IN THE HIGH COURT OF GUJARAT AT AHMEDABAD CIVIL REVISION APPLICATION No 1211 of 2002 For Approval and Signature: HON'BLE MR.JUSTICE KUNDAN SINGH ============================================================ 1. Whether Reporters of Local Papers may be allowed : YES to see the judgements? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the concerned : NO Magistrate/Magistrates,Judge/Judges,Tribunal/Tribunals? -------------------------------------------------------------- POPATLAL VADILAL BHANSALI Versus KASTURBHAI RANCHHODBHAI SONI -------------------------------------------------------------- Appearance: MR SHALIN N MEHTA for the Petitioners. MR HM PARIKH for Respondent No. 1-5 MR.HEMANG H PARIKH for Respondent No. 1-5 -------------------------------------------------------------- CORAM : HON'BLE MR.JUSTICE KUNDAN SINGH Date of decision: 02/09/2003 ORAL JUDGEMENT This Revision Application has been preferred by the petitioners-original defendants-tenants against the judgment and order dated 30.8.2002 in Regular Civil Appeal No. 31 of 1997 passed by the 5th Extra Assistant Judge, Kheda at Nadiad whereby the judgment and decree dated 10.2.1997 in Regular Civil Suit NO. 338 of 1990 passed by the 5th Joint Civil Judge (S.D.), Nadiad for recovery of actual, vacant and physical possession of the suit shop from the defendants has been confirmed. 2. The petitioner no.1 Popatlal Vadilal Bhansali is the original tenant of the suit property which was rented to him for business purpose. The petitioner no.1 was doing his business of hosiery and readymade clothes in the name and style of Deepmala Dresses. Thereafter, that business name was changed and the firm Parth Jewellers was started in the suit premises. The respondents-plaintiffs did not see the petitioner no.1 sitting regularly in the suit shop. Hence, they filed Regular Civil Suit no. 338 of 1990 against the petitioners-defendants for vacant possession of the suit shop from the defendants and for the recovery of Rs.170/- p.m. from the person and property of the defendant no.1 and also damages of Rs. 170/- from 1.5.1990 for not using the suit shop and arrears of rent from the defendants. In the suit, the plaintiffs also prayed for Rs.85/- from the date of the suit till the date of possession from the defendant no.1 together with municipal taxes, education tax and other taxes by way of mesne profits alongwith costs of the suit. It is stated in the plaint that the defendant no.1 was the tenant of the previous landlady Revaben. From her, the defendant no.1 has taken the suit shop on rent for Rs.85/- per month as standard rent. Municipal taxes, education tax and other taxes were to be paid by the defendant no.1. The defendant no.1 was carrying on his business of readymade clothes and hosiery in the name and style of Deepmala Dresses. It is also stated that the defendant no.1 has been intending to illegally sub-let, assign or transfer the suit premises by leave and licence and he has sub-let by leave and license or by any other mode and assigned or transferred physical possession of the suit shop to the defendant no. 2 by executing a bogus and false partnership deed. The defendant no.1 has put a false date on the partnership deed which was prior to the service of ad-interim injunction granted to him. The defendant no.1 has handed over physical possession of the suit property. Hence, the suit. The defendant no.1 has paid rent upto 1.5.1990. Thereafter, he has not paid any rent. 3. The defendants have filed their written statement to the suit in which they have denied that the defendant no.1 has taken the suit shop on standard rent of Rs.85/- per month from the previous landlady Revaben and they have also denied that the rent was payable per month. But the defendants have admitted that the defendant no.1 has taken the suit shop on rent to carry on the business from the previous landlady Revaben. She had filed M.C.A.No. 154 of 1990 against the defendant no.1 in the court to fix the standard rent, but the matter was compromised between defendant no.1 and the landlady. It is also admitted that the defendant no.1 was doing business of readymade garments and hosiery in the suit shop. It is also admitted that the suit shop is situated in the bazar wherein most of the shopkeepers are doing business of gold and silver. Therefore, the defendant no.1 has started the business of gold and silver in the suit shop. The allegation of sub-letting or transfer of the suit shop to other defendants has been denied by the defendant no.1 in the written statement. 4. After recording evidence and after hearing the arguments of the learned advocates for the parties, the trial Court has recorded a finding that under camouflaged partnership deed, the defendant no.1 has sub-let the suit shop to defendant nos. 2 to 5 and by its judgment and decree dated 10th February, 1997 decreed the suit with costs for recovery of actual and vacant possession of the suit shop from the defendants. The defendants were also directed to hand over vacant possession of the suit shop to the plaintiffs within two months from the date of the order. Being aggrieved and dissatisfied with the judgment and decree of the trial court, the petitioners-original defendants-tenants filed Regular Civil Appeal No. 31 of 1997 before the District Court. After appreciating the evidence of the parties on record and after considering the arguments of the learned advocates for both the parties, the lower appellate court vide its judgment and order dated 30th August, 2002 dismissed the appeal and confirmed the judgment and decree of the trial court. 5. Therefore, being aggrieved by the concurrent findings of the courts below, the petitioners-original defendants have filed the present Civil Revision Application under section 29(2) of the Bombay Rent Act before this Court. 