1 CRA355OF10.sxw vks IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION CIVIL REVISION APPLICATION NO.355 OF 2010 Metal Box India Limited .. Applicant -versus M/s S.F. Engineer & Anr .. Respondents . S/Shri Aspi Chinony, Senior Counsel with Ms Preeti Ramani, Sarosh Bahrucha S. Srivastava and S. Pandey i/b M/s D.H. Law Associates for the Applicants. S/Shri D.D. Madon, Senior Counsel with Atul Daga and Amit Mehta i/b M/s Mahimtura & Co. for respondent No.1. CORAM: R.C. CHAVAN, J. DATED: 12th August, 2010 P.C. 1. This revision application by tenant questions decree of ejectment passed by the trial Court and maintained upon appeal by the appellate bench of the Court of Small Causes, on the ground of sub-letting. It was heard finally at the admission stage by consent of parties. 2. Facts which could be gathered from the compilation filed by applicant are as under: 3. Respondents-plaintiffs are the owners of the suit 2 CRA355OF10.sxw premises bearing flat Nos 201 and 204 on the 2nd floor and garage Nos 7 and 8 on the ground floor which were let to the applicant company for providing residential accommodation to its executives. Defendant No.2 was employed by Applicant and was allowed to occupy flat No.201 in 1979. In l987, a lock out was declared in a company and on 27.5.1988 the company was declared a sick company. On 12.1.1989 defendant No.2 resigned and his resignation was accepted on 11.2.1989, but continued to occupy the premises. 4. Respondent-plaintiff alleged that this amounted to sub- letting and hence terminated contractual tenancy by notice dated 19.1.1989. Applicant withheld respondent No.2’s Provident Fund Dues, which attracted a notice from Commissioner of Provident Fund on 19.10.1993. Applicant filed writ petition No.2134 of l993, with a prayer to direct the respondent No.2 to hand over possession of flat, which is pending. Applicant also filed a criminal complaint u/s 630 of Companies Act which was dismissed in default on 8.5.1996. Applicant filed a fresh criminal complaint on 6.3.2003. 5. On 2l.l2.l996, Respondent No.l filed suit for ejectment on the grounds of sub-letting, non user and bonafide requirement, in respect of both the flats. This was contested by the applicant. 6. In applicant’s fresh criminal complaint of 2003, applicant sought interim relief for direction to respondent No.2 to vacate the 3 CRA355OF10.sxw premises which was rejected by the learned Additional Chief Metropolitan Magistrate on 28.2.2006 against which applicant filed Criminal Writ petition No.2154 of 2006. Applicant filed a Summary suit against respondent No.2 seeking liquidated damages for overstaying in which this Court granted unconditional leave to defend. This was challenged by applicant before Supreme Court by filing Special Leave Petition, which was settled on 15.3.2007 7. The trial Court decreed the suit only on the ground of sub-letting negativing claims on the grounds of bonafide need and non user. Applicant’s appeal and respondent No.1’s cross objections were dismissed upholding decree of the Lower Court. Aggrieved thereby only applicant has filed this revision. 8. I have heard learned Senior Counsel for both the applicant and Respondent No.1. The learned counsel for applicant submitted that Courts below erred in holding that applicant had sub-let the premises to respondent No.2, when the applicant is all along trying to oust respondent No.2 who is simply overstaying after resigning from applicant’s service. He pointed out that the company had withheld respondent No.2’s Provident Fund dues because he did not vacate the premises, filed proceeding u/s 630 of Companies Act before Metropolitan Magistrate and also sought recovery of charges for overstaying as per clause 19 of agreement dated 11.5.1982 by which agreement respondent No.2 was allowed 4 CRA355OF10.sxw to use the premises during his employment. It was pointed out that since leave to defend was granted to respondent No.2, applicant preferred a Special Leave Petition, wherein a settlement was reached on 15.3.2007. According to the settlement on 4.4.2007, Respondent No.2 handed over vacant possession of the premises to applicant. These developments were brought to the notice of appellate bench and yet the bench upheld the decree against the applicant. It was submitted that there was never any consensus that respondent No.2 was to be allowed to occupy the premises after he ceased to be in the company’s employment and in fact applicant had been continuously seeking to evict him. Therefore, it was submitted that the courts below were totally wrong in holding that the applicant had sublet the premises to respondent No.2. 