http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 7  

PETITIONER: ROOP CHAND

       Vs.

RESPONDENT: GOPI CHAND THALIA

DATE OF JUDGMENT29/03/1989

BENCH: NATRAJAN, S. (J) BENCH: NATRAJAN, S. (J) PATHAK, R.S. (CJ)

CITATION:  1989 AIR 1416            1989 SCR  (2) 184  1989 SCC  (2) 383        JT 1989  Supl.     73  1989 SCALE  (1)733  CITATOR INFO :  D          1990 SC1208  (4)

ACT:     Rajasthan  Premises  (Control of Rent &  Eviction)  Act, 1950:  Section  13(1)(e)--Parting with  possession;  whether user   by   a   social  club   amounts   to   parting   with possession--Permission to file additional documents in  this Court--No satisfactory explanation for not filing in  Courts below--Hence no justification.

HEADNOTE:     The  appellant/tenant took on lease a building from  the respondent. In the Deed of Rent there was an express  provi- sion  that  the  tenant should not sublet  the  premises  to anyone. However, shortly thereafter a social club came to be opened  in the premises, where members played  cards,  chess etc.  every  evening  till about  midnight.  The  respondent thereupon  filed.  a  suit against the  tenant  seeking  his eviction  inter alia on the ground of sub-letting the  prem- ises  contrary  to the terms of the lease deed.  The  tenant admitted the factum of the opening of the club but contended that he had neither sublet the premises for rent nor  other- wise parted with its possession to the club.     The  Trial Court held that the respondent had failed  to prove that the appellant had sublet the premises to the Club for rent, and that the evidence only warranted an  inference that the appellant had allowed the club to use the  premises as  a licencee and as such, the appellant was not liable  to be  evicted. The Appellate Court held that the evidence  did not  establish any subletting of the premises for rent,  but nevertheless there were adequate materials to hold that  the appellant had parted with the possession of the premises  in favour  of  the club and such parting  of  possession  would amount to subletting within the meaning of section  13(1)(e) of the Rajasthan Premises (Control of Rent & Eviction)  Act, 1950  and  as such the appellant was liable to  be  evicted. Consequently, the Appellate Court passed a decree for  evic- tion.  The  High Court dismissed the second  appeal  of  the appellant.     After  the  filing of the appeal in this Court  the  re- spondent  filed a civil miscellaneous petition seeking  per-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 7  

mission  to produce certain documents in the nature  of  the Auditor’s  reports and the Managing Committee’s  reports  of the club as additional evidence to establish that 185 there  existed a stipulation for the payment of rent by  the club to the appellant, and the club was bound to pay rent to the appellant for the user of the premises, but such payment was  being deferred in view of the pendency of the  eviction suit between the respondent and the appellant.     Dismissing the appeal and the civil miscellaneous  peti- tion, the Court,     HELD:  (1)  On a reading of sub-clause  (e)  of  Section 13(1)  it is seen that a tenant will render  himself  liable for eviction if he has "assigned, sublet or otherwise parted with  the possession of, the whole or any part of the  prem- ises without the permission of landlord." Consequently, even if  a tenant parts with possession of the whole or any  part of  the premises without assigning or subletting  the  prem- ises, he would still be liable to be evicted from the  prem- ises under the Act. If from this perspective the user of the premises  by the club is examined, it can certainly be  held that  the  appellant had parted with the possession  of  the premises  as envisaged in clause (e) of sub-section  (1)  of section 13. [188E-G]     (2) There is no evidence to show that the appellant  had at any time exercised his right to exclusive possession  and kept the premises locked and denied the members of the  club entry to the premises. [188H; 189A]     (3)  Section  146  of the Companies  Act  enjoins  every company to have a registered office and certain requirements of the Companies Act have to be complied with by the club by virtue of its registered office being situated in the leased premises.  The appellant cannot prevent the club  from  per- forming  its  statutory duties so long as the club  has  its registered office in the premises. [189B, D]     Smt. Rajbir Kaur v. M/s. S. Chokesiri & Co., JT  1988(3) SC 593, distinguished.     (4)  The additional documents could have  been  obtained and filed before the Trial Court, the Appellate Court or the High Court and no satisfactory explanation has been  offered for having failed to do so. Hence there is no  justification to allow the civil miscellaneous petition. [191 C]

