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2011 DIGILAW 324 (KER)

A. Muraleedharan Nair v. Pazhani Vinayakan

2011-03-18

N.K.BALAKRISHNAN, PIUS C.KURIAKOSE

body2011
JUDGMENT :- Balkrishnan,J. 1. The two points that arise for consideration in this revision petition filed u/s 20 of Act 2 of 1965 are; (1) Whether mere formation of a partnership by the tenant without proof of actual conduct of the business as a partnership concern would enable the tenant to stall a petition for eviction on the ground of sublease. (2) Whether acquiescence even if capable of being inferred from the circumstances would disentitle the landlord from claiming eviction u/s 11(4)(1). 2. The alleged subtenant has filed this revision petition u/s 20 of Act 2 of 1965, challenging the order of eviction passed u/s 11 (4)(i) of the Act. The first respondent in this revision is the landlord. The 2nd respondent is the tenant. The petition schedule building was originally taken on rent by the 2nd respondent's father. On his death the 2nd respondent and the landlord executed Ext.A1, a fresh rent deed on 1.6.00. The first respondent/landlord alleged that the 2nd respondent/tenant sublet the petition schedule building to the revision petitioner without his consent. Demanding termination of sub tenancy notice was issued by the landlord to the tenant as required under the proviso to S.11(4)(i). Contending that subtenancy was not terminated, the petition was filed. 3. The tenant/2nd respondent remained exparte. The revision petitioner, the alleged sub-tenant, alone filed counter contending that there was no subtenancy as alleged by the landlord. It was contended that the revision petitioner and the 2nd respondent along with two others entered into a partnership under the name and style 'Geetha Traders' with effect from 1-4-2000 for which necessary permissions, registration and sanctions were obtained. It was contended that 'Geetha Traders' is the actual tenant in possession of the petition schedule building. It was also contended that the landlord is residing in the building adjacent to the petition schedule shop room and he used to visit the petition schedule shop room regularly and thus he had acquiesced in the revision petitioner occupying the premises and since there was acquiescence the landlord is not entitled to get an order of eviction u/s 11(4)(i). It was also contended that it was in fact the partnership firm which was paying rent to the landlord. Considering the oral and documentary evidence adduced by the parties the Rent Control Court found against the case of sublease pleaded by the landlord and thus dismissed the petition. 4. It was also contended that it was in fact the partnership firm which was paying rent to the landlord. Considering the oral and documentary evidence adduced by the parties the Rent Control Court found against the case of sublease pleaded by the landlord and thus dismissed the petition. 4. The learned Appellate Authority found that Ext.B4 partnership deed is only a camouflage and that there was no sharing of profits. The fact that the tenant/2nd respondent remained exparte and did not explain how the partnership was constituted or how the business was conducted etc. was also duly taken note of by the learned Appellate Authority to hold that the case of partnership set up by the subtenant is not acceptable and found that the case of sublease set up by the landlord is true and thus an order of eviction was passed u/s 11(4)(i). 5. Sri.K.Ravikumar, learned counsel appearing for the revision petitioner submits that the learned Appellate Authority failed to note that Ext.B5, sale tax registration in respect of the business conducted in the petition schedule building was given to M/s 'Geetha Traders' and that the rent was also paid by the firm. The further fact that the business was conducted in the petition schedule building from 1-6-2000 and that the RCP was filed only in the year 2008 was also not considered by the learned Appellate Authority in its correct perspective. It was further contended that in fact a power of attorney was executed by the tenant/2nd respondent Mr.Sreekandan in favour of the revision petitioner Muraleedharan Nair for the conduct of the business and for doing whatever is required for the same, but that was also not properly considered by the learned Appellate Authority. The learned counsel for the revision petitioner would submit that there is absolutely no evidence to prove that there was objectionable subletting or transfer of exclusive possession of the tenanted premises as alleged by the landlord and hence the order of eviction passed by the learned Appellate Authority is liable to be set aside. 6. The argument advanced by Sri.K.Ravikumar has been stoutly resisted by Sri.G.Rammohan, learned counsel for the first respondent landlord. 