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2011 DIGILAW 1271 (MAD)

Vikhrem Parekh @ Amar Parekh v. Jaya Ramdass

2011-03-07

S.TAMILVANAN

body2011
Judgment :- 1. In this Civil Revision preferred under Section 25 of Tamil Nadu Buildings (Lease and Rent Control) Act, the important issue to be decided is regarding the scope of Section 10 (2) (ii) (a) of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, with reference to the available facts of the Rent Control Original Petition and the Appeal. 2. It is seen that this Revision has been preferred, challenging the Judgment and Decree, dated 12.08.2010 made in R.C.A.No.100 of 2009 on the file of the Rent Control Appellate Authority / VII Judge, Court of Small Causes, Chennai, reversing the order and decretal order, dated 28.01.2009 made in RCOP.No.1622 of 2008 on the file of the Rent Controller / XVI Judge, Court of Small Causes, Chennai. 3. It is an undisputed fact that the first respondent herein, as landlady had filed Rent Control Original Petition in RCOP.No.1622 of 2008 against the petitioner and the second respondent herein seeking an order of eviction on the ground of unauthorised sub-letting of the property, under Section 10(2)(ii)(a) of Tamil Nadu Buildings (Lease and Rent Control) Act ( Hereinafter referred to as the 'Act'). Learned Rent Controller, by his order dated 28.01.2009 dismissed the petition, holding that there was no sub-letting of the rented premises. Aggrieved by the said order and decretal order, the first respondent / landlady preferred an appeal under Section 23(1) of the Act in RCA.No.100 of 2009 and by the impugned Judgment and Decree, dated 12.08.2010, learned Rent Control Appellate Authority allowed the appeal, setting aside the order and decretal order passed by the Rent Controller in the RCOP and directed the respondents / tenants to vacate and hand over the premises on or before 12.09.2010. Aggrieved by the Judgment and Decree passed in the Rent Control Appeal, the tenant, the revision petitioner herein, has preferred this revision under Section 25 of the Act. 4. Mr.S.Elambarithi, learned counsel appearing for the petitioner submitted that there is no subletting of the premises to any third party by the petitioner herein, however, learned Rent Control Appellate Authority has reversed the order and decretal order passed by the learned Rent Controller and ordered eviction against the petitioner, which is liable to be set aside. It was contended on behalf of the petitioner / tenant that the petitioner is carrying on business in the same premises. It was contended on behalf of the petitioner / tenant that the petitioner is carrying on business in the same premises. It is further submitted that though the second respondent is a private limited company, the petitioner is one of the Director in the said company and therefore, according to the learned counsel for the petitioner, the dictum laid down by the Hon'ble Supreme Court in M/s. Madras Bangalore Transport Company (west) vs. Inder Singh and others reported in AIR 1986 SC 1564 , that the co-existence of two entities in possession of the premises would not be construed as sub-letting, however, that was not considered by the Rent Control Appellate Authority. It was further contended that the actual physical and exclusive possession of the premises has not been parted to the second respondent company, since the petitioner is a Director of the said company. In support of his contention, the learned counsel appearing for the petitioner drew the attention of this Court to the copy of the Memorandum of Association, Form 20 B and Form 32 marked as Exs.P.7 to P.9 by the first respondent herein. 5. Per contra, Mr.Satish Prasaran, learned counsel appearing for the first respondent submitted that the revision petitioner is carrying on the business in the rented premises and the second respondent, private company limited, is also carrying on business in the premises. According to the learned counsel, the petitioner and the second respondent are different legal entities. Though the petitioner is a Director in the second respondent company, it cannot be said that the petitioner and the second respondent are one and the same in the eye or law. Learned counsel for the first respondent / landlady argued that the decision in M/s. Madras Bangalore Transport Company (west) vs. Inder Singh and others, reported in AIR 1986 SC 1564 is not applicable to the facts and circumstances of this case. 6. Learned counsel appearing for the first respondent further submitted that the Head Office of the second respondent is at some other place and the company has its branch at the premises. The second respondent, a private limited company is different from the petitioner, an individual. According to him, even there are other Directors and Managing Director, apart from the petitioner in the second respondent company. The second respondent, a private limited company is different from the petitioner, an individual. According to him, even there are other Directors and Managing Director, apart from the petitioner in the second respondent company. In the aforesaid circumstances, it cannot be decided that the petitioner and the second respondent are one and the same in the eye of law. 7. Learned counsel appearing for both sides referred the following decisions to enlighten this Court on the legal aspects : 1. R.Nagarathinam Ammal vs. M.Raja alias Govindaraj, 2006 (2) MLJ 260 2. Singer