Madras High Court
Abdullah vs I.Augustin on 29 January, 2021
CRP.NPD.Nos.1203 & 2909 of 2014
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 29.01.2021
CORAM
THE HON'BLE MR. JUSTICE G.K.ILANTHIRAIYAN
CRP.NPD.Nos.1203 & 2909 of 2014
CRP.NPD.No.1203 of 2014
1.Abdullah
2.Mohamed Ibrahim ..Petitioners
Vs.
1.I.Augustin
2.David TOPSING ..Respondents
PRAYER:
The Civil Revision Petition is filed under Section 25 of the Tamil
Nadu Buildings Lease and Rent Control Act, 1960 against the judgment
and decree dated 25.09.2013 in RCA.No.504 of 2006 on the file of the
VII Small Causes Court, Chennai and confirming the judgment and
decree dated 24.03.2006 in RCOP.No.668 of 2005 on the file of XIV
Judge, Small Cause Court at Chennai.
For Petitioners : Mr.M.Ganesan,
for Nikitha R.Vora
For Respondents : Mr.K.Sridar
CRP.NPD.No.2909 of 2014
1.I.Augustine
2.David Topsingh
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
3.Saroja ..Petitioners
Vs.
1.N.Abdullah
2.M.S.Mohammed Ibrahim ..Respondents
PRAYER:
The Civil Revision Petition is filed under Section 25 of the Tamil
Nadu Buildings Lease and Rent Control Act, 1960 against the order
and decreetal order of the VIII Judge, Small Causes Court/Rent
Control Appellate Authority, Chennai dated 01.04.2013 made in
RCA.No.825 of 2007 confirming the order and decreetal order of the
XVI Judge, Small Causes Court/Rent Controller, Chennai dated
26.03.2007 made in RCOP.No.2423 of 2005.
For Petitioners : Mr.K.Sridar
for Mr.K.Sridhar Asso.
For Respondents : Mr.M.Ganesan,
for Nikitha R.Vora
COMMON ORDER
The civil revision petitions are filed against the judgment
and decree dated 25.09.2013 in RCA.No.504 of 2006 on the file of the
VII Small Causes Court, Chennai and confirming the judgment and
decree dated 24.03.2006 in RCOP.No.668 of 2005 on the file of XIV
Judge, Small Cause Court at Chennai; and against the order and
decreetal order of the VIII Judge, Small Causes Court/Rent Control
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
Appellate Authority, Chennai dated 01.04.2013 made in RCA.No.825 of
2007 confirming the order and decreetal order of the XVI Judge, Small
Causes Court/Rent Controller, Chennai dated 26.03.2007 made in
RCOP.No.2423 of 2005.
2. The petitioners in CRP.No.1203 of 2014 (hereinafter called
as landlords) filed petition for eviction on the ground of subletting the
petition premises against the respondents (hereinafter called as
tenants). The learned Rent Controller dismissed the petition and the
same was also confirmed by the learned Rent Control Appellate
Authority. Aggrieved by the same, the landlords have preferred the
Civil Revision Petition in CRP.NPD.No.1203 of 2014. The landlords also
filed petition for fixation of fair rent for the petition premises as against
the tenants. The learned Rent Controller fixed fair rent for the petition
premises at Rs.12,879/- per month payable by the tenants. Aggrieved
by the same, the tenants filed appeal and the learned Rent Control
Appellate Authority confirmed the same. Aggrieved by the same, the
tenants has filed the civil revision petition in CRP.NPD.No.2909 of
2014.
3. The learned counsel for the landlords submitted that the
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
petition premises admeasuring 600 sq.ft. situated in the first floor of
the Door No.33/2, New No.73, Purasawalkam High Road, Chennai-7.
The tenants are paying monthly rent at Rs.1,750/-. Thereafter the first
tenant subleased the petition premises to the second tenant without
the knowledge and consent of the landlords under secret arrangement.
