RAM DAS GUPTA v. IIIRD ADDL. DISTRICT JUDGE, GORAKHPUR
2001-08-22
YATINDRA SINGH
body2001
DigiLaw.ai
YATINDRA SINGH, J. ( 1 ) TODAY, if a tenant of a non-residential building-governed by U. P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act. 1972 (the new Act) -admits a person who is not a member of his family as a partner or takes a new partner, he is deemed to have ceased to occupy the premises (Section 12 (2) of the new Act ). He is also deemed to have sublet the building (Section 25 (2) Explanation (i) of the new Act ). The tenant could avoid this consequence only if it is a bona fide transaction (not a mere cover up for Sub-letting) and had made an application in this behalf before the District Magistrate before admission of such partner. In this event, the non-residential building could be allotted to the newly constituted or re-constituted firm (Rule 10 (6) proviso (a) of the new Rules ). ( 2 ) BUT what is the position if the aforesaid provisions are not applicable? Was it the same, when u. P. (Temporary) Control of Rent and Eviction Act, 1947 (the old Act) was applicable? What is the status of the partner after the tenant dies and partnership dissolves? Is a licensee of a tenant or a person on behalf of a tenant, whose possession continues till tenancy lasts, entitled to challenge the decree of eviction? Can he resist it? These are the questions, involved in this case. THE FACTS ( 3 ) SRI Lalta Prasad was owner of the building situate in Moballa Urdu Bazar, Gorakhpur. It has two floors. The western portion of the ground floor of the building is residential and eastern portion is a shop. He sold this building to Sri Ram Das Gupta (the landlord) and became his tenant of the ground floor on 2. 5. 1963. They agreed that : * Ram Das Gupta would start living on the first floor of the building. * Sri Lalta Prasad would continue to occupy the ground floor as a tenant at the rate of Rs. 75 per month. * He could take a partner for doing business in the shop. Thus. Sri Lalta Prasad (the original tenant) became tenant of the ground floor. He entered into an alleged partnership with one Sri Navneet Das (the contesting respondent) to carry on business in the shop " on 13. 3. 1969. The original tenant died on 22. 5.
* He could take a partner for doing business in the shop. Thus. Sri Lalta Prasad (the original tenant) became tenant of the ground floor. He entered into an alleged partnership with one Sri Navneet Das (the contesting respondent) to carry on business in the shop " on 13. 3. 1969. The original tenant died on 22. 5. 1970 and was survived by respondent Nos. 4 to 7 (the tenants), who inherited the tenancy. ( 4 ) THE landlord served a notice dated 6. 10. 1970 on the tenants demanding arrears of rent from 1. 4. 1970 and terminating the tenancy. It was served on 9. 10. 1970. When neither the rent was paid, nor the premises was vacated, the landlord filed the present suit No. 70 of 1971 before the judge Small Causes Court (J. S. C. C.) for arrears of rent and eviction of the tenants. The contesting respondent was also imp leaded on the ground that the original tenant had illegally subject the shop (a part of the ground floor) to him. ( 5 ) THE contesting respondent contested the suit on the ground : * He was doing business in partnership with the original tenant. * After death of the original tenant, he became tenant of the shop in June, 1970 at the rate of Rs. 40 per month. * The landlord wanted to increase the rent to Rs. 60 per month in October, 1970 ; as this was refused the landlord filed the suit for eviction. ( 6 ) THE tenants compromised the suit with the landlord on 9. 8. 1973. The terms of the compromise are as follows : * They surrendered their tenancy and handed over the possession of the tenanted premises (including the shop) to the landlord, who in lieu of this gave up his right to realise the arrears of rent. * The tenants admitted that the shop was in possession of the contesting respondent and the original tenant had sublet it to him. " The landlord could get the possession of the shop from the contesting respondent. ( 7 ) THE J. S. C. C. has held that : * The partnership deed is fictitious document and the shop was Sub-let to contesting respondent. * Even if the contesting respondent was a partner, the firm stood dissolved after death of the original tenant.
