Mani Ram vs Satpal Kapoor and others

J.N. Bhat, J.—This is a civil second appeal against the decree of the learned District Judge, Jammu, dated 16th October 1970 whereby he

reversed the decree dated 20th May 1970 for ejectment passed by the Sub Judge, Jammu, against the present defendants-respondents.

The brief facts of this case are that a suit for ejectment was brought by the appellant against Satya Pall respondent seeking ejectment from a

shop situate at Lind Road Jammu, with the allegation that he had let out the shop to Satya Pall from 5th December 1964 at a monthly rental of Rs.

100/-. The defendant was not entitled to sublet the shop but he had done so. The plaintiff required the shop for his own use and a valid notice for

ejectment has been issued to the defendant. The plaintiff sought permission to amend the plaint and by order dated 23-4-1968 he was permitted

by the court to amend the plaint and made the so called subtenants as parties to the suit. The plaintiff by means of the amended plaint presented on

10th May 1968 added the other respondents viz: Sohan Lal and Raghuwansh Lal as defendants.

The defendants-respondents resisted this suit on various pleas. The main contention of the defendants was that the defendant No. 2 Sohan Lal is

the real brother of defendant No. 1 and both the brothers carried on the business jointly in the shop and defendant No. 3 had nothing to do with

this business. The shop was run under the name of Messrs Kapoor Cloth House. In the additional pleas they challenged the validity of the notice;

there was no subletting; that the plaintiff had taken an advance rent of Rs. 2000/- from the defendant No. 1 out of which Rs. 50/- were to be

deducted every month against the agreed rent and the remaining Rs. 50/- were to be paid by the defendant in cash to the plaintiff till the whole

amount of Rs. 2,000/-was adjusted. The plaintiff did not require the shop for his use, the advance paid would exhaust on 5-5-1968, the suit was

therefore, premature.

The pleadings of the parties suggested the following issues to the trial court:-

Whether the shop in dispute has been sublet by defendant No. 1 to defendants Nos. 2 and 3, if so what is its effect on the suit? O. P. P.

Whether the plaintiff reasonably requires the disputed shop for his personal necessity, keeping into consideration the comparative advantage and

disadvantage of the parties? O. P. P.

Has the plaintiff served a valid notice on the defendants? O. P. P.

Whether the plaintiff has received Rs. 2,000/- as advance rent from the defendant No. 1 which was to exhaust on 5th May 1968 and if so what

is its effect on the suit? O. P. D.

Relief.

The plaintiff appellant produced 2 Chhaju Rams. Radha Kant, Sohan Lal, Karan Dev and Dharam Pal, clerk income tax department as his

witnesses and appeared as his own witness also. The defendants produced Trilok Chand, Kasturi Lal, Surinder Mohan, Girdhari Lal and Attar

Chand as witnesses. In addition all the three defendants appeared as witnesses in support of their case.

The trial court held that the plaintiff required the shop for his own use; that the shop had been sublet by Satya Pal defendant; that a valid notice

to quit was served upon the defendant and Rs. 2,000/- was not advance rent but it was only to be considered as a debt and therefore the suit was

not premature. Ultimately the trial court decreed the suit. An appeal was preferred before the learned District Judge who upset this finding and

dismissed the suit of the present appellant. Against this decree of dismissal of the suit, this second appeal has been preferred by the plaintiff in this

court.

We have heard detailed arguments of the learned counsel for the parties. In the words of the learned counsel for the respondents only three

points have been argued by the learned counsel for the appellant and only these three points require adjudication by this court. The three points

are:-

(i) Whether the plaintiff requires the shop for his personal use and what is the comparative advantage and disadvantage of the parties in case a

decree for ejectment is passed or rejected:

(ii) Whether Satya Pall had sublet the shop to defendant No. 2 Sohan Lal:

(iii) Whether the suit was premature or had been rightly decreed.

These points are the subject-matter of issue Nos. 1, 2 and 4. The learned counsel for the appellant also agreed that these are the main points for

decision although during arguments he pressed some nice points of law also, which would be discussed at their proper place.