6. Heard the learned counsel for the parties at length and perused the relevant papers on record. The contention of the learned counsel for the petitioners is that the courts below have applied wrong test for arriving at a conclusion that the property was sub-let and the only formula has been applied by the courts below is that the defendant no.1 is not using the premises. The courts below have not considered the real test for recording a finding that the defendant no.1 has sub-let the suit property. The test is whether the possession of the suit shop has been parted with or not. Further contention of the learned counsel for the petitioners is that the findings recorded by the courts below that the partnership is a bogus and sham one and some clauses of the partnership deed have not been complied with are perverse, wrong and not sustainable in the eye of law. The burden lies on the plaintiff to prove the case of sub-tenancy. The defendant-tenant is not required to prove anything. The landlords have not established the fact that the property has been sub-let to the petitioner nos. 2 to 5. He also argued that the case law cited in support of the contentions of the defendants have not been properly considered by the courts below. Section 13(1)(e) of the Bombay Rent Act has not been properly interpreted by the courts below. It is also the contention of the learned counsel for the petitioners that the findings recorded by the courts below are perverse as there is no evidence of sub-letting at all. Even no inference can be drawn on the basis of the evidence and material on record. The courts below have not recorded the finding that the tenant has parted with possession to other partners and the tenant is not using the said premises. The contention of the learned counsel for the petitioners is that the partnership deed executed by the defendant no.1 cannot be said to be a bogus or sham one and it has been supported by the following material. There is an existence of partnership deed dated 29th March 1990 exh. 43. He referred clause-4 of the partnership deed which says that at the end of every accounting year in the said partnership firm, whatsoever profit and loss that shall remain after deducting all expenses such as salary, interest, discounting, commission, stationery, printing, postage and telegram, travelling, electricity, advertisement, repairing, depreciation or business tax, licence fees etc. and all such other expenses as per the business tradition and remaining amount of profit or loss shall be distributed amongst all the five partners in the following proportions. Name Profit/loss 1. Popatlal Vadilal Bhansali 20% 2. Dilipbhai Bansilal Chokshi 29% 3. Kantaben Bansilal Chokshi 17% 4. Naynaben Vinodchandra Chokshi 17% 5. Alkaben Jagdischandra Chokshi 17% Clause-8 of the partnership deed says that necessary bank account and shroff account shall be opened in the name of the firm and they shall be operated by the joint signature of the first and second parties. Necessary and appropriate changes for the convenience of the firm may be made in future with the written consent of all the parties. Para-9 of the deed says that all the partners in the said partners in the said partnership firm together shall work in harmony for the development of the firm. Moreover, the first and second party shall handle the day to day routine business of the said firm, such as purchase, sales, collection, accounts, correspondence of the firm, operation of Bank and shroff account and Income-tax, Sales Tax, Professional tax, Shops and Establishment Act, excise and all other Government procedures etc. whereas, the third to fifth parties are the capital investing partners, whenever the necessity of money arises for the further development of business, they shall procure the same on interest in the form of capital or loan or as a deposit. Para-13 of the partnership deed says that as the first party has obtained the place of business of the said partnership firm on rent in his own individual name from the landlord of the said place of business, so long as the said partnership remains in existence and thereafter also, no person, other than the first party, shall have any tenancy rights, ownership right, user right or any other right or claim over the place of business of the said firm. In other words, all the tenancy rights over the said place of business shall always be considered as of first party only just as they will remain in existence prior to the establishment of the said firm. Para-14 of the partnership deed says that no partner of the said partnership firm shall directly or indirectly sell, mortgage, tranfer or assign his/her right and share in the partnership firm in favour of any one, and if he/she does so, his/her such an act shall not be binding to the firm. (ii) The second document shown by the learned counsel for the petitioners is the certificate of registration exh. 14 which is dated 4th October, 1990. As per the provisions of section 68 of the Indian Partnership Act, 1932, any statement, intimation or notice recorded or noted in the register of firms, shall be authenticated (iii) The third type of document shown by the learned counsel for the petitioners is the certificate under Gujarat professional business Trade and Employment Rules, 1976 which is at exh. 45. (iv) A copy of the application dated 7.6.1990 for registration of firms for the purpose of sales tax by all the partners, wherein the shares of the partners have been defined. (v) Exh. 46 is the certificate dated 15.6.1990 under the provisions of Bombay Shops and Establishment Act issued by the authority granting permission to start the business under the provisions of that Act. (vi) Exh. 51 is the assessment order passed by the Income-tax Department which is