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2015 DIGILAW 140 (ALL)

Chandra Metal Company Lko. Throu Its Prop. v. Avtar Singh

2015-01-21

MAHENDRA DAYAL

body2015
JUDGMENT Mahendra Dayal,J. The petitioners-tenant have filed this writ petition for quashing of the order dated 18.03.2010 passed by the opposite party no.10 i.e. Additional District Magistrate (Trans Gomtil)/Rent Control and Eviction Officer, Lucknow declaring the vacancy, the order dated 08.04.2011 passed by the aforesaid authority allowing the release application of the opposite parties no.1 to 8 and the judgment and order dated 05.04.2013 passed by the District Judge, Lucknow in Rent Revision No.4 of 2011, whereby the revision against the release order has been dismissed. 2. The dispute in this writ petition relates to a shop situated on the ground floor of house No.27 Gautam Budh Marg Lucknow. The undisputed facts are that the shop in question was let out in the year 1928 by its then owner Sri Bal Mukund Gupta to Sri Kailash Chandra Garg. There is also no dispute that since inception of the tenancy the business in the name of M/s. Chandra Metal Company is being carried on from the disputed shop. Sri Bal Mukund Gupta, the owner, sold the house to Smt.Alam Ara and Hashmi Khanam, who subsequently gifted the same to Mir Vilayat Hussain. In the year 1967, the property was purchased by Smt. Sumitra Devi, Sri Avatar Singh, Smt. Krishna Kumari, Smt. Pushpa Rani, Sri Raj Kumar and Sri Narendra Kumar by means of a registered sale-deed. Soon after the purchase of the property, they issued a notice to the tenants-petitioners informing them about the purchase of the property and also asking them to pay rent of the shop in their tenancy. The notice was replied but on 16.08.1969, the landlord again issued a notice and thereafter filed a suit under Section 3 of the U.P. Act No.3 of 1947 for eviction of the tenants-petitioners. However, the parties entered into a compromise outside the court and the suit was dismissed as withdrawn. The business in the disputed shop has all along being carried on in the name of the firm M/s Chandra Metal Company, in which four persons, namely, Sri Kailash Chandra Garg, Sri Vinod Chandra Garg, Sri Dinesh Chandra Agrawal and Sri Arun Chandra Garg were the partners. Upon the death of Sri Kailash Chandra Garg, the remaining three surviving partners continued with the business. Upon the death of Sri Kailash Chandra Garg, the remaining three surviving partners continued with the business. The dispute between the parties arose when a new firm Chandra Jain Agency was constituted and an outsider, namely, Sri Ram Singh Jain was inducted as a partner. The landlord opposite parties no.1 to 8 filed an application for release on 13.05.1988 under Section 16 (1)(b) of the U.P. Act No.13 of 1972 with the allegations that the shop was in the tenancy of Sri Vinod Chandra, Sri D.C. Agarwal and Sri Arun Chandra Garg and they have admitted Sri Ram Singh Jain as their partner. The induction of an outsider in the firm amounts to subletting and thereupon a deemed vacancy? had occurred under Section 12 of the Act. The tenants-petitioners filed their objection on 17.08.1989 denying having inducted any person as partner in the firm and also stating that Chandra Jain Agency was not carrying on any business from the shop in question. However, in the year 1994, one of the landlords, namely, Dr. Narendra Kumar Mehandiratta expired and a fresh application for release including the legal heirs of Dr. Narendra Kumar Mehandiratta was filed on 31.08.1995 on the same ground. 3. When the earlier release application was moved, the Rent Control Inspector had submitted the inspection report on 03.06.1998, but after the expiry one of the landlords, a second release application was moved, no fresh inspection was made and on the basis of earlier inspection report, the learned Rent and Control Eviction Officer proceeded to hear the matter. Consequently, the vacancy was declared on 27.08.1998. The tenants-petitioners moved an application for recall of the said order on the ground that the order declaring vacancy was passed without any notice to them and thereupon the order declaring vacancy was recalled on 16.04.2001. The opposite parties no.1 to 8 landlords challenged the aforesaid order by filing a Writ Petition No.70 (R/C) of 2001which was dismissed on 10.05.2007. In the meantime, the tenants-petitioners filed another objection before the Rent Control and Eviction Officer on 23.10.2007 denying having admitted any partner and also denying any business being run in the name of Chandra Jain Agency. 4. In the meantime, the tenants-petitioners filed another objection before the Rent Control and Eviction Officer on 23.10.2007 denying having admitted any partner and also denying any business being run in the name of Chandra Jain Agency. 4. From the perusal of the record, it appears that the petitioners-tenants sought adjournment on several dates and on 18.03.2010, the learned Rent Control and Eviction Officer refused to give any further time to the tenants-petitioners and passed an order declaring the vacancy on the same date i.e. on 18.03.2010. After the declaration of vacancy, the Rent Control and Eviction Officer proceeded to consider the release application on the basis of the material on record and allowed the same by the order dated 08.04.2011. It also needs mention here that before the release order was passed, the tenants-petitioners challenged the order declaring vacancy by filing a revision, but the same was dismissed as not maintainable. Both these orders were challenged by the tenants-petitioners by filing a Writ Petition No.60 (R/C) of 2011 and this Hon'ble Court vide order dated 04.09.2012 allowed the writ petition and set aside the order dated 04.05.2011 passed by the District Judge and remanded the case to the District Judge, Lucknow to decide the same on merit. The learned District Judge by means of the impugned judgment dated 05.04.2013 has dismissed the revision. 