Now so far as the question of personal necessity is concerned, we agree with the finding of the District Judge that the appellant has not proved

any urgent necessity for the occupation of this shop; compared with the continuance in the shop by the defendant, or defendants. On this issue the

plaintiff has stated that he requires this shop and intends to carry on business in it. His witness Chajuram simply states that the plaintiff requires the

shop for his personal use. This witness has been dubbed to be a landlord witness who is the owner of ten shops and has started eviction

proceedings against his tenants. Moreover his statement is so cryptic as to lead us nowhere. Munshi Ram P. W. states that the plaintiff has never

conducted any business in any shop. This is all the evidence so far as the personal requirement of the plaintiff is concerned. We need not in this

second appeal recapitulate the evidence produced by the defendants consisting of five witnesses to rebut this evidence of the plaintiff because in

our opinion the plaintiff has not been able to prove with any amount of clarity or certainty that he requires the shop for his personal bona fide use.

A mere assertion that he intends to carry on business is not sufficient; more so in view of the provisions of the Jammu & Kashmir Houses and

Shops Rent Control Act, 1966 (hereinafter referred to as ""the Act"" in this judgment) which requires two things viz: that the landlord must

reasonably require the premises for his own occupation and in determining the reasonableness of requirement for occupation the court shall have

regard to the comparative advantage or disadvantage of the landlord or the person for whose benefit the shop is held and of the tenant. Here in this

case there is nothing in the statements of the witnesses for the plaintiff which would even indirectly suggest the nature of the business that the

plaintiff intends to carry on in this shop, his wherewithal for carrying on business and his aptitude and physical strength and other facts requisite for

such a purpose. It has been held in Naresh Vs. Kanai Lal Roy Chowdhury, that the word ""require"" is something more than the word ""desire"".

Although the element of need is present in both the cases. the real distinction between ""desire"" and ""require"" lies in the insistence of that need.

There is an element of ""must have"" in the case of ""require"" which is not present in the case of mere ""desire."" What has got to be seen is that there

must be a sort of ""must have"" element in the need of the landlord and also that his want or need of the shop must be honestly felt by him. The

learned counsel for the plaintiff has relied upon an authority reported as 1970 Ren CJ 174 (P&H) of the Punjab and Haryana High Court which

says that ordinarily it is for the landlord to judge his need, the Rent Controller should normally give weight to the statement on oath made by the

landlord in that behalf. The Rent Controller should not ordinarily become the judge of the landlord's needs unless material had been brought on the

record by the tenant to show that the desire of the landlord to occupy the house for his own residence was not genuine and the eviction proceeding

had not been filed bona fide. But from the language of this authority it seems the law in East Punjab is different from the law in this State. There

normally it is the statement of the landlord that may be accepted so far as his own requirement is concerned but that also under the law of the State

must clearly show that his requirement is reasonable and secondly the landlord must show that the advantage in evicting the tenant will be greater

than the disadvantage to the tenant. The advantages of both the landlord and the tenant have to be comparatively weighed and then a conclusion

arrived at. Therefore on this point we feel that the plaintiff appellant has failed to make out any case.

Now we take up issue No. 1. This issue is to be divided into four subheads which are as under:-

(i) Whether factually there has been any sub-letting by Satyapal of the shop to Sohan Lal?

(ii) What is the relationship of the two defendants (Satyapal and Sohan Lal) inter se so far as the occupation of this shop is concerned;

(iii) Whether Mani Ram Landlord has accepted Sohan Lal as his tenant?

(iv) Whether acceptance of rent from Sohan Lal would clothe Sohan Lal with the status of a tenant vis-a-vis Maniram plaintiff?

It has been argued by the learned counsel for the appellant that the original tenant is Satya Pal who has executed the rent note dated 12-12-

1964. After some time he inducted Sohan Lal into this shop and himself started a new business at Tanda vide statement of Surinder Mohan D. W.

This was a clear case of subletting. He has further stated that Mr. Dharam Pal, a clerk in the income tax Department has stated that there was

some partnership between Satya Pal and Sohan Lal about Kapoor Cloth House which had been dissolved after eight months. But the original

record has not been produced. On the other hand Mr. Gupta has argued that Satya Pal and Sohan Lal are real brothers, they constitute a Hindu

Joint Family and they jointly carry on business in this shop under the name Kapoor Cloth House, there is no subletting. Mr. Gupta has further tried

to show from the evidence of the plaintiff himself that the shop is being run by both Satya Pal and Sohan Lal, Chajuram P. W. states that both