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No.  855  of 1978. 186     From  the  Judgment and Order dated 21.3.  1978  of  the Rajasthan  High Court in S.B. Civil Second Appeal No. 59  of 1978.     Tapas  Ray, Sushil Kumar Jain, Sudhanshu Atrey and  L.C. Agrawalas for the Appellant.     G.L. Sanghi, Parmod Dayal, A.D. Sangar, Ajay K. Jain and K.K. Jain for the Respondent. The Judgment of the Court was delivered by     NATARAJAN,  J.  This  appeal by special leave  is  by  a tenant  and  is directed against the judgment  of  the  High Court  of  Rajasthan in Civil Second Appeal No. 59  of  1978 confirming  the judgment of the Appellate Court whereby  the appellant  was held liable to be evicted from  the  premises leased  to  him by the respondent on the  ground  of  having parted with the possession of the premises.     C.M.P. No. 906 of 1973 has been filed by the  respondent

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 7  

under  Order 41 Rule 27 C.P.C. for certain  documents  being received as additional evidence.     In  so far as the facts are concerned, there is no  con- troversy  whatever. In January 1963, the appellant  took  on lease  from  the respondent a building situate in  Rasta  Ka Gheewalan in the city of Jaipur. In the Deed of Rent execut- ed by the appellant, there was an express provision that  he should not sublet the premises to anyone. However, in  March 1968,  a social club known as the Lokpriya Social Club  came to  be  opened in the premises and the members of  the  club began  using the premises for playing cards,  chopar,  chess etc.  every evening till about midnight or even till 1  a.m. The  functioning  of  the club in the premises  led  to  the respondent  filing a suit against the appellant seeking  his eviction  on two grounds viz. (1) sub-letting  the  premises contrary  to the terms of the lease deed and (2)  conversion of the user of the premises from residential to non-residen- tial purposes. As it has been concurrently held by the first two  courts that the premises had not been leased for  resi- dential purposes, no further advertance is called for to the second ground on which the eviction was sought for.     As  regards  the  first ground, the  appellant  did  not dispute  but  on the other hand admitted the factum  of  the Lokpriya Social Club being opened in the leased premises  in March 1968 and the club functioning 187 in the premises since then. He however contened that he  had neither  sublet for rent nor otherwise parted with the  pos- session  of the premises to the club. His case was  that  he continued  to  have  possession of the  premises  for  doing business in gold jewellery and cloth on commission basis  in a small portion of the building but being the founder of the club, he had provided the club a room to have its office and a hall for the club members to assemble and play games  such as cards, chess, chopar etc.     In  the trial of the suit, the respondent examined  him- self  and  an Assistant in the office of  the  Registrar  of Companies  as witnesses on his side. The appellant  examined himself and three other witnesses on his side to  substanti- ate his contentions.     The  Trial Court held that the respondent had failed  to prove  that  the appellant had sublet the  premises  to  the Lokpriya  Social  Club for rent and that the  evidence  only warranted  an inference that the appellant had  allowed  the club  to  use the premises as a licencee and  as  such,  the appellant was not liable to be evicted. The Appellate Court, while concurring with the Trial Court that the evidence  did not  establish  any  subletting of the  premises  for  rent, nevertheless held that there were adequate materials to hold that  the  appellant had parted with the possession  of  the premises  in favour of the club and such parting of  posses- sion  would amount to subletting within the meaning  of  the Act  and  as such the appellant was liable  to  be  evicted. Consequently, the Appellate Court passed a decree for  evic- tion  against the appellant. The Second Appeal to  the  High Court  by the appellant did not meet with success and  hence he  has  approached this Court by way of appeal  by  special leave.     Since the first ground on which eviction was sought  for was  the subletting of the premises to the  Lokpriya  Social Club,  the question whether the appellant was receiving  any rent  or not from the club had loomed large in the  proceed- ings  before  the Trial Court and the Appellate  Court.  The appellant’s  categoric stand that he was not  receiving  any rent  from the Club and his permitting the club to  use  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 7  