India Ltd., vs. Chander Mohan Chadha, 2004 AIR SCW 5039 3. Senniappan, P vs. Kannammal, 1998 (I) CTC 537 4. Sree Venkateswara Varukadalai Mills, Rep. By its Partner vs. Vijayalakshmi, 1991 (II) MLJ 156 5. M/s. Madras Bangalore Transport Co., (West) vs. Inder Singh, AIR 1986 SC 1564 8. Learned counsel appearing for the petitioner / tenant drew the attention of this Court to the decision, M/s. Madras Bangalore Transport Co., (West) vs. Inder Singh, AIR 1986 SC 1564 , wherein it was held that there is no sub-letting, assignment or parting with possession of the firm to a limited company, so as to attract Section 14 (1) (b) of the Delhi Rent Control Act (59 of 1958). It is held by the Hon'ble Supreme Court that there was no sub-letting, assignment or parting with possession of the premises by the firm, to the limited company, so as to attract S.14 (1) (b) of the Delhi Rent Control Act, since the firm continued to be in occupation of the premises even after the private limited company came in. The firm never effaced themselves. The firm allowed the private limited company to function from the same premises but the private limited company, though a separate legal entity was in fact a creature of the partners of the firm and was the very image of the firm. The limited company and the partnership firm were two, only in name but one for practical purpose. There was substantial identity between the limited company and the partnership firm. As such even though the firm and company were distinct legal entities there was no sub-letting or assignment. 9. The limited company and the partnership firm were two, only in name but one for practical purpose. There was substantial identity between the limited company and the partnership firm. As such even though the firm and company were distinct legal entities there was no sub-letting or assignment. 9. Learned counsel appearing for the first respondent submitted that the aforesaid decision is not applicable to the facts and circumstances of the instant case, since the petitioner is an individual and the second respondent private limited company, is not solely under the control of the petitioner. 10. However, in the subsequent decision, Full Bench of the Hon'ble Apex Court in Singer India Ltd., vs. Chander Mohan Chadha, reported in 2004 AIR SCW 5039 has held that though an American company amalgamated with Indian company under a scheme of amalgamation sanctioned by High Court, by its order under Sections 391 and 394 of Indian Companies Act, under Section 14 (1) (b) of Delhi Rent Control Act (59 of 1958), the transfer of tenancy right by virtue of scheme of amalgamation not contemplated by provisions of Act was held as sub-letting and accordingly, order for eviction was held proper. 11. In R.Nagarathinam Ammal vs. M.Raha alias Govindaraj, reported in 2006 (2) MLJ 260 , this Court (M.Karpagavinayagam, J), referring various decisions of the Hon'ble Apex Court and this Court, decided, in order to establish sub-letting that the alleged sub-tenant should be in actual, exclusive and physical possession of the premises and the tenant retained no control over the premises and divested himself completely of the possession of the premises. If the tenant had permitted a third party to use the premises along with him while the tenant retained legal possession, it will not amount to-sub-letting. It is only where the sub-tenant is in possession of the premises in exercise of his own right, the presumption of sub-letting can arise. If exclusive possession is established it may not be impermissible for the Court to draw an inference that the transaction was entered into with monetary consideration in mind. It is open to the tenant to rebut the same. 12. In Sree Venkateswara Varukadalai Mills, Rep. If exclusive possession is established it may not be impermissible for the Court to draw an inference that the transaction was entered into with monetary consideration in mind. It is open to the tenant to rebut the same. 12. In Sree Venkateswara Varukadalai Mills, Rep. By its Partner vs. Vijayalakshmi, reported in 1991 (II) MLJ 156 , this Court (Somasundaram, J), held that a tenant can be said to be sub-letting the demised premises to a third party to occupy the premises and had divested himself completely of the possession of the premises or part thereof. In other words, there must be transfer of the exclusive right to enjoy the demised premises by the tenant in favour of a third party and the said right must be in lieu of payment of some compensation or rent. If a tenant had permitted a third party to use the premises along with him while the tenant retains legal possession, it will not amount to sub-letting. 