Case: M/S S.F.Engineer Vs. Metal Box India Ltd

the appellant a sum of Rs. 3,24,000/- (Three Lakhs and Twenty Four Thousand only) in full and final settlement of the amount payable by the respondent for overstaying in the premises in question.(ii) A sum of Rs.4,17,000 (Rupees Four Lakhs and Seventeen Thousand only) has been deposited by the appellant in the High Court of Bombay in Writ Petition No. 2134/1993. The said amount of Rs.4,17,000/- together with interest that may have accrued thereon, after deducting the amount of Rs. 3,24,000/- shall be paid to the respondent. The sum of Rs.3,23,000/- shall be paid to the appellant.(iii) The respondent shall handover vacant possession of the premises in question to the appellant on a date and time to be fixed by the senior Prothonotary of the High Court of Bombay in the presence of a representative of the Senior Prothonotary who shall record a memorandum signed by the respondent and a representative of the appellant. The possession shall be handed over by the respondent to the appellant within a period of three weeks from today. The amount payable to the respondent shall be handed over to him forthwith, or soon after the possession of the premises in question is handed over to the appellant.(iv) The parties agree that Summary Suit No. 947/2004 pending before the High Court of Bombay; Complaint Case No.1195/S/2003 pending before the Metropolitan Magistrate, Dadar, Bombay which is challenged before the High Court of Bombay in Criminal Writ Petition No. 2514/2006 and Writ Petition No. 2134/1993 shall be withdrawn by moving appropriate applications by the party concerned. Two suits, namely, RAE Suit No. 45/1984 pending before the Small Causes Court, Bombay giving rise to Appeal No. 372/2005 and TE&R Suit No. 153/165 of 2001 pending before the Small Causes Court, Bombay which have been filed by the landlord of the premises in question shall continue and the appellant herein may contest the same, if so advised. So far as the respondent herein is concerned, he shall stand absolved of any liability in the said wo suits before the Small Causes Court.” 27. We have referred to the written statement in extenso and the terms that have been recorded by this Court solely for the purpose of appreciating the plea whether creation of sub-tenancy by the landlord has really been established. The thrust of the matter is whether the trial court and the appellate court have correctly arrived at the conclusion of sub-letting on the foundation of legitimate inference from the facts proven. As is evincible, the defendant No. 2 was put in possession by the defendant No. 1 while he was in service. There was an agreement between the defendant No. 2 and the defendant No. 1 which has been brought on record. The agreement of tenancy between the plaintiff and the defendant No. 1 is not disputed and one of the stipulations in the agreement is that the tenant has been given the premises on lease for the purpose of occupation of its executive staff. Thus, handing over of the possession of the premises to the defendant No. 2 is in accord with the terms and conditions of the agreement entered between the landlord and the tenant and, therefore, the entry of the defendant No. 2 into the premises is legal. The trial court as well as the appellate court has drawn inference that after the defendant No.2, the employee, resigned from service and remained in occupation while he was not entitled to, the defendant No. 1 did not take any steps to get back the possession and the proceedings initiated under the Companies Act were dismissed for non- prosecution and at a belated stage only a suit for recovery of occupational charges was instituted. The emphasis is on the inaction on the part of the defendant No. 1 to institute a suit for eviction. Such inaction would not by itself persuade a court to come to the conclusion that the sub-letting was proved. Nothing has been brought on record by way of documentary or oral evidence to suggest that there was any kind of arrangement between the defendant No. 1 and the defendant No. 2. The written statement which has been filed by the defendant No.2, in fact, is a series of self serving assertions for his own benefit. His stand would show that non-payment of provident fund and gratuity and other retiral dues amounted to consideration or a kind of arrangement. That apart, he has claimed himself to become a tenant under the landlord and also had put an aspirational asseveration that he had negotiated with the landlord to purchase the property to become the owner. The High Court has noted that the tenant, defendant No.1, was a sick company under the SICA and could not have received any money in a clandestine manner. Be that as it may, withholding of retiral dues cannot be considered as a consideration or any kind of arrangement. The settlement before this Court shows that the defendant No. 2 had paid the amount for overstaying in the premises in question and the deposited amount with the High Court was required to be paid towards the dues of the defendant No. 2 after deducting overstayal charges. Mr. Sundaram, learned senior counsel for the appellant, has contended that the settlement before this Court was between the defendant No.1 and the defendant No. 2 to which the landlord was not a party and hence, it cannot have any effect on the issue of sub-letting. True it is, it is a settlement between the defendant No. 1 and defendant No.2, but it is a settlement between an employer and an erstwhile employee and, therefore, the landlord had no role. We have noted the settlement only to show that barring withholding of the retiral dues the employer had not received any thing either in cash or in kind or otherwise from the defendant No. 2 and hence, under these circumstances, it is extremely difficult to hold that the factum of sub-letting has been established.