5. I have heard Sri Pritish Kumar, learned counsel for the petitioners and Sri Surya Kant appearing on behalf of contesting opposite parties no.1 to 8 landlords. 6. The main ground of challenge by the tenants-petitioners is that the release application under Section 16 of the Act was filed on 13.05.1988 which remained pending and during the pendency of this release application, a fresh release application was filed by the same landlords and on the same grounds on 30.01.1995, During the pendency of first release application, the second release application was not maintainable on behalf of the same landlords and on the same grounds. This argument of the learned counsel for the tenants-petitioners has no force in view of the fact that during the pendency of first release application, one of the landlords, namely, Dr. Narendra Kumar Mehandiratta expired. This argument of the learned counsel for the tenants-petitioners has no force in view of the fact that during the pendency of first release application, one of the landlords, namely, Dr. Narendra Kumar Mehandiratta expired. Since the Rent Control Act does not provide any provision for substitution in the matter of release under Section 16 of the Act, the landlords had no other option except to move a second application on behalf of the surviving landlords and also joining the legal heirs of Dr. Narendra Kumar Mehandiratta who inherited the ownership after his death. The landlords were conscious enough to move the application praying therein that their subsequent release application be considered in continuation with the earlier release application. A copy of this application has been filed as annexure no.1 to the supplementary counter-affidavit. This is a copy of the subsequent release application, in which a prayer has been made to the effect that the fresh release application be taken on record in continuation of the earlier release application. The learned counsel for the opposite parties no.1 to 8 landlords has contended that the Rent Control Act does not provide for any provision of substitution in the cases of release sought under Section 16 of the Act. Since the landlords could not have substituted the legal heirs of the deceased co-landlord, they had no other option except to move a fresh release application including the heirs of the deceased co-landlord. Thus, the first submission made on behalf of the tenants-petitioners has no force. 7. It is next contended by the learned counsel for the petitioners that pursuant to the filing of the release application on 13.05.1988, the Rent Control Inspector visited the spot and submitted his report on 03.06.1988. The second release application was moved in the year 1995 and after a gap of about ten years, the vacancy was declared on 27.08.1998 on the basis of the report already submitted on 03.06.1988. The submission of the learned counsel for the tenants-petitioners is that after filing of the second release application, the building was not inspected and as such the Rule 8 framed under U.P. Act No.13 of 1972 has not been complied with which is mandatory. Rule-8 provides that before making any order of allotment or release in respect of any building which is alleged to be vacant or is likely to fall vacant shall be inspected. Rule-8 provides that before making any order of allotment or release in respect of any building which is alleged to be vacant or is likely to fall vacant shall be inspected. It further provides that an inspection of the building so far as possible shall be made in the presence of the landlord and tenant or any other occupant. The facts mentioned in the report should where ever practicable, be elicited from at least two respectable persons in the locality and the conclusion of the inspection report shall be pasted on the notice board of the office of the District Magistrate for information to the general public. The submission on behalf of the tenants-petitioners is that after the filing of subsequent release application, the building was not at all inspected. Sri Surya Kant has fairly admitted that after the filing of the release application, the building was not inspected, but he has submitted that since the subsequent release application was in continuation of the earlier release application, hence the building was not required to inspected again after filing of the subsequent release application. A copy of the report of the Rent Control Inspector is available on record, which indicates that the building was inspected by the Rent Control Inspector in the presence of one Sri Om Prakash, who was an employee of the shop. The landlords were also present at the time of inspection and they provided a copy of the lease-deed dated 24.10.1970 to the Inspector. The Rent Control Inspector has mentioned in his report that he had asked for the documents relating to the registration of the firm, registration of sale tax etc., but none of the papers were provided. Thus, it is an admitted fact that at the time of inspection, the petitioners-tenants were not present. However, upon a notice being issued to the tenants-petitioners, they filed their objections and copies of documents were also annexed with the objection. The learned Rent Control and Eviction Officer firstly declared the vacancy ex parte without hearing the tenants-petitioners, but on an application being moved on their behalf for recall of the order, the said ex parte order was recalled and thereafter by the order dated 18.03.2010 the vacancy was declared on the basis of the report submitted in the year 1988. 