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1997 DIGILAW 587 (KAR)

BANGALORE COMPANY, BANGALORE v. T. V. BALASUBRAMANYAM

1997-09-22

P.VISHWANATHA SHETTY

body1997
P. VISHWANATHA SHETTY, J. ( 1 ) THIS is respondent-tenants' revision petition filed under Section 50 (1) of the Karnataka Rent Control Act, 1961 (hereinafter referred to as "the act"), questioning the correctness of the order dated 20th of january, 1997 made in h. r. c. No. 966 of 1992 by the court of vi additional small cause judge at Bangalore, directing eviction of the petitioners herein under Section 21 (1x0 of the act. ( 2 ) THE facts that may be relevant for disposal of the petition may be briefly stated as follows: (a) the respondents herein, who are the landlords of the premises bearing portion of No. 1, new No. 28/3, kanakapura road, Bangalore, which consists of a workshop with asbestos roofing sheds and other super structure situated thereon (hereinafter referred to as "the petition schedule premises"), instituted proceedings against the petitioners for their eviction on two grounds firstly on the ground that the respondents reasonably and bona fide required the petition schedule premises for their use and occupation i. e. , for the purpose of their business; and secondly on the ground that the first petitioner, who had taken the premises in question on lease for a period of five years by means of a registered lease deed and who continued as a statutory tenant in the petition schedule premises after the expiry of the lease period, in contravention of the terms of the lease and without the written consent of the respondents, subleased the petition schedule premises to the second petitioner; and, therefore, the petitioners are liable to be evicted under section 21 (1) (h) and (f) of the act. (b) since the first petitioner did not appear before the learned small cause judge in the course of the proceedings, he was placed ex parte. This is clear from the observation made by the learned judge in paragraph 3 of the order. However, the second petitioner resisted the claim of the respondents contending, inter alia, that the claim made by the respondents that the petition schedule premises is required by them for their bona fide use and occupation, is not true and genuine and their further claim that the first petitioner subleased the petition schedule premises to the second petitioner is also not correct. In the course of the proceedings, the first respondent examined himself as P. W. 1 and his son one kailash chandra sudarshan was examined as P. W. 2 and number of documents were also marked in support of the case of the respondents. The second petitioner herein examined himself as r. w. 1 and one nagesh kumar, who is the brother-in-law of the second petitioner and who was also working as chief executive of the first petitioner, was examined as r. w. 2. One goutham was examined as r. w. 3. (c) the learned small cause judge, after considering the evidence on record, while rejecting the claim of the respondents for eviction of the petitioners under Section 21 (1) (h) of the Act, has passed the order under revision directing eviction of the petitioners under Section 21 (1) (f) of the act on the ground that the petition schedule premises was subleased by the first petitioner to the second petitioner without the written consent of the respondents. The said finding is challenged in this revision petition. ( 3 ) SRI r. b. sadashivappa, learned counsel for the petitioners, submitted that the finding recorded by the learned small cause judge that the first petitioner has subleased the petition schedule premises, is erroneous in law and the said finding has been recorded in total disregard to the evidence on record and misunderstanding of Section 21 (1) (f) of the act. Elaborating this submission, the learned counsel pointed out that the admission of P. W. 1 shows that the second petitioner was paying rent to the first respondent and, therefore, the finding recorded by the learned judge that the first petitioner has subleased the petition schedule premises in favour of the second petitioner is erroneous in law. According to the learned counsel, since the second petitioner has purchased the running business concern carried on by the first petitioner in the petition schedule premises, it is not a case of sublease. ( 4 ) SRI m. r. janardhan, learned senior counsel appearing along with Sri m. Shivaprakash, while supporting the order passed by the learned small cause judge, submitted that the case set-up by the second petitioner in his evidence would clearly establish that the second petitioner was a sublessee in respect of the petition schedule premises. ( 4 ) SRI m. r. janardhan, learned senior counsel appearing along with Sri m. Shivaprakash, while supporting the order passed by the learned small cause judge, submitted that the case set-up by the second petitioner in his evidence would clearly establish that the second petitioner was a sublessee in respect of the petition schedule premises. He further pointed out that at no point of time, the respondents received the rent from the second petitioner. He would further submit that it is only during the pendency of the proceedings before the court, without prejudice to their contention that the second petitioner is a sublessee, that the respondents received the rent before the court on 18th of march, 1993 and since the amount was received by the first respondent in the course of the