9
9
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1135 1135
A tenant had never parted with possession of the leased premises and had
never left the premises, being a partner. Holding so, the High Court
concluded that there was no error on the face of the record and dismissed
the review petition. Presently, these two judgments are under appeal.
4. While so, the tenant, Janardhan Subajirao Wide, the sole
B respondent in these appeals, expired on 16.02.2018. Thereupon, the
appellants filed I.A. No. 89838 of 2021 seeking condonation of the delay
of 1169 days in taking steps and I.A. No. 89837 of 2021 to set aside the
abatement of the appeals and to permit substitution of the legal heirs of
the deceased respondent. Notice having been ordered thereon, Mr.
Sudhanshu S. Choudhari, learned counsel, who had earlier appeared for
C the deceased respondent, e-filed his vakalatnama/appearance on behalf
of the legal representatives on 05.11.2022. No counter was filed by him
opposing the applications. Sufficient cause having been shown, delay in
taking necessary steps is condoned; abatement of the appeals is set
aside; and legal representatives of the deceased sole respondent are
D brought on record. Registry shall make necessary changes in the cause
titles in both the appeals before issuing certified copies of this judgment.
5. Heard Mr. Vinay Navare, learned senior counsel, appearing
for the appellants; and Mr. Sudhanshu S. Choudhari, learned counsel,
appearing for the respondents.
E 6. The leased premises, consisting of two blocks with an
approximate area of 455 sq. ft., are situated on the ground floor on the
eastern side of the cement-concrete building, bearing C.T.S No. 1873 at
Bhamburda, Pune. These premises were let out to the tenant by the
original landlord and landlady, the predecessors-in-title of the appellants,
F for the purpose of his hotel business under the name and style of Hotel
Ambika. Civil Suit No. 386 of 1985 was filed by the landlord and landlady
for eviction of the tenant on two grounds. Their claim was that the tenant
carried out unauthorized construction of a toilet in the leased premises,
thereby violating the mandate of Section 13(1)(b) of the Act of 1947. It
was also their case that the tenant parted with the running of the hotel
G and possession of the leased premises in favour of one Krishna B Shetty,
thereby committing breach of Section 13(1)(e) of the Act of 1947. These
grounds are borne out by the plaint filed in the suit, which is sought to be
placed on record, by way of I.A. No. 38142 of 2023, along with a
photocopy of Section 15 of the Act of 1947. I.A. No. 38143 of 2023 was
H filed seeking exemption from filing an official translation of the plaint.
YUVRAJ @ MUNNA PRALHAD JAGDALE & ORS. v. 1139
JANARDAN SUBAJIRAO WIDE [SANJAY KUMAR, J.]
The I.A.s are allowed. The documents are taken on record and exemption, A
as prayed for, is granted.
7. The tenant filed a Written Statement denying the suit claims.
Thereupon, the Trial Court settled three issues for consideration. The
plaintiffs examined three witnesses, including plaintiff No. 2, while the
defendant examined himself as DW1. B
8. Plaintiff No. 2, speaking as PW1, stated that the suit premises
was leased out to the tenant in the year 1975 for running his hotel business.
He asserted that the tenant constructed a toilet in the leased premises in
January, 1985, without obtaining his consent and 2-4 days later, he sold
his rights in the hotel to Krishna B Shetty for a sum of ` 2,00,000/- and C
accepted ` 50,000/- as earnest money. He claimed that Krishna B Shetty
was running the hotel in the leased premises thereafter for about eleven
months. He further stated that in November, 1985, there was a dispute
between the tenant and Krishna B Shetty, which led to the sealing of the
premises, and finally the key thereof was handed over by the Sub-
Divisional Magistrate to the tenant and, thereafter, Krishna B Shetty did D
not operate the hotel.
9. PW2, the Advocate-Commissioner, stated in her first report
(Exh.8) that Krishna B Shetty was in occupation of the leased hotel
premises when she visited the same. In her subsequent report (Exh.23),
she stated that she found no trace of a toilet constructed in the leased E
premises.
10. Krishna B Shetty was examined as PW3. He stated that he
intended to purchase the hotel from the tenant and had taken possession
in January, 1985. He stated that the price was settled at ` 2,00,000/- and
he paid ` 50,000/- by way of earnest money at the time of execution of F
the agreement. He asserted that the tenant illegally evicted him from the
hotel premises, constraining him to file a complaint and also a suit for
specific performance.
