SUPREME COURT OF INDIA
O. CHINNAPPA REDDY; G.L. OZA AND K.N. SINGH, JJ.
M/s. Madras Bangalore Transport Company (West), Appellant
Versus
Inder Singh and others, Respondents.
Civil Appeal No. 5292 of 1983
Decided on 5-5-1986.
Advocates appeared
Dr. Y. S. Chitale Sr. Advocate, Mr. K. B. Rohatgi and Mr. S. K. Dhingra, Advocates with him for Appellant; Mr. Sital A. K. Dhar, Sr. Advocate and Mr. P. D. Sharma, Advocate for Respondents.
Constitution of India – Article 136 – Delhi Shops and Establishments Act – Delhi Rent Control Act – Section 14 – Partnership firm - Territory allotted to other - Partnership firm was spilt-up into two firms Madras-Bangalore Transport Company (West) and Madras-Bangalore Transport Company (East business of old firm was also divided between the new firms area wise arrangement each of new firms was forbidden from carrying on operations in the territory allotted to other – Madras-Bangalore Transport Company (East) appears to have ceased to function for practical purposes – Madras-Bangalore Transport Company (West) could not operate in territory allotted to Madras-Bangalore Transport Company partners of Madras-Bangalore Transport Company founded a Limited company styled as the Caravan Goods Carrier Private Limited in order to secure business in territory which had been allotted to Madras-Bangalore Transport Company and which business was going to be lost consequent on Madras-Bangalore Transport Company (East) ceasing to function – Held, Learned single Judge of Delhi High Court held that if an individual took premises on rent and then converted his sole proprietary business into a private limited company in which he had controlling interest he could not be said to have sub-let assigned or otherwise parted with possession of the premises so as to entitle landlord to evict him from premise another learned single Judge of High Court held that where a private limited company was functioning from a rented premises and Managing Director of that company allowed a firm of which he was a partner to function from same premises there was no sub-letting assignment or parting with possession – Madras-Bangalore Transport Company (West) continued to be in occupation of premises even after Caravan Goods Carrier Private Limited came never effaced themselves firm allowed Caravan Goods Carrier Private Limited Company, to function from same premises but Caravan Goods Carrier Private Limited though a separate legal entity was in fact a creature of partners of Madras-Bangalore Transport Company (West) and was very image of firm Limited Company and partnership firm were two only in name but one for practical purposes – Appeal allowed.
JUDGMENT
CHINNAPPA REDDY, J.:— The Madras-Bangalore Transport Company, a partnership firm, became the tenant of the disputed premises in July 1962. In 1967, there appear to have been some disputes between the partners of the Madras-Bangalore Transport Company. The disputes were settled by arbitration. The partnership firm was spilt-up into two firms, the Madras-Bangalore Transport Company (West) and the Madras-Bangalore Transport Company (East). The business of the old firm was also divided between the new firms area wise. Under the arrangement each of the new firms was forbidden from carrying on operations in the territory allotted to the other. However, the Madras-Bangalore Transport Company (East) appears to have ceased to function for practical purposes. Even so, the Madras-Bangalore Transport Company (West) could not operate in the territory allotted to the Madras-Bangalore Transport Company (East). So the partners of the Madras-Bangalore Transport Company (West) founded a Limited company styled as the Caravan Goods Carrier Private Limited in order to secure the business in the territory which had been allotted to Madras-Bangalore Transport Company (East) and which business was going to be lost consequent on the Madras-Bangalore Transport Company (East) ceasing to function. effectively. This was in 1968. The Madras-Bangalore Transport Company (West) was appointed as the agent of Caravan Goods Carrier Private Limited in the territory of Delhi. The Caravan Goods Carrier Private Limited was in turn appointed as an agent of the Madras-Bangalore Transport Company (West) for certain purposes, Both Madras-Bangalore Transport Company (West) and Caravan Goods Carrier Private Limited registered themselves under the Delhi Shops and Establishments Act disclosing their offices as located at the disputed premises. Almost 10 years after, the Caravan Goods Carrier Private Limited was founded and started functioning from the disputed premises, the landlord, in 1979, filed an eviction petition against the Madras-Bangalore Transport Company (West) alleging that the tenant had unlawfully sublet, assigned or otherwise parted with the possession of the disputed premises to the Caravan Goods Carrier, Private Limited without obtaining the consent of the landlord. The Additional Rent Controller, Delhi allowed the petition and ordered eviction. On appeal by the Madras-Bangalore Transport Company (West) the Rent Control Tribunal confirmed the order of eviction. A second appeal to the High Court was dismissed in limine. The present appeal has been filed after obtaining the special leave of this Court under Art. 136 of the Constitution.
2. The submission of Dr. Chitaley, learned counsel for the appellant, was that there was no -subletting, assignment or parting with possession of the premises as contemplated by S. 14(1)(b) of Delhi Rent Control Act. He argued that the Madras-Bangalore Transport Company (West) was always in possession of the, premises and that the Caravan Goods Carrier Private Limited, whose Directors were partners of Madras-Bangalore Transport Company (West) was in truth and reality no other than the Madras-Bangalore Transport Company (West) itself. On the other hand, the learned counsel for the Respondent Landlord urged that the Madras-Bangalore Transport Company (West) was a partnership firm and the Caravan Goods Carrier Private Limited was a limited company and, therefore, they could never be the same as they were two distinct legal entities. It was argued that the Madras-Bangalore Transport Company (West) had gone out of the picture and the Caravan Goods Carrier Private Limited alone was in possession and, therefore, there was subletting, assignment or parting with possession of the premises as contemplated by S. 14(1)(b) of the Rent Control Act.
3. We have been taken through the Judgments of the Rent Controller and the Rent Control Tribunal. We have also been taken through the relevant evidence. The facts which emerge from the evi
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