Civil Revision No.1491 of 1989 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Revision No.1491 of 1989 (O&M) Date of decision: 03 .02.2009 Dass Kumar and others .............. Petitioners Vs. Tilak Raj and another .............Respondents Present: Mr. Sudhir Mittal, Advocate for the petitioners. Mr. Amit Jain, Advocate & Mr. Chetan Slathia, Advocate for Mr. Arun Jain, Sr. Advocate for the respondents. CORAM:HON'BLE MR. JUSTICE K. KANNAN 1. Whether Reporters of local papers may be allowed to see the judgment ? Yes 2. To be referred to the Reporters or not ? Yes 3. Whether the judgment should be reported in the Digest ? Yes -.- K.KANNAN, J. 1. The tenant who was successful in resisting the claim for ejectment before the Rent Controller suffered a reversal of the decision at the Appellate Authority. The Appellate Authority upheld the contention of the landlord that there had been a subletting of the premises by the first respondent to respondent Nos.2 to 4. 2. Learned counsel for the tenant adverted to the decision of the Appellate Authority to point out to the errors in reasons on the following grounds:- (i) The landlord had not made any reference to the rent note as existing in the petition and the reliance on Ex. A-1 which was rent note to uphold the contention of the landlord that the property had been rented out only to the first respondent was not tenable. Civil Revision No.1491 of 1989 (O&M) -2- (ii) The permission accorded by the Appellate Authority to the landlord to file additional evidence of registered rent deed dated 01.09.1976 was not justified for the landlord had not set out any reason as to why same was not filed before the Rent Controller. (iii) The landlord had himself issued receipts admitting the possession of respondents No.2 to 4 which contained reference to M/s Pal Automobiles as his tenant with the names of respondent Nos.1 to 4. The receipts marked R-7 to R-13 betrayed the falsity of contention of the landlord that respondent Nos.2 to 4 were sub-tenants. 3. Learned counsel for the respondent sought to support the reasoning of the Appellate Authority by pointing out that once it was established that the tenancy had been only in favour of the first respondent by reference to Ex.P-2 dated 01.09.1976 and it was brought out in evidence that the first respondent himself was not in possession of the property, it was the duty of the respondent Nos.2 to 4 to establish that there had been no sub- tenancy and the character of possession as direct tenants not having been established by them, the finding of sub-tenancy by the Appellate Authority was justified. The learned counsel also referred to decisions rendered by the Hon'ble Supreme Court and other Courts that the mere receipt of rent from sub-tenants will not amount to creation of tenancy in their favour, for the law required consent in writing by the tenant and the act of sub-tenancy by a tenant cannot seem to be actionable by any act acquiescence by the landlord. 4. In the present case, the contention of the tenants to explain their possession has come under the circumstance that admittedly the property had been inducted to the possession of the first respondent. While the respondent No.2 to 4 contended that initially the tenancy itself had been Civil Revision No.1491 of 1989 (O&M) -3- made to the first respondent in his capacity as a partner of the firm, their attempt was to show that their own association with the first respondent was not as sub-tenants but as partners and consequently they could not be attributed to the status of sub-tenants. Learned counsel for the respondent- landlord would immediately respond to this attempt of respondent Nos.2 to 4 by pointing out that if the original tenancy is to an individual and he took other persons as partners so long as the original tenant who was individual continued in the partnership, the landlord might not have remedy but the moment the individual withdrew himself from partnership and ceased to occupy the premises and allowed the other persons who are inducted as partners to continue in business, the possession of the other partners would partake the character of the sub-tenants. To this line of reasoning, the learned counsel for the respondent before this Court cited the decisions of this Court in Santosh Rani and others Vs. Nand Lal and others 2000(1) R.C.R. (Rent) 376, Tilak Raj Anand Vs. Surinder Kumar 2005(1) R.C.R. (Rent) 505. 5. The Appellate Authority approached the contentions of respondents No.2 to 4 from the point of view of their inability to produce any written document to show that there was any form of partnership between them and the first respondent and that further the best evidence by production of account books not having been produced was taken as a circumstance strongly against them to reject the plea of the tenancy in favour of the partnership. To the Appellate Authority, the fact that there was a registered rent deed in favour of the first respondent Ex.P-2 was sufficient to establish that the tenancy had, at no point of time, been in favour of the partnership and if the tenant was admittedly not in possession of the premises at the time of the eviction petition was filed, the consequence was inescapable that respondent Nos.2 to 4 must be only sub- Civil Revision No.1491 of 1989 (O&M) -4- tenants. 6. The reasoning of the Appellate Authority, in my view, suffers from a very serious lacuna only by the fact that the Appellate Authority was looking for proof from the respondents on a matter of admission. The first respondent who was alleged as having caused a sub-tenancy was examined by the landlord as his witness PW-2. PW-2 had admitted in the cross- examination that he was having the partnership with his father Mani Ram some time in the year 1976 and they had as employees-respondent Nos.2 to 4 in the business and took them as partners in the year 1981. If this was the admitted premise, the reasoning of the Appellate Authority that the documents of a partnership deed or submission of partnership accounts to establish the truth of defence falls to ground. Significantly, the landlord had not referred to any alleged receipt in his petition and the production of Ex.P- 1 was itself a suspect and the recitals cannot be given any more weight when he did not explain