1. Ejectment proceeding under the Tamil Nadu City Protection Act, 1922 — Conversion of individual business into partnership — Alleged subletting of leased premises. (Para 1 , 2 , 4 )
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1996 Supreme(SC) 1496
1996(7) Supreme 620
SUPREME COURT OF INDIA
K. Ramaswamy, Faizan Uddin and
G.B. Pattanaik, JJ.
P.A. Thomas & Anr. -Appellants
versus
M. Mohammed Tajuddin & Anr. -Respondents
Civil Appeal No. 1569 of 1987
Decided on 19-9-1996
Counsel for the Parties :
For the Appellants : Ms. Seita Vaidyalingam, Advocate (NP).
For the Respondents : K.R. Chowdhary, Advocate.
IMPORTANT POINT
When suit land was let out to a person who converted individual business into a partnership business and was not having any control over the property or business, it could be said that he had sub-let the property to partnership firm and was liable for ejectment.
Headnote:Tamil Nadu City Protection Act, 1922-Section 2(4)(ii)(a)-Subletting-Land was let out to first defendant-He converted individual business into a partnership business-He was not having any control over the property or the business-It was subletting to partnership firm in contravention of terms of lease-Tenant was liable for ejectment. (Para 5)
Legal Category Hierarchy
Table of Contents
2. Whether the tenant retained effective control over the partnership business to prevent the conversion of the business from being deemed as subletting. (Para 1 )
3. The tenant lacked effective control over the business, as it was run exclusively by another partner while the tenant resided in a different state. (Para 4 )
4. Conversion of a business into a partnership without the original tenant retaining effective control over the business or property constitutes subletting and grounds for ejectment. (Para 5 )
5. Appeal dismissed; decree of ejectment affirmed. (Para 6 )
6. Does converting an individual business into a partnership constitute subletting?
Yes, if the original tenant does not maintain effective control over the management of the business and the property, such conversion is considered subletting and a contravention of lease conditions. (Para 1 , 5 )
7. What is the legal consequence of a party failing to testify when given the opportunity?
The court may draw an adverse inference against the party for their failure to examine themselves as a witness. (Para 4 )
8. How is a tenant defined under the Tamil Nadu City Protection Act, 1922?
A tenant is a person liable to pay rent under an express or implied tenancy agreement, or one who continues in possession after the agreement's determination. (Para 2 )
ORDER
A Bench of three Judges of this Court by judgment dated May 26, 1989 while negativing all the contentions raised by the appellant-tenant found merit in the contention raised by the counsel that if the first appellant was in effective control over the management of the business of the partnership to which he had taken two other partners, it would amount that he had not sublet that premises and that he would be "a tenant" within the meaning of sub-clause (a) of Clause (ii) of sub-section (4) of Section 2 of the TAMIL NADU CITY PROTECTION ACT , 1922.
2. Sub-section (4) of Section 2 defines, the term "tenant" in relation to any land. Clause (i) thereof runs as follows :
"(i) means a person liable to pay rent in respect of such land, under a tenancy agreement express or implied."
Sub-clause (a) of clause (ii) of sub-section (4) of Section 2 of the said Act runs as follows :
"(a) any such person as is referred to in sub-clause (i) who continues in possession of the land after the determination of the tenancy agreement."
The relevant part of sub-clause (b) of the said clause runs as follows :
"(b) any person who was a tenant in respect of such land under a tenancy agreement to which this Act is applicable under sub-section (3) of Section 1 and who or any of his predecessors in interest had erected any building on such land and who continues in actual physical possession of such land and building, notwithstanding that ........"
3. Since there is no evidence on this issue this Court thought that a finding was required to be given by the High Court and if required, the matter may be sent to the trial Court for recording the evidence for submission thereof to the High Court. In furtherance thereof, the High Court remitted the matter to the trial Court for recording further evidence afresh which was adduced.
4. After consideration of the evidence, the High Court noted that in paragraph 8 of the plaint it is stated that the business of the first defendant was converted into a partnership in the name and style of "P.A. Thomas and Co." taking the second defendant who was looking after the business and another as partners. The averment that the second defendant was looking after the business was not specifically denied in the written statement Therefore, no issue was raised in that behalf. The first defendant was not continuing to have effective control over the business even after its conversion into a partnership firm. The High Court pointed out that though the partnership deed was filed in this Court in the appeal, the same was not produced either in the trial Court; nor was it produced in the High Court. The first defendant did not choose to examine himself as a witness after remand. Only the second defendant who was examined as DW-1, has reiterated his evidence given on earlier occasion. The first defendant was doing business only upto 1970 in the suit property and thereafter he never turned up. On the other hand, the business was being run in the suit property exclusively by the second defendant. It was also noted by the High Court that the first defendant was doing business in Mundakkayam as pointed out in paragraph 5 of the judgment. The High Court has recorded the finding that after remand, DW-1 admitted that his father, the first defendant, was living in Mundakkayam, Kerala State and he as his son was doing the business in the suit property at Cumbum. The evidence of DW-2 is also to the same effect and he claimed that it was he who remitted the rent by money orders to the plaintiffs and later deposited the rent in the Court. After considering the entire evidence on record and drawing an adverse inference against the first defendant for his failure to get himself examined as a witness, though opportunity was given to him, a finding was recorded by the High Court that the first defendant was not in exclusive control of the business. On the other hand, the second defendant was doing the business in the premises after converting it into
