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2023 DIGILAW 3464 (PNJ)

Charanjit Singh v. Kuldeep Singh

2023-12-20

GURBIR SINGH

body2023
JUDGMENT Gurbir Singh, J. Challenge in the present revision petition is to the order dated 20.10.2023, passed by learned Appellate Authority, SAS Nagar (Mohali), thereby allowing appeal filed by Kuldeep Singh-Respondent no.1 (hereinafter referred to as - the landlord) against petitioner (hereinafter referred to as - the tenant) and proforma Respondents no.2 and 3 and the judgment dated 23.03.2013, passed by learned Rent Controller, Kharar has been set aside and order of ejectment has been passed on the ground of subletting. 2. The brief facts of the case, as culled out from the paper-book, are that the landlord filed a petition under Section 13 of the East Punjab Urban Rent Restriction Act (for short - the Act) for ejectment from the demised premises on the ground of non-payment of arrears of rent, submitting therein that the petitioner-tenant has sub-let the premises to Respondents no.2 and 3; the petitioner-tenant has changed the user of premises and the petitioner-tenant has materially impaired the value of the demised premises. The learned Trial Court decided all the issues against the landlord and petition was dismissed vide order dated 23.03.2013. The landlord filed appeal. Vide judgment dated 20.10.2023, appeal was allowed and order of ejectment was passed on the ground that the landlord has successfully proved his entitlement for eviction of the demised premises on the ground of sub-letting. The judgment passed by learned Rent Controller, so far as ground of sub-letting was concerned, was held to be not legally sustainable and was liable to be set aside and accordingly, appeal was allowed. 3. The appeal is filed by the tenant against the finding recorded by Appellate Court on the ground of sub-letting. So, only this issue is being discussed here. 4. It is the case of the landlord that petitioner-tenant has sub-let the demised premises to Respondents no.2 and 3 without permission of the landlord. The case of petitioner-tenant and Respondent no.3 is that in the year 2001, the petitioner-tenant formed a partnership firm with Respondent no.3 under the name and style of M/s Rana Brothers and executed a partnership deed. Since the incorporation of partnership deed, petitioner-tenant and Respondent no.3 are running the business jointly in the demised premises. However, Respondent no.2 has nothing to do with the said business and he has been wrongly joined by the landlord. Since the incorporation of partnership deed, petitioner-tenant and Respondent no.3 are running the business jointly in the demised premises. However, Respondent no.2 has nothing to do with the said business and he has been wrongly joined by the landlord. Respondent no.3, being partner of M/s Rana Brothers, had been regularly paying the rent of the demised premises up to August 2007 but no receipt was issued by the landlord on account of cordial relations between the parties. Since petitioner-tenant and Respondent no.3 were partners, so question of sub-letting of the premises by petitioner-tenant in favour of Respondent no.3 does not arise at all. 5. Learned counsel for the petitioner-tenant has argued that inducting a partner or partners in the business or profession by a tenant by itself does not amount to sub-letting. If a tenant is actively associated with partnership business and retains the control of tenancy premises with him, may be along with other partners, then tenant cannot considered to have parted with possession of the demised premises. The learned Appellate Court has erred in interpreting the judgment of Hon'ble Supreme Court in case of M/s Celina Coelho Pereira and Ors. v. Ulhas Mahabaleshwar Khokar and Ors. reported as 2009(2) RCR (Rent) 456. It is further argued that Respondent no.3 admitted in his cross-examination that office work is being looked after by him whereas the field work was done by the petitioner-tenant. The learned Appellate Court has wrongly held that possession of Respondent no.3 stood established from the said admission. Rather, said admission fortified the stand of the petitioner-tenant and Respondent no.3 that they are partners and Respondent no.3 is not in exclusive possession and control of the tenanted premises. Reliance is placed on case Parvinder Singh v. Renu Gautam and others - Civil Appeal Nos.1680-1681 of 1999, decided on 22.04.2004. 6. Learned counsel for Respondent no.1-landlord has argued that the partnership deed (Ex.R-1) has been created just to defeat the rights of the landlord. Neither any income-tax return of the partnership firm is produced nor account books of the said firm were produced. It is not the case of the tenant that the said firm was registered with the sales tax Authorities or now under the GST Act. No such return has been brought on the file. Even bank documents have not been produced to show that the firm is operating any account in the bank. It is not the case of the tenant that the said firm was registered with the sales tax Authorities or now under the GST Act. No such return has been brought on the file. Even bank documents have not been produced to show that the firm is operating any account in the bank. Respondent no.3 is in exclusive possession of the demised premises. The partnership deed was for doing business of cattle feed but now, Respondent no.3 is exclusively doing business of insurance and Respondent no.3 has also admitted that he is working at the demised premises whereas petitioner-tenant is doing the field work. In other words, petitioner-tenant is not in any way associated with the demises premises. A well reasoned finding of fact has been recorded by the learned Appellate Court. This Court has no power in revision to re-appreciate the evidence to come to a different conclusion. Reliance in this regard has been placed on a judgment of Hon'ble Supreme Court in Hindustan Petroleum Corporation Ltd. v. Dilbahar Singh reported as 2014 (4) RCR (Civil) 162. There is only bald statement that business is being conducted by the partnership firm but no document is proved to corroborate the same. So, it is proved that petitioner-tenant has sub-let the demises premises in favour of Respondent no.3. Reliance has also been placed on a judgment passed by Co-ordinate Bench of this Court in Balwant Singh Narang and another v. Saroj Gupta reported as 2017(2) RCR (Civil) 659. 