IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. C.R. No. 91 of 2008 Date of Decision: 20.9.2010 M/S Trade Link Limited and another. ....... Petitioners through Shri M.L.Sarin, Senior Advocate with Ms.Himani Sarin, Advocate. Versus Varinder Kumar and others. ....... Respondents through Shri Arun Palli, Senior Advocate with Shri Divanshu Jain and Shri Parminder Singh, Advocates. CORAM: HON'BLE MR.JUSTICE MAHESH GROVER .... 1. Whether Reporters of Local Newspapers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? .... Mahesh Grover,J. This revision petition is directed against judgments dated 27.1.2006 and 8.12.2007 passed respectively by the Rent Controller, Chandigarh and the Appellate Authority, Chandigarh, whereby the application moved by landlord-respondent nos. 1 to 3 under Section 13 of the East Punjab Urban Rent Restriction Act,1949 (for short, `the Act') for ejectment of the tenant-petitioners from ground-floor of S.C.O. No.19, Sector 26, Chandigarh, (hereinafter described as `the demised premises') on the ground of sub-letting was accepted and the appeal of the latter was dismissed. C.R.No. 91 of 2008 -2- .... The tenancy in favour of the petitioners was created in the year 1977 at a monthly rent of Rs.3600/- which was subsequently increased to Rs.4000/-. Om Parkash, father of respondent nos. 1 & 3 and husband of respondent no.2, was the original landlord, who died in the year 1987. In 1983, a notice was served upon the petitioners which is on record as Exhibit RW2/A informing them that the tenancy stood terminated for the reason that the premises had been sub-let to M/S Mohan Meakin Ltd. Subsequent to the death of Om Parkash, Sat Pal, one of the co-owners of the demised premises, modified the terms of the tenancy which is reflected from Exhibit RW4/C in the year 1988 and permitted the petitioners to operate from back portion of the demises premises while M/S Mohan Meakin Ltd. was allowed to use the front portion. In the year 1997, respondent no.1 to 3 initiated ejectment proceedings against the petitioners on the ground of subletting. The petitioners resisted the prayer of respondent nos. 1 to 3 by pleading that there could not have been any subletting as the arrangement was made by Sat Pal, one of the co-owners, who permitted the use of the demised premises by M/S Mohan Meakin Ltd. It was further pleaded that the petitioners have a number of sister concerns including M/S Mohan Meakin Ltd. and in such an eventuality, there was no subletting. The Rent Controller as well as the Appellate Authority negated the plea of the petitioners and ordered their ejectment, resulting in the filing of the instant petition. Learned counsel for the petitioners contended that respondent C.R.No. 91 of 2008 -3- .... nos. 1 to 3 failed to discharge the onus of proving the willful parting of possession of the demised premises by the petitioners for valuable consideration, which is an essential ingredient of subletting and, therefore, the impugned judgments are liable to be set aside. It was next contended by the learned counsel for the petitioners that respondent nos. 1 to 3 failed to prove by bringing on record any cogent evidence qua the aspect of sub-letting and even if their best case that petitioner- M/S Trade Link Limited has stopped operating from the demised premises and has not transacted any business in the last many years, is taken as correct, then it can, at best, be treated as cessation of occupation which ground was never pleaded and set up, but it does not amount to subletting. It was submitted that petitioner-M/S Trade Link Limited is a public limited company and has many sister concerns and is carrying on its business from the demised premises. It was further submitted that the onus to prove subletting was on the landlords alone and they have failed to discharge the same. Learned counsel for the petitioners then submitted that the mala fides on the part of respondent nos. 1 to 3 is evident from the fact that Sat Pal, one of the co-owners, who had negotiated with the petitioners at the time of change of terms of tenancy, was impleaded as proforma respondent in the ejectment application and he was never examined as a witness. The next contention of the learned counsel for the petitioners is that the alleged sub-tenant was a necessary party to be impleaded in the ejectment application and since respondent nos. 1 to 3 did not do so, the C.R.No. 91 of 2008 -4- .... proceedings stood vitiated on that ground. Lastly, it was argued by the learned counsel for the petitioners that the authorities below have gone wrong in drawing an adverse inference that the petitioners have failed to produce