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CASE NO.: Appeal (civil)  7160 of 2005

PETITIONER: Nirmal Kanta (Dead) through Lrs.

RESPONDENT: Ashok Kumar & Anr.

DATE OF JUDGMENT: 28/03/2008

BENCH: C.K. THAKKER & ALTAMAS KABIR

JUDGMENT: J U D G M E N T

Altamas Kabir,J.

1.      This appeal by special leave is directed  against the judgment and order dated 7th January,  2002, passed by the High Court of Punjab & Haryana  at Chandigarh in Civil Revision No. 2250 of 1984  filed under Section 15 of the East Punjab Rent  Restriction Act, 1949, (hereinafter called \023the  1949 Act\024).  By the said judgment, the High Court  set aside the order dated 25th October, 1983, passed  by the Appellate Authority and restored the order  dated 13th August, 1983, passed by the Rent  Controller dismissing the appellant-landlords\022  petition for eviction of the respondents under  Section 13 of the 1949 Act.  The facts relating to  the filing of the eviction petition are set out in  brief hereinbelow.

2.      One Smt. Nirmal Kanta, wife of Shri  T.R.Bhandari, filed the above-mentioned petition  under Section 13 of the 1949 Act seeking ejectment  of the respondents herein from the shop-room in  question.  Ejectment was sought on the ground that  the tenant had not paid the rents for the tenanted  shop-room from 2nd March, 1982, till 15th June,  1982, when the eviction petition was filed.  It was  also alleged that the conduct of the tenant was a  constant nuisance not only to the landlord but also  to the neighbours as well and that the landlord  wanted to construct a first floor on the demised  premises, which was being obstructed by the tenant.    A separate ground as to creation of sub-tenancy was  also pleaded along with some other grounds relating  to installation of electric meter and an attempt  being made by the tenant to establish his own title  to the suit property.  The Rent Controller  dismissed the application on 13.8.1983 and against  such order of dismissal of his petition the  appellant filed an appeal before the Appellate  Authority.  The Appellate Authority allowed the  appeal and set aside the order of the Rent  Controller by its judgment dated 14th June, 1984.    The tenant, the respondent No.1 herein, was  directed to put the landlord/appellant in  possession of the tenanted premises within three

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months.  The respondent No.1/tenant filed Civil  Revision No. 2250 of 1984 before the High Court  against the order of the Appellate Authority and  the same was allowed on the finding that by  allowing a tailor, even on payment, to sit in a  part of the shop-room with his sewing machine,  while retaining his possession and rights as a  tenant over the premises leased to him, the  respondent No.1/tenant did not create a sub-lease  and the tailor could at best be said to be a  licensee. The High Court held that the appellant  landlord had failed to discharge his burden that  there was a sub-letting of the demised premises.   

3.      None of the other grounds appear to have been  urged on behalf of the appellant-landlord before  the High Court, which set aside the judgment of the  Appellate Authority only on the ground of alleged  sub-letting.  It is against the said order of the  High Court that the present Special Leave Petition  has been filed.

4.      At this juncture, it may be mentioned that the  sole petitioner before the Rent Controller died  during the pendency of this appeal and she was  substituted by her legal heirs in the appeal.  The  appellant No.1, Tilak Raj Bhandari, the husband of  the deceased Nirmal Kanta, who is an advocate, has  appeared in person in support of the appeal.

5.      He urged that the High Court had erred in  reversing the well-considered judgment and order of  the Appellate Authority on a wrong understanding of  the law relating to creation of sub-tenancies by  holding that even if it was established that the  respondent No.1-tenant had allowed the respondent  No.2, a tailor, to sit inside a part of the demised  premises with his sewing machine for the purpose of  stitching, the same would not amount to creation of  a sub-tenancy or a sub-lease.  It was urged that by  allowing the respondent No.2 to use a portion of  the demised premises, the respondent No.1, had  parted with the exclusive possession of the said  portion of the demised premises, thereby, in fact,  creating a sub-tenancy. 6.      The appellant No.1 urged that during the  hearing of the application filed before the Rent  Controller under Section 13 of the 1949 Act, the  Rent Controller had appointed a Local Commissioner  on 15th June, 1982, to visit the locale and to  report the factual position regarding the use of  the portion of the demised premises by Lachman  Singh working as a tailor and as to whether, he had  affixed his sewing machine, plied by feet, on the  floor at a particular point in the site plan.  It  was pointed out that the Local Commissioner had  reported that on his inspection in the presence of  the parties, he found that the tailor Master  Lachman Singh was operating as a tailor from the  point shown in the site plan of the shop-room and  that he had got a sewing machine plied by feet  fixed to the said spot.