13. In Senniappan, P vs. Kannammal, reported in 1998 (I) CTC 537 , this Court (K.Govindarajan,J) held while interpreting the scope of Section 10 (2) (ii) (a) of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 that there must be transfer of exclusive right to enjoy the demised premise by tenant in favour of third party and that right must be given in lieu of payment of compensation or rent. 14. It was argued on behalf of the first respondent / landlord that the second respondent, being a private limited company, different from the petitioner, the legal presumption is that the petitioner is receiving the rent or compensation in lieu of the rent. 15. Section 10 (2) (ii) (a) of the Act, reads as follows : "10 (2) (ii) (a) : transferred his right under the lease or sub-let the entire building or any portion thereof, if the lease does not confer on him any right to do so" 16. Section 10 of the Act clearly stipulates that a tenant shall not be evicted whether in execution of a decree or otherwise except in accordance with the provisions of Section 10 or Section 14 to 16. It is a protection given to the tenant under the Tamil Nadu Buildings (Lease and Rent Control) Act. Section 10 of the Act clearly stipulates that a tenant shall not be evicted whether in execution of a decree or otherwise except in accordance with the provisions of Section 10 or Section 14 to 16. It is a protection given to the tenant under the Tamil Nadu Buildings (Lease and Rent Control) Act. When there is a violation of the aforesaid provisions of law, the landlord is entitled to evict the tenant under the aforesaid sections. As per Section 10 (2) (ii) (a) of the Act, if the tenant without the consent of the landlord has transferred his right under the lease or sub-letting the entire building or any portion thereof, when the lease does not confer on him any right to do so, he is liable to be evicted on that ground. 17. Mr.S.Elambarithi, learned counsel appearing for the petitioner submitted that the petitioner has not sub-let the rented premises or any portion thereof to the second respondent, since the petitioner is one of the Directors in the second respondent, private limited company. 18. Mr.Sathish Parasaran, learned counsel appearing for the first respondent submitted that the Hon'ble Full Bench of the Supreme Court in the case of Singer India Ltd., (referred to above), has categorically held that the decision in M/s. Madras Bangalore Transport Co., (West) vs. Inder Singh, reported in AIR 1986 SC 1564 had been decided purely on the facts peculiar to the circumstance and no principle of law was laid down in the decision. 19. In Singer India Ltd., vs Chander Mohan Chadha, reported in 2004 AIR SCW 5039, the Full Bench of the Hon'ble Apex Court has held as follows : "16...Therefore, it is not possible to hold that it is the American Company which is still in existence and is in possession of the premises in question. On the contrary, the inescapable conclusion is that it is the Indian Company which is in occupation and is carrying on business in the premises in question rendering the appellant liable for eviction." 20. On the contrary, the inescapable conclusion is that it is the Indian Company which is in occupation and is carrying on business in the premises in question rendering the appellant liable for eviction." 20. The question of law involved in this revision is based on the issue, whether the petitioner / tenant had sub-let a portion of the demised premises to the second respondent or not, for which, (1) there must be transfer of exclusive right to enjoy the demised premises or portion thereof by the tenant in favour of the third party and that should have been given in lieu of payment of rent or compensation, (2) unless the tenant parts with the actual possession in favour of third party, there will be no sub-letting and (3) if a tenant had permitted a third party to use the premises along with him while the tenant retains legal possession, it will not amount to sub-letting. 21. In order to decide the issue, under Section 10 (2) (ii) (a) of the Act, for eviction on the ground of unauthorised sub-letting, there must be transfer of exclusive right to enjoy the demised premises or a portion thereof by the tenant in favour of a third party and that right could have been given in lieu of payment of rent or compensation or monetary consideration. Unless the tenant parts with legal possession in favour of the third party, there is no sub-letting. The monetary consideration is also paramount to decide the issue of sub-letting the premises or a portion thereof. 22. As contended by Mr.Sathish Parasaran, learned counsel appearing for the first respondent / landlady, the petitioner is an individual, who is admittedly the tenant of the premises under the first respondent / landlady. The second respondent, M/s. Shagun Creations (P) Ltd., is a private limited company, incorporated under the Indian Companies Act. The petitioner is an individual person, whereas the second respondent is a legal person, being a company incorporated, as per the Indian Companies Act and therefore, in the eye of law, both are different entities. If the tenant is an individual and the alleged sub-tenant is a sole trading or proprietary concern run by the tenant, it could not be construed as sub-letting of premises, as both are under the same administrative control. 23. If the tenant is an individual and the alleged sub-tenant is a sole trading or proprietary concern run by the tenant, it could not be construed as sub-letting of premises, as both are under the same administrative control. 