records regarding their business activities for the reason that the official witness, who was sought to be produced by them and who was also bound down by the Rent Controller, failed to do so and in such an eventuality, they could not be held liable for the same because it was the duty of the Court to carry the process forward to its logical end to examine the said witness. In support of his contentions/submissions, he placed reliance on Dev Dutt Verma Versus Ajit Singh and others, 1965 Cur.L.J. 341 (Punjab); Dipak Banerjee Versus Lilabati Chakraborty, 1987 (4) S.C.C. 161; Jagan Nath (Deceased) through his Legal Representatives Versus Chandar Bhan and ors., 1988(1) R.C.R. 629; Kishan Lal Vig Versus Shri Sunder Lal and anr., 1988(1) Rent Control Reporter 580 (P&H); Pala Ram and another Versus Om Dutt, 1993(2) R.C.J. 390 (P&H); Ram Dhan Sharma Versus Shri Bishan Sarup Mittal and another, 1994(1) P.L.R. 492; Dev Kumar (Died) through L.Rs. Versus Swaran Lata (Smt.) and others, 1996(1) S.C.C. 25= 1995(2) R.C.J. 531 (S.C.); M/S Mahendra Saree Emporium Versus G.V.Srinivasa Murthy, 2004(2) Rent Control Reporter 286 (S.C.) and Anil Kumar Versus Sita Devi and another, 2006(2) Rent Control Report 417 (P&H). On the other hand, learned counsel for respondent nos. 1 to 3 argued that the onus to prove the parting of possession by the petitioners C.R.No. 91 of 2008 -5- .... stood adequately discharged and that in the cases of sub-letting, the strict proof is not required because it is always a secret arrangement between tenant and sub-tenant. He then argued that respondent nos. 1 to 3 had adduced sufficient evidence to establish that the petitioners had ceased to transact business from the demised premises and M/S Mohan Meakin Limited was in possession thereof from where it was doing business because they had admitted in their written statement that the latter was operating from the demised premises and in the absence of any written consent by the landlords, this had to be taken as an admission under Order 8 Rule 5 of the C.P.C. and thus, invited eviction straightaway on the ground of subletting. It was submitted that the petitioners could not prove from any material on record that M/S Mohan Meakin Limited was their sister concern. It was further submitted that the petitioners had nowhere pleaded in their written statement that they were in possession of the demised premises and not M/S Mohan Meakin Limited even though respondent nos. 1 to 3 had pleaded a positive case to that effect. Learned counsel for the respondent nos. 1 to 3 then argued that the petitioners pleaded that M/S Trade Link Limited was a public limited company, but there is no evidence on record to show that it was functional because the witnesses who were produced from the Taxation Department categorically deposed that M/S Trade Link Limited had not filed any returns even though the returns submitted by M/S Mohan Meakin Limited were produced. It was next argued that the petitioners had no leg to stand on for C.R.No. 91 of 2008 -6- .... the reason that the ejectment application was being contested by one Mr.S.K.Kochar, but he could not plead and prove whether he was their authorised representative or was their employee. Learned counsel for respondent nos. 1 to 3, thus, submitted that this was fatal to the case of the petitioners because it was pleaded to be a public limited company and in the absence of authorisation, the written statement could not be treated as valid written statement in the eyes of law and even the subsequent evidence that was produced, stood vitiated on this score alone. Reference was made to the statements of the witnesses, who were produced by the petitioners, namely, RW1-Raj Kumar, RW2- Shri Adish Gupta, Advocate, RW3- S.K.Kochar and RW4-Rajinder Kumar, to say that RW4-Rajinder Kumar, a Clerk from the Taxation Department of Chandigarh Administration had clearly deposed that the petitioners had not filed any return and that Mr.Kochar was not even authorised to file a written statement or make a statement on their behalf and further that the plea of the petitioners that this witness had been bound down, but not examined further by the Court is also not tenable because on 22.1.2004, further cross-examination of the said witness had to be deferred because he had not brought the complete record and thereafter, his bailable warrants were ordered to be issued, but in the meantime, the petitioners had moved an application for amendment of the written statement which was accepted. Further reference was made to the order dated 23.9.2005 of the Rent Controller whereby the evidence of the petitioners was closed by the order of the