" The landlord could get the possession of the shop from the contesting respondent. ( 7 ) THE J. S. C. C. has held that : * The partnership deed is fictitious document and the shop was Sub-let to contesting respondent. * Even if the contesting respondent was a partner, the firm stood dissolved after death of the original tenant. The contesting respondent is a sub-tenant of the tenants. as he has Continued in possession of the shop. * The contesting respondent never became the tenant of the shop. * The notice of demand was served and the termination of tenancy is valid. * The compromise was made part of the decree. On these findings, the suit was decreed on 6. 11. 1974 for eviction. No decree of arrears of rent was passed as the landlord had given up his right to realise rent under the compromise. ( 8 ) THE tenants did not file any revision but the contesting respondent filed a revision under section 25 of the Provincial Small Cause Courts Act (the P. S. C. C. Act ). The revisional court has held that : (i) The contesting respondent was carrying on business in partnership with the original tenant. He was not a subtenant. (ii) The partnership was bonafide and it dissolved after death of the original tenant. (iii) The contesting respondent never became tenant of the shop after death of the original tenant. (iv) After death of the original tenant, the status of the contesting respondent is that of a trespasser. He cannot be evicted in a suit filed before J. S. C. C. It is on the fourth finding that the revision was partly allowed. The decree of the trial court for eviction of the contesting respondent from the shop only was set aside. The rest of the decree was maintained. The result is that the contesting respondent has continued in possession over shop without payment of any damages to the landlord. ( 9 ) THE tenancy was surrendered during pendency of the suit. The possession of the residential portion with the tenants. They had handed it over to landlord. Now. there is no dispute about residential portion. The landlord has filed this writ petition against the revisionat order and it is confined to the shop.
( 9 ) THE tenancy was surrendered during pendency of the suit. The possession of the residential portion with the tenants. They had handed it over to landlord. Now. there is no dispute about residential portion. The landlord has filed this writ petition against the revisionat order and it is confined to the shop. POINTS FOR DETERMINATION ( 10 ) 1 have heard Sri Swaraj Prakash, counsel for the landlord and Sri M. K. Gupta, counsel for the contesting respondent. No one has appeared for the tenants. Following points arise for determination in this case : (i) Could the finding regarding sub-tenancy be interfered with under Section 25 of the P. S. C. C. Act? (ii) What is the status of a partner of a tenant qua the landlord? Is he-- merely because he is a partner a sub-tenant? (iii) Was the partnership bona fide or merely a cover-up for sub tenancy? Is the contesting respondent a sub-tenant? (iv) If the partnership was bona fide and the contesting respondent is not a subtenant, then : (a) What is the status of the contesting respondent after death of the original tenant? (b) Was the decree of J. S. C. C. for eviction of the contesting respondent legal on any ground? what is its effect? (c) Is the suit for eviction of the contesting respondent maintainable before J. S. C. C. ? (d) Was the revision maintainable at the instance of the contesting respondent? (e) In the circumstances of the case, ought the revlsional court to have exercised revisional jurisdiction in favour of the con -testing respondent? point NO. 1 : SCOPE OF SECTION 25 OF THE P. S. C. C. ACT ( 11 ) REVISIONAL jurisdiction under Section 25 of the P. S. C. C. Act has limited jurisdiction. It is wider than Section 115 of the Civil Procedure Code yet only errors of law can be corrected. Parties have cited a few decision1 on the scope of this section and whether the question of subtenancy is a question of law or not. But in this case, the question of subtenancy partly depends upon i nterpretation of the rent note and the partnership deed. Interpretation of a document is always a question of law. In view of this, it is not necessary to discuss these cases.