6. The argument advanced by Sri.K.Ravikumar has been stoutly resisted by Sri.G.Rammohan, learned counsel for the first respondent landlord. It is argued that though it was contended that a partnership business was actually conducted in the petition schedule building no document whatsoever was produced by the revision petitioner to show what was the income derived from the partnership business or that there was sharing of profits. No document was produced to show that the rent was actually paid by the firm. Ext.A1 rent deed was executed by the 2nd respondent/tenant in favour of the first respondent landlord on 1.6.00 with a specific stipulation that it was executed by the tenant in his individual capacity for his own occupation. That would demolish the case of the revision petitioner that the petition schedule building was obtained for conducting the partnership business. Even though the case of the revision petitioner is that the partnership business had commenced on 1.4.2000; nearly two months prior to the execution of Ext.A1, the rent deed was executed by the second respondent on 1.6.2000 for his own occupation. 7. The burden of proving subletting is on the landlord. But if the landlord proves that the subtenant is in exclusive possession of the tenanted premises then the onus is shifted to the tenant to prove that it was not a case of subletting. Onus lying on the landlord would stand discharged by adducing prima facie proof of the fact that the alleged subtenant was in exclusive possession of the premises. No doubt, the mere fact that another person is allowed to use the premises while the tenant retains the legal position is not enough to prove a sublease. Similarly, if there was a genuine partnership firm of which the tenant was a partner the same would not amount to subletting. Inviting a partner to join the tenant's business is permitted so long as such partnership is genuine. But if the purpose of such partnership may ostensibly be to carry on the business in partnership but the real purpose was subletting of the premises to such a person who is ostensibly a partner then the same would be deemed to be an act of subletting coming within the mischief of S.11(4)(1). The exact nature of transaction entered into or arrangement or understanding arrived at between the tenant and the alleged subtenant may be known only to them. The exact nature of transaction entered into or arrangement or understanding arrived at between the tenant and the alleged subtenant may be known only to them. Such a transaction being unlawful would be normally entered into clandestinely or in secrecy. It would not be possible for the landlord to discover the true nature of the transaction between the tenant and the alleged subtenant. 8. It is pertinent to note that though the 2nd respondent/tenant was served with notice no vakalath was filed on his behalf. No counter- statement was also filed denying the plea of sublease set up by the landlord. In fact, he remained exparte. There is no case for the revision petitioner that the landlord and the 2nd respondent/tenant colluded to oust the revision petitioner. Similarly, it is not a case where the revision petitioner set up an independent tenancy. On the other hand, execution of Ext.A1 rent deed by the 2nd respondent in favour of the landlord was not challenged at all. If so the revision petitioner is heard to contend that the tenancy was obtained by 'Geetha Traders', the partnership firm. Even though such an argument was advanced, in fact the plea set up by the revision petitioner was one of acquiescence and not a case of independent tenancy by the so called partnership firm. The contention that it was the firm 'Geetha Traders', which obtained tenancy of the petition schedule building must fall to the ground since as already found Ext.A1 was executed by the 2nd respondent and the landlord with a specific recital that the lease was obtained by the 2nd respondent in his individual capacity and not for anybody else. This contention has been vehemently pressed into service by Sri.Rammohan to canvass for the position that as the tenant remained exparte, the subtenant cannot, as a matter of right, put forward any claim denying the sublease pleaded by the landlord especially when the revision petitioner does not have a plea of collusion between the landlord and the tenant, or a case of tenancy distinct and independent of the one pleaded by the landlord. Therefore, on that score itself the revision petitioner must be shown the way out, learned counsel Sri. Rammohan submits. 9. Therefore, on that score itself the revision petitioner must be shown the way out, learned counsel Sri. Rammohan submits. 