dated 4th February, 1993 for the assessment year 1992-93 wherein it is mentioned that the firm is genuine and shows the shares of the partners. The petitioners have also pointed out from the income-tax return (statement of total taxable income) for the year 1993-94 showing the partnership deed attached and the salaries to partner nos. 1 and 5. It was also pointed out that though the salary was not permissible under the partnership deed to any of the partners, but lateron the income-tax rebate regarding salasry to partner was allowed under Income-Tax Act and hence some amendment was made in the partnership deed regarding salary to the partner nos. 1 and 5, though that amended partnership deed is not on record. But as per the statement made in the income-tax return, it appears that the amended partnership deed was filed. On that basis, the salary was permitted by the Income-tax Department. Otherwise, had it not been so, the salary must have been disallowed by the Income-tax department. (vii) The statement of total income for the year 1994-95 exh. 53 showing the salary of both the partners. Exh. 54 is the statement of total taxable income for the year 1995-96 showing that the share of both the partners as 20% and the salary was increased to 30% from the profit. Exh. 55 is the Income-tax return for the year 1996-97 showing the share as 20% and salary 30%. (viii) Exh. 56 is the capital account of the partners in the partnership firm for the year 1990-91. Exhs. 57 to exh. 61 are all capital accounts of the partners for the respective years. (ix) Exhs. 62, 63 and 64 are the receipts of payment of professional tax made by the defendant no.1 as partner of the firm. Exh. 65 is the communication by the department addressed to the firm through defendant no.1 as a partner asking information about the registration number allotted to other partners. (x) The bills issued in the name of the firm which are exhs. 66 to 88 have been filed by the petitioners which were signed by the defendant no.1 at the relevant time when they were issued. 7. It is also contended by the learned counsel for the petitioners that the burden has been wrongly shifted on the petitioner no.1 -defendant no.1 that he is using the shop in dispute. To make out the transfer of possession cannot be attributed to sub-letting and the defendant no.1 has to prove that he is using the suit premises though as per the rule laid down by the Supreme Court, the burden is on the landlord to show that the tenant has parted with his possession of the suit premises and other person has been placed in exclusive possession. The lower appellate court has recorded a finding shifting the onus of proof on the tenant that the appellants have not proved that they have not sub-let the suit shop to other appellants. The learned counsel for the petitioners has relied on the following decisions. 7.1. The judgment of this Court in the case of Manchharam Sobhraj and others vs. Jamnadas Mulchand and another reported in 16 GLR, 898 wherein this Court has held that if a tenant walks out of the premises in his possession and allows a third party to carry on his business under a sham or camouflage partnership with the tenant it may amount to an act of unlawful sub-letting by the tenant if the camouflage partnership has been entered into for the purpose of screening the act of unlawful sub-letting. Similarly if a tenant has parted with possession of his premises and put his another partner in exclusive possession thereof, it will amount to an act of unlawful sub-letting because such an act connotes a transfer of legal interest in the premises from the tenant to some else. Similarly, if a third party is permitted by tenant to carry on his own business in the premises it may lead to an inference of unlawful sub-letting because the tenant has no interest in the profit and loss of business can be said to be no longer interested in the premises. The Bombay Rent Act does not prevent a tenant who has taken on rent business premises from taking partners in his business and carry on a partnership business. So long as the right of occupancy as a monthly tenant in respect of the premises remains with the tenant and does not form a part of the assets of the partnership firm, there cannot be said to be any sub-letting. Different consideration will certainly prevail if the tenancy rights have been amalgamated in the pool of partnership deeds and all partners are entitled to a share therein upon the dissolution of the partnership. Even if the rent of the premises let to a tenant is payable under the deed of partnership by the partnership firm of which the tenant is a partner it does not amount to unlawful sub-letting but it is merely a matter of partnership accounts. Unless therefore, there is evidence to show that a tenant has transferred "legal possession" to his partners with whom he has been constituting a partnership firm, he cannot be said to have unlawfully sub-let, assigned or transferred his interest in the premises within the meaning of section 13(1)(e) and section 15 of the Bombay Rent Act. 7.1 The judgment of this Court in the case of Budhalal Chhotalal Zaveri vs. Lilavatiben Ratilal reported in 1994(1) GLR, 209 wherein the ingredients of sub-letting have been described. Under section 13(1)(e) a landlord shall be entitled to recover possession of the demised premises if the Court is satisfied that the tenant has, since the coming into operation of the Act, unlawfully, sublet the whole or part of the premises or assigned or transferred in any other manner his interest therein. Under clause (e), the landlord has to prove (i) that the tenant has sublet, assigned or transferred in any other manner his interest in the demised premises (ii) that it is done after the commencement of the Act and (iii) that it is