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2009 DIGILAW 14 (KER)

Kanavayalil Rajan v. K. K. Muhammed

2009-01-06

M.C.HARI RANI, PIUS C.KURIAKOSE

body2009
Judgment : Pius C. Kuriakose, J. The defeated tenant who has suffered concurrent orders of eviction on the ground under section 11 (4)(1) of Kerala Act 2 of 1965 at the hands of the Rent Control Court and the Appellate Authority is the revision petitioner. The respondent landlord sought eviction on the grounds of arrears of rent and user of the building in such a manner as to reduce the value and utility of the building materially and permanently {Sections 11(2)(b) 11(4)(2)} also. However, since those two grounds no longer survive, in this revision petition we are concerned with the ground of objectionable subletting/transfer only. The allegation of the landlord in the context of the ground of subletting was that contrary to the terms of the lease the tenant has sublet the premises to one Hareendranath and that in spite of statutory notice the tenant did not terminate the sublease. In the first instance the rent control petition was allowed by the Rent Control Court on the ground of subletting. Later, the tenant preferred an appeal to the Appellate Authority and the Appellate Authority remanded the matter to the Rent Control Court for fresh disposal giving opportunity to both sides for adducing further evidence. After remand, the additional evidence adduced by the landlord was Ext.A5 document and the oral testimony of PW-2, who interestingly is none other than the alleged sub-lessee. PW-2 was cited not only for giving oral evidence but also for producing Ext.A5 which is an agreement incorporating the terms of the real arrangement between the revision petitioner, PW-2 and one Santhosh who is son of one Ramachandran who was alleged by the landlord at a later stage to be joint sub-lessee. The defence of the revision petitioner to the case of sub-lease was one of denial. The specific contention was that the revision petitioner himself retained possession of the building and was continuing the business in partnership with PW-2 as evidenced by B9 partnership. On an evaluation of the evidence, the Rent Control Court concluded that the jural relationship between the respondent and PW-2 and the other parties to Ext.A5 agreement, is that of tenant and authorized transferees and accordingly ordered eviction on the ground of subletting. The partnership between the parties as evidenced by Ext.B9 put in defence was found to be a camouflage for covering up the real arrangement of sublease. The partnership between the parties as evidenced by Ext.B9 put in defence was found to be a camouflage for covering up the real arrangement of sublease. The Rent Control Appellate Authority on a reappraisal of the evidence concurred with the findings of the Rent Control Court and confirmed the order of eviction. 2. Before us Smt. C.G. Preetha, learned counsel for the revision petitioner would submit that it was placing reliance on Ext.A5 document that the authorities below came to the conclusion that the status of PW-2 is that of a sub-lessee under the revision petitioner. Ext.A5 document, according to her, is a document which should not have been marked in evidence since the same is a compulsorily registrable one. In this context, she referred to section 17(1)(d) and section 49 of the Indian Registration Act. A number of authorities were also cited before us by Smt. Preetha in support of the proposition that a document which is compulsorily registrable but not registered should not be received as evidence. Ext.B9 was a valid partnership and she pointed out that it was not in dispute that the terms of that partnership have been implemented. Ext.X-1 file summoned from the Sales Tax Office containing the affidavits submitted by all the three partners of Ext.B9 partnership was also relied on by her to argue that the partnership is a real partnership, which exists in law. Strong reliance was placed by her on the judgment of this court in P.J. Jacob v. T.J. Jacob, (1977 KLT 224) and the judgment of the Supreme Court in Girdharbhai v. Saiyed Mohmad Mirasaheb Kadri, (AIR 1987 SC 1782) and she argued that the Supreme Court has gone to the extent of holding that just because the partner who is the tenant of the building in question is not authorized to operate the bank account of the firm it cannot be said that the partnership is not a genuine partnership, but is only a camouflage. 3. We have considered the submissions. The argument of the learned counsel for the revision petitioner that a document which is compulsorily registrable, if not registered, cannot be received as evidence of the transaction which by law is required to be registered is founded on sections 17(1)(d) and 49 of the Registration Act, 1908 which we quote below. "17. 3. We have considered the submissions. The argument of the learned counsel for the revision petitioner that a document which is compulsorily registrable, if not registered, cannot be received as evidence of the transaction which by law is required to be registered is founded on sections 17(1)(d) and 49 of the Registration Act, 1908 which we quote below. "17. Documents of which registration is compulsory;-(1) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No.XVI of 1864, or the Indian Registration Act, 1866, (20 of 1866) or the Indian Registration Act, 1871 (7of 1871) or the Indian Registration Act, 1877 (3 of 1877) or this Act came or comes into force, namely:- (a) ............... ........... (b).......... ........ .(c) ......................... .(d) Leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent; 49. Effect of non-registration of documents required to be registered:-No document required by section 17 or by any provision of the Transfer of Property Act, 1882 (4 of 1882) to be registered shall- .(a) affect any immovable property comprised therein; or .(b) confer any power to adopt, or .(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered: Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882) to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (3 of 1877), or as evidence of any collateral transaction not required to be effected by registered instrument." 4. A certified copy of Ext.A5 document was placed before us by Smt. Preethi. It is a tripartite agreement executed amongst the revision petitioner, Sri.Hareendranath the alleged sub-lessee and one Santhosh. In the very first paragraph of this agreement it is stated that the agreement is being executed regarding the entrustment of the petition schedule room over which the revision petitioner has tenancy rights with the other two parties so that they can conduct business therein. In the very first paragraph of this agreement it is stated that the agreement is being executed regarding the entrustment of the petition schedule room over which the revision petitioner has tenancy rights with the other two parties so that they can conduct business therein. Paragraphs 2 and 3 contains the terms of the agreement between the parties including a term that a total amount of Rs.2 lakhs is payable by parties 2 and 3 therein to the first party, out of which Rs.50,000/-is readily paid and the balance is made payable within a period of four months in instalments. Paragraph 4 contains a clause which obliges the other parties to the agreement to pay a sum of Rs.1000/- every month as consideration for the user of the premises to the revision petitioner. Paragraph 5 provides that it shall be the revision petitioners obligation to pay rent for the building to the landlord and to entrust the receipts with the other two parties to the agreement. Paragraph 6 provides that it shall be the obligation of the revision petitioner to subscribe his signature to every document as may become necessary for the purposes of making the possession of party Nos. 2 and 3 over the building lawful. It is further provided in this paragraph that on the above count parties 2 and 3 to the agreement will not be liable to pay any additional remuneration to party No.1, the tenant -revision petitioner. 5. Paragraph 7 is the only remaining consequential paragraph in Ext.A5 which has altogether nine paragraphs. Paragraph 7 is to the effect that the period of Ext.A5 agreement is two years from the date of the agreement and that upon expiry of the agreement the same will have to be renewed by the parties by executing fresh agreement. This paragraph also provides that upon their surrendering the building back to party No.1 the tenant, the alleged sub-lessee Sri. Hareendranath and Sri.Santhosh will be entitled to receive the sum of Rs.2 lakhs back from the tenant. According to us, the one transaction which the law insists to be by means of a registered instrument only, in this case is the transaction which is recorded in paragraph 7 of Ext.A5 -the transaction of sublease for a period exceeding one year. Hareendranath and Sri.Santhosh will be entitled to receive the sum of Rs.2 lakhs back from the tenant. According to us, the one transaction which the law insists to be by means of a registered instrument only, in this case is the transaction which is recorded in paragraph 7 of Ext.A5 -the transaction of sublease for a period exceeding one year. This view we are taking in view of the general principle that a lease shall include an under-lease also and the statutory definition of the term landlord under Act 2 of 1965 which provides that as between a subletting tenant and the subtenant, the jural relationship will be that of landlord and tenant. Thus it is only the above transaction of creation of sublease for a period of more than one year, which is insisted by law to be through a registered instrument. Ext.A5 will certainly not be admitted as evidence of the creation of a sublease for more than one year. Nevertheless, Ext.A5 notwithstanding its non-registration can be relied on to prove the nature of possession of the alleged sub-lessee over the building and also to prove collateral transactions recorded therein which are not required by law to be made by means of a registered instrument only. Importantly, Ext.A5 was allowed to be marked in evidence and that too after the remand order without any objection whatsoever from the side of the revision petitioner tenant. The contention of the revision petitioner at the time of argument before the courts below was only that Ext.A5 has not been proved by examining atleast one of the attesting witnesses