9. If it is the case of the tenant that the petition schedule building was obtained on lease by the 2nd respondent but was made use of for conducting the business of the partnership firm, 'Geetha Traders', the plea of sub tenancy can be resisted provided there is cogent and convincing evidence to prove that there was in fact a partnership firm as alleged and that there was sharing of profits between or among the partners as the case may be. 10. Exts.B2 to B4 would show that a partnership firm by name 'Geetha Traders' was entered into on 1.4.00 and it was registered with the Registrar of firms. It is important to note that Ext.A2 notice had preceded the filing of RCP as per which a demand was made to the tenant to terminate the sub tenancy. Ext.A2 was issued on 15.1.2008. Though a sale tax receipt was issued in the name of 'Geetha Traders', no other document was produced to show what actually was the capital invested or pooled by each of the partners for the conduct of the business. The accounts and other particulars regarding the business conducted in the petition schedule building, the amount incurred as expenses for the running of the business, the gross income derived from the business and net income obtained and as to how the profits were shared among the partners were not at all stated by the revision petitioner nor was any document produced with regard to the same. The further fact is that the 2nd respondent tenant has gone abroad in 2001 itself. There is absolutely nothing on record to show that the 2nd respondent has at any time thereafter taken part in the business conducted in the petition schedule building or has received any share of profits. 11. It was held in Nirmal Kanta v. Ashok Kumar(2008 (7) SCC 722); "Inducting a partner or partners in the business or profession by a tenant by itself does not amount to sub-letting. However, if the purpose of such partnership is ostensible and a deed of partnership is drawn to conceal the real transaction of subletting, the Court may tear the veil of partnership to find out the real nature of transaction entered into by the tenant. However, if the purpose of such partnership is ostensible and a deed of partnership is drawn to conceal the real transaction of subletting, the Court may tear the veil of partnership to find out the real nature of transaction entered into by the tenant. The existence of deed of partnership between the tenant and alleged subtenant or ostensible transaction in any other form would not preclude the landlord from bringing on record material circumstances, by adducing evidence or by means of cross examination, making out a case of subletting or parting with possession in tenancy premises by the tenant in favour of a third person." 12. It is pointed out by Sri.G.Rammohan, learned counsel for the landlord that the plea set up by the revision petitioner would only show that he is in exclusive possession of the petition schedule building and not as a partner or on behalf of the second respondent. 13. There is nothing on record to show that the 2nd respondent/tenant has contributed any amount to the partnership firm for the conduct of the business. Unless and until it is proved by adducing cogent and convincing evidence to show that the 2nd respondent/tenant still continues in possession of the petition schedule building and that he has not parted with exclusive possession of the tenanted building, the revision petitioner cannot resist the claim for eviction under the cover of a partnership deed. There is nothing on record to show that the 2nd respondent was having any domain or control over the business conducted in the tenanted premises. Though a plea was raised by the revision petitioner to the effect that the rent in respect of the petition schedule building was paid by the firm, not even a single receipt was produced to show that any such receipt was issued by the landlord in favour of the firm. It is also worthwhile to note that if as a matter of fact, rent was paid by the firm expenses incurred for that purpose would certainly be shown as the expense incurred by the firm for the conduct of the business and if that be so it must certainly find a place in the accounts of the firm. That was also not produced. That was also not produced. The non production of the relevant and acceptable documents as referred to above would loom large in this case and would go a long way against the case pleaded by the revision petitioner. 14. The claim for eviction on the ground of sublease was strongly resisted by the revision petitioner contending that there was implied consent or acquiescence on the part of the landlord. Mere knowledge of the landlord about the occupation of the tenanted premises by a person other than the tenant will not prove that there was implied consent on the part of the landlord. Learned counsel for the landlord submitted that as there was no evidence to show that the revision petitioner was inducted with the consent of the landlord, he does not get immunity from eviction u/s 11(4)(i) of the Act. Admittedly, the lease deed does not authorize the lessee to sublease or to transfer possession of the tenanted premises. It has already been found that Ext.B4 partnership deed is only a camouflage created with a view to get over or circumvent the provisions contained in S.11(4)(i) of the Act. The only other point that would arise for consideration is whether the landlord should be denied the order of eviction on the premise that there was acquiescence or implied consent on the part of the landlord as put forward by the revision petitioner. This plea is put forward by the alleged subtenant only. The tenant has no such case. The alleged subtenant has no case that the tenant has colluded with the landlord to oust him. So far as the case of implied consent or acquiescence is concerned it is only the tenant who can contend that his action was consented to, or permitted or acquiesced in by the landlord. Therefore on that ground also the revision petitioner cannot sustain his plea of acquiescence. 