Satya Pal and Sohan Lal work on this shop. Chaju Ram Postman also states the same thing. Mr. Sohan Lal P. W., Labour Inspector, has stated

that on one form Ex. P. W. B. Sohan Lal has signed as the proprietor of the shop. This was filled in to declare the close day of the week to be

observed by the shop. This witness has produced another form Ex. P. W. C. which has been signed by both Satya Pal and Sohan Lal as

proprietors of the shop. Mr. Karan Dev P. W. stated that Sohan Lal pays the electric charges of this shop but in cross-examination he says that in

order to get an electric connection, the form that is filled up requires the name and signature of the owner also and then only an electric connection

is given. The form has not been produced. Therefore argues Mr. Gupta the evidence produced by the plaintiff himself disclosed that both Satya Pal

and Sohan Lal carry on business in this shop, being members of a Hindu Joint Family. There is no question of subletting the shop as such there is

force in this contention which I accept as correct. This finding would dispose of points 1 and 2 posed by me above while considering the case of

subletting.

About the third point much argument was advanced on either side as to what are the elements for creating tenancy. In this case let me state the

factual position first which has been proved. It has been proved that the plaintiff has been receiving rent of this shop from Sohan Lal. There are two

clear receipts evidencing this fact and they are on a piece of paper marked as Ex. D. E. One is dated 6-4-67 wherein Mani Ram has stated that he

received Rs. 100/- as rent of his shop from Sohan Lal Kapoor and the other Rs. 100/- has been given credit from the pronote. On 6-6-1967

again Rs. 100/- has been received from Sohan Lal Kapoor by the plaintiff and Rs. 50/- has been credited from the pronote. These receipts are

admitted by Mani Ram. Mr. Sethi has argued that mere acceptance of rent would not by itself create any tenancy. He has referred to a number of

authorities on this point and they are Dr. H.S. Rikhy and Others Vs. The New Delhi Municipal Committee, ; Panchanan Ghose Vs. Haridas

Banerjee, ; AIR 1949 124 (Federal Court) & Udhoo Dass Vs. Prem Prakash and Another, .

In Dr. H.S. Rikhy and Others Vs. The New Delhi Municipal Committee, some shops belonging to the Municipality were occupied by some

people and some money was received from the occupiers describing it as rent. The Punjab Municipal Act which governed the case required

certain formalities to be observed for entering into a contract with the Municipality. The contract was to be reduced to writing and it was essential

that it should, as required by Section 47, have been made by an instrument in writing executed by the President or the Vice-President and at least

two other members of the Committee and the execution by them should have been attested by the Secretary. If these formalities were not

observed it was not a valid contract at all and would not create the relationship of a landlord and a tenant between the Municipality and the

occupiers of the shops in the Municipal Market. Their Lordships therefore in the circumstances of that case held that:-

............... The word ""rent"" may be used in the legal sense of recompense paid by the tenant to the landlord for the exclusive possession of

premises occupied by him. It may also be used in the generic sense, without importing the legal significance aforesaid of compensation for use and

occupation. 'Rent' in the legal sense can only be reserved on a demise of immovable property. Hence the use of the term 'rent' cannot preclude the

landlord from pleading that there is no relationship of landlord and tenant..........

This authority has no application to the facts of this case. On the other hand in Ram Kumar Das Vs. Jagadish Chandra Deb Dhabal Deb and

Another, the defendant had executed a Kabuliyat in favour of the Receiver of the plaintiff's estate by which he purported to take a settlement of

land in suit for building purposes for a period of ten years at an annual rent. Two payments were made. Afterwards no payment was made. The

Kabuliyat was held to be an inoperative document u/s 107, T. P. Act. The question that was posed was whether there was any tenancy created by

implication of law. It was held that:-

The rule of construction embodied in Section 106. T. P. Act applies not only to express leases of uncertain duration but also to leases implied by

law which may be inferred from possession and acceptance of rent and other circumstances.

In another authority reported as Julumdhari Rai and Others Vs. Debi Rai and Others, it was held that when a deed of settlement was not proved

but rent receipts were produced, payment and acceptance of rent brought into existence the relationship of landlord and tenant. Proof of the

settlement deed was not necessary. In that case a number of authorities have been followed and the Supreme Court authority reported as Ram

Kumar Das Vs. Jagadish Chandra Deb Dhabal Deb and Another, above referred to also has been relied upon. In another authority viz.,

Gurcharan Singh Jodh Singh Vs. Chairman Delhi Improvement Trust, New Delhi, it has been held that a rent is a usual, though not an essential

incident of the relationship of landlord and tenant and payment of rent by the occupier to the owner of premises raises a presumption that the

relationship of landlord and tenant has come into existence.

