Dharamvir Kataria Through L.Rs vs Shyam Sunder Talwar & Ors
2012 Latest Caselaw 861 Del

$~R-25A

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

%                               Date of Judgment: 08.02.2012

+                      CM (M) No. 1428/2007


      DHARAMVIR KATARIA THROUGH L.RS.
                                       ..... Petitioners
                  Through: Mr.J.P.Sengh, Senior Adv. with
                           Ms.Jyotika Kalra, Advocate.

                       versus


      SHYAM SUNDER TALWAR & ORS. ...... Respondents
                  Through : Mr.S.K.Taneja, Sr. Adv. with
                            Mr.Puneet Taneja, Advocate.



      CORAM:
      HON'BLE MS. JUSTICE INDERMEET KAUR


INDERMEET KAUR, J. (Oral)

1. Impugned judgment is the order passed by the Rent Control

Tribunal (RCT) dated 02.07.2007 which has reversed the finding of the

Additional Rent Controller (ARC) dated 16.11.2005. Vide order dated

16.11.2005, the petition filed by the landlord namely Dharamvir Kataria

(Dead) through his legal representatives seeking eviction of his tenant

Shyam Sunder Talwar & Others on the grounds under Section 14

(1)(a)(b) & (c) of the Delhi Rent Control Act (DRCA) had been decreed

on the ground under Section 14 (1)(b) of the DRCA; on other grounds,

the eviction petition had been dismissed. The RCT had however

reversed the finding of the ARC and had dismissed the eviction petition

of the landlord on the ground under Section 14 (1)(b) of the DRCA as

well.

2. Record shows that the present eviction petition has been filed by

the landlord under Section 14 (1)(a)(b) & (c) of the DRCA; premises

which had been let out to Shiv Narain is suit property bearing Municipal

No. 1978, ground floor, Bank Street, Karol Bagh, New Delhi. The

ground under Section 14 (1)(b) of the DRCA i.e. the ground of

subletting had found favour with the ARC and he had decreed the

eviction petition. This was after examination of oral and documentary

evidence led by the respective parties which included one witness on

behalf of the landlord and correspondingly one witness on behalf of the

tenant.

3. The averments in the eviction petition disclose that the suit

property is in possession of unauthorized occupants and M/s Chander

Bhan Shiv Narain Jeweller Private Ltd (arrayed as respondent No. 3)

(hereinafter referred to as respondent No. 3) is a private limited

company having a separate legal entity distinct and different from the

original tenant namely Shiv Narain; this has amounted to an

unauthorized subletting/parting with possession in favour of the third

respondent.

4. Needless to state that the averments made in the eviction petition

had been disputed. Contention of respondent No. 3 (M/s Chander Bhan

Shiv Narain Talwar Jeweller Private Ltd) is that the premises are being

used only its registered address but it has never functioned from the suit

premises and Shyam Sunder Talwar (legal representatives of the original

tenant Shiv Narain) has always been in physical control and possession

of the premises and they are in fact carrying out their business from the

said property; they along with the original tenant Shiv Narain admittedly

have a shareholding in the company i.e. respondent No. 3; ground of

subletting is clearly not made out.

5. Before the Rent Controller, the application filed by the tenant

seeking permission to lead additional evidence had been permitted.

Affidavit dated 14.05.2003 Ex. „X‟ had been filed by Rajinder Talwar,

the son of the original tenant Shiv Narain; he had deposed that

respondent no.3 had been incorporated in the year 1993 having two

directors namely their father Shiv Narain and Shyam Sunder Talwar his

elder brother; after the death of Shiv Narain; Rajinder Talwar and

Neeraj Talwar (the son of Shyam Sunder Talwar) were also included as

directors; they are registered at the tenanted shop but the business of the

company is being carried out from 1981-84, Chapper Walan, Karol

Bagh, New Delhi and the company (respondent No. 3) has in fact never

used the suit premises; income tax returns, sales tax returns, license of

respondent No. 3, invoices, telephone and electricity bills are also at the

address at Chapper Walan, Karol Bagh. In the deposition of RW-1 the

name of another company namely M/s Talwar Jewellers (P) Ltd

(hereinafter referred to as the „Company‟) had also surfaced as also

being registered at the address of the tenanted premises. The RCT in

this scenario had directed the tenant to file shareholding pattern of

respondent no.3 (M/s Chander Bhan Shiv Narain Jeweller Private Ltd.)

as also the shareholding pattern of the other company ( i.e. Talwar

Jewellers Pvt. Ltd.) as on 31.3.2000. The list of directors and

shareholding pattern of two companies i.e. respondent no.3 and of the

Company evidenced that the two companies were in fact the family

companies of Shiv Narain who was the original tenant. This evidence

filed before the RCT of the shareholding of the two companies had in

fact not been rebutted by the landlord.