15. Learned counsel for the landlord would place reliance on the decision of the Division Bench of this Court reported in 2001 (1) KLT 772 (Raghavan v. Sreedhara Panicker) where it was held: "On a proper reading of the provision, it is clear that the subletting should be with consent, to escape the consequences envisaged by that provision. In other words, the consent must precede the subletting. In other words, the consent must precede the subletting. It has to be noted that a sub tenant is not a tenant as defined in the Act and the sub tenant gets no protection under the Act. This position is further emphasized by S.21 of the Act. It has even been held that even a sub tenant let in with the consent of the landlord only gets immunity from eviction under S.11(4)(i) of the Act is not entitled to raise any other claim under the Act.(See Kammath v. Chandran, 1989 (1) KLT 473 = 1989 (1) KLJ 292 and Varghese Ittoop v. Ibrahim, 1991 (2) KLT 394 = 1991 (2) KLJ 444). From the context also, it is clear that the subletting to escape the tentacles of S.11(4)(i) of the Act should be one authorised by the lease or in the alternative, made with the consent of the landlord. Hence, it is not possible to import the theory of implied consent or acquiescence while dealing with a claim under S.11(4) (i) of the Act." 16. In Harilal Kapur v. Prabhu Choudhury (AIR 1988 SC 852), the Supreme Court held that even in a case where, after subletting of a portion by the tenant, rent was being received by the landlord by way of two cheques, one drawn by the tenant and the other by the sub tenant coupled with the fact that the landlord was aware that certain activities of the sub tenant was being carried on in a part of the premises, was not sufficient to establish that the landlord had accepted the sub tenant as a tenant in respect of the portion used by the sub tenant. Learned counsel for the landlord would submit that mere acceptance of the rent in the absence of proof of conscious relinquishment of right to eviction, would not amount to waiver by a landlord and so even if the plea raised by the revision petitioner that the rent was paid by the firm is accepted still that will not come to his rescue. In fact in this case except the plea that the rent was paid by the firm no document whatsoever was produced to substantiate that the rent was in fact paid by the firm and that the receipt was issued in the name of the firm. In fact in this case except the plea that the rent was paid by the firm no document whatsoever was produced to substantiate that the rent was in fact paid by the firm and that the receipt was issued in the name of the firm. There was no conscious relinquishment of right to eviction and there was no waiver also. 17. Consent contemplated under S.11(4)(i) of the Act is a consent to subletting before the subletting. Mere knowledge or inaction or even the receipt of rent by the landlord even after somebody else is let into the building, will not deprive the landlord of his right to evict the tenant u/S.11(4)(i). 18. The decision reported in Fathima v. Saidali Bafakhy (2001 (2) KLT 857) has also been relied upon by Sri.G.Rammohan, learned counsel for the landlord to buttress his submission that the delay in seeking eviction cannot be taken as a ground to contend that the landlord has acquiesced in the subletting. This decision has been relied upon by the learned counsel since the plea very much emphasized by the revision petitioner is that the RCP was filed only in the year 2008, even though the revision petitioner has been in the tenanted premises for more than seven years prior to the filing of the RCP. In the aforesaid decision it was held that S.11(4) (i) would be attracted in a case where there is a subletting that is not authorised by the lease deed or is not granted with the consent of the landlord. In that case the Appellate Authority negatived the claim for eviction on the ground of subletting only on the ground that the landlords have not taken prompt action and so he must have been aware of the subletting and must be taken to have acquiesced in the subletting. Following the decision in Pulin Behari Lal v. Mahadeb Dutta (1993 (1) SCC 629) it was held by the Apex Court that waiver of a right under the statute cannot be easily inferred. It was also pointed out in that case that the sublease in favour of respondent Nos. 5 and 6 therein were in 1967 and 1970 respectively. RCP was filed in the year 1982. It was also pointed out in that case that the sublease in favour of respondent Nos. 5 and 6 therein were in 1967 and 1970 respectively. RCP was filed in the year 1982. Despite the delay noticed as above it was held in Fathima's case(Fathima v. Saidali Bafakhy (2001 (2) KLT 857) that mere silence or failure to raise objection to the subletting cannot lead to the conclusion that the landlords have waived their right of eviction u/s 11(4)(i) of the Act and thus allowed eviction u/s 11(4)(i). 