premises  was not for any monetary return could not be  dis- lodged  by  the respondent by specific  materials.  However, after  the appellant had filed this appeal,  the  respondent has  been able to obtain copies of the Managing  Committee’s reports,  balance sheets and auditor’s reports of  the  club for  the years 1968 to 1976. It is relevant to mention  here that the club has been registered as a limited company under the Indian Companies Act, 1956. As a registered company,  it had to prepare audited balance 188 sheets  every  year and present the same together  with  the Auditor’s  Report  to the members of the club and  have  the same approved. The respondent seeks permission of the  Court to  have  the Managing Committee’s  reports,  the  Auditor’s Reports and the balance sheets filed as additional  evidence in  the  appeal and for that purpose he has  filed  CMP  No. 906/79 under Order 41 Rule 27 C.P.C. The learned counsel for the  appellant vehemently opposed the filing  of  additional documents  by the respondent as additional evidence  on  the ground  these documents ought to have been filed before  the trial court or the Appellate Court and hence they cannot  be filed  now. It was also contended that if  additional  docu- ments are received in evidence at this stage, the  appellant will  have no opportunity to adduce contraevidence. We  will take  up the question whether CMP No. 906/79 should  be  al- lowed or not for consideration later. We will first  examine whether  even without these documents the order of  eviction passed  by  the Appellate Court and confirmed  by  the  High Court can be sustained or not.     It may be recalled that the decree for eviction  against the  appellant  has been passed on the  ground  that  though subletting of the premises for rent has not been proved, yet the appellant must be held to have parted with possession of a portion of the premises to the club and such parting  with possession  would attract Section 13(1)(e) of the  Rajasthan Premises  (Control of Rent & Eviction) Act, 1950 (for  short the Act). On a reading of sub-clause(e) of Section 13(1), it is  seen that a tenant will render himself liable for  evic- tion  if he has "assigned, sublet or otherwise  parted  with the  possession  of, the whole or any part of  the  premises without the permission of landlord." Consequently even if  a tenant parts with possession of the whole or any part of the premises  without assigning or subletting the  premises,  he would still be liable to be evicted from the premises  under the Act. If from this perspective, the user of the  premises by  the club is examined, it can certainly be held that  the appellant had parted with the possession of the premises  as envisaged in clause (e) of sub-section 1 of Section 13. This conclusion is warranted by several factors. Admittedly, when the  club began to function in the leased premises,  a  name board carrying the name of the Club came to be exhibited  in the  premises. It is also admitted that the members  of  the club  assemble at the premises everyday and play  cards  and other indoor games from evening till about midnight.  Though the  appellant would say that the club members  cannot  have access  to  the  premises unless he or in  his  absence  his brother  or son opens the premises, there is no evidence  to show that the appellant had at any time exercised his  right to exclusive 189 possession  and  kept  the premises locked  and  denied  the members of the club entry to the premises. That apart  there is  a significant fact which has escaped the notice  of  the Appellate Court and the High Court viz that the club has its registered office at the leased premises. Section 146 of the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 7  

Indian Companies Act enjoins every company to have a  regis- tered office to which all communications and notices may  be addressed.  Once  a company has a registered  office  it  is bound  to  comply with several provisions of  the  Companies Act,  viz. (a) the register of members is to be  kept  there (Section 163; (b) the right of inspection has to take  place there  (Section 163); (c) the register of directions,  etc., is  also  to be kept there (Section 303):  (d)  the  account books are to be maintained there unless the directors decide otherwise  (Section 20): (e) the register of  mortgages  and charges  and copies of registered documents are also  to  be kept  there  (Section 143); and the right of  inspection  of them is to be exercised there (Section 144). (f) service  of documents  should be effected there. These  requirements  of the  Act have to be complied with by the club by  virtue  of its registered office being situated in the leased premises. The  appellant cannot prevent the club from  performing  its statutory  duties  so long as the club  has  its  registered office in the premises. Hence this factor also warrants  the view  that the appellant had parted with possession  of  the major  portion of the premises to the club. In such  circum- stances  we see no merit in the contention of the  appellant that  the user of a portion of the premises by the  club  is only  of a permissive nature and that there was  no  parting with  possession of the premises to the club. The  Appellate Court  and the High Court were therefore, right  in  holding that  the user of the premises by the club would  amount  to the appellant having parted with possession of a portion  of the premises" as contemplated under Section 13(1)(e) of  the Act.     Learned  counsel for the appellant referred us  to  Smt. Rajbir Kaur & Anr. v. M/s. S. Chokesiri & Co., JT 1988 3  SC 593  and  argued that even if the  appellant  had  conferred rights of exclusive possession to the club over a portion of the leased premises, the club would not be a sub-lessee  but only  a licencee of the appellant. We are unable  to  accept this  argument  because  of various factors.  In  the  first place,  in  Smt. Rajbir Kaur, (supra) it was  clearly  found that  in the documents which had been brought about  between the  parties.  the occupants were inducted  into  possession only  as  licencees and not as lessees. Secondly,  the  case arose  under the East Punjab Rent Restriction Act  in  which Section  13 refers only to a tenant transferring  his  right under  the  lease or subletting the entire building  or  any portion thereof whereas in Section 13(1)(e) of the Rajasthan Premises (Control 190 of Rent and Eviction) Act with which we are concerned, there is reference to a tenant assigning, subletting or  otherwise parting with the possession of the whole or any part of  the premises  without  the permission of the landlord.  In  such circumstances,  the  judgment in Smt. Rajbir  Kaur  &  Anr., (supra) cannot be of any avail to the appellant.     Coming now to C.M.P. No. 906/79 filed by the  respondent for  receiving certain documents as additional evidence,  we have  already  stated that these documents  consist  of  the reports  of the Managing Committee, the balance  sheets  and the  auditor’s  reports for the years 1968 to  1976.  Though there  are  as  many as 25 documents filed  along  with  the application  they  really  constitute 8  sets  of  documents pertaining  to the period 1963 to 1976 except for  the  year 1969. The purpose of filing these documents is to show  that in  each of the years in question it has been stated in  the auditor’s report that the rent of the club premises has  not been  determined  and provided for as the  matter  is  under