6. It is in this background that the ground of Section 14(1)(b) has to

be viewed.

7. Section 14 (1) (b) of the DRCA; it reads as under:-

14. Protection of tenant against eviction.

(1) Notwithstanding anything to the contrary contained in any other law or contract, no order or decree for the recovery of possession of any premises shall be made by any court or Controller in favour of the landlord against a tenant:

Provided that the Controller may, on an application made to him in the prescribed manner, make an order for the recovery of possession of the premises on one or more of the following grounds only, namely:-

(a)    XXXXXXXXXXXXX
(b)    That the tenant has, on or after the 9th day of June, 1952, sub-let, assigned or

otherwise parted with the possession of the whole or any part of the premises without obtaining the consent in writing of the landlord;

8. It clearly notes that if after 09.06.1952, the tenant has either sublet

or assigned or otherwise parted with possession of the whole or any part

of the premises, he is liable for eviction; the applicability of this Section

depends upon the facts of each case.

9. The moot question thus which has to be answered is to whether

the tenant had sublet, assigned or otherwise parted with the possession

of the whole or part of the premises. It is well settled that to make out a

case for sub-letting or parting with possession, it means giving of

possession to persons other than those to whom the possession had been

given by the original lessor and that parted with possession must have

been made by the tenant; as long as the tenant retains the legal

possession himself, there is no parting with possession in terms of

Section 14 (1)(b) of the Act. The word „sub-letting‟ necessarily means

transfer of an exclusive right to enjoy the property in favour of the third

party. In (1988) 1 SCC 70 Shalimar Tar Products Ltd. Vs. H.C. Sharma,

the Apex Court had noted that to constitute a sub-letting, there must be a

parting of legal possession i.e. possession with the right to include and

also right to exclude other and whether in a particular case, there was

sub-letting or not was a question of act.

10. On behalf of the petitioner, it has vehemently been urged that the

impugned judgment holding that Shiv Narain, the original tenant had a

controlling interest in respondent No.3 and the Company is not based

on a correct appreciation of the evidence; in fact the share holding

pattern and the Memorandum of Association and the Articles of

Association of the company (M/s Talwar Jewellers Pvt Ltd.) shows that

Shiv Narain was never a Director of this company; his share holding

was also only to the tune of 5 shares and thus the RCT returning a

finding that there has been no sub-letting by Shiv Narain in favour of

respondent No.3 and Talwar Jewellers, suffers from a infirmity.

11. Arguments have been refuted. Learned counsel for the respondent

has pointed out that the impugned judgment in no manner calls for any

interference. Reliance has been placed on Jagan Nath vs. Chander

Bhan and Ors. AIR 1988 SC 1362; submission being that where the

family of the original tenant is carrying out business from the demised

premises, even if there is a change in the name of the business, the

identity of the original tenant and the alleged sub-tenant being the same,

a case of subletting is not made out.

12. Perusal of the record shows that the impugned judgment in this

background does not suffer from any infirmity. The whole case set up

by the petitioner is that respondent No.3 was the sub tenant and Shiv

Narain the original tenant had completely divested himself of the control

of the disputed premises. There is no dispute to the proposition that

respondent No.3 is a distinct legal entity; it is also an admitted fact that

the respondent No.3 was incorporated on 5.4.1993 which was an

incorporation in the life time of Shiv Narain, Shiv Narain having expired

on 1.3.1994. The documents of incorporation of respondent No.3 and

the share holding pattern of respondent No.3 shows that at the inception

and incorporation of said company, there were only two share holders;

the company had two shares of which one was held by Shiv Narain; he

was 50% share holder and a director of respondent No.3. These are the

admitted facts. The case of the petitioner is in fact bordered on a

subletting made by Shiv Narain to respondent No.3. The evidence on

record has established that the controlling interest of respondent No.3

was Shiv Narain; thus, the question of Shiv Narain having divested

himself from the control and management of respondent No.3 did not

arise. In fact, this has not even been seriously disputed by the learned

counsel for the petitioner. The case of the learned counselfor the

petitioner is the ground of subletting in favour of Talwar Jewellers Pvt

Ltd. Admittedly, this was never a plea set up by the petitioner in his

pleadings; this was elicited for the first time only in the statement of

RW-1 wherein he had stated that Talwar Jewellers Pvt. Ltd. had its

registered office at the disputed premises but it did not carry out any

business from the said premises.

