vsa 1 WP3933_1998 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 3933 OF 1998 Smt. Leelabai Ratilal Merchant ...... Petitioner v/s. Shri Shamdatta Tarachand Dave since deceased through legal heirs Smt. Saraswatidevi S. Dave & Ors. ..... Respondents Shri A.A. Kumbakoni with Shri T.D. Deshmukh for the Petitioner Shri S.J. Rairkar for the Respondents CORAM : A.S.OKA, J. DATE : 23rd December, 2011 Oral Judgment: The submissions of the learned counsel appearing for the parties were heard on the earlier date. The petitioner is the original plaintiff and the respondents are the original defendants. The suit premises is shop no. 4 admeasuring about 240 to 250 sq.ft., more particularly described in the suit filed by the petitioner. According to the case of the petitioner, her husband by executing a rent note dated 25th October, 1966 had let out the suit premises to the first respondent. An allegation made in the plaint is that the first respondent was a defaulter, as he did not pay the rent. The allegation is also regarding causing nuisance and annoyance. It was alleged in the suit that the first respondent has illegally sublet the suit premises to the second respondent. 2. The suit was contested by the first respondent by filing written statement. The first contention in the written statement is that the relationship as a landlord and tenant between the petitioner and the 1st respondent was not legally subsisting. The second contention is that the suit premises was taken on rent by the first respondent for conducting the partnership business and only for convenience, the rent receipt was being vsa 2 WP3933_1998 issued in the name of the first respondent though the tenancy was taken for the partnership firm. Reliance was placed by the first respondent on the consent decree passed in the suit between him and the second respondent . It was contended that as per the said decree, the first respondent has no right in respect of the suit premises and only the second respondent is entitled to claim tenancy right. The second respondent filed written statement. The second respondent contended that the suit premises was let out to the first respondent for partnership of the respondents in the name of Ganapati Bhuvan and only for the sake of convenience that the rent note and the rent receipts appear in the name of first respondent . It is contended that right from the inception of tenancy, second respondent was dealing with the suit premises to the knowledge of the petitioner. It is contended that even the petitioner was aware of the suit filed by the first respondent against the second respondent . It is alleged that the petitioner was accepting the rent from the second respondent and was issuing rent receipt. It is alleged that the rent sent by money order was not accepted by the petitioner. It is contended that in the suit filed by the first respondent, by virtue of compromise, the assets of the partnership firm including the tenancy rights came to the share of the second respondent . The allegation of sub-letting was denied by the second respondent . 3. The Trial Court, after considering the evidence, passed a decree for possession on the ground of sub-letting. An appeal was preferred by the second respondent before the District Court. The Appellate Court has interfered and has set aside the decree. 4. The learned counsel appearing for the petitioner has taken the Court through the pleadings, notes of evidence and documents on record. He submitted that the rent receipt records the name of only the first respondent. He submitted that the Partnership deed dated 1st September, 1967 between the first and second respondents of the partnership business of Ganapati vsa 3 WP3933_1998 Bhuvan does not make a reference to the tenancy rights in respect of the suit premises. He submitted that the case made out in the written statement is that though the tenancy was taken in the name of first respondent , in fact, it was taken for the partnership business of Ganapati Bhuvan and only for the sake of convenience, the name of first respondent was shown as tenant. Inviting attention of the Court to paragraph 9 of the cross-examination of the second respondent , he stated that a totally different case is made out by stating that as a result of the compromise in partnership suit, the tenancy rights were transferred by the first respondent to the second respondent. He pointed out that in the cross-examination, the second respondent has reiterated that the first respondent has transferred the tenancy rights in his favour. He invited attention of the Court to the terms of the Consent decree passed in Special Civil Suit No. 595 of 1982 filed by the first respondent against the second respondent. Apart from the fact that the case made out in the cross-examination of the second respondent is completely contrary to the terms incorporated in the consent decree, he submitted that the consent decree is of 29th January, 1994 by which the first respondent purportedly transferred the tenancy to the second respondent and, therefore, this is a clear case of unlawful sub-letting by the first respondent to the second respondent. He invited attention of the Court to the findings recorded by the Appellate Court. He submitted that there is no evidence on record to accept the case of the first respondent that the suit premises was taken on rent for the benefit of the partnership firm. He submitted that the finding of the Appellate Court based on amended Section 15 of the Bombay Rent, Hotel and Lodging House Rates Control Act, 1947 (herein referred to as the said Act) is perverse. He submitted that in view of the categorical admission in the cross-examination by the second respondent and in view of the fact that there is no material on record to show that the tenancy was a part of the assets of the partnership firm, the first respondent has illegally sublet the suit premises to the second respondent and, therefore, decree of the vsa 4 WP3933_1998 Trial Court ought to have been affirmed. 