Court. Order dated 23.12.2005 passed by the Rent Controller was also referred to vide which the C.R.No. 91 of 2008 -7- .... application for additional evidence made on behalf of the petitioners was declined and it was also mentioned therein that the petitioners had failed to file process fee and warrants fee. It was submitted that the petitioners did not file any revision against the aforesaid orders and thereby sealing the fate of further cross-examination of RW4 and, thus, it does not lie in the mouth of the petitioners to rake up this plea at this stage. Learned counsel for respondent nos. 1 to 3, lastly, contended that the sub-tenant was not a necessary party and, therefore, it did not affect the eviction petition. Lastly, it was contended that the mere silence of the landlord for a long period qua the subletting would not amount to acquiescence or waiver of right of the landlord to seek eviction of the tenant on that ground. In support of his contentions/ submissions, learned counsel for respondent nos. 1 to 3 placed reliance on the following judgments:- 1. Parkash Chand Versus Shri Muni Lal and ors. , 1979 (1) R.C.R. (Rent) 90 (P&H); 2. Lajwanti and anor. Verksus Daulat Ram, 1990(2) P.L.R. 426 (P&H); 3. Lohia Properties (P) Ltd. Versus Atmaram Kumar, 1994(1) Civil Court Cases 4 (S.C.); 4. Life Insurance Corporation of India Versus Bharat (Sales) Ltd., 1995(1) R.C.R. (Rent) 422 (Delhi); 5. Ram Saran Versus Payare Lal and another, 1996(1) Rent Control Reporter 212 (S.C.); C.R.No. 91 of 2008 -8- .... 6. Chaudhary Ram Versus Liba Sood and others, 1998(2) Rent Law Reporter 260(P&H); 7. Rajbir Kaur Versus M/S Joginder Associates Architect, 1999(1) Rent Control Reporter 229 (P&H); 8. Iswar Bhai C.Patel @ Bachu Bhai Patel Versus Harihar Behera & Anr., 1999(2) Civil Court Cases 1 (S.C.); 9. P.John Chandy and Company (P) Ltd. Versus John P.Thomas, 2002(1) Rent Control Reporter 569 (S.C.); 10. Sushil Kumar Versus Rakesh Kumar, 2004(1) Civil Court Cases 63 (S.C.); 11. Reema Rani Versus Gurmukh Singh and another, 2004(2) Rent Control Reporter 619 (P&H); 12. Balvant N.Viswamitra and others Vekrsus Yadav Sadashiv Mule (dead) through L.Rs. and others, (2004) 8 S.C.C. 706 (S.C.); 13. Ram Kishan Moti Ram and another, 2006(1) Rent Control Report 395 (P&H); and 14.Ms.Celina Coelho Pereira & Ors. Versus Ulhas Mahabaleshwar Kholkar & Ors., 2009(2) R.C.R. (Rent) 456 (S.C.). I have thoughtfully considered rival contentions/ submissions and have gone through the impugned judgments, as also the whole record. Section 13(2)(ii)(a) of the Act gives right to a landlord to seek eviction of a tenant on the ground of sub-letting. It reads as under:- C.R.No. 91 of 2008 -9- .... “13. Eviction of tenants. (1) xx xx xx xx (2) A landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf. If the Controller, after giving the tenant a reasonable opportunity of showing cause against the applicant, is satisfied -- (i)xx xx xx xx xx xx xx (ii) that the tenant has after the commencement of this Act without the written consent of the landlord - (a) transferred his right under the lease or sublet the entire building or rented land or any portion thereof; or (b) xx xx xx xx xx xx xx (iii)to (v) xx xx xx xx xx xx xx xx the Controller may make an order directing the tenant to put the landlord in possession of the building or rented land and if the Controller is not so satisfied he shall make an order rejecting the application. Provided that the Controller may give the tenant a reasonable time for putting the landlord in possession of the building or rented land and may extend such time so as not to exceed three months in the aggregate.” In view of the above extracted provisions, two facts are essential to constitute subletting, i.e., (i) parting of possession of the tenanted premises by the tenant, and (ii) it has been done without the written consent of the landlord. C.R.No. 91 of 2008 -10- .... In my opinion, while considering the subletting, it is also to be kept in mind that such an arrangement is clandestine in nature between the tenant and the sub-tenant and the landlord, though the owner of the property, is stranger to the same. It is, thus, to be viewed in that perspective where the landlord's authentication of such an arrangement is severely handicapped. The Courts are, thus, required to examine it from that angle and acknowledge such handicap of the landlord. It is ostensibly with this reason that the following observations were made by this Court in Parkash Chand Versus Shri Muni Lal and ors. (supra):- “For holding as to whether the landlord had succeeded in proving his allegation of subletting against the tenant, he is only