13. The order of the ARC dated 25.7.2002 is also relevant in this

context. ARC had declined the prayer made by the landlord seeking

permission of the Court to place on record the certificate of

incorporation of M/s Talwar Jewellers. This was vide an application

filed by the landlord dated 15.7.2002. In terms of this application, the

landlord had wanted to file the certificate of incorporation of Talwar

Jewellers Pvt. Ltd. stating that pursuant to the examination of RW-1, it

has now been known that the possession of the premises have in fact

been parted with to Talwar Jewellers who which is carrying out its

business from the said premises and additional evidence was sought to

be led on this score to prove this certificate of incorporation. This

application and the prayer made in the application was declined on

25.7.2002. The ARC had noted that the whole case of the petitioner is

bordered on the factum hat respondent No.3 is the sublettee/sub tenant

of Shiv Narain; there is no utterance in the entire pleadings about Talwar

Jewellers; by permitting this evidence to be brought on record, it would

be going beyond pleadings and permitting the plaintiff to take a

somersault which is not permitted. This application was accordingly

dismissed on 25.7.2002. Admittedly, this order has since attained

finality. It has not been challenged before any court. Final judgment of

ARC was delivered on 16.11.2005; the eviction petition had been

decreed in favour of the landlord. Obviously, the aggrieved party was

the tenant and he had filed an appeal before the RCT. The contention of

the petitioner/tenant before this Court is that this order dated 25.7.2002

can still be recalled by this Court in its superintending powers. This

submission of learned counsel for the petitioner is not only misplaced; it

is also misconceived.

14. Be that as it may, record shows that before RCT and even before

this Court, the parties had been directed to file the share holding pattern

of both the companies, not only of respondent no.3 but also of Talwar

Jewellers Pvt Ltd.. As noted supra, share holding pattern of respondent

No.3 shows that Shiv Narain had a controlling interest in respondent

No.3; he was 50% share holder and director of respondent No.3; the

question of subletting by Shiv Narain in favour of a company where he

himself had the controlling interest thus did not arise. Thus, a case of

subletting qua respondent no.3 does not arise.

15. Qua the plea of the petitioner that subletting has arisen qua

Talwar Jewellers, is also misplaced; also a plea which is misdirected.

The share holding pattern of Talwar Jewellers Pvt. Ltd. shows that this

is also a family concern of the original tenant i.e. Shiv Narain, his sons,

daughters-in-law and grandsons are the share holders; admittedly, out of

the original share holding of 25 shares, the petitioner had only five

shares and although he is not a majority share holder, but this court

cannot overlook the fact that the rest of the shares were being held by

his sons and daughters-in-law. Essentially, the company was a family

concern. The contention of Rajender Talwar (son of Shiv Narain) in his

affidavit dated 14.5.2003 was clearly to the effect that M/s Talwar

Jewellers has only its registered office at the tenanted premises but it has

not been carrying out any business from the tenanted premises. As noted

by the RCT, this averment made in this affidavit was never disputed by

the landlord. Shiv Narain, the original tenant was an integral part of M/s

Talwar Jewellers Pvt. Ltd. as well. He continued to retain control and

possession of the suit premises from where Talwar Jewellers Pvt. Ltd.

only had its registered office. The question of Shiv Narain having

divested himself from the suit premises and having parted with its

possession either in whole or in part to M/s Talwar Jewellers also did

not arise.

16. The judgments relied upon by the learned counsel for the

petitioner reported in (2004) 7 SCC 1 in Singer India Ltd. vs.