5. The learned counsel appearing for the second respondent supported the impugned judgment and decree. He pointed out that there is more than enough material on record to show that from the inception of the tenancy, the business of partnership firm was being carried out in the suit premises. He submitted that there is evidence on record to show that the rent was being paid from the account of the partnership firm. Inviting the attention of the Court to the cross-examination of the petitioner's son, he submitted that the residential house of the petitioner is just on the left side of the suit premises and therefore the petitioner was all along aware that the suit premises is being used for conducting the business of the partnership. He submitted that the petitioner has avoided to enter the witness box. He pointed out that the case made out in the cross-examination is that the second respondent was the servant of the first respondent . He submitted that the petitioner had knowledge that the respondents are running the business of the partnership firm in the suit premises since the creation of tenancy. He pointed out that the case of the respondents in the written statement is that it is the partnership firm which was the tenant and in the suit filed by the first respondent against the second respondent , a consent decree was obtained recording that the partnership firm has been dissolved and the assets of the partnership were allotted to the share of the second respondent . He submitted that if the partnership firm was the tenant and if upon the dissolution of the partnership, the assets and tenancy rights have gone to one of the two partners, it would not amount to sub-letting. He submitted that the statements of the second respondent in paragraph 9 of the cross-examination were in the context of the consent decree. He submitted that there is no inconsistency in the case made out in the pleadings and the case made out in the evidence. He, therefore, submitted that the Appellate Court was justified in interfering with the decree for vsa 5 WP3933_1998 possession. The learned counsel appearing for the petitioner placed reliance on the decision of the Apex Court in the case of Celina Coelho Pereira (Ms) and Others vs. Ulhas Mahabaleshwar Kholkar and Others [(2010) 1 SCC 217]. He submitted that once a landlord discharges the burden on him to prove that a stranger is in possession of the suit premises, the onus is on the tenant to prove the nature of the occupation of such a stranger and that the tenant continues to hold the legal possession. He submitted that in the present case, the petitioner has discharged the burden on him and the onus shifted to the first respondent which is not discharged in as much as both the respondents could not prove in what manner and in what capacity the second respondent was in possession of the suit premises. 6. Before adverting to the submissions made by the learned counsel appearing for the parties, it will be necessary to make a reference to the finding recorded by the Courts below. The Trial Court has relied upon the fact that the rent receipt was issued right from the inception of the tenancy till 1986 only in the name of the first respondent and that the partnership was constituted after the rent note was executed. The Trial Court relied upon the admission of the second respondent that in the suit filed by the first respondent against him, it was the contention of the first respondent that the suit premises was let out to the first respondent and not to the partnership firm. After referring to the admissions, the learned Judge held that the plea of sub-tenancy was established by the petitioner. 7. As far as the Appellate Court is concerned, the finding recorded by the Appellate Court is that all along the business of the partnership firm was being conducted in the suit premises and that there was ample evidence on record to show that the tenancy was taken for the benefit of the partnership firm. The Appellate Court also recorded a finding that even if it is held that there was sub-letting by the first respondent in favour of second respondent , vsa 6 WP3933_1998 the sub-letting was of the year 1967 and therefore, in view of the amendment to Section 15(2) of the said Act made with effect from 1st October, 1987, the prohibition against sub-letting shall not apply in the present case. 8. Perusal of the written statements filed by both the respondents show that the specific contention raised by them is that the suit premises was taken on tenancy for the benefit of the partnership and only for convenience, the name of the first respondent was incorporated in the rent receipt. The contention of the second respondent is that the suit premises was taken on rent for the partnership and that he was doing business in the suit premises with the knowledge of the petitioner. Reliance was placed on a consent decree passed in Special Civil Suit No. 595 of 1982 filed by the first respondent against the second respondent . 