to the document and not that A5 is inadmissible for want of registration. The courts below however, have observed that the purported signature of the revision petitioner tenant on Ext.A5 compares very favourably with his admitted signatures, which are available in the records. The courts have also observed that in the nature of the facts, which became evident in the case, execution of Ext.A5 was quite probable. All the same, it is not correct to say that it was relying on Ext.A5 that the Courts below concluded that the premises were sublet by the revision petitioner to Sri. Hareendranath. The courts have also observed that in the nature of the facts, which became evident in the case, execution of Ext.A5 was quite probable. All the same, it is not correct to say that it was relying on Ext.A5 that the Courts below concluded that the premises were sublet by the revision petitioner to Sri. Hareendranath. In our opinion A5 could certainly have been relied on for proving the nature of possession which the parties to the same came to have in relation to the building which is the subject matter. According to us, even ignoring the recitals in Ext.A5 completely there is enough material in the case to justify the conclusion of the courts below that the revision petitioner sublet or transferred possession of the premises unauthorisedly to Sri. Hareendranath, thereby entailing liability for eviction on the ground under section 11(4)(1). 6. Ext.B9 partnership deed is relied on by the revision petitioner to contend that the jural relationship between the revision petitioner and the alleged sub-lessee is that of partners. On the terms of Ext.B9 it is a very nominal percentage of the capital which is contributed by the tenant and tenants share in the profits is also very nominal. Significantly, the alleged sub-lessee is the Managing Partner and one Ramachandran, father of Sri. Santhosh, party to Ext.A5 is the working partner who is assisting the Managing Partner in the conduct of business of the firm. The tenant is not given any part in the management of the affairs of the firms business, which is to be conducted in the schedule building. Remuneration is fixed as per Ext.B9 to the partners other than the revision petitioner. On reading through Ext.B9 we are of the firm view that the authorities below were perfectly justified in concluding that the tenant was if at all only a dormant/sleeping partner. Remuneration is fixed as per Ext.B9 to the partners other than the revision petitioner. On reading through Ext.B9 we are of the firm view that the authorities below were perfectly justified in concluding that the tenant was if at all only a dormant/sleeping partner. PW-2 is none other than the Managing Partner under Ext.B9 and when he testifies before the court below that the physical possession of the building as well as the right to conduct of business therein was with him and the working partner only and that despite B9 the tenant was not actually taking part in the business at all and that the very execution of Ext.B9 was to cover up the real arrangement between the parties to A5, the Rent Control Court and the Rent Control Appellate Authority could have found only that the real arrangement between the tenant and the alleged sub-lessee is that of objectionable sublease or transfer. Existence of a real partnership between the tenant and the alleged sub-lessee where the tenant continues in possession of the building and does business along with his partner will be a valid defence to petition based on sublease. But in the instant case the finding based on evidence is that the tenant does not carry on business at all and that the partnership itself is a camouflage of covering up the sublease. Such a partnership will be a valid defence to the plea of objectionable sublease. 7. Smt. C.G. Preetha submitted before us that at any rate, at the time of commencement of the rent control petition the sublease had come to a close. She made that submission in view of the period of two years provided for the sublease under A5. In our opinion, in as much as the revision petitioner did not have a case that the sublease had been terminated and the sub-lessee sent away within the statutory period of 30 days of receiving mandatory notice under the proviso to section 11(4) (1), it will be difficult to accept the above argument. It is a matter of common knowledge that tenants who include subtenants also hold over even after the expiry of the agreed period of lease or sublease. 8. We therefore conclude that there is no illegality, impropriety or irregularity about the orders of the Rent Control Court and the Appellate Authority justifying invocation of revisional jurisdiction under section 20. It is a matter of common knowledge that tenants who include subtenants also hold over even after the expiry of the agreed period of lease or sublease. 8. We therefore conclude that there is no illegality, impropriety or irregularity about the orders of the Rent Control Court and the Appellate Authority justifying invocation of revisional jurisdiction under section 20. The orders have been passed on the basis of findings founded on evidence and probabilities. The R.C.R. Accordingly will stand dismissed in limine.