But in this case, the question of subtenancy partly depends upon i nterpretation of the rent note and the partnership deed. Interpretation of a document is always a question of law. In view of this, it is not necessary to discuss these cases. The question of sub-tenancy in this case could be seen under Section 25 of the P. S. C. C. Act. But whether the courts below have correctly decided the question of sub-tenancy is another question and will be seen in the 3rd point. POINT NO. 2 : A BONA FIDE PARTNER - MERELY IN PERMISSIVE POSSESSION ON behalf OF THE TENANT ( 12 ) THE Transfer of Property Act (the T. P. Act) provides general law relating to a landlord and a tenant. Section 108 of the T. P. Act enumerates rights and liabilities of a lessor and a lessee. Section 108 (j) of the T. P. Act says that a tenant can sub-let in absence of contract or legal usage to the contrary. With the advent of Second World War and shortage of accommodations, rent Control Acts were enacted. These Acts override the provisions of the T. P. Act to the extent of inconsistency. Our State too had enacted one. It was titled as U. P. (Temporary) Control of rent and Eviction Act, 1947 (the old Act]. It placed certain restriction on the rights of the landlord and the tenant. One restriction on the tenant was that he could not sub-let without obtaining the permission in writing of the landlord and the District Magistrate. This was true for residential as well as for non-residential building. The old Act and the old Rules were silent as to what would be consequence of taking a new partner in a business. ( 13 ) THE old Act was replaced by U. P. Urban Buildings (Regulation of Letting. Rent and eviction) Act. 1972 (the new Act ). This Act also prohibits sub-letting (Section 25 of the new act ). It also provides consequences of taking a new partner as explained i n the introduction of this judgment. The transaction in this case took place, when new Act was not in existence though the case is being decided when new Act is enforced. Our Court has held that provisions (Section 12 (2) and Section 25 (2 ).
It also provides consequences of taking a new partner as explained i n the introduction of this judgment. The transaction in this case took place, when new Act was not in existence though the case is being decided when new Act is enforced. Our Court has held that provisions (Section 12 (2) and Section 25 (2 ). Explanation (i) of the new Act providing consequence of taking new partner are not retrospective, and the question-if there is sub-tenancy on taking a new partner before enforcement of the new Act-- should not be determined by applying the provisions of the new Act. We have to decide this case under the provisions of old act or general law in this regard. ( 14 ) UNDER the general law. there is a conflict amongst the High Courts on the consequences of a tenant taking a new partner in his business. Some High Courts have held that it amounts to sub-letting ; others have held otherwise. But so far as our Court is concerned, It has held as follows : no hard and fast rule can be laid down as to whether in all cases of partnership, the admission of another partner to the joint possession of the shop will or will not amount to subletting. Each case will depend upon its own facts. The intention of the parties and particularly whether any interest of the other partner created is in the tenancy by the agreement between the parties will have to be seen. Radha Kishan v. Data Ram, 1961 ALJ927. rights regarding tenancy are distinct from the business, which is run in this premises. A tenant is entitled to use the premises for whatever business he likes and if instead of running his own personal business, he takes a partner in his business and carries it on, the partner does not get any right in the title as a tenant. The tenant remains a tenant of the premises and instead of working alone, he at the best takes the help of a partner whose position can only be that of a licensee permitted to work together in the premises for the mutual benefit of both. Seth L. Chand v. N. Dulichand. 1965 ALJ 1000. a tenant has the right to start and run any lawful business i n the premises occupied by him.
Seth L. Chand v. N. Dulichand. 1965 ALJ 1000. a tenant has the right to start and run any lawful business i n the premises occupied by him. What he can do alone, he can also do in partnership with others. He has the right to admit a partner in an existing business or start a new one in partnership with others. These rights are inherent in, and flow from, a tenants fundamental right to occupy and enjoy the use of his premises in any legitimate manner. There is nothing in the U. P. (Temporary) Control of Rent and Eviction Act suggesting that a tenant cannot start a bona fide business in the premises in partnership with others. Puram Chand v. RCEO, 1959 ALJ 343. ( 15 ) OUR Court, in a nutshell, has held that a bona fide partner in business of a tenant is not a subtenant but his possession is Joint, permissive, and on behalf of the tenant ; his possession can continue, only till tenancy lasts : a sort of licensee. We have to apply this principle to the facts of this case and find out the status of the contesting respondent. POINT NO. 3 : THE FINDING ON SUB-TENANCY BY BOTH COURTS IS ILLEGAL-BUT case IS NOT REMANDED ( 16 ) THE J. S. C. C. held that the contesting respondent is a sub-tenant primarily on the following considerations : (i) Partnership deed, on the face of it. Is a fictitious document. (ii) No accounts of the partnership have been produced. (iii) Receipts Exhibit No. A3 to A6 are fictitious. (iv) The tenants have admitted in the compromise that the contesting respondent is a sub-tenant. ( 17 ) THE finding of the J. S. C. C. on the sub-tenancy is illegal as the partnership deed cannot be said to be fictitious document on the face of it and its provisions have to be seen in the light of the rent note. This was not done by the J. S. C. C. ( 18 ) THE revisionsl court has also not considered relevant factors while reversing the finding on the subtenancy. The J. S. C. C. had held Exhibit A3 to A6 to be fictitious documents on the ground that : * No accounts were produced.
