1574 of 2010. The High Court held that the respondent-tenant, Hakim Rai had not sub-let the premises to his son-in-law, Raj Kumar in pursuance of a partnership deed dated 20.05.1983 entered into between them.  

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3. Hakim  Rai  died  and  was  substituted  by respondent  Nos.1  to  5  i.e.  his  widow  and  four daughters.  The respondent No.1, Smt. Sumitra Devi, was  deleted  from  the  array  of  parties  upon  her death.   4.  The landlord sought the eviction of the tenant on  the  ground  that  the  tenant  had  sub-let  the premises  to  his  son-in-law  in  contravention  of Section  14  of  the  Delhi  Rent  Control  Act,  1958 (hereinafter  referred  to  as  ‘the  Act’).   The landlord had also sought eviction of the tenant on the ground of arrears of rent. As of now the only ground  that  survives  is  that  of  sub-letting  the tenant  having  paid  off  the  arrears  according  to law.

5.  The tenancy was in respect of a Kirana shop at the monthly rent of Rs. 50/-. The tenant was an old and infirm man, incapable of running the business on his own. It has been found that the son-in-law sat in the shop and conducted business exclusively

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therefrom.  The dispute was whether he was doing business  along  with  his  father-in-law  or independent  of  him,  i.e.  whether  he  was  doing business  exclusively  behind  the  façade  of  a partnership or as a genuine partner.  It is an uncontroverted fact before us that the landlord’s permission in writing was not obtained before the tenant had allowed the alleged sub-tenant to occupy the shop.  6. The Rent Controller found that the partnership was a ruse and that it was the son-in-law who was in exclusive possession of the shop and running the business  on  his  own.  No  books  of  accounts  were maintained,  no  profit  and  loss  accounts  were maintained, and no stock registers concerning the goods in the shop were maintained, as required by the partnership deed. Moreover, the tenancy rights with respect to the lease of the shop were found to have been made property of the partnership firm. The  evidence  of  the  widow  of  the  tenant  who inherited the tenanted premises and claimed to be

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running the business along with her son-in-law was held incredible. She was unable to give any details of the amount invested in the shop, or any details of profit and loss.   Thus, the Rent Controller clearly found that the son-in-law had been put in possession of the shop in pursuance of a sham partnership deed and was not merely assisting in the shop as a son-in-law.   7. With regard to the arrears of rent, it was an undisputed  position  that  the  tenant  had  been granted the benefit of Section 14(2) of the Act, as it was a case of first default and the tenant had complied with the order passed under Section 15(1) of the Act. 8. The landlord contested the appeal on the only remaining  ground  of  sub-tenancy.  The  Appellate Authority observed that it could not be said that there was a parting of possession if an alleged sub-tenant was closely related to a tenant, or if he was a person whose assistance was a matter of necessity for the survival of the business of the

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tenant.  Thus, since the alleged sub-tenant was a close  relative  i.e.  a  son-in-law  of  the  tenant, there was no parting of possession and therefore no sub-letting.   The appellate authority relied on Smt. Krishnawati Vs. Shri Hans Raj (1974) 1 SCC 289 in which it was held that in an arrangement where the premises was rented by the husband, and the wife was allowed to carry out business in a part of the premises, would not amount to sub-letting.   9. The High Court concurred with the finding of the  appellate  authority  that  the  son-in-law  had come  to  Delhi  to  assist  his  father-in-law  in business  for  which  a  partnership  deed  had  been executed between them, and he resided at the same premises as his father-in-law. The partnership was a genuine partnership as it could not be said that it  had  been  entered  into  for  the  purpose  of subletting. The father-in-law had not in any manner given  the  possession  of  the  shop  in  question exclusively  to  his  son-in-law  thereby  divesting

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himself  of  it.  Thus  the  mere  occupation  of  his son-in-law was not sufficient to establish a case of subletting.  10.  Having  heard  the  learned  counsels  for  both parties, we find that a significant fact which has not been controverted by the respondents has been completely  overlooked  in  the  proceedings  of  the courts below.  That  fact  is  that  no  consent  in  writing  was obtained  from  the  landlord  before  the  so  called partnership was entered into between the tenant and the  sub-tenant,  and  before  the  sub-tenant  was allowed to occupy the premises. 11. Section   14(1) of the Act reads as under:-

“(14)(1)   Notwithstanding anything to the  contrary  contained  in  any  other law or contract, no order or decree for the recovery of possession of any premises shall be made by any court or Controller in favour of the landlord against a tenant:  Provided that the Controller may, on an application made to him in the pre- scribed  manner,  make  an  order  for the  recovery  of  possession  of  the

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premises on one or more of the follow- ing grounds only, namely:- (a) That the tenant has neither paid nor tendered the whole of the arrears of the rent legally recoverable from him within two months of the date on which  a  notice  of  demand  for  the arrears of rent has been served on him by the landlord in the manner provided in  section  106  of  the  Transfer  of Property Act, 1882; (b) that the tenant has, on or after the  9th day  of  June,  1952,  sub-let, assigned or otherwise parted with the possession of the whole or any part of the  premises  without  obtaining  the consent in writing of the landlord”.   

