Hugh vs Sukha Singh

D.K. Mahajan, J.

This petition, u/s 15 (5) of the East Punjab Urban Rent Restriction Act, 1949 (East Punjab Act No. III of 1949)-(hereinafter referred to as the Act) is directed against the concurrent decisions of the Rent Controller and the Appellate Authority. The Rent Controller had held that it was proved on evidence that the petitioner-tenant had either sublet the premises or had transferred the tenancy rights, and, therefore, was liable to be evicted in view of the provisions of section 13 (2) (ii) (a) of the Act. This provision is in these terms:

13(2). A landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf, if the Controller, after giving the tenant a reasonable opportunity of showing cause against the applicant, is satisfied-

13 (2) (ii)-that the tenant has after the commencement of this Act without the written consent of the landlord-

13 (2) (ii) (a) - transferred his right under the lease or sublet the entire building or rented land or any portion thereof: or

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On appeal, the Appellate Authority has affirmed the decision of the Rent Controller. Against this decision, the present petition in revision has been preferred.

This petition came up for hearing before me on the 19th of April, 1966. The contention of the learned counsel for the petitioner was that in view of the decisions of Chief Justice Falshaw in Shri Bhim Sain v. Dr. Parshotam Lal Kapur C.R. 4l6 of 1962, Civil Revision No. 416 of 1962 decided on 30th September, 1933 and Shiv Parshad Jain v. Brij Lal 1966 Curr. C.J. 361, there was no option but to allow the petition as the only facts, that stood established, were that the petitioner-tenant was not residing in the premises from the year 1962 onwards and that they were in possession of one Peter, who was a nephew of the tenant. At that time, I was. however, doubtful about the correctness of these decisions and, therefore, thought it fit to refer the case to a larger Bench for an authoritative decision so that the two decisions referred to above could be scrutinized. I also posed another problem for decision, namely-

Whether concurrent decisions on a question of fact by the Rent Controller and the Appellate Authority could be interfered with in revision u/s 15 (5) of the Act ?

It is in this situation that the matter has been placed before a Division Bench consisting of my Lord, the Chief Justice and myself.

Mr. H.L. Sarin, learned counsel for the petitioner, has contended that no subletting or transfer of tenancy rights is established in this case. He has taken us through the evidence. There is clear allegation on the part of the respondent-landlord that the premises have been sublet to Mr. Peter. This fact is denied by the petitioner-tenant. But it has been accepted by the tenant that he left the premises with his family in the year 1962 and has been residing since then in Delhi. He has not been able to come and reside in the premises because he is a Chinese by origin and his movements are restricted after the trouble with China. He has further stated that the premises were taken on rent by him from a Muslim owner and he has been residing in the same since 1946. According to him, in the business Hugh and Company, there are two other partners, namely, Y.S. Hugh and S.S. Hugh, who are his cousin brothers. Mr. Peter is the son of one Mr. C.F. Hue. Mr. C.F. Hue is doing business in Calcutta. The petitioner-tenant has not stated, as his own witness, as to what relationship Peter has with him. Peter has appeared in the witness-box and has stated that the petitioner-tenant is his uncle and he is the nephew.

It is also significant that the petitioner maintains accounts and is assessed to income tax. This he admitted in the witness-box. But he has not produced the accounts because if the accounts had been produced, they would have clearly proved whether the rent was being paid by the petitioner or by somebody else. If the rent was being paid by the petitioner, perhaps the matter may have taken a different turn. But from the non-production of the account books which was the best evidence to disprove the allegation of the landlord that there was sub letting, an inference could be drawn that if the account books had been produced they would have gone against the contention of the tenant that there was no subletting. The petitioner has also admitted that in Delhi, he and his other partner, S.S. Hugh, reside in separate houses and pay rent separately. Peter, in his statement has admitted that the petitioner is living in Delhi and so also Mr. Y.S. Hugh and Mr. S.S. Hugh. He has, however, maintained that the family of Y.S. Hugh is residing in the premises in dispute alongwith him and that the earnings of the business are kept by the wife of Mr. Y.S. Hugh, his aunt. No document embodying the terms of the partnership has been produced. There is also no cogent evidence of the exact relationship of Mr. Peter with the petitioner-tenant. It is, however, clear from the evidence that Peter''s father is not a partner in Hugh and Company, even if the allegation of the petitioner is accepted that Hugh and Company is a partnership firm. So far as the the evidence of the landlord is concerned, besides the assertion that there is subletting, there is nothing specific that has been brought about excepting that the tenant has quitted the premises from 1932 and has gone to Delhi to live and in his place the premises are in occupancy of Mr. Peter. It is on this state of evidence that the Rent Controller as well as the Appellate Authority came to the conclusion that in this case either there was subletting or the tenant had transferred the tenancy rights and; therefore, incurred the liability to ejectment u/s 13 (2) (ii) (a) of the Act.