why there was a lack of reference in his pleading. The non-production of Ex.P-2 which is registered document itself was not properly explained but at least by the fact that the document was registered one, definitely it could not have been manufactured subsequent to the filing of the petition. It is no doubt true that the rent deed dated 01.09.1976 (Ex.P- 2) was a registered document and the tenancy was made only in favour of the first respondent. The recital in P-1 which recites P-2 cannot still explain the landlord's contention that the tenancy persisted only in favour of the first respondent in his individual capacity. Ex.P-1 itself does not evoke any confidence and the reliance on the document which had no foundational basis in the pleadings ought not to have been relied on by the Appellate Authority. If, according to the landlord, the tenancy commenced only in 1977 and by the evidence of first respondent who was examined as PW-2 there was already a partnership at that time, it should only be taken that the Civil Revision No.1491 of 1989 (O&M) -5- tenancy was made in favour of the partnership. Even if the tenancy had been only in favour of the first respondent in his individual capacity, the fact that the first respondent was running a partnership along with respondent Nos.2 to 4 proves two things:- (i) The defence that respondent Nos.2 to 4 were not sub- tenants at the inception when they continued to associate themselves with the first respondent but they were partnership as contended by them was true. (ii) If the possession in their capacity as partners were established, it is not merely a simple case of the first respondent withdrawing from the partnership that changed the character of possession of respondent Nos.2 to 4 as sub-tenants. 7. The decision adverted to by the counsel for the landlord referred to instances of the individual tenants later inducting partners and the result of withdrawal of the tenant from partnership that could bring about the change of character of the partners as sub-tenants. In this case the defence must be seen in its entire perspective. The defendants were specifically pleading that the landlord considered the partnership itself as its tenants and not merely the first respondent as a tenant by virtue of fact that the receipts were issued by the landlord in the name of M/s Pal Automobiles referring to all the four persons in the rent receipts. 8. Learned counsel for the respondent relied on the decision of Hon'ble Supreme Court in Pulin Behari Lal Vs. Mahadeb Dutte and Ors. JT 1993(1) SC 341, P. John Chandy and Company (P) Ltd. Vs. John P. Thomas JT 2002 (4) SC 444 to the effect that mere acceptance of rent cannot defeat the landlord's right to get decree for ejectment. It is one thing to contend that the landlord's mere receipt of rent from sub-tenants cannot Civil Revision No.1491 of 1989 (O&M) -6- defeat the right of the landlord to obtain eviction, when an action of sub- tenancy without the written consent of the landlord would not be lawful under the particular tenancy law but quite another to contend that the tenancy itself later became a tenancy in favour of the partnership and not in favour of the individual. The Hon'ble Supreme Court decisions did not refer to instances of the landlord issuing rent receipts to persons other than the original tenant. In our present case, Ex.R-7 to R-13 beginning from the year 1982 to 1985 referred to the partnership firm as well as the names of respondent Nos.2 to 4 in the rent receipts. The Appellate Authority itself had referred to the receipts standing in the name of the respondent Nos.2 to 4. The landlord himself had no explanation to offer as to why rent receipts were issued also in the names of respondent Nos.2 to 4. Issuing a receipt in the nature of a tenant but delivering it to a person under the employment of a tenant itself will not be artificial. If the contention of the landlord had been true that he knew his tenant to be only the first respondent, he would have also issued the receipt only in the name of first respondent and not made references to other persons in employment under the first respondent. The issuance of receipts for rent in the name of the partnership containing the names of respondent Nos.2 to 4 is a positive act on the part of the landlord creating a tenancy by implication in favour of the partnership. It is, therefore, not a case of a tenancy in favour of an individual where an individual enters into a partnership arrangement without reference to the landlord and later the individual withdrawing their partnership. On the other hand, it is a case of the original tenancy being in the name of an individual but later the tenancy itself has enured in favour of the partnership by the express conduct of the landlord, creating the tenancy in favour of partnership by receiving the rents from the partnership and issuing the receipts in the name of the partnership. Civil Revision No.1491 of 1989 (O&M) -7- 9. The legal approach to the issue relating to the issuance of receipts in the name of the partnership firm was lost sight of by the Appellate Authority. The provisions of the Transfer of Property Act are not totally abrogated by the Rent Restriction Act. It only stands eclipsed to the extent to which specific provisions are made under the Special Rent Control Act. The expression lease itself is not defined under the Rent Restriction Act and by the definition as contained under Section 105 of the Transfer of Property Act, a lease could be either expressed or implied. While the express terms of the lease under Ex.A-2 was in favour of the individual, the issuance of receipt in the name of the partnership subsequently by the landlord created a tenancy by implication in favour of the partnership. By the fact that I find that the tenancy had been in favour of the partnership, I uphold the contention of the revision petitioners that there had been a mis-judgment by wrong approach to the facts and law that were involved in this case. The order of eviction passed by the Appellate Authority, in my view, therefore is erroneous and is liable to be set aside. 10. The revision petition is, therefore, allowed but under the circumstances there shall be no direction as to costs. (K. KANNAN) JUDGE February 03, 2009