This was not done by the J. S. C. C. ( 18 ) THE revisionsl court has also not considered relevant factors while reversing the finding on the subtenancy. The J. S. C. C. had held Exhibit A3 to A6 to be fictitious documents on the ground that : * No accounts were produced. * By these receipts, the share for the entire month was paid in the first week or by middle of the month. This was not possible as the share of a partner could only be determined by the end of the month. These are relevant considerations for deciding if receipts are fictitious. The finding that receipts are fictitious, is a finding of fact and cannot be reversed by the revisional court. The revisional court wrongly considered the question of sub-tenancy treating them as genuine. ( 19 ) APART from it. in view of my finding on point No. 4 (a) that the contesting respondent was i n permissive possession on behalf of the tenants and could continue till tenancy lasted. In view of it the compromise of the tenants should have been, at least, looked into by the revisional court. Reasons for not remanding the case ( 20 ) THE finding of both the courts below on sub-tenancy is illegal. In view of this, I would have remanded the case back to the revisional court for deciding afresh on the question of sub-tenancy but for my findings on point No. 4. Even if it is held that the contesting respondent was not a subtenant, the decree of eviction of J. S. C. C. cannot be interfered with. POINT NO. 4 : GENERAL DISCUSSION ( 21 ) THIS point is sub-divided into many points. In fact, these sub-points are independent points but have been clubbed together as two factors are common to all of them. There is no final finding regarding sub-tenancy. It is not necessary, as even if the contesting respondent is not a sub-tenant, his revision ought to have been dismissed. The reasons are detailed while discussing different sub-points. For purposes of these sub-points, 1 am assuming that : * The partnership was bona fide. * The contesting respondent is not a sub-tenant. , POINT NO.
It is not necessary, as even if the contesting respondent is not a sub-tenant, his revision ought to have been dismissed. The reasons are detailed while discussing different sub-points. For purposes of these sub-points, 1 am assuming that : * The partnership was bona fide. * The contesting respondent is not a sub-tenant. , POINT NO. 4 (a) : THE CONTESTING RESPONDENT HAS NO INDEPENDENT RIGHTS ( 22 ) THE courts below have held that the contesting respondent never became tenant of the shop after death of the original tenant. It is finding of fact. There is no illegality i n this finding and I affirm it. ( 23 ) EVEN if it is held that partnership was bonafide, then the possession of the contesting respondent, during lifetime of the original tenant, would be permissive. The firm dissolved on the death of the original tenant. Thereafter the contesting respondent himself claimed to be the tenant of the shop, that is permissive possession, then it does not stand to reason that he would become a trespasser as held by the revisional court. This finding of the revisional court is illegal. ( 24 ) THE introduction to the partnership deed shows that its terms are binding upon the heirs. If this was so. then permissive possession of the contesting respondent could neither become adverse to the tenants (heirs of the original tenant] nor to the landlord. ( 25 ) APART from the terms of partnership deed, it is settled law that a person in permissive possession asserts hostile title till he surrenders his possession and re-enters in his own right. This was never done in this case. The contesting respondent has no independent rights apart from holding through the tenants. He floats or sinks with the tenants ; he continues tilt they are there : and if the tenants go out, the contesting respondent also goes out. POINT NO. 4 (b) : THE DECREE OF J. S. C. C. FOR EVICTION IS VALID ( 26 ) IN this case the decree of eviction by the J. S. C. C. dated 6. 11. 1974 is Justified on two other reasons. These reasons are : (i) There are arrears of rent for more than statutory period. (ii) There is vacancy : the tenants have left. In view of this, the revisional court ought not to have interfered with the decree of eviction.