9. The learned Senior Counsel for respondents submitted that this Court must not overlook the limits of revisional jurisdiction which is invoked, and concurrent findings on fact cannot therefore be disturbed. He pointed out that respondent No.2 had specifically claimed that applicant had never objected to respondent No.2’s occupation for 4 years after he resigned, and that he is a sub tenant. After considering evidence tendered, the Courts below had rightly so concluded and this finding of fact cannot be disturbed in revision. He submitted that non payment of rent by respondent No. 2 to applicant cannot be equated to there being no agreement to 5 CRA355OF10.sxw pay rent and sub tenancy was rightly inferred. The learned Senior Counsel pointed out that respondent No.2 had specifically admitted in cross examination by respondent No.1 that personal Manager of the applicant had asked respondent No.2 to continue to live in the flat even after he resigned. He relied on judgments of Hon’ble Supreme Court in case of Bharat Sales Ltd -vs- LIC of India reported in (1998) 3 SCC 1, and in Joginder Singh Sodhi -vs- Amar Kaur reported in (20050)1 Supreme Court Cases, 31, wherein the Hon’ble Supreme Court had considered the ingredients of subletting. For limits of revisional jurisdiction, he placed reliance on judgment of Supreme Court in N. Eswari w/o Adinarayana -vs- K. Swarajya Lakshmi w/o Late K.V.L.N.A. Sastry, reported in (2009) 9 Supreme Court Cases 678. 10. I have carefully considered these submissions. There can be no doubt that revisional jurisdiction could be exercised to upset concurrent findings of facts only if they are arbitrary or perverse as held in N. Eswari’s case (supra). But the question is whether mere fact of a person, other than a tenant, being in possession was enough to establish sub tenancy. Sub tenancy is something more than placing another in possession, as has been held in the two judgments to which learned Senior Counsel for respondent very fairly drew my attention. 11. In Bharat Sales Ltd (supra), the Hon’ble Supreme 6 CRA355OF10.sxw Court considered the difficulties of the landlord in proving sub tenancy and therefore held in para Nos 4 and 5 as under: “4. Sub tenancy or sub letting comes into existence when the tenant gives up possession of the tenanted accommodation, wholly or in part, and puts another person in exclusive possession thereof. This arrangement comes about obviously under a mutual agreement or understanding between the tenant and the person to whom the possession is so delivered. In this process, the landlord is kept out of scene. Rather, the scene is enacted behind the back of the landlord, concealing the overt acts and transferring possession clandestinely to a person who is an utter stranger to the landlord, in the sense that the landlord had not let out the premises to that person nor had he allowed or consented to his entering into possession over the demised property. It is the actual, physical and exclusive possession of that person, instead of the tenant, which ultimately reveals to the landlord that the tenant to whom the property was let out has put some other person into possession of that property. In such a situation, it would be difficult for the landlord to prove by direct evidence, the contract or agreement or understanding between the tenant and the sub tenant. It would also be difficult for the landlord to prove by direct evidence, that the person to whom the property had been sub let had paid monetary consideration to the tenant. Payment of rent, undoubtedly, is an essential element of lease or sublease. It may be paid in cash or in kind or may have been paid or promises to 7 CRA355OF10.sxw be paid. It may have been paid in lump sum in advance covering the period for which the premises is let out or sub let or it may have been paid or compromised to be paid periodically. Since payment of rent or monetary consideration may have been made secretly, the law does not require such payment to be proved by affirmative evidence and the court is permitted to draw its own inference upon the facts of the case proved at the trial, including the delivery of exclusive possession to infer that the premises were sub let. 5. In Rajbir Kaur -vs- Chokesiri & Co, it was held that it was not necessary for the landlord in every case to prove payment of consideration. It was laid down that if exclusive possession was established, it would not be impermissible for the Court to draw an inference that the transaction was entered into with monetary consideration in mind. The Court further observed that transactions of sub-letting in the guise of licences are in their very nature clandestine arrangements between the tenant and the sub tenant and there cannot be furnished direct evidence in every case. It will be noticed that in this case it was established as a fact that the tenant had parted with a part of the demised premises in favour of an icre-cream vendor who was in exclusive possession of that part of the premises and, therefore, the Court drew an inference that the transaction must have been entered into for monetary consideration. This decision has since been followed in many cases, as, for example, United bank of India v. 8 CRA355OF10.sxw Cooks and Kelvey Properties (P) Ltd upon which, as we shall presently see, reliance has been placed by the petitioner. 