proceedings before the court on 18th of march, 1993, the first respondent, in the course of the evidence, has admitted the said fact. He further pointed out that there is no material on record to show that at any time before the institution of the proceedings, the respondents have received the rent from the second petitioner directly recognising him as tenant or waiving the right of the respondents to seek eviction of the petitioners under Section 21 (1) (f) of the act. In this connection, the learned senior counsel drew my attention to paragraph 3 of the affidavit filed by the first respondent before this court on 10th of june, 1997, wherein the order dated 26th of august, 1993 passed by the learned small cause judge has been extracted. It is useful to extract paragraph 3 of the affidavit, which reads as under:"i submit that on the application made by me in the house rent control proceedings under Section 29 of the Karnataka Rent Control Act, on detailed enquiry, the trail court was pleased to allow my application by giving a direction to the petitioner 1/tenant to pay the rents. At that time the petitioner 2-Mr. Kashinath tendered the rents in the court below. The trial court vide its order dated 26-8-1993 was pleased to direct my counsel to accept the cheque for Rs. 51,000/- without prejudice to my contention that the petitioner 2 herein is a sublessee. The order reads as follows: 'sri H. R. V. for petitioners reports receipt of a cheque for Rs. Kashinath tendered the rents in the court below. The trial court vide its order dated 26-8-1993 was pleased to direct my counsel to accept the cheque for Rs. 51,000/- without prejudice to my contention that the petitioner 2 herein is a sublessee. The order reads as follows: 'sri H. R. V. for petitioners reports receipt of a cheque for Rs. 51,000/- (fifty-one thousand only) without prejudice to right from the ii respondent, which satisfies rent upto end of august, 1993. Sri H. R. V. says that rent is received subject to his plea that respondent 2 is a sublessee'. in pursuance of the Order, without prejudice to my rights as per the directions of the Hon'ble court, i received the rents, by way of drafts. . . . . ". the learned senior counsel further drew my attention to the evidence of r. w. 1 i. e. , the second petitioner, who, in the course of his evidence, has stated that he had purchased the running Bangalore company, which was the partnership firm, and by virtue of that, he stepped into the shoes of the first petitioner-firm as a proprietor. The relevant portion of the evidence of r. w. 1, referred to me by the learned senior counsel, reads as follows:"it is true i did not take the schedule property on lease directly from the first petitioner. I purchased the running Bangalore company and by virtue of that i got the possession of the schedule property. When i purchased, the first respondent was a registered partnership firm. I did not buy the running concern of the first respondent partnership firm but i stepped into the shoes of first respondent-firm as a proprietor. I knew that at that time the respondent 1 was only a tenant of the building and not owner. I did not make enquiry to ascertain to whom the building belongs and to whom the first respondent was paying rents. Even now I am not aware of the original suit nos. 2517 and 1146 of 1991 and also the original suit no. 976 of 1996". I did not make enquiry to ascertain to whom the building belongs and to whom the first respondent was paying rents. Even now I am not aware of the original suit nos. 2517 and 1146 of 1991 and also the original suit no. 976 of 1996". relying upon the said admission made by r. w. 1, the learned senior counsel submitted that the learned small cause judge was fully justified in his finding that the first petitioner has subleased the petition schedule premises to the second petitioner and the said finding does not suffer from any error much less an error which calls for interference by this court in exercise of its ervisional jurisdiction under Section 50 (1) of the act. ( 5 ) I do not find any merit in this revision petition. The evidence of r. w. 1 i. e. , the second petitioner herein, referred to above, clearly shows that he had purchased the running concern of Bangalore company, which was the partnership firm, and by virtue of the purchase of the business of the partnership firm known as "bangalore company", the second petitioner has stepped into the shoes of the first petitioner-firm as proprietor and he has purchased the said business knowing fully well that the first petitioner was the tenant of the petition schedule premises. ( 6 ) SECTION 21 (1) (f) of the act provides for a right to the landlord to seek eviction of a tenant on the ground that the tenant has unlawfully sublet the whole or part of the premises or assigned or transferred, in any other manner, his interest therein contrary to any of the Provisions of law in force. sub-section (3) of Section 21 further provides that for the purpose of clause (f) of the proviso to sub-section (1) of section 21, the court may presume that a premises has been sublet by a tenant in respect of non-residential premises if the court is satisfied that the tenant, without the consent in writing of the landlord, has 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 profession but really for the purpose of subletting such premises to that person. There fore, once it is admitted that the tenant has allowed any person to occupy