11. 1974 is Justified on two other reasons. These reasons are : (i) There are arrears of rent for more than statutory period. (ii) There is vacancy : the tenants have left. In view of this, the revisional court ought not to have interfered with the decree of eviction. GROUNDS-- ARREARS OF RENT and VACANCY-- ARE AVAILABLE ( 27 ) THIS suit was filed on two grounds, namely, sub-letting and arrears of rent. Suit could be decreed on any of the two grounds. Sri Gupta counsel for the contesting respondent submits that the landlord had waived his right of eviction on the ground of arrears of rent and as such, it is not available. But this is not correct. ( 28 ) THERE were arrears of rent for more than three months and tenants had failed to pay the same to the landlord within one month from service of the notice upon them. The notice was served on them on 9. 10. 1970. The tenants compromised in the suit and accepted both the grounds namely sub-tenancy and arrears of rent. The landlord merely gave up the claim to recover the arrears of rent in lieu of surrender of tenancy and handing over possession. This did not mean that there were no arrears of rent or landlord waived the same. The suit of the landlord was liable to be decreed on his ground also. ( 29 ) THE tenants have surrendered the tenancy and vacated the premises. They have handed over possession to the landlord. They do not wish to contest the case. There is vacancy in the case. The decree of eviction is justified on this ground also. FIROZI LAL CASE-- NOT APPLICABLE ( 30 ) SRI Gupta counsel for the contesting respondent cited a Supreme Court decision in Firozi Lal v. Man Lal (Firozi Lal case)1 and submits that no eviction i s possible unless statutory grounds are made out and even a sub-tenant can challenge his eviction even in an execution proceeding. ( 31 ) IN the Firozi Lal case, a suit was filed on the ground that respondent No. 1 had sub-let the premises to respondent No. 2 illegally. It was decreed on the basis of compromise between the plaintiff and respondent No. 1. This compromise did not make any reference to the alleged sub-letting (or ground of eviction ).
( 31 ) IN the Firozi Lal case, a suit was filed on the ground that respondent No. 1 had sub-let the premises to respondent No. 2 illegally. It was decreed on the basis of compromise between the plaintiff and respondent No. 1. This compromise did not make any reference to the alleged sub-letting (or ground of eviction ). Then there was another compromise with respondent No. 2 but that also did not mention about sub-letting. The judgment also did not make out any ground of eviction. There was nothing to show that respondent No. 2 was sub- tenant or was claiming through respondent No. 1. The Supreme Court in paragraph 6 held : from the facts mentioned earlier, it is said that at no stage, the Court was called upon to apply its mind to the question whether the alleged sub-letting is true or not. Order made by it does not show that it was satisfied that the sub-letting complained of has taken place, nor is there any other material on record to show that it was so satisfied. It is clear from the record that the Court had preceded solely on the basis of the compromise arrived at between the parties. That being so there can be hardly any doubt that the Court was not competent to pass the impugned decree. ( 32 ) THE facts here are different and are as follows : * Here the suit was filed on two grounds for eviction and the compromise admitted both of them. There is evidence to support both of them. * The tenant surrendered and vacated the premises. * The contesting respondent has no independent rights. He, on his best case, claims through the tenants and has to vacate if the tenants vacate. * In Firozi Lal case, respondent No. 1 had neither surrendered his tenancy nor vacated the premises. There was nothing to show that respondent No. 2 was claiming through respondent no. 1. Neither ground for eviction was made out. nor there was any mention of sub-tenancy in the compromise or in the order. The observations in the Firozi Lal case are confined to facts of that case only and cannot be made applicable here.
