On 14th September, a bench of Delhi High Court consisting of Justice Asha Menon, held that the court does not sit as a court of appeal while exercising its powers under Article 227 of the Constitution of India. The court is not required to go into the questions which depend on appreciation of evidence, even when two conclusions were possible.

It was also held that only if there is misdirection in law, or a view or fact taken is in the teeth of preponderance of evidence and the finding was so perverse and not based on any material evidence or has resulted in manifest injustice, would the court, while exercising its jurisdiction under Article 227 of the Constitution of India, go into the questions of facts or re-appreciate evidence.

Facts of the case:

The petition has been filed under Article 227 of the Constitution of India seeking quashing/setting aside of the judgment of the learned Rent Control Tribunal dated 12th February, 2021, passed in RCT No.24/2018 and the judgment of the learned Additional Rent Controller dated 8th June, 2018, passed in ENo.24/2008. The respondent No.1 had filed an eviction petition under Section 14(1)(b) of the Delhi Rent Control Act, 1958 (“DRC Act”, for short) against the petitioners on grounds of the petitioner No.1 having sublet the premises to the co-petitioners. Qua the respondent No.2 herein i.e., M/s. East West Agencies, the learned ARC held that the decision in a previous eviction petition filed by the petitioner No.1 against the respondent No.2, which had been dismissed by the then RCT, operated as res-judicata qua the ground of subletting. The learned RCT vide its judgment dated 12th February, 2021 upheld the decision of the learned ARC.

Contention of the petitioner:

Mr. Ajay Kohli, learned counsel for the petitioners, submitted the following:

  1. It was submitted that the conclusions of the learned ARC as well as the learned RCT were erroneous inasmuch as the original landlord had, while executing the Lease-Deed dated 24th February, 1971, permitted K.C. Jain and Sons to carry on their business from the demised premises.
  2. It was submitted that subletting entails the effacement of the tenant from the control over and possession of the tenanted premises.
  3. It was argued that there was no necessity for the learned RCT to have gone into the question of whether the petitioner No.1 was a defunct company.
  4. It was submitted that the health of the business of the tenant is not a factor relevant to establish continuance of possession.

Contention of the respondent:

The counsel for the respondent contended the followed:

  1. It was submitted that even if subletting had been permitted to K.C. Jain and Sons, it could not be extended to other entities created by them.
  2. It was also submitted that merely because the Managing Director, Pawan Sagar Jain, was common to all the concerns, would not make them the same legal entity.
  3. Learned senior counsel further contended that the profit, which the petitioner No.1 was claiming, was actually, the rent paid by the petitioners No.2 & 3 to petitioner No.1. This also clearly established that the demised premises had been sublet.
  4. It was also submitted by the learned senior counsel for the respondent No.1 that in the absence of any error or perversity in the judgments or the exercise of powers without jurisdiction, or the over-looking of evidence or admission of evidence erroneously, the present petition was liable to be dismissed.
  5. It was also submitted that the ‘piercing of the corporate veil’ is intended to avoid impropriety and wrongdoing or misuse.

Observation and judgement of the court:

The Hon’ble bench of the court observed the followed:

  1. In case the courts below had exceeded their jurisdiction and authority, the court in the exercise of its supervisory power under Article 227 of the Constitution of India would no doubt interfere.
  2. The court did not find no force in the contention of the learned counsel for the petitioners that the learned ARC had wrongly shifted the burden of proof on the petitioners.
  3. The court did not find anything amiss in the observations of the learned RCT that the petitioner No.1 is in fact a defunct company and that the premises are in actual use and control of the petitioners No.2 & 3.

In the light of the above, no merit was found in the present petition. The same was accordingly dismissed along with the pending applications and the eviction was upheld. 

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