Initially, the petition premises owned by one Narayana Rao and
subsequently it was purchased by the landlords by registered sale
deed dated 31.05.2004 vide document No.2204 of 2004. Immediately
after purchase of the petition premises on 31.05.2004 itself, the
erstwhile owner issued letter to the first tenant thereby call upon the
first tenant to attorn the tenancy in favour of the landlords from
01.06.2004. In fact, the landlords also issued letter to attorn his
tenancy in favour of the landlords. Thereby the first tenant was
directed to pay rents. Till the year 2005 rent was paid and issued
receipts in the name of the first tenant namely I.Augustin, Proprietor
of Sagayam Traders. He further submitted that in fact the first tenant
also filed suit in OS.No.4055 of 2002 for declaration for his entitlement
to put up their name board as Sagayam Traders in the petition
premises and also injunction from evicting them unlawfully except due
process of law. The said suit was also filed by him in the capacity of
the proprietor of Sagayam Traders. Whereas, he introduced new plea
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
in the eviction petition on the ground of sub lease that the Sagayam
Traders is a partnership firm and he also produced registration
certificates of the partnership firm. The Sagayam Traders is a
partnership firm running by its partners namely first and second
tenants and also their sisters. All along the tenancy stands in the name
of the first tenant who is the proprietor of Sagayam Traders and issued
receipts in the name of first tenant and also he filed suit in the
capacity of proprietor of Sagayam Traders as against the erstwhile
landlord. Without considering the same, the learned Rent Controller
dismissed the eviction petition on the ground of sublease and the same
was also confirmed by the learned Rent Control Appellate Authority.
3.1 He also submitted that insofar as fixing the fair rent is
concerned, in respect of petition premises, the petition premises is
type 1 construction and aged about 81 years. According to the
engineer's report, the plinth area of the premises is 570 sq.ft, balcony
is measuring 22.6 sq.ft. and exclusive balcony area in the first floor is
102 sq.ft. As far as basic amenities, fixed at 10% for the petition
premises. The land value fixed at Rs.86,86,080/-. Accordingly, the
petition premises valued at Rs.70 lakhs per ground. Thereby calculated
fair rent at Rs.12,879/- and as such there is absolutely no infirmity in
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
the order passed by the learned Rent controller and the same was
confirmed by the learned Rent Control Appellate Authority.
4. Per contra, the learned counsel for the tenants would
submit that the petition premises was rented out to Sagayam Traders
which is run by both the tenants as partners. The Sagayam Traders is
consisting of three partners. All the partners are in joint possession of
the petition premises and running the business in the name and style
of Sagayam Traders. It is their family business and accordingly
Sagayam Traders has been registered before all the tax authorities.
Due to inadvertence in the suit, stated as proprietary concern
represented by first tenant and filed for declaration and injunction in
respect of petition premises. He further submitted that even assuming
that after inducted as tenant, the proprietorship is converted as
partnership firm. It is among the family members and the partners are
none other than own brothers and sister. In fact the first tenant is
continuing as partner jointly doing the business in the name and style
of Sagayam Traders. In support of his contention, he also relied upon
the following judgments:
(i) Parvinder Singh Vs. Renu Gautam
reported in 2004 (4) SCC 794
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
(ii) Krishnawati Vs. Hans Raj reported in 1974(1) SCC 289
(iii) Senniappan and others Vs. Kannammal and others
reported in 1988 (1) CTC 537
(iv) Gundapalli Rangamannar Chetty Vs. Desu Rangiah
reported in AIR 1954 Madras 182
(v) Helper Girdharbhai Vs. Saiyed Mohamad Mirasaheb Kadri
reported in AIR 1987 SC 1782
(vi) Mahendra Saree Emporium Vs. G.V.Srinivasa Murthy
reported in AIR 2004 SC 4289
4.1 He further submitted that insofar as fixation of fair rent is
concerned, even according to the landlords' engineer's report, balcony
is common one and as such 50% of the area only has to be calculated
for total area of the petition premises. In the first floor there are
tenants and both had access to the said balcony and both are using
the same. Therefore it has to be divided by half and only half extent
can be included in the petition premises. Therefore, fixation of fair rent
at Rs.12,879/- is higher than the value of the petition premises.
5. Heard Mr.K.Sridar, the learned counsel appearing for the
petitioners in CRP.NPD.No.2909 of 2014 and respondents in
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
CRP.NPD.No.1203 of 2014; Mr.M.Ganesan, the learned counsel
appearing for the respondents in CRP.NPD.No.2909 of 2014 and
petitioners in CRP.NPD.No.1203 of 2014.
6. The petition premises was rented out to the tenants for
commercial purpose to run the business under the name and style of
Sagayam Traders. On perusal of the petition for eviction on the ground
of sublease revealed that the first tenant subleased the petition
premises to the second tenant. The exhibits produced by the tenants
revealed that Sagayam Traders is a partnership firm consisting of
three partners. The partnership firm is consisting the first and second
tenants along with the sister. Admittedly the first tenant is continuing
as partner and running business with the other partners under the
name and style of Sagayam Traders. To prove the sub tenancy the
first ingredient has to establish is that the sub tenant is in exclusive
possession or part of the premises in lieu of payment of compensation
or rent. The second ingredient to prove the sub tenant is that the right
to occupy premises must be in lieu of payment of some compensation
or rent. Therefore, mere occupation is not sufficient inference either on
sub tenancy or part with the possession. In the case on hand, the
Sagayam Traders is a partnership firm and both the tenants are
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
partners and also along with the other partners running business in the
name and style of Sagayam Traders. In support of the contention, the
learned counsel for the tenants cited the judgment in the case of
Gundapalli Rangamannar Chetty Vs. Desu Rangiah reported in
AIR 1954 Madras 182, wherein it is held as follows:
"The mere act of letting other persons into possession by the
tenant, and permitting them to use the premises for their own
purposes, is not, so long as he retains the legal possession
himself, a breach of the covenant."