On the evidence as it stands, we see no reason to differ from the conclusions of the Rent Controller and the Appellate Authority. Before dealing with the decisions of Falshaw C.J. in Bhim Sain''s case1 and Shiv Parshad Jain''s case2 it will be proper to notice the corresponding provision to section 13 (2) (ii) (a) of the East Punjab Urban Rent Restriction Act. The correspond in provision in the Delhi Act (The Delhi and Ajmer Rent Control Act 1952) is section 13 (1) (b) (i). This provision is in the following terms:

13 (1) (b)-that the tenant, without obtaining the consent of the landlord in writing, has, after the commencement of this Act,

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(i) sublet, assigned or otherwise parted with the possession of the whole or any part of the premises". In the Act, which replaced the 1952 Act, namely, the Delhi Rent Control Act, 1958, the corresponding provision is section 14 (b) and is in these terms:

14 (b) -that the tenant has, on or after the 9th day of June, 1952, sublet, 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.

The provision of section 13(2) (ii) (a) of the Punjab Act has already been set out. The comparative reading of these provisions shows two differences, namely, that in the Punjab Act, besides subletting, transfer of rights under the lease is made penal; whereas in the Delhi Act, the phrase ''''transfer of his rights under the lease" does not occur; but instead the phrases "assigned or otherwise parted with possession" occur. Thus it would be apparent that the provisions of the Delhi Act are wider than those of the Punjab Act. Thus parting with possession of whole or part of the premises, even to a licensee, would incur the penalty of ejectment under the Delhi Act; but not so under the Punjab Act. Therefore, where the tenant has not parted with possession of the premises and has inducted a licensee in them, could it be said that there has been a transfer or assignment of the premises? Licensee would of course, be in actual possession of the premises and, to that extent, the tenant would be out of possession of the premises. But in the case of a transfer, as opposed to a license, the tenant will be out of possession; whereas in the case of a license, he will be in possession. Possession could both be actual as well as constructive. In other words, a person in possession has the absolute control of the premises even when they are with the licensee, whereas a person out of possession will not have the absolute control of the premises as in the case of a transfer. The distinction between "a lease" and a "license" has been pointed out by their Lordships of the Supreme Court in Associated Hotels of India Ltd. Vs. R.N. Kapoor, . K Subha Rao J. (as he then was) while dealing with this matter, observed as follows:

There is a marked distinction between a lease and a license. S. 105 of the Transfer of Property Act defines a lease of immoveable property as a transfer of a right to enjoy such property made for a certain time in consideration of a price paid or promised. Under S. 108 of the said Act, the lessee is entitled to be put in possession of the property. A lease is, therefore, a transfer of an interest in land. The interest transferred is called the leasehold interest. The lessor parts with his right to enjoy the property during the term of the lease, and it follows from it that the lessee gets that right to the exclusion of the lessor. Whereas S. 52 of the Indian Easement Act defines a licence thus:

''Where one person giants to another, or to a definite number of other persons, a right to do or continue to do in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence''.

Under the aforesaid section, if a document gives only a right to use the property in a particular way or under certain terms while it remains in possession and control of the owner thereof, it will be a licence. The legal possession, therefore, continues to be with the owner of the property, but the licensee is permitted to make use of the premises for a particular purpose. But for the permission, his occupation would be unlawful. It does not create in his favour any estate or interest in the property. There is, therefore, clear distinction between the two concepts. The dividing line is clear though sometimes it becomes very thin or even blurred. At one time it was thought that the test of exclusive possession was infallible and if a person was given exclusive possession of a premises, it would conclusively establish that he was a lessee But there was a change and the recent trend of judicial opinion is reflected in Errington v. Errington (1952) 1 All. E.R. 149 wherein Lord Denning reviewing the case law on the subject summarizes the result of his discussion thus at p. 155: ''The result of all these cases is that, although a person who is let into exclusive possession is, ''prima facie'' to be considered to be tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy.''