8. 8. The learned counsel for the petitioner has submitted that even if the report of the Rent Control Inspector dated 03.06.1988 is taken into consideration, it would reveal that the building was not inspected in the presence of the tenants-petitioners. One of the employees of the firm, namely Sri Om Prakash was present at the time of inspection and he was not in a position to show the documents relating to the registration of the firm, sale tax etc. Thus, the compliance of Rule 8 has not been made by the Rent Control Inspector. Even the report does not indicate that any information was given by the Rent Control Inspector to the parties prior to the visit of the disputed shop. 9. The learned counsel for the petitioners has relied upon a case reported in 1987 (ARC), page 108 in which it has been held that the declaration of vacancy without following the procedure prescribed in Rule-8 is illegal and no order of allotment could be passed on the basis of such order declaring vacancy. In this case, Smt. Kanta Gupta Vs. VIII Addl. District Judge, Meerut and others this Hon'ble Court has held that the act of declaring vacancy in respect of a building has to conform to the procedure prescribed in the Act. Reliance has also been placed upon a judgment reported in 2001 (19) LCD, page 964 Navin Chandra Agrawal Vs. Ist Addl. District Judge, Nainitial & others in which it has been held that the provision of Rule 8 is mandatory and non-compliance thereof renders the order declaring the vacancy in valid. Similar view has been expressed in the case of Smt. Leelawati and another Vs. Shri Ram Swaroop and others reported in 2004 (22) LCD, page 678. 10. Sri Surya Kant, learned counsel for the opposite parties-landlords has argued that even if there is some discrepancy in the inspection made by the Rent Control Inspector but it is established from the record that the tenants-petitioners were given full opportunity of hearing before the order of vacancy was passed Rule 8 would be deemed to have been substantially complied with. The impugned order declaring vacancy itself shows that after filing of the objection, the tenants-petitioners never appeared and always sought adjournments on each and every date. The impugned order declaring vacancy itself shows that after filing of the objection, the tenants-petitioners never appeared and always sought adjournments on each and every date. Since there was a direction of the District Magistrate to expedite the disposal of case, the learned Rent Control and Eviction Officer had no other option except to refuse further opportunity to the tenants-petitioners and proceed with the matter. The Rent Control and Eviction Officer has considered the entire material on record and came to the conclusion that since the tenants-petitioners have inducted a person in the firm who is not a member of their family, therefore, by operation of law the building fell vacant under Section 12 of the Act. He has relied upon in a case of Smt. Radhika Devi Agarwal Vs. The District Judge and others reported in ARC, 1978, page 242 in which this Hon'ble Court has observed that the purpose of Rule-8 is to intimate the parties about the visit of the Rent Control Inspector. If the landlord was present at the time of inspection, the compliance of Rule-8 can be deemed to have been made even if no prior intimation has been given. Reliance has also been placed upon a case reported in 2011 (2) ARC 692 , Gorakh Nath Yadav Vs. Manglesh Kumar Srivastava and others in which it has been held that once the tenant gets full opportunity of filing objection against the report, it would not prejudice his case. It has further been held that if the inspection was carried out in the presence of the tenant who also participated in the proceedings before the Rent Control and Eviction Officer by filing objection, he can not be allowed to say that any prejudice has been caused to him. Learned counsel on the basis of the aforesaid case law has submitted that since the tenants-petitioners have filed objection against the report of the Rent Control Inspector and also participated in the proceedings, they can not be allowed to assail the report of the Inspector on the ground that compliance of Rule-8 has not been made. 11. A perusal of the order declaring vacancy dated 18.03.2010 indicates that the case was fixed on 24.02.2010 for arguments when an application was moved on behalf of the tenants-petitioners for time which was refused and arguments on behalf of the landlords were heard. 