expected to place on record circumstances from which an inference of subletting can be drawn. It has been more than often held that the landlord is a stranger to the agreement of subletting between the tenant and sub-lessees and in that state of affairs it is not possible for the landlord to produce the lease deed between these parties or even oral evidence to testify that the sublease was created in the presence of some witnesses. The Court is only required to be guided like a prudent person, keeping always in mind the ordinary course of human conduct for deciding as to whether the premises had been sublet or not. The further rule in this behalf is that if the landlord is able to show that some person other than the tenant is in occupation of the demised premises C.R.No. 91 of 2008 -11- .... which is not being used by the tenant himself for a long time, the landlord must be deemed to have discharged his onus and ball shifts to the court of the tenant to explain the aforesaid circumstances.” Again, this Court in Lajwanti and another Versus Daulat Ram (supra), observed in paragraph 11 of the judgment which is extracted below:- “11. It cannot be disputed that in order to prove the subletting the creation of an interest in the lease hold rights is a sine quo non. Though exclusive possession is one of the strong circumstances to show an interest of the transferee in the demised premises and in a given circumstance sub-tenancy may be interfered to assumed, yet, it itself does not show that any legal rights had been created. It may shift the onus of proof. It may be one of the strong circumstances to be taken into consideration, but that by itself is not sufficient. The tenancy laws are for the protection of the tenants. The burden of proof with respect to sub-letting continues to be on the landlord. The burden may be very light and in particular facts and circumstances of a case may stand discharged by a statement on oath by the landlord alone. It is only when the onus shifts that the tenant is required to explain the nature of possession of the person other than the tenant.” In Life Insurance Corporation of India Versus Bharat (Sales) C.R.No. 91 of 2008 -12- .... Ltd. (supra), while dealing with a case of subletting, a learned Single Judge of Delhi High Court observed in paragraph 6 of the judgment as under:- “6. The other principle of law well- established by a catena of decisions, which it is not necessary to refer, is that direct evidence can rarely be expected to prove sub-letting or parting with possession. The plaintiff landlord may rely on circumstances which may lead to an inference of the premises or part thereof having been sub-let or parted with possession by the tenant. The initial onus of proving availability of such a ground lies on the landlord. The onus is discharged by the plaintiff having brought material on record prima facie leading to the inference abovesaid. It is then for the tenant to bring on record the facts within his exclusive knowledge as would rebut the inference raised in favour of the landlord.” Their Lordships of the Supreme Court in Ms.Celina Coelho Pereira & Ors. Versus Ulhas Mahabaleshwar Kholkar & Ors. (supra) dealt with a case which arose from the proceedings initiated under Goa, Daman & Diu Buildings (Lease, Rent & Eviction) Act,1968 on the ground of subletting and change of user. After noticing a number of judgments on the subject including the judgments in Jagan Nath(Deceased) through his Legal Representatives Versus Chandar Bhan and ors. (supra) and M/S Mahendra Saree Emporium Versus G.V.Srinivasa Murthy (supra) relied upon by the learned counsel for the petitioners, the legal position was summed up as under:- C.R.No. 91 of 2008 -13- .... “28. The legal position that emerges from the aforesaid decisions can be summarised thus: (i)In order to prove mischief of subletting as a ground for eviction under rent control laws, two ingredients have to be established, (one) parting with possession of tenancy or part of it by tenant in favour of a third party with exclusive right of possession and (two) that such parting with possession has been done without the consent of the landlord and in lieu of compensation or rent. (ii) Inducting a partner or partners in the business or profession by a tenant by itself does not amount to subletting. However, if the purpose of such partnership is ostensible and a deed of partnership is drawn to conceal the real transaction of sub-letting, the court may tear the veil of partnership to find out the real nature of transaction entered into by the tenant. (iii) The existence of deed of partnership between tenant and alleged sub-tenant