7. I have heard submissions of learned counsel for the parties and perused the case file. 8. It is well settled that onus to prove the sub-letting is on the landlord. If landlord prima facie shows that the third party is in exclusive possession of the premises, let out for valuable consideration, it would then be for the tenant to rebut the evidence. Sub-letting means parting with the legal possession by one in favour of the other. As long as legal possession remains with the tenant, the mere fact of tenant having entered into partnership for the purpose of carrying out business in the tenancy premises, would not amount to sub-letting. Sub-letting means parting with the legal possession by one in favour of the other. As long as legal possession remains with the tenant, the mere fact of tenant having entered into partnership for the purpose of carrying out business in the tenancy premises, would not amount to sub-letting. In case Parvinder Singh (supra), Hon'ble Supreme Court devised the test to know sub-letting as under :- "If the tenant is actively associated with the partnership business and retains the use and control over the tenancy premises with him, maybe along with the partners, the tenant may not be said to have parted with possession. 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 sub-tenancy 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." 9. In case M/s Celina Coelho Pereira (supra), Hon'ble Apex Court summarized the legal position as under :- "28. The legal position that emerges from the aforesaid decisions can be summarised thus : (i) In order to prove mischief of subletting as a ground for eviction under rent control laws, two ingredients have to be established, (one) parting with possession of tenancy or part of it by tenant in favour of a third party with exclusive right of possession and (two) that such parting with possession has been done without the consent of the landlord and in lieu of compensation or rent. (ii) Inducting a partner or partners in the business or profession by a tenant by itself does not amount to subletting. However, if the purpose of such partnership is ostensible and a deed of partnership is drawn to conceal the real transaction of sub-letting, 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 sub-letting, the court may tear the veil of partnership to find out the real nature of transaction entered into by the tenant. (iii) The existence of deed of partnership between tenant and alleged sub-tenant or ostensible transaction in any other form would not preclude the landlord from bringing on record material and circumstances, by adducing evidence or by means of cross-examination, making out a case of sub-letting or parting with possession in tenancy premises by the tenant in favour of a third person. (iv) If tenant is actively associated with the partnership business and retains the control over the tenancy premises with him, may be along with partners, the tenant may not be said to have parted with possession. (v) Initial burden of proving subletting is on landlord but once he is able to establish that a third party is in exclusive possession of the premises and that tenant has no legal possession of the tenanted premises, the onus shifts to tenant to prove the nature of occupation of such third party and that he (tenant) continues to hold legal possession in tenancy premises. (vi) In other words, initial burden lying on landlord would stand discharged by adducing prima facie proof of the fact that a party other than tenant was in exclusive possession of the premises. A presumption of sub-letting may then be raised and would amount to proof unless rebutted." 10. The petitioner-tenant and Respondent no.3 are not related to each other. The partnership propounded by them is not a registered partnership, as per law. No copy of income tax return, sales tax return or GST return of the partnership firm is brought on the file. The account books of the partnership firm are also not produced. No bank record is produced that partnership firm has opened any account. Learned Appellate Court has held that as per the terms and conditions of the partnership deed, Respondent no.3-Netar Pal was authorized to operate the account in any bank. No profit and loss statement of the partnership firm is produced. Presently, insurance business is being conducted on the demised premises. Learned Appellate Court has held that as per the terms and conditions of the partnership deed, Respondent no.3-Netar Pal was authorized to operate the account in any bank. No profit and loss statement of the partnership firm is produced. Presently, insurance business is being conducted on the demised premises. Earlier, service tax was required to be paid and now, GST is required to be paid for doing the business of insurance and no business can be done without registering the firm under the GST Act but it is not so in the present case. Even the petitioner-tenant has admitted that there is no account of the firm in the bank. No VAT number has been obtained. Income tax is not deducted in the name of the firm and this business is being run since the year 2003. Respondent no.3-Netar Pal stated that now, business of Oriental Insurance (General) is being carried out in the demised premises. Office work is being looked after by him and field work is done by Charanjit Singh i.e. petitioner-tenant. If Charanjit was doing field work, then he would have been collecting money, issuing receipts etc. in connection with insurance work but no such document has been proved on record. So, the landlord has duly proved that demised premises has been sub-let by the petitioner-tenant to Respondent no.3. In case Balwant Singh Narang (supra), it has been clearly held that partnership business was being run by father and son. Keeping in view that nothing was produced on record showing that the firm was maintaining any regular books of accounts or paying regularly income tax, order of ejectment was upheld. 11. A well reasoned finding has been recorded by the learned Appellate Court. There is no ground to interfere with the same. The revision petition is without any merit and the same is accordingly dismissed. 12. Pending applications, if any, shall stand disposed of along with this judgment.