9. As far as the oral evidence is concerned, the petitioner has avoided to enter into the witness box. She examined her son, who proved the rent note dated 25th October, 1966 which stands in the name of the first respondent . The purpose of letting shown in the rent note, which was for a period of 11 months, was for running the business of selling tea, coffee and soda lemon. The suit premises is situated in property bearing Survey No. 1133, Shivajinagar, Pune. The son of the petitioner stated that though the suit premises was let out to first respondent , the second respondent was carrying on business. However, he has not stated from which year the second respondent was inducted. He stated in the cross-examination that he knew the second respondent for a period of 5 to 10 years. He admitted that the second respondent used to come for the payment of rent to the petitioner. He stated that the second respondent was a servant of the first respondent . In the cross-examination, he stated that he cannot exactly state for how many years, the second respondent was in possession of the suit premises. He, however, stated that he has seen that the second respondent vsa 7 WP3933_1998 was in possession of the suit premises. Later on, in the cross-examination he stated that “I came to know today itself that Mohan Raval is doing the business in the suit premises”. Later on he stated that he has made second respondent as a party, as he was occupying the suit premises. He stated that he was not aware of the business in partnership of Shri Ganapati Bhuvan. However, he admitted that there is a board displayed on the suit premises in the name Ganapati Bhuvan. He pleaded ignorance as to when the partnership between the first and second respondent was dissolved and the tenancy rights came to the share of second respondent. Thus, the petitioner has not at all stated from what year the second respondent was in possession. 10. Before dealing with the oral evidence of the second respondent, it will be necessary to make reference to the documentary evidence on record. The Deed of Partnership dated 1st September, 1967 refers to the fact that the business of the partnership will be carried out in the suit premises. It is important to note that there is a specific recital that the parties to the partnership were already carrying on business of Shri Ganapati Bhuvan in the suit premises since last seven months. Thus, the partnership business of first and second respondent commenced in the suit premises atleast from February, 1967. The licence issued under the Shops and Establishment Act, 1948 at Exh. 63 shows that it was in the name of Shri Ganapati Bhuvan and names of both the respondents appear on the licence which was issued on 13th July, 1967. Income-tax returns and extracts of Income and Expenditure Accounts of the partnership are on record. The extract of accounts of Samvat Year 2028 (Assessment Year 1973-74 and Financial year 1972-73) is on record which discloses that the rent was being paid from the account of the partnership firm. Apart from that, the said extract which is at Exh. 60 clearly shows that a sum of Rs.1912.15 towards rent was paid from the accounts of the partnership firm in the relevant Samvat year. Even the vsa 8 WP3933_1998 accounts of Samvat 2029 also show similar entry. 11. The petitioner's son, who stepped into the witness box, pleaded ignorance about the fact as to when the second respondent entered possession of the suit premises. As pointed out earlier, the partnership deed dated 1st September, 1967 records that the business of the partnership firm was started in the suit premises from February, 1967. The license under the Bombay Shops and Establishment Act at Exh, 63 is of 3rd July, 1967 which contains the name of the partnership business as well as names of the first and second respondents. There is evidence on record to show that at least in the Financial Year 1972-73, the rent was being paid from the account of the partnership. 12. As both the learned counsel have relied upon the documents on record of the Trial Court, this Court was required to peruse the record. Perusal of the record shows that the second respondent in paragraph 3 of his deposition has proved agreement dated 15th February, 1973 executed by and between himself and the first respondent . He identified the signature of the first respondent and stated that the contents thereof are correct. It will be necessary to make a reference to the said agreement dated 15th February, 1973. The said agreement has been admitted in evidence and marked as Exh. 72. The said agreement is on stamp paper of the same date, which appears to have been purchased in the name of first respondent . In the said agreement between the first and second respondent , it is recorded that the suit premises has been taken on tenancy by the first and second respondents and the the partnership firm was the tenant. This document on which there does not seem to be any cross-examination cannot be kept out for consideration. The documents on record show that the second respondent was in the suit premises right from the year 1967. The case made out by the petitioner in the plaint is that the first respondent has sublet the suit premises to the second respondent. It is not a case made out by the vsa 9 WP3933_1998 petitioner in the plaint that the sub-letting was made on 29th January, 1994 when consent decree was passed in partnership suit filed by the first respondent. The case is simplicitor that the first respondent sublet the premises to the second respondent. Thus, the evidence on record shows that prior to 1st February, 1973, the second respondent was carrying on business in the suit premises. There is no specific case made out that the sub-letting was of year 1994. It is true that the petitioner discharged burden of showing that second respondent whose name was not mentioned in the rent note was in possession of the suit premises. In terms of the decision of the Apex Court in the case of Celina (supra), the burden shifted on the respondents to prove in what capacity the second respondent was in possession. The explanation is that the tenancy was taken for the benefit of the partnership and only for convenience that the name of first