There was nothing to show that respondent No. 2 was claiming through respondent no. 1. Neither ground for eviction was made out. nor there was any mention of sub-tenancy in the compromise or in the order. The observations in the Firozi Lal case are confined to facts of that case only and cannot be made applicable here. NOT NECESSARY TO REMAND OR FRESH PROACEEDING ( 33 ) SRI Gupta counsel for the contesting respondent submits that : * The decree of eviction may not be justified on the grounds above mentioned as the J. S. C. C. had not passed decree on these grounds and the case may be remanded. * The parties be left to agitate the question of vacancy in appropriate proceedings for declaration of vacancy or in another suit for eviction. ( 34 ) THIS case was filed in the year 1971. It is not a regular suit but a suit before small causes court. These suits are to be decided as early as possible. It has taken 30 years to complete this journey. Should the case be remanded to record these findings, when tenants have admitted them? Should the question of vacancy be left open to be decided in another round of litigation, when the tenants have left? ( 35 ) WE have to check delays before it is permanently. About thirty years ago. Lord Denning said, laws delays have been intolerable. They have lasted so long as to turn justice sour. This could be said about our legal system too ; perhaps it is worse. We have to re-kindle our legal system ; we must find out new tools and new methods to end delays. ( 36 ) WHAT may be the new tools and ways to end delays? Undoubtedly the Court management would be an important part of it. So would the new scientific developments; better use of computers would be imperative. But whatever be the new tools or methods, it would be fundamental to end litigation and avoid multiplicity of proceedings. An unnecessary remand prolongs litigation ; It does not end it. ( 37 ) THE facts of this case are clear. On the admitted and proven facts, ground of arrears of rent is made out and vacancy has arisen. There is neither any necessity for remand nor any Justification to multiply the proceedings.
An unnecessary remand prolongs litigation ; It does not end it. ( 37 ) THE facts of this case are clear. On the admitted and proven facts, ground of arrears of rent is made out and vacancy has arisen. There is neither any necessity for remand nor any Justification to multiply the proceedings. It is in view of this that I have chosen to justify the eviction decree of the J. S. C. C. on the above-mentioned grounds. POINT 4 (c) TO (e) ( 38 ) THE suit was for rent and eviction on the grounds of arrears of rent and alleged sub-tenancy. The only independent right claimed by the contesting respondent was of tenancy but the courts below have negated it and so have I. According to the plaint case, the contesting respondent was a sub-tenant. 1 have held that even if the contesting respondent is not a sub-tenant, his possession is on behalf of the tenants and continues till tenancy lasted. In view of this, the suit would be maintainable before J. S. C. C. and not in the regular civil courts. The revisional court has wrongly allowed the revision on the ground that the contesting respondent was a trespasser and the suit was cognizable by regular civil court and not by the J. S. C. C. ( 39 ) IN the circumstances of the case, when the contesting respondent had no independent right and could remain in possession only till tenancy lasted, no revision lay at his i instance. And apart from it. when tenants were not challenging eviction and there was vacancy, then the revisional jurisdiction ought not to have exercised revisional jurisdiction or interdiction or interfered with the decree of eviction, even if there was any mistake. CONCLUSION ( 40 ) MY conclusions are as follows : (i) A person in permissive possession cannot assert hostile till he surrenders his possession and re-enters in his own rights. (ii) The courts below have wrongly decided the question of sub-tenancy. But even if it is held that the contesting respondent is not a subtenant, he is liable for eviction. (iii) The contesting respondent has no independent tights. Even if he is a bona fide partner (note cover up for sub-tenant) his possession is permissive ; on behalf of the tenants and it continued till tenancy lasted ; (iv) The order of the revisional court dated 17. 11.
(iii) The contesting respondent has no independent tights. Even if he is a bona fide partner (note cover up for sub-tenant) his possession is permissive ; on behalf of the tenants and it continued till tenancy lasted ; (iv) The order of the revisional court dated 17. 11. 1976 is illegal and is quashed. The order of the j. S. C. C. dated 6. 11. 1974 is restored. ( 41 ) THE writ petition is allowed with costs throughout.