unlawful. The tenant incurs liability to eviction under this clause when unlawful sub-letting is established even on or before the date of notice. It is not further necessary to show that the sub-letting should be subsisting at the date of the suit. Thus, any sub-letting, assignment or transfer made after the commencement of the Bombay Rent Act, if it is found to be unlawful, it is made a ground for eviction. In order to hold a tenant guilty for sub-letting or for unlawful transfer or assignment, it must be successfully shown that the tenant has lost the possession and that he has abandoned his interest in the demised premises. In a case of partnership, all the partners are joint in respect of partnership properties subject to the extent they have agreed. In an assignment, the assignor transfers the totality of his rights and interests to the assignee. The transaction results in the assignor being denuded of the entire interest and the assignee replacing him and acquiring the interest in the property. If the tenant of a shop takes one or more partners for doing business in the demised shop, would this itself constitute either sub-letting or assignment. The answer would be positively in the negative. Even assuming that the tenancy interest had been thrown into the partnership firm, even in that case also, the tenant continues to have an interest alongwith other partners. Unless it is shown that the original tenant's entire leasehold interest has been extinguished and that of some one else to the exclusion of the original tenant is created, it is futile to contend that there has been an assignment or transfer of interest. It has also been held that taking a partner or entering into a partnership firm for doing a business in a demised shop "ipso facto" also would not constitute an act of sub-letting. Sub-letting postulates two distinct personalities: the head tenant and the sub-tenant. Undoubtedly, their rights and obligations would be different. One cannot be one's own sub-tenant. If the transaction of taking in partners constitutes sub-letting, the defendant-tenant will be a head tenant and he himself alongwith his other partners will also be sub-tenant, as the partnership firm, as such, he has no separate legal entity. It must be successfully shown that there was a transfer of legal possession. There is a distinction between actual possession and legal possession. What is contemplated is the transfer of legal possession. The physical occupation may be of one or more partners, but the legal possession would remain with the tenant, if such a possession is not parted with, with or without consideration. Thus, if the partners of the firm attend the shop and do business alongwith the tenant, it cannot be contended that the partners are in legal possession of the demised shop. When a partner has brought in as his asset tenancy of the premises in which the partnership business was to be carried on, the fact that the partner in question was to share the profits only and was to get a fixed percentage of the profits or the further fact that the said partner was not to operate the bank accounts, there being nothing intrisically wrong in law from constituting a partnership in the manner it was done, it could not be said that no genuine partnership had come into existence. 7.3. The decision of the Supreme Court in the case of Helper vs. Saiyed Mohmad Mirasaheb Kadri and others reported in AIR 1987, SC, 1782 wherein it has been held that in order to establish partnership (1) there must be an agreement entered into by all parties concerned (2) the agreement must be to share profits of business and (3) the business must be carried on by all or any of the persons concerned acting for all. For the exercise of revisional jurisdiction under section 29(2), this case has been relied on by the learned counsel for both the parties. It has been held that in exercising revisional power under section 29(2) the High Court must ensure that the principles of law have been correctly borne in mind by the lower court. secondly, the facts have been properly appreciated and a decision arrived at taking all material and relevant facts in mind. In order to warrant interference, the decision must be such a decision which no reasonable man could have arrived at. Lastly, such a decision does not lead to a miscarriage of justice. But in the guise of revision substitution of one view where two views are possible and the Court of Small Causes has taken a particular view, is not permissible. If a possible view has been taken, the High Court would be exceeding its jurisdiction if it substitutes its own view in place of that of the courts below because it considers it to be a better view. 7.04. The judgment of the Supreme Court in the case of Jagdish Prasad vs. Smt. Angoori Devi reported in AIR 1984, SC, 1447 wherein it has been held that merely from the presence of a person other than the tenant in the shop subletting cannot be presumed. So long as control over the premises is kept by the tenant and the business run in the premises is of the tenant, subletting flowing from the presence of a person other than the tenant in the shop cannot be assumed. The Act does not require the court to assume a sub-tenancy merely from the fact of presence of an outsider. Where, therefore, an application for eviction of tenant from a shop was based on the allegation that the premises had been sub-let to a trading company, this allegation had to be proved as a fact by the landlord and merely on the basis of the photograph showing the presence of the son of the proprietor of that company within the room, subletting could not be presumed. The legal position having been totally misconceived by the trial court and there being an assumption of the position which the landlord was required to