Jamuna Oil Mills vs Pradeep Tandon and Others

B.N. Sapru, J.—the Petitioner M/s. Jamuna Oil Mills is a registered partnership firm carrying on business in oil and took premises No. 75, Malvi-yanagar, Allahabad (old No. 64/74, Yahiapur, Allahabad) on rent from its owner Smt. Brij Rani Mehrotra on a monthly rent of Rs. 500/- in 1955.

On 1-1-1975, one Pradip Tandon, made an application to the Kent Control and Eviction Officer for the allotment of the accommodation on the ground that the partnership firm had illegally sub-let the accommodation to one Bishambhar Lal. Subsequently he took up another plea also that there was a deemed vacancy under the provisions of Section 12(2) of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972, here-in-after referred to as ''the Act as the partners of M/s. Jamuna Oil Mills had, after coming into force of the Act, introduced a new partner, namely, one Sri Nar-singh Das into the partnership.

The landlady also made an application u/s 16 of the Act. She also claimed that there was a deemed vacancy u/s 12(2) of the Act as the partners of the firm had admitted Sri Narsingh Das as a new partner in the firm.

The Petitioner denied that Sri Narsingh Das was a new partner and they also denied that they had illegally sublet the accommodation to Sri Bishwambhar Lal.

The Rent Control and Eviction Officer, by his order dated 18-8-1975, held that there had been no sub-letting in favour of Vishwambhar Lal and Narsingh Das was an old partner and as such there was no deemed vacancy u/s 12(2) of the Act. He, accordingly, dismissed the application of the landlady for the release of the accommodation in her favour. He similarly dismissed the application of Sri Pradip Tandon for allotment. The landlady did not file any appeal but Sri Pradip Tandon filed an appeal which was numbered as Rent Control Anneal No. 596 of 1975 Pradip Tandon v. Jamuna Oil Mills in the court of III Additional District Judge, Allahabad. The learned III Additional District Judge has allowed the appeal on the ground that Sri Narsingh Das was a new partner introduced in the firm as a partner with effect from 9-9-1974 and as such there was a deemed vacancy. The learned Judge did not accept the case of Pradip Tandon and the landlady that there was sub-letting in favour of Vishwambhar Lal. After holding that there was a deemed vacancy, the learned Judge has directed the Rent Control and Eviction Officer to notify the vacancy and proceed according to law. Aggrieved by the order of the learned III Additional District Judge, the Petitioner has preferred the present writ petition.

Admittedly, the accommodation in dispute was taken on rent in 1955 by five persons as partners of M/s. Jamuna Oil Mills on a monthly rent of Rs. 500 namely, Sri K.C. Mehrotra, Sri Nar-singh Das, Sardar Gurcharan Singh, Sardar Mehar Singh and Sardar Singh. This partnership continued till its reconstitution on 12th November, 1962 with only three partner, namely K.C. Mehrotra, Narsingh Das and Sardar Gurcharan Singh. The partner-ship firm was registered with the Registrar of Firms u/s 58(1) of the Indian Partnership Act, 1932 Under the partnership deed, Sri Nar singh Das did not contribute anything towards the capital of the partnership firm but he was a working partner. Sardar Gurcharan Singh died on 27th May, 1968 and this resulted in the automatic dissolution of the partnership firm as provided by the provisions of Section 42(c) of the Indian Partnership Act.

According to the Petitioner, after the death of Sardar Gurcharan Singh, the two previous partners namely, Sri K.C. Mehrotra and Narsingh Das admitted one Hardeep Singh, son of Sardar Gurcharan Singh to the partnership firm and the firm continued while according to the contesting Respondents, Sri Narsingh Das withdrew from the firm and Sri K.C. Mehrotra inducted Hardeep Singh son of Sardar Gurcharan Singh into the partnership. The learned District Judge after an analysis of the evidence, held that after the death of Sardar Gurcharan Singh, Sri Narsingh Das dissociated himself from the partnership and the partnership continued with only K.C. Mehrotra and Hardeep Singh. The learned District Judge was of the view that as Narsingh Das had ceased to be a partner after the death of Sardar Gurcharan Singh, he became a new partner within the meaning of Section 12(2) of the Act when he was inducted again as a partner in the partnership firm on 9-9-1974.

Having come to the conclusion that Narsingh Das was a new partner, the learned Judge has held that there was a deemed vacancy under the provisions of the Act.

Shri Shanti Bhushan for the Petitioner has submitted three questions for consideration of the Court.