The other authorities cited by Mr. Sethi do not very much support him. In Panchanan Ghose Vs. Haridas Banerjee, it has been held that a suit

for ejectment after acceptance of rent after the notice to quit would amount to waiver but where the rent is accepted under a statute mere

acceptance of rent in the absence of any other evidence does not operate as a waiver of the notice. In AIR 1949 124 (Federal Court) A lets his

house to B. B. sublets the same to C. After the expiry of the lease C did not give vacant possession to A but continued to remain in possession and

sent a certain amount by cheque to A as rent for the period. A first refused the cheque but subsequently it was received by him and put into his

banking account. The majority of the learned judges in that case held that:-

When the cheque was cashed by A it was done without any reservation or condition whatever. As the agreement between the parties was

complete by acceptance of rent as such by A when he cashed the cheque any subsequent protest by him could not alter its legal consequences.

Further it did not lie in the mouth of A to say that he would receive the money but not as rent. Consequently a monthly tenancy u/s 116 came into

existence.

It may be mentioned that the landlord had received the cheque without prejudice to his rights under the Rent Act. This authority supports the case

of the defendants rather than that of the plaintiff.

A Full Bench of the Allahabad High Court in Udhoo Dass Vs. Prem Prakash and Another, held that a lease involves two agreements: one by

the landlord agreeing to let his accommodation to be used by the tenant in consideration of the latter's paying him money called rent, and the other

by the tenant agreeing to pay to the landlord money called rent, in consideration of the latter allowing him to use his accommodation. Each party

agrees to do a certain act and such agreement is a consideration for the other. In one case the consideration is payment of rent and in the other

case allowing the accommodation to be used and neither of the two considerations is unlawful.

Therefore none of the authorities cited by Mr. Sethi supports him. Accordingly the finding on this part of the case will be in favour of the

defendants.

It has been argued by the learned counsel for the appellant that even taking a partner in the business by a tenant would amount to subletting.

He has in this behalf referred to the following authorities: 1970 Ren CJ 338 (MP) and 1970 Ren CJ 707 (Ker). I would first take up the latter

authority. In this case the so called servant, an Ayah with her children had been living exclusively in the building and the ration card also was issued

to her under that very address. She rendered service to the tenant and in view of that service she was given absolute possession of the building. It

was held that the service rendered is tentamount to rent paid and u/s 105 of the Transfer of Property of Act, 1882 occupation in consideration of

such service would be occupation for rent and such transaction would amount to a lease in the eye of the law. The learned Judge further on goes to

say that in case of subletting two things have to be proved; firstly that the sub-lessee is in absolute possession of the building and secondly that he is

paying the rent, which both facts were proved in that case. The learned Judge further on went to say that:-

When once possession is proved the burden will shift to the tenant to show that the sub-tenant is in occupation not as a sub-tenant.

And in the peculiar circumstances of that case, it was held that the tenant had not proved such a case. Again this authority would not help Mr. Sethi

because here on a question of fact the possession is not exclusively with Sohan Lal but both with Satya Pal and Sohan Lal and there is nothing in

evidence to show that Sohan Lal pays anything to Satya Pal as rent in any form for the occupation of this shop. The other authority viz., 1970 Ren

CJ 338 (MP) does in fact lay down that when a tenant takes a new partner and continues to occupy the premises without the permission of the

landlord, he would certainly come within the mischief of Section 12 (1) (b) of Madhya Pradesh Accommodation Control Act. 1961. The judgment

does not mention what those sections namely 12 (1) (b) and 14 (1) of the Madhya Pradesh Accommodation Control Act are. It seems that in that

Act even assigning part of the possession to somebody else would incur the same consequences as subletting. Although strictly speaking this

authority has no application to the facts as held proved in this case, apart from the factual argument. I have some hesitation in accepting the ratio

decidendi of this authority in its entirety. In the first place I might mention that there are authorities of other High Courts which have taken a

contrary view. Some of the authorities on this subject are mentioned on page 66 of Fundamentals of Rent Control Legislation in India by Shri R. C.