7.      The appellant No.1 submitted that the report  of the local commissioner had been wrongly

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interpreted by the High Court, inasmuch as, it  amply proved that a portion of the shop-room had  been sublet to Lachhman Singh. He also submitted  that the Appellate Authority had correctly held  that the respondent-tenant was liable to be evicted  on account of such sub-letting and the High Court  had erred in reversing the said finding upon  holding that the fact that the alleged sub-tenant  was found sitting inside the shop-room would not  alone establish the sub-tenancy and that if any  person sits in the shop-room for augmentation of  the business of the tenant the plea of sub-tenancy  could not be accepted. The High Court further  observed that the Rent Controller had arrived at  the correct finding that at best Lachman Singh was  a licensee under the tenant and not a sub-tenant as  alleged by the appellant herein. The appellant  submitted that the judgment of the High Court was  contrary to the law relating to licence and sub- tenancy and was liable to be set aside  and that of  the Appellate Authority was liable to be restored.

8.      On behalf of the respondents it was contended  that in order to constitute a sub-tenancy, one of  the basic ingredients is that the tenant was  required to part with possession of the whole  premises let out to him and that by allowing a  person to sit in a portion of the shop-room even if  on payment of rent do not amount to sub-letting but  at best could have created a licence.  It was urged   that from the evidence on record it would be amply  clear  that the respondent No.1 had not parted with  exclusive possession of the shop\026room and had only  allowed the  alleged sub-tenant to operate his  sewing-machine from a portion of the shop-room and  that too for the purpose of assisting the  respondent No.1 in his cloth business.

9.      It was submitted that Lachhman Singh, the  alleged sub-tenant, had been allowed to sit in the  shop-room to facilitate customers in taking  measurements for the purpose of buying cloth and as  a master tailor, Lachhman Singh\022s job was to assist  the customer to assess the amount of cloth required  for a particular purpose.

10.     It was urged that even if the report of the  local commissioner showed that a sewing-machine had  been affixed to the floor in a portion of the shop- room, that was not in the nature of a sub-tenancy  as alleged on behalf of the appellant, but in order  to assist the respondent No.1 in his business. It  was submitted that the Rent Controller, as also the  High Court, had very correctly assessed the  situation in holding that at best it could be said  that a licence had been created by the respondent  No.1 in favour of Lachman Singh in that portion of  the shop-room where the sewing-machine had been  affixed and from where Lachman Singh was operating.

11.     In support of his submission learned counsel  firstly relied upon the decision of this Court in  Delhi Stationers and Printers vs. Rajendra Kumar  [(1990) 2 SCC 331] wherein the meaning of sub- letting had been explained to mean transfer of an

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exclusive right to enjoy the property in favour of  a third party in lieu of payment of some  compensation or rent. It was observed that parting  with legal possession meant parting with possession  with the right to include and to exclude others and  that mere occupation is not sufficient to infer  either sub-tenancy or parting with possession.

12.     Reliance was also placed on the decision of  this Court in Bharat Sales Limited v. Life Insurance  Corporation of India [(1998) 3 SCC 1] in which it  was held that sub-tenancy or sub-letting comes into  existence when the tenant gives up possession of the  tenanted accommodation wholly or in part and puts  another person in exclusive possession thereof in  such process. Rather, the scene is enacted behind  the back of the landlord, concealing the overt acts  and transferring possession clandestinely to a  person who is an utter stranger to the landlord. It  was further observed that it is the actual, physical  and exclusive possession of that person, instead of  the tenant, which ultimately reveals to the landlord  that the tenant to whom the property was let out has  put some other person into possession of that  property.  