11. The tenant examined himself as DW1. In his examination-in-
chief, he claimed that he had not given the hotel business to Krishna B G
Shetty or anyone else and that Krishna B Shetty was not given possession
of the leased premises at any time. However, during his cross-
examination, he admitted that he was carrying on hotel business in the
leased premises with the name ‘Hotel Ambika’ and in the year 1984, he
thought of admitting a partner to run the hotel. As Krishna B Shetty was
H
1140 SUPREME COURT REPORTS [2023] 2 S.C.R.
A also in the same business, he stated that he had talks with him about
joining the business. He denied that Krishna B Shetty was allowed by
him to join as a partner in January, 1985. He, however, admitted his
signatures in the partnership agreement executed in that regard (Exh.48)
and conceded that his own Advocate had purchased the stamp paper
and drafted the said agreement. He denied that Krishna B Shetty
B
performed Satyanarayan Pooja on 07.01.1985, after execution of the
partnership agreement, but admitted that the Invitation Card (Exh.44)
issued on that occasion bore his name. He also admitted his signatures
in the assignment agreement dated 15.01.1985 (Exh.49). He denied that
Krishna B Shetty was running the hotel as his own business in his individual
C capacity and that he forcibly dispossessed him in January, 1986. He
admitted that proceedings were initiated under Section 145, Cr.P.C. but
asserted that final orders were passed in his favour.
12. Upon consideration of the pleadings and evidence, the Trial
Court answered the three issues framed by it as under: -
D
13. The Trial Court held against the plaintiffs in so far as the
ground under Section 13(1)(b) of the Act of 1947 was concerned, as the
G Advocate Commissioner’s second report (Exh.23) showed no trace of
a toilet having been constructed in the leased premises. However, as
regards the ground raised under Section 13(1)(e) of the Act of 1947, the
finding was otherwise. The Trial Court took note of the admitted execution
of the partnership agreement dated 01.01.1985 (Exh.48), whereby the
tenant accepted Krishna B Shetty as a partner in his hotel business.
H
YUVRAJ @ MUNNA PRALHAD JAGDALE & ORS. v. 1141
JANARDAN SUBAJIRAO WIDE [SANJAY KUMAR, J.]
Further, the Trial Court noted that the Invitation Card (Exh.44) for the A
Satyanarayan Pooja, mentioned the name of Hotel Ambika, the name of
the tenant and the name of the new partner, Krishna B Shetty. The Trial
Court also noted that the tenant admitted his signatures in the assignment
agreement dated 15.01.1985 (Exh.49), whereby he had assigned his hotel
business in the leased premises to Krishna B Shetty for ` 2,00,000/- and
B
accepted ` 50,000/- as earnest money. It was accordingly held that
Krishna B Shetty was taken as a partner in the business initially but,
thereafter, the business was sold to him for ` 2,00,000/-. The Trial Court
observed that the original lease deed dated 22.01.1975 (Exh.55) stated
clearly in page 4 that the tenant would not assign the business and would
not allow third persons to conduct the said business in any way nor C
would he transfer the said business in any way in favour of a third person.
The Trial Court then adverted to Section 15(1) of the Act of 1947, which
provides that, in the absence of a contract to the contrary, the tenant
would not be entitled to sublet or transfer or give on licence the leased
premises and also the proviso thereto, which allowed the Government,
D
by way of a notification in the Official Gazette, to permit in any area
transfer of interest in premises held under leases or a class of leases to
such extent as may be specified in the notification. As the conditions of
the proviso were not satisfied on facts and in the light of the clear
prohibition of assignment in the lease deed, the Trial Court decreed the
suit. E
14. The learned 13th Additional District Judge, Pune, affirmed
these findings of the Trial Court and dismissed Civil Appeal No. 1030 of
1987 filed by the tenant. The Bombay High Court, however, reversed
the findings of both the Courts below. While accepting that there was
material to show that the tenant had assigned his business in favour of F
Krishna B Shetty, the High Court took recourse to the proviso to Section
15(1) of the Act of 1947 and held that it was permissible thereunder for
a statutory tenant to transfer his tenancy rights even though the lease
agreement prohibited such a transfer. Further, the High Court took note
of the fact that Civil Suit No. 623 of 1986 filed by Krishna B Shetty
against the tenant for specific performance had been dismissed. G
According to the High Court, so long as the legal possession remained
with the tenant, mere creation of a partnership agreement by the tenant
for the purpose of jointly carrying on business in the leased premises
would not amount to sub-letting. Holding so, the High Court set aside the
decree of eviction/possession and dismissed the suit. By its later judgment H
1142 SUPREME COURT REPORTS [2023] 2 S.C.R.
A dated 09.09.2009, the High Court dismissed the Review Petition filed by
the appellants herein, reiterating that the tenant had never parted with or
left the premises and, being a partner, he was also involved in the business.
