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CASE NO.: Appeal (civil)  1680-1681 of 1999

PETITIONER: Parvinder Singh

RESPONDENT: Renu Gautam & Ors.

DATE OF JUDGMENT: 22/04/2004

BENCH: R.C. LAHOTI, BRIJESH KUMAR & ARUN KUMAR.

JUDGMENT: J U D G M E N T

R.C. Lahoti, J.

       The suit premises consist of a shop bearing No.96/1, Lower  Bazar, Shimla, governed by the H.P. Urban Rent Control Act,  1987.  The appellant is the landlord-cum-owner of the shop.  It  was let out to late Vijay Gautam under an oral lease.  On  31.12.1988, a partnership deed was signed between late Vijay  Gautam and Harbhajan Singh, the respondent No.3 herein.  On  26.6.1991, Vijay Gautam died.  The partnership stood dissolved  consequent thereupon. On 29.6.1991, another deed of  partnership was signed between respondent No.1, the widow of  late Vijay Gautam acting for herself and as guardian of  respondent No.2, the minor son of Vijay Gautam, on the one  hand and Harbhajan Singh, respondent No.3 on the other hand.   On 7.7.1992, appellant initiated proceeding for eviction of the  respondents from the shop alleging that the tenant Vijay Gautam  had sublet the premises to Harbhajan Singh which subletting has  been continued by the heirs \026 Respondent No.1 & 2, after the  death of Vijay Gautam.  A ground of default in payment of rent  was also taken.  The suit for eviction was dismissed by the  Controller and the dismissal was upheld by the appellate  authority as also by the High Court in civil revision.  Feeling  aggrieved, the landlord has filed this appeal by special leave.

       A perusal of the three judgments ___ impugned herein ___  shows that the ground for eviction for default in payment of rent  has been negatived by all the three Courts.  So far as the ground  of subletting is concerned, the plea has not been gone into on  merits by any of the Courts because of the law laid down by a  two-Judges Bench of this Court in A.S. Sulochana Vs. C.  Dharmalingam, (1987) 1 SCC 180.  In A.S. Sulochana’s  case, the tenant was sought to be evicted on the ground of  subletting within the meaning of Section 10(2)(ii)(a) of Tamil  Nadu Buildings (Lease and Rent Control) Act, 1960.  The facts  found therein were that the original landlord and tenant between  whom the lease was created had both died.  No evidence, direct  or circumstantial, was available wherefrom it could be inferred if  the lease prohibited the tenant from creating a sub-tenancy or  whether the sub-tenancy was created by the tenant without the  written consent of the landlord.  Under the Tamil Nadu Act, the  landlord could not succeed in evicting the tenant without  establishing that Section 10(2)(ii)(a) was violated.  Thus, the  Court found that an inference as to creation of an unlawful sub- tenancy within the meaning of Section 10(2)(ii)(a) of the Tamil  Nadu Act could not be drawn.  However, the Court went on to  observe:- "When the statute says the tenant who is

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sought to be evicted must be guilty of the  contravention, the court cannot say, ’guilt of  his predecessor in interest’ will suffice.  The  flouting of the law, the sin under the Rent Act  must be the sin of the tenant sought to be  evicted, and not that of his father or  predecessor in interest.  Respondent inherited  the tenancy, not the sin, if any, of his father.   The law in its wisdom seeks to punish the  guilty who commits the sin, and not his son  who is innocent of the rent law offence.  It  being a penal provision in the sense that it  visits the violator with the punishment of  eviction, it must be strictly construed."

       A.S. Sulochana’s case came up for the consideration of a  three-Judges Bench of this Court in Imdad Ali  Vs. Keshav  Chand & Ors., (2003) 4 SCC 635, though in the context of  dealing with a ground for eviction under a local rent control law  of Madhya Pradesh.  A.S. Sulochana’s case was distinguished  and also adversely commented upon.  The Court felt that in A.S.  Sulochana’s case the Division bench was influenced by the  opening clause of the relevant provision in Tamil Nadu Act which  begins with "a landlord who seeks to evict his tenant" so as to  hold that the facts constituting the ground for eviction should be  referable to the present tenant and not to his predecessor who  had already died.  The Court further held in Imdad Ali’s case:-  "It matters not whether such default is made  by the original tenant or by his successor  inasmuch as the successor-in-interest of the  original tenant continues to be a tenant within  the meaning of the provisions thereof.  By  reason of death of the original tenant, a new  tenancy is not created. A successor-in-interest  of a tenant holds his tenancy right subject to  rights and obligations of his predecessor.  He  does not and cannot claim a higher right than  his predecessor. It is now well settled that a  person by reason of inheritance or assignment  does not derive any better title than his  predecessor, and, thus, the right which the  original tenant did not possess cannot be  passed on to his successor."

       In Imdad Ali’s case, the three-Judges Bench opined that  the law laid down in A.S. Sulochana’s case was not applicable  for interpreting a provision in M.P. Accommodation Control Act  1961.  The Bench also said ___ "We do not subscribe to the  general observations made in A.S. Sulochana’s case and to the  said extent it cannot be held to have laid down a good law and is  overruled accordingly".