11. A perusal of the order declaring vacancy dated 18.03.2010 indicates that the case was fixed on 24.02.2010 for arguments when an application was moved on behalf of the tenants-petitioners for time which was refused and arguments on behalf of the landlords were heard. Thereafter the learned Rent Control and Eviction Officer considered the release application of the landlords and the report of the Rent Control Inspector and declared the vacancy on the ground that the tenants-petitioners had inducted a person in the business who is not a member of their family. It has also been mentioned in the order itself that the case was transferred to his Court by the order of the District Magistrate in which there was a direction for early disposal of the case. The notice were issued to the tenants-petitioners for 18.02.2010, upon which the tenants-petitioners appeared and prayed for time, then 23.02.2010 was fixed and again on his request 24.02.2010 was fixed, but when again a request for adjournment was made, the same was refused and even after refusal of request the tenants-petitioners did not argue the case. However, the Rent Control & Eviction Officer heard the learned counsel for the landlords and perused the file and declared the vacancy on 18.03.2010 having recorded a finding that the tenants-petitioners have inducted a person in the business of the firm, who is not a member of their family. It is a settled position of law that after declaration of vacancy, the person in occupation of the disputed premises becomes unauthorized occupant and has no right to oppose the release application of the landlords. 12. The real controversy between the parties is as to whether the premises in occupation of the tenants-petitioners is deemed to be vacant in view of the fact that they have inducted Sri Ram Singh Jain as a partner in the firm who is not a member of their family. In this regard, learned counsel for the petitioners has drawn the attention of the Court towards the objection filed by the tenants-petitioners before the Rent Control & Eviction Officer. In para-5 of the objection, it has been specifically stated that the partners of Chandra Metal Company and U.P. Engineering Company have never inducted Sri Ram Singh Jain as partner. He has no concern with the business of the firm. In para-5 of the objection, it has been specifically stated that the partners of Chandra Metal Company and U.P. Engineering Company have never inducted Sri Ram Singh Jain as partner. He has no concern with the business of the firm. In para-6 of the objection, it has been stated that the partners of the firm have not started any business with Ram Singh Jain. The firm, namely Chandra Jain Agency does not have place of business from the disputed shop. The submission on behalf of the tenants-petitioners is that since the firm Chandra Jain Agency was not doing any business from the disputed shop and none of the partners of Chandra Metal Company were partners in the firm Chandra Jain Agency, therefore, the question of admitting any new partner or inducting a person not being a member of their family, does not create vacancy under Section 12 of the Act. 13. The learned counsel for the landlords has drawn the attention of the Court towards the copy of the partnership deed filed along with the counter-affidavit. This partnership deed suggests that a firm, namely, M/s Chandra Jain Agency was constituted in the year 1987 in which Ram Singh Jain, Smt. Indu Prabha Garg and Sri Vinod Chandra Garg were the partners. The place of business of this firm is shown as 27 Latuche Road, Lucknow. The submission on behalf of the opposite parties-landlords is that Sri Vinod chandra Garg is partner in both the firms i.e. in the firm Chandra Metal Agency and in the firm Chandra Jain Agency and admittedly Ram Singh Jain is not a member of his family. Moreover, the place of business is also shown as 27 Latuche Road, Lucknow which is the address of the tenants-petitioners. Thus, this document leaves no room of doubt that Sri Vinod Chandra Garg who is the partner in Chandra Metal Agency has started a new business with Ram Singh Jain and has constituted a new firm inducting an outsider and the place of business is the same. The submission of the opposite parties-landlords is that in view of the aforesaid document, it is ample clear that both the courts below have rightly held that the premises in question had fallen vacant by operation of law and as such the vacancy was rightly declared and the release application was rightly allowed. 14. The submission of the opposite parties-landlords is that in view of the aforesaid document, it is ample clear that both the courts below have rightly held that the premises in question had fallen vacant by operation of law and as such the vacancy was rightly declared and the release application was rightly allowed. 14. Sri Pritish Kumar has submitted that the firm Chandra Jain Agency lasted only for twenty months and thereafter the firm was dissolved and since then the business is being carried on in the name of Chandra Metal Agency and U.P. Engineering Company. 15. Sri Surya Kant has, on the other hand, submitted that the dissolution of the firm after wards, does not make any difference because the occurrence of vacancy under Section 12 is by operation of law and as soon as the tenants-petitioners constituted a new firm with a partner who is an outsider and is not a member of their family, the premises in their tenancy fell vacant by operation of law. Subsequent dissolution of firm will not make any difference because the building in question already fell vacant by induction of a new partner. Sub-section (2) of Section 12 clearly provides that in the case of non-residential building where a tenant carrying on a business in the building admits a person who is not a member of his family as partner or a new partner as the case may be, the tenant shall be deemed to have ceased to occupy