6. It is clear from the aforesaid decisions that there cannot be a
sub-letting, unless the lessee parted with legal possession. The
mere fact that another is allowed to use the premises while the
lessee retains the legal possession is not enough to create a sub-
lease. Section 105 of the Transfer of Property Act defines a lease
of immovable property as to transfer of right to enjoy such
property. Therefore to create a lease or sub-lease a right, to
exclusive possession and enjoyment of the property should be
conferred on another. In the present case the exclusive
possession of the premises was not given to the second
respondent. The first respondent continued to be the lessee,
though in regard to the business carried on in the premises he
had taken in other partners. The, partners are not given any
exclusive possession of the premises or a part thereof. The first
respondent continues to be in possession, subject to the liability
to pay rent to his landlord. The partnership deed also, as I have
already stated, does not confer any such right in the premises on
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
the other partners. If therefore hold that in the circumstances of
the case the first respondent did not sublet the premises to the
second respondent, and therefore he is not liable to be evicted
under the provisions of Act No. 23 of 1949.
7. He also relied upon the judgment in the case of Helper
Girdharbhai Vs. Saiyed Mohamad Mirasaheb Kadri reported in
AIR 1987 SC 1782, wherein it is held as follows:
5.The main question in issue in this appeal as well as
before the High Court in revision was whether there was a
genuine partnership at the appellant was a partner. It is true that
since after 4th of October, 1960 the partnership firm was carrying
on business in the premises in question. It is well settled that if
there was such a partnership firm of which the appellant was a
partner as a tenant the same would not amount to subletting
leading to the forfeiture of the tenan- cy. For this proposition see
the decision of the Gujarat High Court in the case of Mehta
Jagjivan Vanechand v. Doshi Vanechand Harakhchand and others,
A.I.R. 1972 Gujarat 6. Thakkar, J. of the Gujarat High Court, as
the learned Judge then was, held that the mere fact that a tenant
entered into a partnership and allowed the premises being used
for the benefit of partnership does not constitute assign-
ment or subletting in favour of the partnership firm enti- tling a
landlord to recover possession. This view is now concluded by the
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
decision of this Court in Madras Bangalore Transport Co. (West) v.
Inder Singh and others, [1986] 3 S.C.C. 62.
8.Whether there was a partnership or not may in certain
cases be a mixed question of law and fact, in the sense that
whether the ingredients of partnership as embodied in the law of
partnership were there in.a particular case or not must be judged
in the light of the principles applicable to partnership. The first
question, therefore, is what is a partnership? That has to be found
in section 4 of the Indian Partnership Act, 1932, it says
"Partnership is the relation between persons who have agreed to
share the profits of a business carried on by all or any of them
acting for all" (Emphasis supplied). Section 6 of the said Act
reiterates that in determining whether a group of persons is or is
not a firm, or whether a person is or is not a partner in a
firm, regard shall be had to the real relation between the par- ties,
as shown by all relevant facts taken together. The following
important elements must be there in order to establish
partnership, (1) there must be an agreement en- tered into by all
parties concerned, (2) the agreement must be to share profits of
business; and (3) the business must be carried on by all or any of
the persons concerned acting for all. The partnership deeds were
there entitling the petitioner to share in the partnership. It is true
that in the partnership deeds the bank accounts were not to be
operated by the appellant, and further that irrespective of the
profit the clause of the partnership deed provided that there
should be a fixed percentage of profit to be given to the partner-
appellant No. 1. The appellant was not to share the losses. But
there is nothing illegal about it. The appellant was to bring his
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
asset being the tenancy of the premises in question for the user
of the partnership. All these tests were borne in mind by the Court
of Small Causes, Bombay in the appeal from the decision of the
learned trial Judge. The Appellate Court had considered the
partnership deeds. One point was emphasised by Mr. Mehta,
learned coun- sel appearing for the respondents, that the original
first partnership deed did not mention the appellant or his father
as a partner. It was in the second partnership deed that the
appellant and his father joined the firm. The firm started as
emphasised by Mr. Mehta on 4th of October, 1960 and it was only
on the 24th of October, 1960 the second partnership deed was
-executed. Therefore, it was emphasised that there was a gap of
time when there was user by the partnership firm of the premises
in question when the appellant was not a member of the firm. It
was emphasised that this aspect was not considered by the Court
of Small Causes and the High Court, therefore, was justified in