the whole or part of the premises without the written consent of the landlord, the court will have to presume that the person in occupation for the purposes of Section 21 (1) (f) of the act is a subtenant. However, it is a rebuttable presumption. under those circumstances, it is open to the person in occupation of the premises to explain and with cogent evidence, satisfy the court that his occupation of the premises is not as a subtenant or by virtue of transfer or assignment of interest of the tenant in the leased premises, but either as a servant or in any other capacity wherein the transfer of interest in the leasehold property, is not transferred from the tenant to the subtenant. In the instant case, it is admitted by the second petitioner in his evidence, that he has purchased the Bangalore company, which was a partnership firm, from the first petitioner and in that capacity, he "stepped into the shoes" of the first petitioner-firm as a proprietor. Therefore, the admission of the second petitioner made in the course of his evidence, would clearly show that the first petitioner, who was admittedly a tenant in respect of the petition schedule premises, has assigned or transferred his interest in the petition schedule premises in the guise of the sale of the running business carried on by him in the petition schedule premises, to the second petitioner. It is necessary to point out that even if the case set-out by the second petitioner that he has purchased the running concern of the Bangalore company, which is a partnership firm, and in that capacity, he stepped into the shoes of the first petitioner as proprietor, is true, the substance of the transaction, in my view, is only a transfer of leasehold interest of the first petitioner to the second petitioner. Therefore, it is not permissible for the second petitioner in the guise of purchase of a running concern from the first petitioner, which includes the leasehold interest of the first petitioner, to thrust himself as a tenant of the respondents, which is not permitted under law. Therefore, it is not permissible for the second petitioner in the guise of purchase of a running concern from the first petitioner, which includes the leasehold interest of the first petitioner, to thrust himself as a tenant of the respondents, which is not permitted under law. The transaction of the nature set-out by the second petitioner, in my view, is a clear case of transfer or assignment of the leasehold interest of the first petitioner in the petition schedule premises, to the second petitioner by way of sublease, which entitles the respondents-landlord to seek eviction of the petitioners under Section 21 (1) (f) of the act. The learned judge has taken the admission of the second petitioner into consideration and passed the impugned order of eviction against the petitioners under Section 21 (1) (f) of the act. I do not find any infirmity in the said finding recorded by the learned judge. Further, as stated earlier, the first petitioner, who is admittedly a lessee of the petition schedule premises, has remained absent and, therefore, he was placed ex parte. The second petitioner has not placed any material on record to discharge the burden placed on him under sub-section (3) of Section 21 of the act to show that his occupation is not that of a subtenant or by virtue of any transfer or assignment of leasehold interest of the first petitioner in his favour. Therefore, as stated earlier, i do not find any error in the order under revision. ( 7 ) IN so far as the contention of Sri sadashivappa relying upon the admission of the first respondent that he had received the rent from the second petitioner is concerned, it is necessary to point out that the said admission has to be read in the background of the order dated 26th of august, 1993, extracted above, passed by the learned small cause judge, wherein it is made clear that the first respondent herein had received the rent from the second petitioner without prejudice to his plea that the second petitioner is a sublessee. There is no material on record to show that the respondents had, at any time, received the rent from the second petitioner directly recognising him either as a tenant or subtenant or in any other capacity, knowing fully well that the second petitioner was a subtenant; and that they have waived their right to seek eviction of the petitioners under Section 21 (1) (f) of the act. ( 8 ) FOR the reasons stated above, there is no merit in this revision petition and the same is liable to be rejected. ( 9 ) ACCORDINGLY, the revision petition is rejected. ( 10 ) THE second petitioner, in the course of his evidence, has admitted that he has a service station, parking place for vehicles, show room with telephone facility in his head office at No. 28, k. h. road, Bangalore. He has also admitted that he had retrenched workmen in large number in the petition schedule property and also on double road. The said admission made by the second petitioner clearly supports the case of the respondents that the petitioners have closed down the business in the petition schedule premises. The eviction petition is of the year, 1992. Therefore, taking all these factors into consideration, I am of the view that ends of Justice would be met if three months' time from today is granted to the petitioners to vacate the petition schedule premises. ( 11 ) SUBJECT to the time granted, this revision petition is rejected. --- *** --- .