the building. The disputed shop is admittedly a non-residential building in which the petitioners-tenants had been carrying on business and the document referred to above which is a partnership deed clearly indicates that Sri Vinod Chandra Garg has inducted a person as partner who is not a member of his family. Thus, by operation of law the building fell vacant within the meaning of Section 12 of the Act. 16. Lastly, it has been argued on behalf of the petitioners that in view of the lease deed dated 24.10.1970 and subsequent lease deed dated 24.10.1987 executed between the parties, no action could have been taken by the opposite parties-landlords against the petitioners. While referring to the aforesaid lease deed it has been argued on behalf of the petitioners that initially the period of lease was 30 years from the date of execution of the lease deed. While referring to the aforesaid lease deed it has been argued on behalf of the petitioners that initially the period of lease was 30 years from the date of execution of the lease deed. However, by the subsequent lease deed dated 24.11.1987, the monthly rent was enhanced with effect from 1st November, 1987 and it was agreed that increase of 25 % rent as per stipulation of the earlier registered lease deed shall be on the increased rate of rent. The execution of the aforesaid two lease deeds was concealed by the opposite parties-landlords before the Rent Control & Eviction Officer otherwise the vacancy in respect of the disputed shop could not have been declared and no release order could have been passed in favour of the opposite parties-landlords. 17. Learned counsel for the opposite parties-landlords has, on the other hand, submitted that since the petitioners have violated the terms and conditions of the lease deed, therefore, action was taken against them and the Rent Control & Eviction Officer rightly declared the vacancy and passed the order of release. He has referred to para-6 of the earlier lease deed dated 24.04.1970 which prohibits the petitioners-tenants from sub letting any portion of the premises under their tenancy. It is also specifically mentioned in para-6 that in case of breach of this condition, the lease will stand automatically cancelled and the lessee shall hand over peaceful possession of the shop to the opposite parties-landlords without any obstruction. The learned counsel has further referred to Section 25 of the Rent Control Act which prohibits a tenant from sub letting any portion of the building under his tenancy without the permission in writing of the landlords and of the District Magistrate. The explanation appended to Section 25 further clarifies that where the tenant ceases, within the meaning of clause (b) of sub-section (1) or sub-section (2) of Section 12, to occupy the building or any part thereof, he shall be deemed to have sub-let that building or part. Sub section (2) of Section 12 provides that in the case of non-residential building, where a tenant carrying on business in the building admits a person who is not a member of his family, as a partner or a new partner, as the case may be, the tenant shall be deemed to have ceased to occupy the building. Sub section (2) of Section 12 provides that in the case of non-residential building, where a tenant carrying on business in the building admits a person who is not a member of his family, as a partner or a new partner, as the case may be, the tenant shall be deemed to have ceased to occupy the building. Thus, a bare reading of both the aforesaid sections makes it clear that as soon as the tenant carrying on business admits a non-family member as a partner or a new partner, he shall be deemed to have ceased to occupy the building and in view of the explanation 1 of sub-section 25 it will amount to sub letting. Thus, the petitioners have violated condition No.6 of the lease agreement. In these circumstance, the lease deed relied upon by the petitioners does not help them in any manner. 18. After hearing the learned counsel for the parties and after going through their pleadings and the material available on record, I am of the considered opinion that the petitioners-tenants not only constituted a new firm in the name of Chandra Jain Agency but also admitted a person, namely, Sri Ram Singh Jain as partner which is clear from the copy of the partnership agreement available on record and as such the building under the tenancy of the petitioners was deemed to be vacant by operation of law. Subsequent dissolution of the firm after sometime will not undo the wrong committed by the petitioners-tenants. The learned Rent Control & Eviction Officer has, therefore, rightly found the building as deemed vacant and declared the vacancy. The petitioners-tenants also after filing of the objection did not press the same, and consequently, after the declaration of vacancy, the Rent Control & Eviction Officer passed the order of release. I do not find any illegality and infirmity in the order of the learned District Judge who dismissed the revision filed against the order of release. 19. In view of the above discussions, I find no merit in this writ petition and as such the same is liable to be dismissed. 20. The writ petition is dismissed. However, in the circumstances of the case, four months' time is allowed to the petitioners-tenants to vacate the premises under their occupation, failing which, the opposite parties-landlords shall have liberty to enforce the release order, as provided under the law.