13.     The learned counsel for the respondent also  referred to the decision of this Court in  Joginder  Singh Sodhi vs. Amar Kaur [ (2005) 1 SCC 31], in  which, while dismissing the special leave petition  filed by the landlord this Court observed that as  far as sub-letting was concerned, two ingredients,  namely, parting with possession and monetary  consideration therefor have to be established. It  was submitted that neither of the two ingredients  had been proved in the instant case and all that was  relied upon by the Appellate Authority was the  report of the local commissioner which indicated  that Lachhman Singh was operating from a portion of  the shop-room where he had fixed a feet-driven  sewing machine.  Regarding parting with exclusive  possession learned counsel submitted that the  respondent No.1 was always in possession of the  entire shop-room and the key of the shop-room was  retained by him and till he opened the shop-room no  one had access thereto. Various other decisions were  also referred to on behalf of the respondents, which  need not detain us.

14.     The learned counsel submitted that there was no  merit in the appeal and both the Rent Controller and  the High Court had correctly dismissed the eviction  petition filed by the appellant/landlord.

15.     What constitutes sub-letting has repeatedly  fallen for the consideration of this Court in  various cases and it is now well-established that a  sub-tenancy or a sub-letting comes into existence  when the tenant inducts a third party/stranger to  the landlord into the tenanted accommodation and  parts with possession thereof wholly or in part in  favour of such third party and puts him in exclusive  possession thereof.   The lessor and/or a landlord  seeking eviction of a lessee or tenant alleging  creation of a sub-tenancy has to prove such

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allegation by producing proper evidence to that  effect.  Once it is proved that the lessee and/or  tenant has parted with exclusive possession of the  demised premises for a monetary consideration, the  creation of a sub-tenancy and/or the allegation of  sub-letting stands established.

16.     All the different cases cited on behalf of the  parties are ad-idem on this interpretation of the  law relating to the creation of a sub-tenancy or   sub-letting.  As was observed by this Court in the  case of Bharat Sales Limited (supra) the arrangement  regarding the creation of a sub-tenancy or grant of  a sub-lease without the permission of the landlord  has obviously to be done behind the scene to prevent  the landlord from coming to learn of such  arrangement and it is only after the landlord finds  that stranger or a third party, other than the  tenant, was occupying the tenanted premises, does he  become aware of the creation of such sub-tenancy or  granting of such sub-lease.  In the instant case,  from the report of the Local Commissioner appointed  by the Court it stands established that the  respondent No.2, Lachhman Singh, was, in fact,  operating a feet-driven sewing machine from inside  the shop-room comprising the tenanted premises.  The  same has been interpreted in different ways by the  Rent Controller, the Appellate Authority and  thereafter by the High Court.  From the evidence  that  has come on record, it appears that the  respondent No.2 had been accommodated by the  respondent No.1 to assist him in his cloth business  by helping customers to assess the amount of cloth  required for their particular purposes.   The said  activity did not give the respondent No.2 exclusive  possession for that part of the shop room from where  he was operating and where his sewing machine had  been affixed.  The aforesaid issue has been  correctly decided both by the Rent Controller as  also the High Court.   In our view, the learned  Appellate Authority has mis-construed the principles  relating to parting with exclusive possession which  is one of the key ingredients for arriving at a  finding regarding the creation of a sub-tenancy or  grant of a sub-lease.  Since from the report of the  Local Commissioner it only appears that the  respondent No.2 was operating from a portion of the  shop-room, it is quite clear that the respondent  No.1 had not parted with exclusive possession of the  tenanted premises as had been found both by the Rent  Controller and the High Court.  The main ingredient  of the creation of a sub-tenancy and/or grant of a  sub-lease not having been established, it may at  best be said that the respondent No.2 was a licensee  under respondent No.1 which would not entitle the  appellant-landlord to obtain a decree for eviction  against the respondent No.1-tenant on the ground of  sub-letting.

17.     Since none of the other points appear to have  been urged before either the Appellate Authority or  the High Court, we are not called upon to deal with  the same.

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18.     The appeal accordingly fails and is dismissed.   

19.     There will be no order as to costs.