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 7  

litigation.  Mr. Sanghi, learned counsel for the  respondent submitted  that the explanation given in the  auditor’s  re- ports  for  provision not having been made  in  the  balance sheet  for payment of rent by the club was not  because  the club  had  been allowed free user of  the  premises  without payment  of rent but because there was litigation  regarding the  user of the premises by the club. The further  argument was  that the auditor’s report clearly showed that the  club was  bound to pay rent to the appellant for the user of  the premises but such payment was being deferred in view of  the pendency of the eviction suit between the respondent and the appellant. Mr. Sanghi stated that there cannot be any objec- tion to the additional documents being received in  evidence because  they were reports and balance-sheets  submitted  by the club, of which the appellant is a member, to the  Regis- trar  of  Companies and hence there is no  question  of  the appellant  being  taken by surprise by the contents  of  the documents.  On the other hand, the learned counsel  for  the appellant  vehemently contended that the respondent  is  not entitled  under law to file documents by way  of  additional evidence at this belated stage of matters because the  docu- ments were in existence even when the parties went to  trial before  the  Trial Court and as such the  respondent  should have acted diligently and either summoned for the  documents from  the office of the Registrar of Companies  or  obtained copies  of them and filed them in Court during the trial  or atleast  when  the  matter was before  the  first  Appellate Court. On  a  consideration of the matter we think  the  objections raised 191 by  the  appellant’s counsel for the  filing  of  additional evidence by the respondent in the appeal proceedings  before us  merits acceptance. It is true that the documents  sought to  be filed by way of additional evidence are  indisputably the audited balance sheets and reports submitted by the club but  even so the fact remains that all the  documents  could have  been obtained and filed by the respondent  before  the Trial  Court itself since the judgment had been rendered  by the  Trial Court only on 22.2. 1977. Even if the  respondent was  not able to file the documents before the Trial  Court, he could have filed the documents before the Appellate Court and  sought its permission to file them as  additional  evi- dence.  Even before the High Court there was no  attempt  in this behalf. No satisfactory explanation has been offered by the  respondent for having failed to produce  the  documents before  the Courts below or the High Court. In such  circum- stances, we see no justification to allow C.M.P. No.  906/79 and permit the respondent to file the documents in  question as  additional  evidence  in  the  proceedings.  Accordingly C.M.P. No. 906/79 is dismissed.     In spite of the dismissal of C.M.P. No. 906/79, since we have  sustained the view taken by the first Appellate  Court and  the High Court that the appellant had parted with  pos- session of a major portion of the leased premises in  favour of the Lokpriya Social Club and such parting with possession would  attract  the operation of Section 13( 1 )(e)  of  the Act, we find no merit in the appeal and accordingly it  will stand  dismissed.  The appellant is,  however,  given  three months time from today to vacate and deliver vacant  posses- sion of the premises to the respondent subject to his filing an  undertaking in the usual terms within a period  of  four weeks from today. There will be no order as to costs. R.S.S.                                  Appeal  &   Petition dismissed.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 7  

192