Amar Nath Roy vs Anderson Wright and Company

Ajoy Nath Ray, J.—The appeal is in respect of the Appellant''s suit for eviction filed in the court below on the ground of illegal and unauthorised sub-letting which has failed there.

The facts of the case are really quite brief. The lease in favour of the Respondent-firm was initially for a period of 10 years with a one time option of renewal. The lease itself expired nearly half a century ago but the property in question was held over as a monthly tenant by the firm. The partners were originally all from England and Scotland but at the material time the partners were only some Kedias.

The whole house, a very valuable one, situated nearly the High Court premises was however partitioned into two halves and the suit is with regard to one half of the whole house only. Even that would cover nearly 6,000 sq. ft. of floor area and half the rent as per Deed of Lease would be 800 or 900 rupees per month only.

We are not shocked by the extremely low rent as the Rent Control Legislation prevents the tenants from being disturbed by the landlords in many ways, excepting on specified grounds. One of those grounds is unauthorised sub-letting and that is the issue before us.

The Plaintiff alleged that illegal sub-tenancy had been created in favour of four concerns, three of which are limited companies and one of the three a public limited company. Illegal parting with possession of the entirety of the premises was alleged.

The Respondent-Defendant denied these allegations. Further it filed an additional written statement stating there that the original lease permitted the partnership to remain as tenant even if it changed its business into some other company. The additional written statement took the plea that the four alleged concerns were not sub-tenants and that this above clause could be relied upon by the Defendant.

After evidence was given, it became quite clear that the partnership is nowhere to be found in the premises and business was being carried on by the three companies, the alleged sub-tenants, the fourth concern also having stopped business by that time.

It further appeared that the companies are not wholly Kedia concerns. The Kedias played a very minor role even as regards the Boards of Directors. In regard to one company the annual return shows that none of the Kedias was a Director although the number of Directors exceeded teh. In another case one B.P. Kedia was a Director of a private limited company but B.P. Kedia was not a partner of the partnership firm, although his surname was promising.

In these circumstances Mr. Dasgupta submitted that the Respondent must be adjudged to have parted with physical possession as well as the right of possession, for some consideration, which is within the special knowledge of the Defendant, since this is the most reasonable conclusion on the evidence.

Mr. Mitra, appearing for the Respondents, on the other hand submitted that the Appellants should have proved its case to a much greater degree of satisfaction of the court. According to him direct questions and answers or evidence should have been available showing, or at least suggesting, the flow of consideration from the purported sub-tenants. He submitted that proof of exclusive possession or right of possession (he used the two expressions synonymously and we led the matter pass) by the purported sub-tenant has to be made by the Plaintiff; if that proof is not forthcoming the suit cannot succeed.

The lower court on the basis of two Supreme Court cases which are also referred to below placed a loot of importance on the claim by the Kedias that they were connected with the companies by being on their Boards. On that basis the court opined that there had been no proof of any right to possession being acquired by the purported sub-tenants.

On a conclusion of a matter which is purely one of fact, the appeal court is very hesitant to interfere; even on a conclusion on a point of mixed law and fact, like who had the right of possession on the basis of the evidence given, the appeal court also does not easily interfere. But in this case, the presence of the Kedias on the Board being minimal and even non-existent in the case of at least one of the alleged sub-tenants, we are constrained to re-examine the matter.

The law in regard to proof of sub-tenancy is now well settled by several Supreme Court decisions. In a suit between a landlord and a tenant who has allegedly sub-let the premises the sub-tenant; as here, is most often not a party. Direct evidence of consideration flowing from the sub-tenant can be given by the tenant only, in the large majority of cases, but the tenant is naturally not took in very likely to help the landlord in this regard. The matter, therefore, is almost always left to be assessment of the court, to be made on the basis of the evidence led. Such assessment is made in civil cases on a balance of probabilities. The right to possess in favour of the sub-tenant as against the tenant will arise if a flow of consideration is there. Such flow of consideration is not usually likely, on a balance of probabilities, if the tenant and the sub-tenant are intimately connected, or in very less proximity in some other way. The following Supreme Court cases given by Mr. Mitra show instances of such proximity: Husband and wife, case of Smt. Krishnawati Vs. Shri Hans Raj, ), A firm and a company which is really the firm itself: Madras Bangalore Transport Co. (West) Vs. Inder Singh and Others, was a creature of the partners. Father and sons, Jagan Nath (Deceased) through Lrs. Vs. Chander Bhan and Others, Alleged sub-tenant is employee-cum-brother-in-law of the M/s. Delhi Stationers and Printers Vs. Rajendra Kumar, Two brothers, one allegedly a sub-tenant, Resham Singh v. Radhbir Singh and Anr (1997) 7 S.C.C. 263. Son-in-law of an original partner of the tenant firm is allegedly the sub-tenant, Laba-nya Neogi (Ms) through LRS. Power of Attorney Holder Shri Dr. Subhasis Neogi v. W.B. Engineering Company (1997) S.C.C. 431.

In all these cases the courts'' dicta show that the right of possession could not be concluded as having been parted with by the tenant. In the context, the court opined in each cases that proof of physical possession by the purported sub-tenant was not sufficient for the Plaintiff to get a decree.

On the other hand, in cases where the sub-tenant is at an arm''s length from the tenant, the Supreme Court itself has said that it is quite a permissible for the court to conclude, after proof of physical possession by the stranger sub-tenant, that he was possession it as of his own right, the tenant having got consideration therefor from him.