interfering with the findings of the Court of Small Causes. We are
unable to agree. These deeds were there, the partners were
cross- examined, there was no specific evidence as to from what
date the firm started functioning from the particular prem- ises in
question. Secondly, it was emphasised by Mr. Mehta that the
partnership deed was a camouflage. It is evident from the sales-
tax registration and other registration certificates and licences
under the Shops and Establishments Act that the partnership was
registered in the name of the appellant and the appellant was also
indicated as a partner. It was so in the Income Tax returns and
assessments. There- fore, it was submitted that the Court of Small
Causes com- mitted an error of law resulting in miscarriage of
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
justice. It was submitted by Mr. Mehta that once it was accepted
that the partnership deed was a mere camouflage the other
subse- quent acts and conducts were merely ancillary and were
put in a formal way. But the question is from the three deeds
itself which were examined in detail by the Court of Small Causes
and which were re-examined by the High Court could it be said
unequivocally that there was no partner- ship. The deeds gave the
appellant the right to share the profits and made him agent for
certain limited purposes of the firm and there was evidence that
the partnership deeds were acted upon. There was evidence of
suit of dissolution of the partnership where none of the partners
took the plea that it was a false or a fictitious document. Though
the decree in the dissolution suit was not binding in these
proceedings, inter se between the parties as partners it is a piece
of evidence which cannot be wholly ignored. All these factors
were present before the Court of Small Causes. These were
reappraised by the High Court. One point was emphasised by Mr.
Mehta that in the partnership deed which is not necessary to
recite the terms, the petitioner was completely excluded in
operating the bank accounts etc. There is nothing inherently
illegal or improbable making a provision of such a type. In the eye
of law, such a clause is really non-sequitur or neutral proving
neither the exist- ence nor non-existence of a genuine firm.
8. He also relied upon the judgment in the case of Mahendra
Saree Emporium Vs. G.V.Srinivasa Murthy reported in AIR 2004
SC 4289, wherein it is held as follows:
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
16. The term 'sub-let' is not defined in the Act __ new or
old. However, the definition of 'lease' can be adopted mutatis
mutandis for defining 'sub-lease'. What is 'lease' between the
owner of the property and his tenant becomes a sub-lease when
entered into between the tenant and tenant of the tenant, the
latter being sub-tenant qua the owner-landlord. A lease of
immovable property as defined in Section 105 of the Transfer of
Property Act, 1882 is a transfer of a right to enjoy such property
made for a certain time for consideration of a price paid or
promised. A transfer of a right to enjoy such property to the
exclusion of all others during the term of the lease is sine qua non
of a lease. A sub-lease would imply parting with by the tenant of a
right to enjoy such property in favour of his sub- tenant. Different
types of phraseology are employed by different State Legislatures
making provision for eviction on the ground of sub-letting. Under
Section 21(1)(f) of the Old Act, the phraseology employed is quite
wide. It embraces within its scope sub-letting of the whole or part
of the premises as also assignment or transfer in any other
manner of the lessee's interest in the tenancy premises. The exact
nature of transaction entered into or arrangement or
understanding arrived at between the tenant and alleged sub-
tenant may not be in the knowledge of the landlord and such a
transaction being unlawful would obviously be entered into in
secrecy depriving the owner-landlord of the means of ascertaining
the facts about the same. However still, the Rent Control
Legislation being protective for the tenant and eviction being not
permissible except on the availability of ground therefor having
been made out to the satisfaction of the Court or the Controller
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
the burden of proving the availability of the ground is cast on the
landlord, i.e. the one who seeks eviction. In Krishnawati Vs. Hans
Raj, (1974) 2 SCR 524, reiterating the view taken in Associated
Hotels of India Ltd. Delhi Vs. S.B. Sardar Ranjit Singh, (1968) 2
SCR 548, this Court so noted the settled law ___ "the onus of
proving sub-letting is on the landlord. If the landlord prima facie
shows that the occupant, who was in exclusive possession of the
premises, let out for valuable consideration, it would then be for
the tenant to rebut the evidence". Thus, in the case of sub-letting,
the onus lying on the landlord would stand discharged by adducing
prima facie proof of the fact that the alleged sub-tenant was in
exclusive possession of the premises or, to borrow the language
of Section 105 of the Transfer of Property Act, was holding right to
enjoy such property. A presumption of sub-letting may then be
raised and would amount to proof unless rebutted. In the context
of the premises having been sub-let or parted with possession by
the tenant by adopting the device of entering into partnership, it
would suffice for us to notice three decisions of this Court.