19. The Apex Court's decision in (P.John Chandy & Co.(P)Ltd. v. John. P. Thomas) AIR 2002 SC 2057 has also been referred to. It was held that inaction in every case does not necessarily lead to an inference of implied consent or acquiescence. It was held in paragraph 14 of the judgment; "The consent as envisaged under Section 11(4)(i) of the Kerala Buildings(Lease and Rent Control) Act 1965 would mean consent with some positive act which may lead to inference of conferring right on the tenant to sub-let the premises and mere inaction would not be sufficient to amount to implied consent on the part of the landlord." 20. The Apex Court in Parvinder Singh v. Renu Gautam(2004 (4) SCC 794) commented upon the device adopted by tenants in creating partnership as a camouflage to circumvent the provisions of the Rent Control Act. It was held in the said decision; "To defeat the provisions of law, a device is at times adopted by unscrupulous tenants and sub-tenants of bringing into existence a deed of partnership which gives the relationship of tenant and sub-tenant an outward appearance of partnership while in effect what has come into existence is a sub tenancy or parting with possession camouflage under the cloak of partnership." It was also held; "However, if the user and control of the tenancy premises has been parted with and deed of partnership has been drawn up as an indirect method of collecting the consideration for creation of subtenancy or for providing a cloak or cover to conceal a transaction not permitted by law, the Court is not estopped from tearing the veil of partnership and finding out the real nature of transaction entered into between the tenant and the alleged sub tenant." 21. Since the first respondent/landlord is not bound by the terms of partnership deed he is not excluded from demonstrating the untrue or collusive or fraudulent nature of the document and the illegal purpose for which it was brought into being. 22. The upshot of our finding is that the case pleaded by the revision petitioner that the tenancy was obtained by the firm is bereft of any merit. Ext.A1 would make it indubitably clear that the lease was granted in favour of 2nd respondent/tenant for his own occupation and not to anybody else and that lease deed(Ext.A1) was executed by the 2nd respondent on 1.6.00, after two months of Ext.B4 partnership deed. Except producing the partnership deed and Ext.B5, (the trade licence) no acceptable evidence was adduced by the revision petitioner to show that the business conducted in the petition schedule building was actually a partnership business and the tenant, 2nd respondent was having actual control and domain over the business conducted therein. There is no scintilla of pleading nor any semblance of evidence to show that there was any sharing of profits. The partnership deed was found to be only a camouflage created to circumvent the provisions contained in S.11(4)(i) of the Act. To crown it all the tenant remained exparte through out and did not raise any objection regarding the sublease pleaded by the landlord. The delay, if any, in initiating action cannot be construed as an act of acquiescence. No case of positive consent on the part of the landlord was pleaded by the tenant nor is there any material to uphold any such possible plea. Hence this revision fails and is dismissed. 23. Sri.Ravikumar, the learned counsel for the revision petitioner, submits that at least one year time may be granted to the revision petitioner to vacate the petition schedule building since that much time is required to shift the business which is presently conducted in the petition schedule building. Though the above request was opposed by Sri.Rammohan, learned counsel for the landlord, we are inclined to grant one year time to the revision petitioner to vacate the petition schedule building subject to following conditions; 24. Though the above request was opposed by Sri.Rammohan, learned counsel for the landlord, we are inclined to grant one year time to the revision petitioner to vacate the petition schedule building subject to following conditions; 24. The revision petitioner shall file an affidavit before the Execution Court or the Rent Control Court, as the case may be, within three weeks from today undertaking to give peaceful surrender of the petition schedule building within one year from today and undertaking further to discharge arrears of rent if any within one month and also to pay occupation charges at the rate of Rs.1,500/- per month without fail with effect from 1-4-2011. 25. We make it clear that the revision petitioner will get benefit of time allowed as above, only if he files affidavit on time and honours the undertakings therein.