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1981 Supreme(AP) 47

Andhra Pradesh High Court
Judges : PUNNAIAH
K.NAGENDER - Appellant
Versus
J.MURALIDHAR - Respondent
C.R. P. No.3671/80
Decided On : 02-27-81
Advocates Appeared :
.

Headnote:ANDHRA PRADESH BUILDINGS (LEASE, RENT AND EVICTION) CONTROL ACT, - Sec. 10(2) (ii) (a) - Unauthorised subletting - Converting of his individual business by the lessee into a partnership subsequent to the lease -It does not amount to subletting, if the partnership was genuine and not a camouflage for sub-letting.

       Held: Since the lessee has not parted with, but has retained for himself the legal possession of the premises, though he allows the firm to use it for carrying partnership business and since the tenant obliges himself to work for the firm only and has precluded himself from doing any other business during the subsistence of partnership and as such the vested leasehold interest of the tenant in the premises have not been divested, it cannot be concluded that there is sub-letting.

       The question whether a transaction amounts to a partnership or not must be decided on the terms of the agreement itself and all the relevant facts. Under Sac.4 of the Indian partnership Act, partnership is defined as the relation between persons who have agreed to share the profits of a business carried on by all of then actinag for all. Then Section 6 provides that in determining whether a group of persons is or is not a firm, or whether a person is or is not a partner in a firm, regard shall be had to the real relation between the parties, as shown by all relevant facts taken together.

       Although the right to participate in the profits of a business is a strong test of partnership, yet the question whether that relationship does or does not exist must depend upon the real intention and the contract of the parties and this is to be understood from the language employed in Section 6. The mere stipulation that the firm has to pay the rent does not give rise to the conclusion that the leasehold interests vested in him are divested.

       If once it is concluded that the tenant continues to be in possession and the partnership has been using the premises for carrying on business and the tenant has not received any rent from and precluded himself from carrying on any other business during the subsistence of the partnership and has been carrying on the duties entrusted to him as working partner under the partnership agreement, the partnership is true and genuine, but not a camouflage for sub-letting and hence the tenant cannot held to be guilty of sub-letting and he is, therefore, not liable for eviction under section 10(2) (ii) (a) of the Andhra Pradesh Buildings (Lease, Rent and Eviction Control Act.

       C.R. P. ALLOWRD.

PUNNAYYA, J.

( 1 ) THIS revision is directed against the judgment passed by the Chief judge, City Small Causes Court, Hyderabad in R. A. No. 157/1975 in which the order of the Rent Controller, Secunderabad in R. C. No. 288/71 was reversed,

( 2 ) THE landlord of the premises bearing No. 3-4-379 situated at tobacco Bazaar, Secunderabad, filed the petition for eviction of the petitioner herein who is the tenant on the grounds of (1) wilful default, (2) subletting, and (3) personal requirement. The Rent Controller rejected the case of the landlord on all the three grounds and dismissed the eviction petition, the landlord preferred appeal against the findings of the Rent Controller with regard to sub-letting and personal requirement. The appellate Authority rejected the landlord s cause with regard to personal requirement, but accepted the case of the landlord with regard to sub-letting and ordered for eviction. In this revision, the finding of the appellate Authorily with regard to sub-letting is assailed.

( 3 ) FOR convenience sake, the parties will be referred to as arrayed in the eviction petition. The petitioner-landlord alleges that the 1st respondent tenant had sublet the premises to respondents 2 to 7 to carry on business in the name and style of modi Fabrics Wholesale Depot and the alleged partnership between respondents 1 to 7 is only a bogus affair designed to camouflage the sub-lease of the premises.

( 4 ) THE case of the tenant-1st respondent, on the other hand, is that he entered into a partnership under the partnership deed dated 12-8-1971 with respondents 2 to 7 and the 1st respondent is working partner and the partnership firm is carrying on business under the name and style of modi fabrics Wholesale Depot and the 1st respondent has retained pessession with him, paying the rents to the petitioner-landlord and hence the question of sub-letting does not arise,

( 5 ) THE learned Advocate General, arguing for the tenant, contends that merely because the lessee takes in other partners in his business, it will not be concluded that the lessee has sub-let the building when the lessee did not part with possession and enjoyment of the premises. In support of his contention, he relied upon a decision of the Madras High Court in Rangamannar chetty vs. Rangalah. In that case, the 1st respondent Desu Rangaiah, took the premises bearing No. 258 Ward No. 5 Stone Housepet, Nellore belonging to the petitioner on rent ten years ago for his business. Two years back he entered into a partnership with Thadikamalla Venkataseshayya and posa Veeranna for carrying on business of onions. The partnership arrangment was embodied in a deed Ex. B-1. Under Ex B 1 the leasehold interest was not transferred to the partners. That related only to the partaership business to be carried on jointly by the 1st respondant Desu Rangaiah, venkataseshaiah and Posa Veeraana. It regulated only the rights and liabilties in regard to the business. The 1st respondent continued to be in possession of the premises with a liability to pay the rent to the petitioner. The rent originally was a sum of Rs. 10/. It was enchanced from time to time till it reached the present rate of Rs. 60/ -. The landlord filed eviction petition before the Rent Controller, Nellore for evicting the 1st respondent from the premises. The main ground for eviction was that the 1st respondent had sublet the premises to the 2nd respondent s firm. It was alleged that the 1st respondent was carrying on business in Srirangarajpuram after sub-letting the premises to the 2nd respondent who was described in the petition as Tadikamalla venkataseshaiab, Posa Veeranna represented by its two partners. The real Controller dismissed the petition, In appeal, the Subordinate Judge held that there was no sub-letting and on that finding, dismissed the appeal, the petitioner, therefore, filed the writ petition. Before the High Court it was contended that by reason of the partnership, in law, there was sub-let

















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