The Court of Appeal again in Cobb v. Lane (1952) 1 All. E.R. 1199, considered the legal position and laid down that the intention of the parties was the real test for ascertaining the character of a document, At p. 1201, Somervell L.J., stated:

the solution that would seem to have been found is, as one would expect, that it must depend on the intention of the parties.

Denning L.J., said much to the same effect at p. 1202: ''The question in all these cases is one of intention: Did the circumstances and the conduct of the parties show that all that was intended was that the occupier should have a personal privilege with no interest in the land ?

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The following propositions may, therefore, be taken as well-established:

To ascertain whether a document creates a licence or lease, the substance of the document must be preferred to the form; (2) the real test is the intention of the parties - whether they intended to create a lease or a licence, (3) if the document creates an interest in the property, it is a lease, tut, if it only permits another to make use of the property, of which the legal possession continues with the owner, it is a licence, and (4) if under the document a party gets exclusive possession of the property, ''prima facie'', he is considered to be a tenant; but circumstances may be established which negative the intention to create a lease. Judged by the said tests it "is not possible to hold that the document is one of licence. Certainly it does not confer only a bare personal privilege on the respondent to make use of the rooms. It puts him in exclusive possession of them,'' untrammelled by the control and free from the directions of the appellants. The covenants are those that are usually found or expected to be included in a lease deed. The right of the respondent to transfer his interest under the document, although with the consent of the appellants, is destructive of any theory of licence. The solitary circumstance that the rooms let out in the present case are situated in a building wherein a hotel is run cannot make any difference in the character of the holding. The intention of the parties is clearly manifest, and the clever phraseology used or the ingenuity of the document-writer hardly conceals the real intent. I, therefore, hold that under the document there was transfer of a right to enjoy the two rooms and, therefore, it created a tenancy in favour of the respondent.

What I understand from the above observations is that if the tenant is completely out of possession of the premises and somebody else is in exclusive possession of the same, the person in exclusive possession is to be considered to be a tenant unless there are circumstances negativing such a suggestion.

In the present case, admittedly Peter is in exclusive possession, of the premises and, according to his version, alongwith his aunt Mrs, Y.S. Hugh. The tenant, to whom the premises were let out, namely F.S. Hugh, is completely out of possession of the premises for the last two years.'' There is no proof on the record that the rent of the premises is still being paid by F.S. Hugh. His assertion, that he is paying the rent, cannot be accepted when he has failed to produce the account book''s which, according to him, he regularly maintains. He is also assessed to income tax and, therefore, in the very nature of things, an entry regarding payment of rent, if it had been paid by him, must occur in the account books. The non-production of the same raises a clear inference that the rent has not been paid by F.S. Hugh. Therefore, the Rent Controller as well as the Appellate Authority were right in coming to the conclusion that it was a case of subletting; and we entirely agree with that conclusion. There is no ether circumstance proved which militates against this inference.

This leads me to the consideration of the decisions of Falshaw C.J. already referred to. The facts of both these cases, a reference to which will be shortly made, leave no room for doubt that in each of these cases, the tenant was in effective control of the rented premises and that the alleged sub-tenant was a close relation and was merely a licensee. In Bhim Sain''s case1, a clear finding was given by the Appellate Authority that no subletting was proved. In the other case, on almost similar facts, a contrary finding had been given. In view of his earlier decision, the basis of which has already been indicated, the learned Chief Justice set aside in the latter decision (Shiv Parshad Jain''s case2), the order of the Appellate Authority and thus brought it in line with his earlier decision.

In Bhim Sain''s case1, the proved facts were: Dr. Parshotam Lal Kapur was carrying on his business in a shop quite near to the premises in dispute. Two months before the ejectment petition, he had shifted his residence in the Model Town, Ludhiana-a place 2-3 miles away from the premises in dispute and his shop. In the premises in dispute, his wife''s sister and her husband, Ved Parkash, were living. According to Dr. Parshotam Lal Kapur; he arranged the marriage of his wife''s sister to Ved Parkash who is very much younger, and he takes fatherly interest in them. It was also proved that although Dr. Parshotam Lal Kapur goes to his house in Model Town every night, he has his midday meals, his rest and tea in the disputed premises. On these facts, the Appellate Authority concluded that the tenant had not transferred his tenancy. The learned Chief Justice, after noticing the difference between the Delhi and the Punjab Acts, upheld the decision of the Appellate Authority. The ratio of this decision may better be set out in the words of the learned Chief Justice:

It is noteworthy that in the Punjab Act, the ground for ejectment in this respect is "that the tenant has transferred his right under the lease or sublet the entire building or rented land or any portion thereof" and it does not include the words found in the corresponding part of the Delhi Act "or has otherwise parted with possession". It seems to me that there might have been no difficulty in restoring the order of the learned Rent Controller if the Punjab Act had been in similar terms to the Delhi Act, but I feel bound to agree with the conclusion of the learned Appellate Authority in this case that the facts set out above, in the absence of anything further, do not show that the tenant has parted with his rights under the lease or sublet the premises and there is nothing to show that his wife''s sister and brother-in-law are occupying the premises otherwise than on sufferance and as licensees whom the tenant could turn out or at least compel to find accommodation for himself if it suited his convenience to cease living in Model Town and reside again in the premises in suit.

In Shiv Parshad Jain''s case two brothers of the tenant''s wife were occupying the upper floor of the house in dispute. The remaining part of the premises were in possession of the tenant. The Rent Controller held that the wife''s brothers were living in the premises as licensees and there was no subletting. The Appellate Authority concluded to the contrary and held that the subletting was a reasonable inference from the facts. The learned Chief Justice restored the decision of the Rent Controller and set aside that of the Appellate Authority with the following observations:

In my opinion, the view taken by the learned Rent Controller was proper and no inference could be drawn in the present case beyond that. The tenant had allowed his brothers-in-law to live in a portion of the reuse as licensees on account of their close relationship. I took a similar view in Civil Revision No. 416 of 1962, Bhim Sain v. Dr. Parshotam Lal Kapur, decided on the 30th of September, 1963 in a case in which the tenant''s wife''s sister and brother-in-law were living in part of the leased premises and I adverted to the difference in this respect between the East Punjab Urban Rent Restriction Act and the similar Delhi Act. The words used in the Punjab Act are "that the tenant has transferred his right under the lease or sublet the entire building or rented land or any portion thereof"; while the Delhi Act contained the additional words "or otherwise parted with possession". From this it is clear that for a landlord to succeed in this State, some kind of contractual relationship between the tenant and the alleged sub-tenants must be established which does not exist in the present case.

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It will be seen from the aforesaid decisions that the tenant had not completely parted control of the premises in dispute in both the cases. Therefore, these decisions are correct so far as they go because on the facts of those cases, the only possible inference was that the so-called sub-tenants were licensees and not sub-tenants; while, in the present case, the facts are quite different; and the contention of Mr. Sarin, learned counsel for the petitioner, that the aforesaid two decisions govern this case, is pointless. The necessary difference in the case in hand and the cases relied upon by Mr. Sarin has been pointed out in detail in the earlier part of this judgment.

Mr. Sarin has also drawn our attention to the decisions in Petroleum Workers Union v. Messrs A. Mohamed & Company, Madras (1966) 1 M.L.J. 356, Jetha Nand v. Ram Chander (1966) 68 P.L.R. 377, Bhag Singh v. Surjan Singh (1966) 68 P.L.R. 468 and Dev Dutt Verma v. Ajit Singh (1965) C.L.J. (P&H) 341, for his contention that on the frets of the present case, subletting has not been proved. None of these cases is in point and it is, therefore, not necessary to deal with each one of them individually. Suffice it to say that they do not, in any manner, help the contention of the learned counsel and do not at all advance his case.

This leaves me to consider the scope of the provisions of section 15 (5) of the East Punjab Urban Rent Restriction Act. It cannot be disputed that the powers of the High Court, under this provision, are much larger than those enjoyed u/s 115 of the Civil Procedure Code. See in this connection the decisions in Maharaj Jagat Bahadur Singh v. Badri Parshad Seth (1963) 65 P.L.R. 452 S.C. and Moti Ram Vs. Suraj Bhan and Others, . But this does not mean that the nature of the jurisdiction of the High Court, which essentially is revisional jurisdiction, would justify interference with a concurrent finding of fact where that finding has been properly arrived at. This view has been taken by this Court consistently. See in this connection the decisions in Prem Chand v. Chiranji Lal C.R 638 of 1960 Civil Revision No. 638 of 1960 decided on 8th February, 1961; Mahabir Parshad v. Mohinder Kumar (1959) 61 P.L.R. 625 and Thakar Das v. Kalwant Singh C.R. 582 of 1960 Civil Revision No. 582 of 1960 decided on 7th September, 1961.

No other point has been canvassed before us.

For the reasons recorded above, this petition fails and is dismissed, with no order as to costs. The petitioner is granted two months time to vacate the premises.

Mehar Singh, C.J.

I agree.