CHHOTALAL MAGANLAL BADRANIWALA v. MAYUR SILK MILLS
1977-10-18
A.D.DESAI, N.H.BHATT
body1977
DigiLaw.ai
N. H. BHATT, J. ( 1 ) THE first question that falls for consideration is whether this sort of arrangement found to have been made and arrived at by the two groups of erstwhile partners can amount to an act of sub-letting or assignment or transfer or unlawful licensing out of the rented property. . The clauses that are pressed into service are (e) and (ee) of sub-sec. (1) of sec. 13 of the Bombay Rent Act which are quoted below for ready reference:sec. 13 (1) x x x x x x (e) that the tenant has since the coming into operation of this Act unlawfully sub-let the whole or part of the premises or assigned or transferred in any other manner his interest therein; or (ee) that the tenant has after the commencement of the Bombay Rents Hotel and Lodging House Rates Control Gujarat Extension and Amendment) Act 1963 given the whole or part of the premises on licence for monetary consideration to any person without the previous permission of the landlord. As said above the factual aspects are no longer in controversy. The fact remains that two groups of the erstwhile body of partners have been running their separate businesses. In other words they have divided the rented property for their separate use and enjoyment. The question is whether this act of theirs would amount to an unlawful sub-letting of the whole or part of the rented property or whether it would amount to assignment or transfer in any other manner of their interest in the rented property by them. ( 2 ) WE would like to translate some important clauses as faithfully as possible from the deed of dissolution Ex. 62. "cl. 2. The factory that is the business premises are situated in Ward No. 7 and registered (with municipality) at Sr. No. 678. They consist of four galas: out of that two galas on the southern side a godown an open space are allotted to the 6 of the parties of the first part They will be entitled to use the name M/s. Mayur Silk Mills alias Amrutlal Chhaganlal and Co. for the purpose of running business of manufacturing art silk cloth. The telephone so. 2286 is also allotted to the share of the first group As the price of the name and telephone the parties of the first group will pay Rs. 4501.
for the purpose of running business of manufacturing art silk cloth. The telephone so. 2286 is also allotted to the share of the first group As the price of the name and telephone the parties of the first group will pay Rs. 4501. 00 to the retiring partners of the second group. . . Cl. 5. The debts and liabilities of the firm are allotted to the share of the two partners of the first group. CL. 13. The place of business. that is of the factory of the partnership belong to M/e. Chhotalal Maganbhai Buckhaniwala (i. e. the Plff. No. 1 ). Its rent and municipal taxes are to be paid by us jointly in equal shares or to pay the same on getting separate rent notes. The bath-room and latrine shall remain in joint use of both the parties and neither party should directly or indirectly cause any obstruc tion in the joint use of the samethe above quoted clauses from the deed of dissolution Ex. 62 therefore very clearly show that though the enjoyment was made separate and to that extent there was division of the rented property they had kept intact their contractual relations with the plaintiffs-landlords subject of course to their hope of the landlords agreeing to the separation of the two shares. In other words there is no manner of doubt that so ever left at that time that both the groups shall jointly be liable to pay the rent and municipal taxes and implicit therein is their undertaking to treat the tenancy as one and indivisible vis-a-vis the landlords. ( 3 ) THE learned counsel appearing for the landlords however urged that this unequivocal division of the rented property the taking over of the business name the telephone the debts and liabilities by the partners of the first group the exclusive possession of the two differently well- demarcated portions and the dissolution of every assets except tenancy a rights event to establish that there was sub-letting. (We put a pertinent question to the learned counsel appearing for the plaintiffs as to who sub-let whom and there could not be any direct and pertinent reply to the query.