Chander Mohan Chandha and Ors. and (2005) 8 SCC 252 in Sait

Nagjee Purushotham & Co. Ltd. vs. Vimalabai Prabhulal and Ors.

are inapplicable. The first was a case of amalgamation of two

companies and in this context Sec. 14(1)(b) of the Delhi Rent Control

Act, 1958 had been the subject matter of a discussion; the facts of the

said case are wholly distinct. In the second case the allegation was that

there was a voluntary transfer by one company to the newly

incorporated company; the court had held that this averment has to be

pleaded and proved that the members of the old firm continued and the

identity of the two companies is the same. In the present case the

evidence both oral and documentary which includes pleadings as well as

documents placed on record had been considered by the RCT to return a

finding that the two companies i.e., respondent No.3 and Talwar

Jeweller Pvt. Ltd are in fact the family companies of Shiv Narain

himself; this was after a scrutiny of the share holding pattern of the two

companies which had been done by the RCT which fact finding as noted

by this Court is completely in conformity with the documents placed on

record. Shiv Narain was an integral part of respondent No.3.

17. Even otherwise as noted supra, Talwar Jewellers was never

pleaded to be the sublessee or the sublettee. The RCT, however, as the

first appellate forum had directed the parties to file the share holding

pattern of both the companies on a scrutiny of documents placed on

record before the RCT; it had returned the finding that Talwar Jewellers

Pvt Ltd was also a family concern of Shiv Narain only. This fact finding

returned is based on cogent and coherent evidence and does not in any

manner calls for any interference.

18. In 1975 RCJ 514 Vishwa Nath and another vs. Chaman Lal

Khanna and Ors., a Bench of this Court has noted inter alia as follows:

"If the company is a façade concealing the true facts, it may be necessary for the Court to pierce the corporate veil. No doubt he (Vishwa Nath the appellant) has let the company into possession but he has not parted with the possession himself and so long as it is true Vishwa Nath has not parted with the possession himself and so long as it is true Vishwa Nath has not contravened the law. If he has allowed the company to use the premises while he himself has remained in possession of them as Managing Director and Chief executive of the company the argument cannot be acceded to that he has

parted with the possession. He has not assigned nor he has sublet. A tenant cannot be said to part with the possession of any part of the premises unless his agreement with the licence wholly ousts him from the legal possession of that part. If there is anything in the nature of a right to concurrent user there is n parting with the possession."

The judgment relied upon by the learned counsel for the

respondent reported as Jagan Nath (Supra) has also dealt with this

contention, the relevant extract of which reads as under:

"The question for consideration is whether the mischief contemplated under section 14(1)(b) of the Act has been committed as the tenant had sublet, assigned, or otherwise parted with the possession of the whole or part of the premises without obtaining the consent in writing of the landlord. There is no dispute that there was no consent in writing of the landlord in this case. There is also no evidence that there has been any subletting or assignment. The only ground perhaps upon which the landlord was seeking eviction was parting with possession. It is well-settled that parting with possession meant giving possession to persons other than those to whom possession had been given by the lease and the parting with possession must have been by the tenant; user by other person is not parting with possession so long as the tenant retains the legal possession himself, or in other words there must be vesting of possession by the tenant in another person by divesting himself not only of physical possession but also of the right to possession. So long as the tenant retains the right to possession there is no parting with possession in terms of clause (b) of section 14(1) of the Act. Even though the father had retired from the business and the sons had been looking after the business, in the facts of this case, it cannot be said that the father had divested himself of the legal right to be in

possession. It the father has a right to displace the possession of the occupants, i.e., his sons, it cannot be said that the tenant had parted with possession. This Court in Smt. Krishnawati v. Shri Hans Raj, [1974] 1 SCC 289 had occasion to discuss the same aspect of the matter. There two persons lived in a house as husband and wife and one of them who rented the premises, allowed the other to carry on business in a part of it. The question was whether it amounted to sub-letting and attracted the provisions of sub-section (4) of section 14 of the Delhi Rent ControlAct. This Court held that if two persons live together in a house as husband and wife and one of them who owns the house allows the other to carry on business in a part of it, it will be in the absence of any other evidence, a rash inference to draw that the owner has let out that part of the premises. In this case if the father was carrying on the business with his sons and the family was a joint Hindu family, it is difficult to presume that the father had parted with possession legally to attract the mischief of section 14(1)(b) of the Act."

19. In view of the aforenoted discussion, it is clear that the impugned

order does not suffer in any manner from any infirmity. The petition is

without any merit.

20. Dismissed.

INDERMEET KAUR, J FEBRUARY 08, 2012 'raj'