The following passage from the case of Rajbir Kaur and Another Vs. S. Chokesiri and Co., being para. 23 of the said judgment should be noted well in this regard, it is set out below:

The High Court did not deal specifically with the question whether, in the circumstances of the case, an inference that the parting of the exclusive possession was prompted by monetary consideration could be drawn or not. The High Court, did not examine this aspect of the matter, as according to it, one of the essential ingredients, viz., of exclusive possession had not been established. If exclusive possession is established and the version of the Respondent as to the particulars and the incidents of the transaction is found unacceptable in the particular facts and circumstances of the case, it may not be impermissible for the Court to draw an inference that the transaction was entered into with monetary consideration in mind. It is open to the Respondent to rebut this. Such transactions of sub-letting in the guise of licences are in their very nature, clandestine arrangements between the tenant and the sub-tenant and there cannot be direct evidence got. It is not, unoften, a matter for legitimate inference. The burden of making good a case of sub-letting this, of course, on the Appellants. The burden of establishing facts and contentions which support the party''s case is on the party who takes the risk of non-pursuasion. If at the conclusion of the trial, a party has failed to establish these to the appropriate standard, he will loss. Though the burden of proof as a matter of law remains constant through out a trial, the evidential burden which rests initially upon a party bearing the legal burden, shifts according as the weight of the evidence adduced by the parties during the trial. In the circumstances of the case, we think, that, Appellants having been forced by the courts below to have established exclusive possession of the ice-cream vendor of a part of the demised premises and the explanation of the transaction offered by the Respondent having been found by the courts below to be unsatisfactory and unacceptable, it was not impermissible for the court to draw an inference having regard to the ordinary course of human conduct, that the transaction must have been entered into for monetary considerations. There is no explanation forthcoming from the Respondent appropriate to the situation as found.

Similarly in the case of Shalimar Tar Products Ltd. Vs. H.C. Sharma and Others, the sub-tenant, a company had gone into liquidation and the Official Liquidator had taken possession. In such a case the court, could not insist upon further proof by the landlord that the tenant, who was still solvent had parted with its right to possession for a consideration. The consideration might be not known or quantified none exactly; but its presence can be inferred for all legal purposes relevant between the landlord and the tenant.

Mr. Dasgupta submitted that in our case, the distinction and difference between the tenant and the purported sub-tenants being sufficiently clear, it was upon the sub-tenant to show that they were enjoying the premises without any right to possession nonetheless. He said that the premises in question are the registered offices of the compaies. It would be an inversion of sound practice in regard to companies so constituted, for the tenant firm to rely upon an abstract doctrine of burden of proof and thus not help the court by producing evidence in this regard which could throw light. He gave us the case of Hiralal and Others Vs. Badkulal and Others, and the case of Shah Phoolchand Lalchand Vs. Parvathi Bai, He also gave us the case of Narayan Bhagwantrao Gosavi Balajiwale Vs. Gopal Vinayak Gosavi and Others, where it has been observed that after both parties had led evidence the question of burden of proof is academic, since the court has to come to a conclusion on the evidence led. The matter has not been left at a stage where one party does not lead evidence at all; in such a case the doctrine of burden of proof might have greater relevance.

The case of Ram Saran Vs. Pyare Lal and another, relied upon by Mr. Dasgupta was a case where the purported subtenant had made the matter comparatively easy for the courty by seeking to tender rent itself on its own behalf. By such tender it claimed, naturally, a right to possession in its favour. He gave us also the cases of Shantilal Rampuria and Others Vs. Vega Trading Corporation and Others, nd Biswanath Poddar Vs. Archana Poddar and Another, for the proposition that a sub-tenant, to be an authorised one, must give notice to the landlord after the creation of sub-tenancy within the specified time and in the specified manner. No notice was given in the instant case; but one should remember that the purported concerns were not being claimed by the tenant as sub-tenants in the first place.

He also submitted that a partnership is not a separate legal person like a company; the position can be seen from the sections of the Partnership Act itself and for further clarification from the judgment given in the case Dulichand Lakshminarayan Vs. The Commissioner of Income Tax, Nagpur, specially paras. 11, 12 and 13 might be seen. Since the companies are themselves are separate legal entities and since the partners themselves were separate persons not at all in proximate relationship or in total control, according to Mr. Dasgupta sub-tenancy should be inferred.

In these cases, whether sub-tenancy has been sufficiently proved or not is a question of judicial assessment. The court might helpfully ask itself the hypothetical question, if the tenant were to go, would the purported sub-tenant go with it too? No doubt the tenant has not yet gone because the landlord''s suit against the tenant is still being heard. But still, the theoritical question is a helpful one to ask oneself. One will find that generally, wives will go with husbands, brothers with brothers, brother-in-law along with their relations in marriage and companies with partnerships, the partners of which are the floaters of the company and all in all to it. In such cases why should the court infer that these anciallary persons or bodies were occupying on their own right?

On the other hand, as here, if the Kedias and their partnership go away, the court will ask itself, why should the likes of Taparia, Jaipuria, Goenka, Kulkarni, Todi, Balagopal and Basu go away along with the Kedias? It is not merely a question of surnames. The surnames are indicative of their distinctiveness. If these persons on the Board of Directors will not go away with the Kedias, then they have come in to stay on their own right and that is what the Plaintiff set out to prove in the first place.

Accordingly the appeal succeeds. The judgment under appeal is upset. The decree under appeal is set aside. The Plaintiff''s suit is decreed and there will be a decree for eviction as claimed in claim (a) of the plaint to be found set out at page 12 of the Paper Book. The Appellant/Plaintiff will be entitled to costs both in the court below and before us.

Stay of operation of our decree is prayed for but the prayer is unhesitatingly turned down. Absolute strangers are occupying the property, which is too valuable, at the cost of the Appellants at a throw away price.

Tapan Kumar Dutt, J.

I agree.