Observing that the dominant purpose of the agreement executed by the
tenant was not to sub-let the premises, the High Court opined that there
was no error on the face of the record warranting exercise of review
B
jurisdiction.
15. At this stage, we may note that neither of the parties thought
it appropriate to place on record all the documents that they considered
relevant. The original lease deed dated 22.01.1975 (Exh.55), relied upon
by Mr. Vinay Navare, learned senior counsel, is not available for scrutiny.
C Similarly, the judgment in Civil Suit No. 623 of 1986, filed against the
tenant by Krishna B Shetty, relied upon by the High Court and
Mr. Sudhanshu S. Choudhari, learned counsel, was not produced prior
to conclusion of the hearing of these appeals. However, the learned
counsel deemed it fit to enclose a copy of the said judgment along with
D his Written Submissions, after this judgment was reserved. As the said
document was not placed on record in keeping with due procedure and
at the appropriate time, it is liable to be eschewed from consideration.
More so, as the sole respondent entered appearance through counsel as
long back as in January, 2011, and had ample opportunity to do the needful
even if the said judgment did not form part of the record before the High
E Court. This Court is, therefore, constrained to adjudicate on the strength
of the material available on record.
16. The issue for consideration is whether the tenant committed
breach of the lease condition with regard to assignment of his business
in the leased premises, warranting his eviction under Section 13(1)(e) of
F the Act of 1947. Though the tenant denied the same, Mr. Vinay Navare,
learned senior counsel, would assert that the admissions made by him
during his deposition as DW1 speak volumes to the contrary. He would
point out that the tenant categorically admitted execution of the partnership
agreement dated 01.01.1985 (Exh.48) and the assignment agreement
G dated 15.01.1985 (Exh.49), apart from conceding that the Invitation Card
(Exh.44), issued in connection with the Satyanarayan Pooja performed
in the hotel, mentioned his name along with those of Hotel Ambika and
Krishna B Shetty.
17. Countering these contentions, Mr. Sudhanshu S. Choudhari,
H learned counsel, would argue that execution of a partnership deed by
YUVRAJ @ MUNNA PRALHAD JAGDALE & ORS. v. 1143
JANARDAN SUBAJIRAO WIDE [SANJAY KUMAR, J.]
the tenant, whereby a third party was inducted into the business as a A
partner, is of no consequence. He would point out that the partnership
agreement dated 01.01.1985 (Exh.48) mentioned that the business would
be undertaken as a partnership with the tenant; his brother, Laxman;
and Krishna B Shetty, as partners and that the relevant clause in the said
document, marked as Exh.51, indicated that Krishna B Shetty would
B
look after the business transactions. He would place reliance on
Parvinder Singh Vs. Renu Gautam and others1 and Mahendra Saree
Emporium (II) Vs. G.V. Srinivasa Murthy2 in support of his contention
that such a business arrangement would not amount to creation of an
assignment or sub-tenancy.
18. In Parvinder Singh (supra), this Court observed that if the C
tenant is actively associated with the partnership business and retains
the use and control over the tenanted premises with him, maybe along
with partners, the tenant may not be said to have parted with possession,
but if the user and control of the tenanted premises has been parted with
and the deed of partnership has been drawn up as an indirect method of D
collecting consideration for creation of a sub-tenancy or for providing a
cloak 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 the transaction entered into between the tenant and the alleged
sub-tenant.
E
19. This Court observed in Mahendra Saree Emporium (supra)
that the transfer of a right to enjoy immovable property to the exclusion
of all others during the term of the lease is the sine qua non of a lease
under Section 105 of the Transfer of Property Act, 1882, and a sub-
lease would imply parting with, by the tenant, of the right to enjoy such
property in favour of his sub-tenant. This Court further noted that the F
phraseology employed for inferring sub-letting is quite wide and would
embrace 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 tenanted premises. On facts, however, it was held that the tenant
therein had not created a sub-tenancy merely by converting his sole G
proprietary business into a partnership business and as the tenant never
dissociated himself from the business activity.
1
(2004) 4 SCC 794
2
(2005) 1 SCC 481 H
1144 SUPREME COURT REPORTS [2023] 2 S.C.R.