(We put a pertinent question to the learned counsel appearing for the plaintiffs as to who sub-let whom and there could not be any direct and pertinent reply to the query. The difficulties in the way of plaintiffs are very obvious because as far as the plaintiffs were concerned there was unity of interest amongst the four partners who for the sake of convenience arrived at some mutual arrangement for their individual benefits. In other words it was a convenient mode of enjoyment of the rented property by the joint tenants or coenants ). This arrangement arrived at by the co-tenants by itself did not work any detriment to the interests of the landlords. For all practical purposes all the four tenants who were the tenants in. their individual capacity continued to remain jointly liable. We have got before us the position of law laid in crystal clear language by the Supreme Court itself in the case of Badri Narain Jha and Others v. Rameshwar Dial Singh and Others A. I. R. 1951 S. C. 186. In very clear terms the Supreme Court has there observed as follows:"the inter se partition of the mekarrari interest amongst the mokarraridars cannot affect their liability qua the lessor for the payment of the whole rent. as several tenants of a tenancy in law constitute but a single tenant and qua the landlord they constitute one person each constituent part of which possesses certain common rights in the whole and is liable to discharge common obligations in its entirety. Such partitions amongst several lessees inner se are usually made for convenience of enjoyment of the lease-hold but they do not in any way affect the integrity of the tenancy or make each holder of an interest in it as separate holder of a different tenancy. (Emphasis by us ). This authority. therefore very clearly lays down that the inter se partition amongst several co-sharers of leasehold rights cannot in any way affect the integrity of the lease. The case on hand clearly falls in this category. ( 4 ) THE sub-letting presupposes from its very nature the two distinct parties one that can be said to be the head-tenant and another a sub- tenant. The defendants Nos. 2 and 3 cannot be said to have sub-let any portion to the defendants No. 4 and 5 nor can defendants Nos.
( 4 ) THE sub-letting presupposes from its very nature the two distinct parties one that can be said to be the head-tenant and another a sub- tenant. The defendants Nos. 2 and 3 cannot be said to have sub-let any portion to the defendants No. 4 and 5 nor can defendants Nos. 4 and 5 be said to have sub-let the southern portions to the defendants Nv. 2 and 3 All is an arrangement for separate enjoyment. The fact that they have been separately and exclusively enjoying their separate portions does not go to the detriment of the plaintiffs-landlords whose position remains absolutely unaltered in respect of the rented property. Whether the portions earmarked by the two sets of partners are equal or unequal is also not a matter of consequence to the landlords so is the case about division of all assets between the two groups of partners We would repeat that as far as the landlords are concerned. their position remains intact and no right of theirs is in any way violated. They have therefore no cause of grievance. ( 5 ) THERE cannot he any assignment or transfer also because as far as the legal liabilities are concerned they continue to remain undivided and intact is-a-vis the landlords. In the words of the Supreme Court by separate enjoyment integrity of tenancy is not affected. Mere separate enjoyment would not give rise to any assignment of interest on the part of all or any of the partners. As this question is disposed of on this count it is not necessary to deal with this aspect from other angles. The fact that each of the groups of the partners contribute 50% of the amount of rent also does not in any way materially alter the position of the landlords. They are being paid rent by and on behalf of all the partners. How they collect the amount is a matter of their internal arrangement with which the landlords have nothing to bother about ( 6 ) A similar question bad arisen before the learned Single Judge of this court and it has been dealt with by him in the case of Jekishondas Maganlal v. Abdul Rehman Haji Ahmedbhai and Others A. I. R. 1975 Guj.
205 In that case the learned Single Judge has examined the import of the term sub-letting and assignment of interest and has rightly held that Sub-letting means that the premises which are in the possession of a person as a lessee are sub-let wholly or partly to a third person. Unless there are two distinct persons or personalities that can be described as a head-tenant and a sub-tenant there cannot be sub-letting. Sub-letting or sub-tenancy must mean transfer of exclusive possession from a head-tenant to a sub-tenant either of the whole premises in the occupation of the tenant or a part thereof. Despite this separate enjoyment of the two parcels of the partners of the two groups their legal right to every inch of the property remains intact. ( 7 ) TO the same effect are the observations of the Division Bench of the Delhi High Court in the case of Kanahiya Lal Balkishan Dass v. Labhu Ram A. I. R. 1971 Delhi 219. As observed therein sub-letting essentially entails induction of a third person into the leased premises. Elaborating in the case of a firm; that court has observed that when a firm becomes a tenant its partners also become tenants since a firm is only a compendious name of the partners. The Division Bench also has observed very clearly that when the premises are allotted to one of the partners on the dissolution of the firm there would be no sub-letting. No doubt it was a case of allotment of the entire premises to one of the partners on dissolution but the underlying Principles remain the same. ( 8 ) WE are therefore of the clear view that the exposition of law by the learned Single Judge of this court in the case of Jakisondas Maganalal (supra) is the correct exposition of law and we respectfully adopt it fully. We therefore find that there is neither sub-letting nor assignment of transfer of interest by the defendants Nos. 2 and 3 on one hand or the defendants Nos. 4 and 5 on the other in favour of the defendants Nos. 4 and 5 and the defendants Nos. 2 and 3 respectively. What we have observed would equally apply to the case of licensing alternatively pleaded under this broad head of arguments by the learned counsel for the plaintiffs. . Applications dismissed. .