23. In the instant case, it is not in dispute that the petitioner is one of the Directors of the second respondent company, however, the second respondent company is not under the exclusive control of the petitioner. There could be no possibility for the petitioner to provide the premises to the second respondent company, without getting rent or compensation. In other words, monetary consideration could be presumed in the instant case, since the second respondent is a company, a business organisation. The petitioner has not produced any acceptable supporting document to show that no rent or compensation is being paid by the second respondent, though he has admitted that he is one of the Directors of the second respondent, private limited company. The second respondent, being a private limited company is a different business organisation, apart from the petitioner, an individual, who is actually the tenant under the first respondent. It is clear from the available evidence and materials on record that the petitioner / tenant has entrusted a portion of the premises to the second respondent, private limited company either for rent or other monetary consideration. It is not the case of the petitioner that a portion of the premises was given to the second respondent company without getting any rent or monetary consideration. 24. During the course of arguments, the letter of the first respondent / landlady, dated 04.07.2005 addressed to one J.Kamdar and D.Amar Parekh available at page number 63 of the typed set was brought to the notice of this Court, whereby the first respondent / landlady had permitted the petitioner to use the premises for sale of sarees and to do textile business, however, she had intimated by the said letter that all other terms and conditions set out in the agreement, dated 28.10.2003 would apply. Hence, it cannot be construed as permission to sub-let the premises or a portion of the premises to the second respondent, private limited company was granted by her and further, as per the Indenture Agreement, dated 28.10.2003 available in the typed set, it is seen that the premises was leased out to the petitioner / tenant and also permitted to use the premises only for the purpose of selling of sarees and to do textiles business by the petitioner. It is admitted by both the learned counsel that J.Kamdar subsequently died. Admittedly, there was no permission granted by the first respondent / landlady in favour of the second respondent, private limited company to run their business in the premises. 25. It is a settled proposition of law that as per Section 106 of the Indian Evidence Act, the burden of proving certain facts lies on the person, making the averments in support of his claim. As the petitioner is one of the Directors of the second respondent company, having knowledge about the payment of rent or monetary consideration being paid by the second respondent to the petitioner for the occupation of a portion of the premises, the burden is up on him to prove the factum, as the same is within his knowledge and the first respondent / landlady is a stranger to the second respondent. Admittedly, the petitioner has not specifically pleaded that no rent or monetary consideration was received by him from the second respondent and there is no proof for the same and further, the second respondent is a business organisation and not a charitable institution. 26. In order to establish the factum of possession of a portion of the premises with the second respondent herein, the first respondent, as petitioner in the Rent Control Original Petition has marked, Ex.P.4, visiting cards, Ex.P.5, Invitation card, Ex.P.6, Photos with CD, Ex.P.7, Memorandum of Association, Ex.P.8, Form 32, which would give particulars of appointment of Managing Director, Director and Manager etc., and Ex.P.9, Form 20, are not disputed by the petitioner. As the petitioner / tenant is one of the Directors in the second respondent company, it cannot be said that the entire second respondent private limited company is under the control of the petitioner herein. As the petitioner / tenant is one of the Directors in the second respondent company, it cannot be said that the entire second respondent private limited company is under the control of the petitioner herein. It is clear that the petitioner and the second respondent are different persons in the eye of law, as discussed earlier and the petitioner has no exclusive control over the second respondent. It could be the legal presumption that the petitioner is collecting rent, compensation or monetary consideration from the second respondent for the occupation of the premises, though the rent is being paid by the petitioner in his individual capacity as tenant. It is also not in dispute that the Head Office of the second respondent company is at some other place. 27. On the aforesaid facts and circumstances, it cannot be said that the petitioner is in actual, exclusive and physical possession of the entire premises and as such, the petitioner / tenant has retained control over the entire premises. When the petitioner / tenant and the second respondent are different legal entities and the petitioner is getting rent or remuneration from the second respondent for the occupation of the premises or a portion of the premises and that the petitioner has no exclusive control over the occupation of the second respondent, in the light of various decisions rendered by the Hon'ble Apex Court and this Court, the same has to be construed only a sub-letting and it would attract Section 10 (2) (ii) (a) of the Tamil Nadu Buildings (Lease and Rent Control) Act. Hence, this Court is of the view that there is no infirmity or material irregularity in the impugned Judgment and Decree, passed by the Rent Control Appellate Authority, so as to warrant any interference of this Court, accordingly, this revision petition is liable to be dismissed. 28. In the result, this Civil Revision Petition is dismissed. Consequently, connected miscellaneous petition is also dismissed. However, there is no order as to costs.