Murlidhar versus Chuni Lal and others (1970 A.I.R.C.J. 922) is a
case where a shop was let out to a firm of the name of Chuni Lal
Gherulal. The firm consisted of three partners, namely, Chuni Lal,
Gherulal and Meghraj. This partnership closed and a new firm by
the name of Meghraj Bansidhar commenced its business with
partners Meghraj and Bansidhar. The tenant firm was sought to be
evicted on the ground that the old firm and the new firm being
two different legal entities, the occupation of the shop by the new
firm amounted to subletting. This court discarded the contention
as 'entirely without substance' and held that a partnership firm is
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
not a legal entity; the firm name is only a compendious way of
describing the partners of the firm. Therefore, occupation by a
firm is only occupation by its partners. The two firms, old and new,
had a common partner namely Meghraj, who continued to be in
possession and it was fallacious to contend that earlier he was in
possession in the capacity of partner of the old firm and later as a
partner of the new firm. The landlord, in order to succeed, has to
prove it as a fact that there was a subletting by his tenant to
another firm. As the premises continued to be in possession of one
of the original tenants, Meghraj, then by a mere change in the
constitution of the firm of which Meghraj continued to be a
partner, an inference as to subletting could not be drawn in the
absence of further evidence having been adduced to establish
subletting. In Helper Girdharbhai Vs. Saiyed Mohmad Mirasaheb
Kadri & Ors. (1987) 3 SCR 289, the tenant had entered into a
partnership and the firm was carrying on business in the tenancy
premises. This Court held that if there was a partnership firm of
which the appellant was a partner as a tenant, the same would not
amount to sub-letting leading to forfeiture of the tenancy; for
there cannot be a sub-letting unless the lessee parted with the
legal possession. The mere fact that another person is allowed to
use the premises while the lessee retains the legal possession is
not enough to create a sub-lease. Thus, the thrust is, as laid down
by this Court, on finding out who is in legal possession of the
premises. So long as the legal possession remains with the tenant
the mere factum of the tenant having entered into partnership for
the purpose of carrying on the business in the tenancy premises
would not amount to sub- letting. In Parvinder Singh Vs. Renu
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
Gautam & Ors., (2004) 4 SCC 794, a three-Judges Bench of this
Court devised the test in these terms ___ "if the tenant is actively
associated with the partnership business and retains the use and
control over the tenancy premises with him, maybe along with the
partners, the tenant may not be said to have parted with
possession. However, if the user and control of the tenancy
premises has been parted with and deed of partnership has been
drawn up as an indirect method of collecting the consideration for
creation of sub-tenancy or for providing a cloak or cover to conceal
a transaction not permitted by law, the court is not estopped from
tearing the veil of partnership and finding out the real nature of
transaction entered into between the tenant and the alleged sub-
tenant."
9. In the above judgments, the Hon'ble Supreme Court of
India as well as this Court held that if there was such partnership firm
of which the party was a partner as a tenant it would not mean to
subletting leading to the forfeiture of the tenancy. In the case on hand,
admittedly, the tenants are partners along with other partner and they
are running business in the name and style of Sagayam Traders.
Insofar as fair rent is concerned, the only point raised by the learned
counsel for the tenants is that the balcony used by the two tenants of
the petition premises and half of the area only has to be calculated for
the extent of the petition premises. According to the engineer's report,
it revealed the plinth area of the petition premises as mentioned supra
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
and fixed fair rent. Therefore, this Court finds no infirmity or illegality
in the orders passed by the court below.
10. In view of the above discussion, both the civil revision
petitions are dismissed. No order as to costs.
29.01.2021
Speaking/Non-speaking order
Index : Yes/No
Internet : Yes/No
lok
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
To
1. The VII Small Causes Court,
Chennai
2. The XIV Judge,
Small Cause Court at Chennai.
3. The VIII Judge,
Small Causes Court/Rent Control Appellate Authority,
Chennai
4. The XVI Judge,
Small Causes Court/Rent Controller,
Chennai
https://www.mhc.tn.gov.in/judis/
CRP.NPD.Nos.1203 & 2909 of 2014
G.K.ILANTHIRAIYAN,J.
lok
CRP.NPD.Nos.1203 & 2909 of 2014
29.01.2021
https://www.mhc.tn.gov.in/judis/
