Important Point
Where a person took premises on lease for his proprietary business and subsequently entered into partnership with his sons and ultimately retired from partnership handing over premises and business to his sons, in the absence of proof that lease was taken for benefit of family, actions of the person amounted to unlawful sub-letting of the premises within the meaning of Section 13(1)(e) of the Bombay Rent Control Act.

Headnote:Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 -Section 13(1)(e) - Eviction-Unlawful sub-letting-Premises let out to one B who carried on business as sole proprietor - B converted business into partnership with his sons - Subsequent partnership agreement whereby B retired and sons carried on business in same premises-Rent paid by partnership of sons-Rent receipt issued in name of B-Facts do not show B could exercise his power throughout suit premises at his pleasure-In fact he did not continue to exercise control over premises-Occasional visit by B to premises does not amount to exercising rights over premises-Sons in occupation of premises and running business not as agents of B-B completely divested himself of premises as well as business-Nothing on record to support plea that B had taken premises on lease for benefit of family-Acts of B amounted to unlawful sub-letting-Landlord entitled to eviction.
       Held : Clause (e) of Section 13(1) of the Act is couched in widest terms. There is absolute prohibition on the tenant from subletting, assigning or transferring in any other manner his interest in the tenanted premises. There appears to be no way around this subject of course if there is any contract to the contrary between the landlord and the tenant. In partnership where tenant is a partner, he retains legal possession of the premises as partnership in a compendium of names of all the partners. In partnership the tenant does not divest himself of his right in the premises. On the question of subletting etc. law is now very explicit. There is prohibition in absolute terms on the tenant from subletting, assignment or disposition of his interest in the tenanted premises. (Para 13)
       In the present case facts do not show that Bakerali could exercise his power throughout the suit premises at his pleasure to the exclusion of his two sons who were running their business in partnership there and it cannot be said that he continued to exercise control over the suit premises. Bakerali had no concern with the partnership business now being carried on under the partnership deeds dated November 14, 1974 and March 6, 1979 in the suit premises. In the absence of records of the partnership business which the respondents failed to produce, it has to be presumed that rent was paid by one of the sons of Bakerali in the new partnership from the partnership account. It is now the sons of Bakerali who are in complete control of the suit premises and were exercising exclusive possession for the same to the exclusion of Bakerali. That Bakerali would occasionally visit the shop premises does not advance the case of the respondents that he could exercise his rights over the shop premises. He had handed over the shop premises to his sons who were exercising their independent right over the same and conducting their business thereat. Bakerali completely divested himself of the suit premises as well as the business. Clause (7) of the first partnership deed dated November 15, 1955 negatived any contention that Bakerali had taken the suit premises on lease for the benefit of the family. Bakerali never paid rent of the shop premises which, as noted above, was paid from the partnership of his two sons. Bakerali was not exercising any physical control over the shop premises. Record does not show that he had either the power or the intention at any given time to exercise his right of possession over the shop premises. It cannot even be said that he was exercising control over the shop premises through his sons who were carrying on their independent business in the shop premises and paying rent therefor. Bakerali was neither in physical nor in actual or constructive possession of the shop premises. Physical control over the shop premises was now exercised by his two sons to the exclusion of Bakerali. It is not that Bakerali could just walk in and assert his right of possession to the shop premises. His sons were not in occupation of the shop premises and running their business as agents of Bakerali. Consequently the impugned judgment of the High Court and restore that of the Judge, Small Causes Court and Joint District Judge, Baroda. We grant six months’ time to the respondents to vacate and hand over the possession of the suit premises to the appellant. (Paras 14 & 15)

Judgment

D.P. Wadhwa, JJ.-The appellant-landlord is aggrieved by the judgment of the Gujarat High Court. By this judgment in revision, High Court reversed the judgments of two Courts below ordering eviction of the respondent-tenant on a petition filed by the appellant under clause (e) of sub-section (1) of Section 13 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (for short, the ‘Act’) as applicable to the State of Gujarat. Under this clause, a landlord is entitled to recover possession of the premises on the ground that “the tenant has since the coming into operation of this Act unlawfully sub-let the whole or part of the premises or assigned or transferred in any other manner his interest therein”.

2. The premises in question is a shop. It was let out to the tenant Bakerali Fatehali (‘Bakerali’ for short) by predecessor of the appellant w.e.f. December 1, 1946. A rent note was duly executed. The premises were sold to the appellant in 1947. Bakerali executed a second rent note in favour of the appellant. There is no dispute that both the rent notes contained a clause that the premises had been taken on lease by Bakerali for his own use and occupation and that “he shall not sublet the premises in favour of anybody”.

3. At this stage, we may also refer to Section 15 of the Act which puts an embargo on the tenant “to sublet the whole or any part of the premises let to him or to assign or transfer in any other manner his interest therein”. This is, however, subject to any contract to the contrary. Thus, irrespective of there being no clause in the rent note entitling the tenant to sublet the premises the law forbids him from doing so. He cannot even assign or transfer in any other manner his interest in the tenanted premises. In the present case, a clause in the rent note specifically forbids Bakerali from subletting the premises.

4. The appellant filed proceedings for eviction of the respondent in 1978 in the court of Small Causes at Vadodara. On October 31, 1984, the eviction suit was decreed. Against that judgment respondent filed an appeal before the Joint District Judge who by judgment dated November 6, 1993 affirmed the judgment of the judge Small Causes and dismissed the appeal. Thereafter, respondent took the matter to the High Court in revision. In the meantime, Bakerali died and his legal representatives were brought on record. High Court, by the impugned judgment dated July 28, 1995, allowed the revision and, as noted above, set aside the orders of both, the Judge Small Causes and the Joint District Judge.

5. The appellant had alleged that Bakerali has unauthorisedly and unlawfully sublet, assigned or transferred his interest in the suit premises to his two sons without obtaining his consent. Appellant said that Bakerali earlier entered into a partnership with his four sons for carrying on the business of sale of medicines in the suit premises and a partnership deed dated November 15, 1955 was executed between them. This partnership deed specified the shares of the five partners in the profit and loss of the firm. While Bakerali was having 4 anna share, his four sons were having 3 anna share each. Earlier, Bakerali was having his business as a sole proprietor in the name of M/s. Fatehali & Sons. After the partnership was formed, it was given the name M/s. B.A. Fatehali & Sons. The partnership was at will and under clause (7) thereof, it was provided that “only the partner No. 1 (Bakerali) will be the exclusive proprietor and owner of the goodwill of the business, place of the business and all other rights of the business”. This partnership continued till November 14, 1974 when a new partnership deed between two sons of Bakerali was executed and in terms thereof Bakerali and his two other sons retired from the business of the partnership. They were the partners in the partnership deed dated November 15, 1955 as well. The recitals of the partnership deed dated November 14, 1974 are as under:

“W

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1998 Supreme(SC) 952

Cases Referred (7)