12. In the above para 5, the Court had referred to case of Unted Bank, which it then analysed in para 9 as under:- 9. Learned counsel for the petitioner placed strong reliance upon the decision of this Court in United Bank of India v. Cooks and Kelvey Properties (P) Ltd, in which it was indicated that “the meaning of transfer of a right to enjoy the property for consideration envisaged under section 105 of the Transfer of Property Act, postulates that a tenant who transfers or assigns his right in the tenancy or any part thereof in whole or in part held by him without the previous consent in writing creates a sub tenancy”. This case also does not help the petitioner as it was found as a fact that although the bank (appellant) had inducted the trade union into the premises, the bank had not received any monetary consideration and the union was only permitted to use the property for its trade union activities. It was also found that the bank had retained its power to call upon the union to vacate the premises at any time. The bank had been maintaining the premises at its own expenses and was also paying the electricity charges consumed by the trade union. It was also found that the bank retained its control over the trade union whose membership was confined only to the employees of the bank. The possession of the union was held to be 9 CRA355OF10.sxw “constructive possession” for and on behalf of the bank. Reliance was placed on the observation that, “the existence of consideration, an ingredient of sub- letting, had not been present to hold that there was sub-letting”. In the background of the facts of the case, this observation does not purport to lay down that in every case payment of consideration must be established by the landlord to prove sub letting by the tenant.” 13. This has a closer resemblance to facts of the case at hand. 14. In Joginder Sing’s case (supra), a father who was the tenant, was alleged to have parted possession in favour of a son staying separately, the Court followed judgment in Bharat Sales and held that sub-letting was proved. The court referred to earlier, judgment in Associated Hotels of India Ltd -vs- S. B. Sardar Ranjitsingh reported in (1968) 2 SCR 548, and observed in para 13 as under:- “13. Regarding sub-letting, in our opinion, the law is well settled. It is observed in the leading case of Associated Hotels of India Ltd v. S. B. Sardar Ranjitsingh that in a suit by the landlord for eviction of tenant on the ground of sub-letting, the landlord has to prove by leading evidence that (i) a third party was found to be in exclusive possession of the rented property and (ii) parting of possession thereof was for 10 CRA355OF10.sxw monetary consideration.” 15. Then as to second ingredient of monetary consideration the Court referred a judgment in Bharat Sales & observed in para 17 and 20 as under: “17. Since payment of rent or monetary consideration may have been made secretly, the law does not require such payment to be proved by affirmative evidence and the court is permitted to draw its own inference upon the facts of the case proved at the trial, including the delivery of exclusive possession to infer that the premises were sub-let 20. In our considered opinion, proof of monetary consideration by the sub-tenant to the tenant is not a sine qua non to establish sub-letting”. 16. In the light of these observations, the facts held as proved must be examined. It cannot be disputed that- i) Respondent No.2 was inducted as a licencee under a licence agreement which was produced before the Courts; ii) after cessation of his employment respondent No. 2 continued to occupy the premises. iii) Applicant had filed a suit for recovery of overstayal charges and eventually was allowed to recover a sum of Rs.4,17,000/- in terms of Order 11 CRA355OF10.sxw of Supreme Court dated 15.3.2007, in Civil Appeal No.2425 of 2007. iv) applicant has vacated the premises on 4.4.2007 in terms of the settlement. v) Applicant is a sick company, and not in a position to receive any clandestine payments. 17. These facts are so glaring, as are the attempts of applicant to get rid of respondent No.2, that it would be inconsistent with any clandestine agreement of sub-letting. True, finding of facts by the Courts below may be respected. But the conclusions drawn about a jural relationship was thoroughly unwarranted and runs in conflict with the very requirement of a consensus. Therefore, the decree of eviction on the ground of sub- letting passed by the trial Court and maintained upon appeal by the appellate bench cannot at all be sustained. 18. Revision application is, therefore, allowed and the decree of ejectment is set aside. (R. C. CHAVAN, J.)