(1) According to Sri Shanti Bhushan, the order of the Rent Control and Eviction Officer holding that there was no vacancy was not appealable u/s 18 of the Act by Sri Pradeep Tandon. In the present case, while holding that there was no vacancy, the Rent Control and Eviction Officer has also rejected the application of Sri Pradeep Tandon for allotment of the accommodation in his favour. In similar circumstances, a learned Single Judge, has, in two cases held that the order is appealable. These cases are Ramlal v. Rent Control and Eviction Officer 1976 ALJ 76 and Dr. S.N. Ghosh Vs. Rent Control and Eviction Officer and Others, . In view of the above decisions of the Court, the argument cannot be accepted and is rejected.

(2) Sri Shanti Bhushan has further contended that the finding of the District Judge that Sri Narsingh Das ceased to be a partner of the firm M/s. Jamuna Oil Mills after the death of Sardar Gurcharan Singh is perverse. This finding of the District Judge is based on evidence and cannot be said to be perverse. There are many documents on the record to show that Narsingh Das had ceased to be a partner of the firm. The partnership deed dated 7th of June, 1968 between K.C. Mehrotra and Hardeep Singh is on the record. It recites that Sardar Gurcharan Singh died on 27th May, 1968 and Sri Narsingh Das withdrew from the firm on 29th May, 1968. The deed is witnessed by Narsingh Das. The Income Tax assessment order showing that M/s. Jamuna Oil Mills had only two partners, between 1968 and 1973 is on the record. In the circumstances, this argument must also be rejected.

(3) Lastly, Sri Shanti Bhushan submitted that even on the findings of fact recorded by the District Judge, the appeal should not have been allowed by him and the court has committed a manifest error of law in allowing the same. The argument is that Sri Narsingh Das was admittedly a partner in the firm M/s. Jamuna Oil Mills from 1962. The partnership firm not being a legal entity, according to him, all the partners of the firm were joint tenants of the disputed accommodation. This position continued till 1968 when Sardar Gurcharan Singh died. According to Mr. Shanti Bhushan''s argument, even if Narsingh Das withdrew from the partnership on Sardar Gurcharan Singh''s death, his joint tenancy interest in the disputed accommodation continued. It is submitted that u/s 46 of the Partnership Act, every partner or his representative is entitled, as against all the other partners or their representatives, to have the property of the firm applied in payment of the debts and liabilities of the firm, and to have the surplus distributed amongst the partners or their representatives according to their rights. The tenancy, according to him, was a partnership asset and as such unless Narsingh Das surrendered the interest in the tenancy, the tenancy will continue.

It cannot be doubted that a partnership is not a legal entity and consequently all the partners in the firm from 1955 onwards were joint tenants. There is no finding by the District Judge as to the manner in which Narsingh Das''s interest in the tenancy came to an end. The mere fact that he ceased to be a partner would not determine his right as a joint tenant. In fact the District Judge has not addressed himself as to I this aspect of the matter at all. The U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 came into force on 15th July, 1972. It did not determine pre-existing tenancies. In the light of this position, Section 12(2) has to be examined. Section 12(2) is reproduced below:

12(1). A landlord or tenant of a building shall be deemed to have ceased to occupy the building or a part thereof if--

(a) ....

(b)....

(c)....

(2) In the case of a non-residential building where a tenant carrying on business in the building admits a person who is not a member of his family as a partner or a new partner, as the case may be, the tenant shall be deemed to have ceased to occupy the building.

Section 12(2) must be interpreted to mean that where there is a partnership firm in existence which is a tenant of a building when the Act came into force the induction of a new partner would lead to the creation of a deemed vacancy. Hywever, a person who has a subsisting right in the tenancy alongwith the partners of the firm can be introduced into partnership without there being a deemed vacancy. The object of the section is to prevent a partnership firm from introducing new tenants. The object of the Act is not to prohibit one of the pre-existing joint tenants from being introduced into the partnership firm.

In this case, the learned District Judge was required to record a finding as to whether Narsingh Das had given up his tenancy rights on the dissolution of the firm consequent on the death of Sardar Gurcharan Singh. This has not been done. Sri Kakkar contended that the tenancy was a monthly tenancy and if Sri Narsingh Das left the partnership, he may very well have also ceased to have any interest in the tenancy. The mere fact that he continued to function as Manager would not mean that he continued to be joint tenants. These are questions of fact which have to be investigated by the learned District Judge.

In the result, writ petition is allowed, the order of the learned District Judge in Rent Control Appeal No. 596 of 1975 Pradeep Tandon v. Jamuna Oil Mills and Ors. dated January 1, 1976 is quashed. The learned District Judge is directed to decide the appeal afresh in the light of the observations made in this judgment. The parties will bear their own costs.