       The relevant provision of the H.P. Act reads as under:-         "14.(1) xxx             xxx             xxx

       (2) A landlord who seeks to evict his  tenant shall apply to the Controller for a  direction in that behalf.  If the controller, after  giving the tenant a reasonable opportunity of  showing cause against the applicant, is  satisfied__

               xxx             xxx             xxx     

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       (ii) that the tenant has after the  commencement of this Act without the written  consent of the landlord__

       (a) transferred his rights under the lease  or sublet the entire building or rented land or  any portion thereof, or

               xxx             xxx             xxx

the Controller may make an order directing the  tenant to put the landlord in possession of the  building or rented land and if the Controller is  not so satisfied he shall make an order  rejecting the application:

               xxx             xxx             xxx"

       Tenancy is a heritable right unless a legal bar operating  against heritability is shown to exist.  Thus, the one who inherits  tenancy rights also inherits the obligations incurred by the  deceased tenant alongwith the rights which he had.  It is difficult  to accept a proposition that on death of the tenant his heirs  inherit only rights and not obligations.  If that be so, then the  heirs would not be liable to pay any arrears of rent which were  not paid by the deceased-tenant.

       The judgments of the Controller, the appellate authority  and the High Court which proceed on A.S. Sulochana’s case  cannot now be sustained and deserve to be set aside.

       The rent control legislations which  extend many a  protection to the tenant, also provide for grounds of eviction.  One such ground, most common in  all the legislations, is  subletting or parting with possession of the tenancy premises by  the tenant.  Rent control laws usually protect the tenant so long  as he may himself use the premises but not his transferee  inducted into possession of the premises, in breach of the  contract or the law, which act is often done with the object of  illegitimate profiteering or rack renting.  To defeat the provisions  of law, a device is at times adopted by unscrupulous tenants and  sub-tenants of bringing into existence a deed of partnership  which gives the relationship of tenant and sub-tenant an  outward appearance of partnership while in effect what has  come into existence is a sub-tenancy or parting with possession  camouflaged under the cloak of partnership.  Merely because a  tenant has entered into a partnership he cannot necessarily be  held to have sublet the premises or parted with possession  thereof in favour of his partners.  If the tenant is actively  associated with the partnership business and retains the use and  control over the tenancy premises with him, may be along with  the partners, the tenant may not be said to have parted with  possession.  However, if the user and control of the tenancy  premises has been parted with and deed of partnership has been  drawn up as an indirect method of collecting the consideration  for creation of sub-tenancy or for providing a cloak or cover to  conceal the transaction not permitted by law, the Court is not  estopped from tearing the veil of partnership and finding out the  real nature of transaction entered into between the tenant and  the alleged sub-tenant.

       A person having secured a lease of premises for the  purpose of his business may be in need of capital or finance or

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someone to assist him in his business and to achieve such like  purpose he may enter into partnership with strangers.  Quite  often partnership is entered into between the members of any  family as a part of tax planning.  There is no stranger brought on  the premises. So long as the premises remain in occupation of  the tenant or in his control, a mere entering into partnership  may not provide a ground for eviction by running into conflict  with prohibition against subletting or parting with possession.   This is a general statement of law which ought to be read in the  light of the lease agreement and the law governing the tenancy.   There are cases wherein the tenant sublets the premises or parts  with possession  in defiance of the terms of lease or the rent  control legislation and in order to save himself from the peril of  eviction brings into existence, a deed of partnership between  him and his sub-lessee to act as a cloak on the reality of the  transaction. The existence of deed of partnership between the  tenant and the alleged sub-tenant would not preclude the  landlord from bringing on record material and circumstances, by  adducing evidence or by means of cross examination, making  out a case of sub-letting or parting with possession or interest in  tenancy premises by tenant in favour of a third person.  The rule  as to exclusion of oral by documentary evidence governs the  parties to the deed in writing.  A stranger to the document is not  bound by the terms of the document and is, therefore, not  excluded from demonstrating the untrue or collusive nature of  the document or the fraudulent or illegal purpose for which it  was brought into being.  An enquiry into reality of transaction is  not excluded merely by availability of writing reciting the  transaction.  Tyagaraja Vs. Vedathanni, AIR 1936 PC 70 is an  authority for the proposition that oral evidence in departure from  the terms of a written deed is admissible to show that what is  mentioned in the deed was not the real transaction between the  parties but it was something different.  A lease of immovable  property is transfer of a right to enjoy such property.  Parting  with possession or control over the tenancy premises by tenant  in favour of a third person would amount to the tenant having  ’transferred his rights under the lease’ within the meaning of  Section 14(2)(ii)(a) of the Act.                   Shri Gourab Banerjee, the learned senior counsel for the  appellant, submitted that all the relevant evidence and material  are available on record and both the parties have adduced the  necessary evidence.  All that is needed to be done is its  appreciation and to draw inferences. In such circumstances and  keeping in view the period of time for which the proceedings  have already remained pending, we deem it proper to remand  the matter to the appellate authority for hearing and decision  afresh.  

       Accordingly, the appeals are allowed.  The judgments of  the High Court and the Appellate Authority are set aside.  The  case is remanded to the Appellate Authority to hear and decide  the appeal afresh after hearing the parties and to record a  finding on the availability of ground for eviction under  Section  14(2) of H.P. Urban Rent Control Act, 1987 and then decide the  appeal finally.  The costs shall abide the result.