respondent was mentioned in the rent receipt and rent note. The deed of partnership dated 1st September, 1967 shows that the partnership business of first and second respondents was commenced in the suit premises somewhere in February, 1967. The license under the Bombay Shops and Establishment Act is of July 1967 which is in the name of partnership business and which contains names of both first and second respondents. The accounts of the partnership firm which have been admitted in evidence show that at least from the Financial Year 1972-73, rent was being paid from the account of the partnership firm. 13. The son of the petitioner admitted that there was a name board of Shri Ganapati Bhuvan on the suit premises. The petitioner is residing very close to suit premises. In the light of these facts, which are on record, there is a finding recorded by the Appellate Court in paragraph 16 that there is ample evidence to hold that the premises was taken from the petitioner on rent for the partnership firm of the respondents. The said finding of fact recorded by the Appellate Court is supported by documentary and oral evidence on vsa 10 WP3933_1998 record. There is no reason to find fault with the said finding. 14. In the consent decree passed on 23rd January, 1994 and in particular Clause 1 thereof, it is provided that the partnership stands dissolved with effect from 23rd September, 1982. There is a further clause that all assets including tenancy rights will belong to the second respondent. As the partnership firm was the tenant, the allotment of assets of the partnership including the tenancy rights to one of the partners on dissolution of the firm will not amount of unlawful sub-letting or unlawful transfer of the suit premises. 15. The learned counsel appearing for the petitioner had relied upon certain admissions of the second respondent. The admissions are in paragraph 9 of the deposition. It will be necessary to make a reference to paragraph 2 of the deposition of the second respondent in which he has categorically stated that rent was being paid by the partnership. He has also stated in the same paragraph that the rent is so debited in the accounts of the firm. In paragraph 8 of the deposition, the second respondent has stated that it was decided orally in the year 1965-66 to carry out business in the partnership. It will be necessary to refer to what is stated in paragraph 9 of the cross-examination of the second respondent which reads as: “9. It is true that it was the contention of deft. No. 1 in the suit filed by him that the suit premises were let out to him but not to the partnership. But that contention was false. The suit was not decreed on merit. It was compromised and the tenancy rights were transferred in my name by defendant no.1. It is not true to say that the tenancy was not in the name of partnership firm or in my name at any time. It is true that the Dave-deft. No. 1 has transferred the tenancy right in my favour. I orally informed to the plaintiff to pass rent receipt in my name. I have informed the landlord in writing for transferring the rent receipt in my name. It is not true to say that I am deposing falsely in this respect as only defendant no. 1 was having tenancy rights. I used to sign on the counterfoil of rent receipt without reading it. It is not vsa 11 WP3933_1998 true to say that I am deposing falsely that I used to sent rent and thereafter the landlord used to send rent receipts. Subsequently the original tenancy agreement was for the business of Soda, lemon, tea and coffee. It is true to say that I am carrying on the business of friend snaks in the suit premises. It is not true to say that because of that the suit premises have been damaged.” 16. The entire cross-examination in paragraph 9 is on the partnership suit filed by the first respondent . What is stated by the second respondent is that the suit was compromised and tenancy rights were transferred in his name by the first respondent. That is reiterated in the subsequent part by stating that the first respondent transferred the tenancy rights in favour of the second respondent . Reference to the said transfer is obviously the transfer effected by the consent decree which clearly provides that on dissolution of the partnership firm, all the assets including the tenancy rights would come to second respondent . What is stated by the second respondent is that the suit was compromised and the tenancy rights were transferred in his name by the first respondent . Thus, what is stated by him is that the tenancy rights were transferred in his name under the said compromise decree. Therefore, this case made out in the cross-examination is consistent with the case of both the respondents that in fact the tenancy was for the benefit of the partnership firm and only on the dissolution of the partnership firm that the second respondent took over the assets of the partnership firm. Therefore, the said statements made in paragraph 9 will not help the petitioner in establishing that there was an unauthorised sub-letting by the first respondent to the second respondent. In short, the respondents have explained in what capacity the second respondent was in possession. The explanation which is accepted by the Appellate Court is that it was the partnership firm for whose benefit the tenancy was acquired and first and second respondents, being partners, were carrying on business in the suit premises. vsa 12 WP3933_1998 17. There is another aspect of the matter. The case made out by the petitioner is that the first respondent was a tenant who has unauthorizedly sublet the premises to the second respondent . Going by evidence on record, the presence of the second respondent in the suit premises was established right from