Clause  (b)  of  the  proviso  to  sub-section  (1) provides  for  the  eviction  of  a  tenant  who  has sub-let,  assigned  or  otherwise  parted  with  the possession of the premises without obtaining the consent in writing of the landlord.  Section 14 (4) reads as follows:-

“(14)(4)For the purposes of clause (b) of the proviso to sub-section (1), any premises which have been let for being used for the purposes of business or profession  shall  be  deemed  to  have been  sub-let  by  the  tenant,  if  the Controller  is  satisfied  that  the tenant  without  obtaining  the  consent

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in writing of the landlord has, after the 16th day of August, 1958, allowed any person to occupy the whole or any part of the premises ostensibly on the ground that such person is a partner of the tenant in the business or pro- fession but really for the purpose of sub-letting  such  premises  to  that person.”   

This  sub-section  provides  that  if  a  person  is allowed  to  occupy  the  premises  ostensibly  as  a partner of the tenant but really for the purpose of sub-letting it, such an arrangement would be deemed to be sub-letting.   Therefore, if the tenant has allowed any person to occupy  the  whole  or  any  part  of  the  premises, actually  for  the  purpose  of  sub-letting  but speciously by entering into a partnership with him, such  an  arrangement  shall  be  deemed  to  be subletting.  In  other  words,  subletting  is  not permitted by camouflaging it as a partnership.   The combined reading of clause (b) of the proviso to Section 14(1) read with Section 14(4) makes it clear that before a tenant can sub-let, assign or part  with  the  possession  of  any  part  of  the

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premises or the whole, it must be preceded by the consent  in  writing  from  the  landlord.  In  other words, the requirement of obtaining the consent in writing  of  the  landlord  is  retained  as  a pre-requisite even for the purposes of sub-section (4).  What is of importance is, in either case whether a person has been inducted genuinely as a partner  and  therefore  allowed  to  occupy  the premises or whether the partnership is a ruse, the requirement of consent in writing as in sub-section (1) is retained. In the present case, there is no evidence that the tenant obtained the consent in writing  from  the  landlord  before  allowing  the son-in-law to occupy the premises in pursuance of the Partnership deed.  12. We are satisfied that the respondents-tenants have been found to have inducted the son-in-law as a  sub-tenant  for  the  purpose  of  doing  business under  a  partnership  agreement.  The  arrangement between Hakim Rai and his son-in-law Raj Kumar was not  a  casual  arrangement  wherein  the  latter  was

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requested to conduct business at the shop because the former was old and infirm.  There was no need of entering into a partnership agreement in that case.   13. We find upon scrutiny of the evidence in this case that the learned Rent Controller was right in coming to the conclusion that the parties had not acted on the partnership which was shown, and that there was a parting of possession of the premises in which the son-in-law was allowed to occupy the premises and carry out business exclusively. There is no evidence on record that the account books were maintained and the profits were shared between the  parties  as  partners.   The  son-in-law  had accepted that he was carrying out a business of sale of merchandise from the shop.   14. It is not possible for us to appreciate the view of the appellate authority that there would be no parting of possession if the alleged sub-tenant is a close relative like a son-in-law.  In this case, the relationship is not like that of a spouse

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being allowed to carry out a business in the same house.  The relationship is of a son-in-law and father-in-law who had entered into a partnership agreement.     15. In any case, there was a failure to obtain consent in writing from the appellants which is a clear  pre-requisite  for  allowing  any  person  to occupy  the  premises.  In  other  words,  a  tenant cannot be allowed to employ a subterfuge and permit another person to occupy the premises by claiming that he is a partner when the real intention is to sublet, without obtaining the consent in writing of the landlord. 16. In  these  circumstances,  we  find  that  the occupation of the shop by Raj Kumar amounts to a sub-letting within the meaning of Section 14(1) (b) read  with  Section  14(4)  of  the  Act  and  the respondents are liable for eviction.  17. We accordingly, set aside the order of the High Court  and  direct  that  the  respondents  shall  be evicted.   However,  time  to  vacate  the  scheduled

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premises  is  granted  till  31st October,  2017  on filing the usual undertaking by them within four weeks from today.  Till such a time, the rent at the rate of Rs. 10,000/- per month shall be paid by the respondents to the appellant. 18. The  appeal  is  disposed  of  with  above observations and directions.

......................J.                       [S.A.BOBDE]

                                        ......................J.  

                    [L.NAGESWARA RAO]                    

NEW DELHI, FEBRUARY 01, 2017.