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]23. We have referred to the aforesaid decisions only to reaffirm the proposition that the Court under certain circumstances can draw its own inference on the basis of materials brought at the trial to arrive at the conclusion that there has been parting with the legal possession and acceptance of monetary consideration either in cash or in kind or having some kind of arrangement. The aforesaid authorities make it further spectacularly clear that the transaction of subletting can be proved by legitimate inference though the burden is on the person seeking eviction. The materials brought out in evidence can be gathered together for arriving at the conclusion that a plea of subletting is established. The constructive possession of the tenant by retention of control like in Cooks and Kelvey Properties (P) Limited (supra) would not make it parting with possession as it has to be parting with legal possession. Sometimes emphasis has been laid on the fact that the sub-tenancy is created in a clandestine manner and there may not be direct proof on the part of a landlord to prove it but definitely it can bring materials on record from which such inference can be drawn.Coming to the case at hand, on a studied scrutiny of the evidence it is quite vivid that an agreement was entered into by the landlord and the tenant in respect of the premises with the stipulation that it would be used only for providing the residential accommodation of the executive staff and not for any other purpose.26. On a close perusal of the assertions made by the defendant No. 2 it is luminous that he was allowed to occupy the premises as an executive by the company and thereafter as his dues could not be paid to him, he remained in occupation and also tried to become the owner of the premises. True it is, the defendant No. 1 did not initiate action at an early stage but in 1993 when the Provident Fund Commissioner made a demand, it moved the writ court and ultimately the matter was settled before thisThus, handing over of the possession of the premises to the defendant No. 2 is in accord with the terms and conditions of the agreement entered between the landlord and the tenant and, therefore, the entry of the defendant No. 2 into the premises is legal. The trial court as well as the appellate court has drawn inference that after the defendant No.2, the employee, resigned from service and remained in occupation while he was not entitled to, the defendant No. 1 did not take any steps to get back the possession and the proceedings initiated under the Companies Act were dismissed for non- prosecution and at a belated stage only a suit for recovery of occupational charges was instituted. The emphasis is on the inaction on the part of the defendant No. 1 to institute a suit for eviction. Such inaction would not by itself persuade a court to come to the conclusion that the sub-letting was proved. Nothing has been brought on record by way of documentary or oral evidence to suggest that there was any kind of arrangement between the defendant No. 1 and the defendant No. 2. The written statement which has been filed by the defendant No.2, in fact, is a series of self serving assertions for his own benefit. His stand would show that non-payment of provident fund and gratuity and other retiral dues amounted to consideration or a kind of arrangement. That apart, he has claimed himself to become a tenant under the landlord and also had put an aspirational asseveration that he had negotiated with the landlord to purchase the property to become the owner. The High Court has noted that the tenant, defendant No.1, was a sick company under the SICA and could not have received any money in a clandestine manner. Be that as it may, withholding of retiral dues cannot be considered as a consideration or any kind of arrangement. The settlement before this Court shows that the defendant No. 2 had paid the amount for overstaying in the premises in question and the deposited amount with the High Court was required to be paid towards the dues of the defendant No. 2 after deducting overstayal charges. Mr. Sundaram, learned senior counsel for the appellant, has contended that the settlement before this Court was between the defendant No.1 and the defendant No. 2 to which the landlord was not a party and hence, it cannot have any effect on the issue of sub-letting. True it is, it is a settlement between the defendant No. 1 and defendant No.2, but it is a settlement between an employer and an erstwhile employee and, therefore, the landlord had no role. We have noted the settlement only to show that barring withholding of the retiral dues the employer had not received any thing either in cash or in kind or otherwise from the defendant No. 2 and hence, under these circumstances, it is extremely difficult to hold that the factum of sub-letting has been established.