or ostensible transaction in any other form would not preclude the landlord from bringing on record material and circumstances, by adducing evidence or by means of cross-examination, making out a case of sub- letting or parting with possession in tenancy premises by the tenant in favour of a third person. (iv) If tenant is actively associated with the partnership C.R.No. 91 of 2008 -14- .... business and retains the control over the tenancy premises with him, may be along with partners, the tenant may not be said to have parted with possession. (v) Initial burden of proving subletting is on landlord but once he is able to establish that a third party is in exclusive possession of the premises and that tenant has no legal possession of the tenanted premises, the onus shifts to tenant to prove the nature of occupation of such third party and that he (tenant) continues to hold legal possession in tenancy premises. (vi) In other words,initial burden lying on landlord would stand discharged by adducing prima facie proof of the fact that a party other than tenant was in exclusive possession of the premises. A presumption of subletting may then be raised and would amount toi proof unless rebutted.” If the facts and evidence in the instant case are evaluated in the light of the above mentioned proposition of law, then it transpires that the petitioners have not denied that M/S Mohan Meakin Limited is in occupation of the demised premises, but it has been pleaded that this was a permissible arrangement at the behest of one of the owners, i.e., Sat Pal, as is evident from Exhibit RW4/C. Thus, the case of the petitioners is that this amounted to tacit consent of the landlords which defies the essence of subletting. It has been contended on behalf of the petitioners that Sat Pal, the co-owner, was the person, who had negotiated such an arrangement and C.R.No. 91 of 2008 -15- .... that despite the fact that he was impleaded as a proforma respondent, he chose not to put in appearance which shows the collusion between him and respondent nos. 1 to 3 in order to cook up a plea of subletting. However, there is no denial by the petitioners to the fact that originally the tenancy was created in the name of M/S Trade Link Limited. It is now to be seen as to whether the petitioners were in possession of the tenanted premises or that they had transferred exclusive possession in favour of M/S Mohan Meakin Limited at some stage after the creation of tenancy in their favour. There is over-whelming evidence on record to show that the petitioners are no longer in business. Even though, it has been pleaded by the petitioners that M/S Trade Link Limited is a public limited company, but nothing has been placed on the file to prove this fact which could reflect the continuance of its existence or continuance of its business activities. Concededly, RW4-Rajinder Kumar, an official from the Excise and Taxation Department of Union Territory, Chandigarh, who was produced by the petitioners themselves, stated in his cross-examination that as per the record, the respondent, i.e., M/S Trade Link Limited had filed sales tax returns uptil the year 1985. The first notice (Exhibit RW2/A) was issued to the petitioners at the behest of the owners through their general attorney, Shri Om Parkash, for eviction on 6.9.1983 on the ground of subletting, as also on the ground of impairment in the value and utility of the demises premises as well as violation of the terms and conditions of the tenancy. There is no C.R.No. 91 of 2008 -16- .... reason to doubt the aforesaid document and merely because Shri Adish Gupta, Advocate through whom it was issued, deposed while appearing as RW2 that he had no record of the same, would not imply that the notice had not been issued as it is hardly expected from a lawyer to retain the copies of the legal notices issued by him on behalf of some clients for as long as ten years,i.e., at the time when he was examined in the year 2003. The contention that parting of possession of the demised premises by the petitioners has not been proved, is devoid of any merit because of the categoric and clear admission by them when they pleaded that M/S Mohan Meakin Limited was in possession thereof. To prove otherwise, the petitioners were required to plead and prove that they were in continuous possession of the demised premises or that the new arrangement came into existence in 1987 with due negotiations with Sat Pal, one of the co-owners. The petitioners have also failed to establish any collusion between respondent nos. 1 to 3 and Sat Pal. Even if the contents of Exhibit RW4/C are stretched to the maximum, and if accepted in