Kochatta, 1968 edition. Some of the rulings referred to therein are not available. The learned author says that

there has been a long standing controversy on the subject that whether the taking a partner by the tenant and doing partnership business on the

premises would amount to subletting. There are some High Courts which took the view that mere creation of partnership by the tenant with

strangers and to continue the partnership business in the tenanted premises would not amount to subletting inasmuch as even if partnership business

is carried on in tenanted premises, the tenant does not lose his legal possession of the premises which is the very essence of the sub-letting,

and he has said that High Courts of Allahabad, Madras, Saurashtra, Punjab, and former Madhya Bharat have subscribed to this view in various

decisions. Then reference is made to some authorities. The learned author continues to say that:-

............... the view of the Nagpur High Court and the Madhya Pradesh High Court is to the effect that the taking of a partner in the

accommodation amounts to subletting inasmuch as the partnership is a distinct person from the partners composing it.

I have been able to lay my hands on three Indian authorities viz., AIR 1954 Nag 169; Nandu Mal and Others Vs. Ramji Lal and Another, & AIR

1953 Sau 113. The Nagpur authority is a very short one and lays down that where A alone was the tenant of the premises and he allowed other

persons to enter into partnership along with himself to carry on business in those premises, the partnership which A entered into along with the third

parties was a personality in law distinct from that of A himself. A thus brought himself within the purview of the law prohibiting subletting except

with the permission of the landlord and was therefore liable to ejectment on the ground of unauthorised subletting

In Nandu Mal and Others Vs. Ramji Lal and Another, it was held:-

It is not every transaction by the lessee with a third party which must amount to a transfer, subletting or parting with possession...............

In that case the intention of the parties was that the original tenant was to have the use of the premises to carry on a business of his own and in the

absence of evidence on the point of transfer of possession the finding must be that the plaintiff landlord had failed to establish that there was

subletting or parting with possession of the premises so as to give them a cause of action to evict the lessee,

In AIR 1953 Sau 113 there was a condition against subletting in the lease agreement but nonetheless the lessee entered into partnership with

some other person for carrying on his business which was cinema business. It was held that there was no breach of condition entitling the landlord

to evict his tenant.

There is another authority reported as (1865) 1 All ER 768. In that case the tenant after some time took two partners into his business, who

were entitled to the capital and property for the time being of the partnership and to the goodwill of the business in equal shares. The deed

contained no specific reference to the tenancy, nor any other indication as to what rights or duties any party should have with regard to it. The

landlords claimed possession of the premises on the ground that, by assigning to the partnership, the tenant had broken his covenant not to assign

or sublet the premises without the landlord's written consent which they had admittedly refused to give. It was held that:-

the facts that the premises were an asset to the business did not bear on the question whether they were an asset that was transferred to the

partnership for the use of the premises by the business might have been dealt with in other ways; accordingly, any assignment must rest on the

partnership deed and, as that could not be construed as constituting an assignment of the premises by the tenant, there was no breach of covenant

and the landlords were not entitled to possession.

If we follow the Madhya Pradesh High Court authority reported as 1970 Ren CJ 338 (MP) referred to above without any exception, it would

result more in miscarriage of justice than advancing the cause of justice. The Houses and Shops Rent Control Act of the State was never designed

to interfere in the normal course of business and one of the normal functions of any business is that the business or the firm as the case may be, can

change its constitution and add to or do away with its partner or partners. If under the garb of entering into partnership the premises are transferred

to somebody else in lieu of rent being recovered from him in whatever form it may be, such an act would constitute subletting. As has been held in

another authority reported as 1970 Ren CJ 707 (Ker) one of the tests is that the possession of the leased property must be absolutely transferred

to the other person i. e. sub-lessee and if that is not done any addition of partners or subtraction therefrom in the business which is run in a

particular leased premises will be deemed to be the business of the original tenant and can by no stretch of imagination be construed as subletting.

Therefore on this point also my finding will be against the appellant.

The last question that was argued was about the suit being premature. Mr. Sethi has quoted some authorities wherein it has been said that

advance rent is no rent but is only a sort of loan. He has referred to Katha Bhatt Nand Kumar Vs. Chotey Lal, & Ram Lal Marwari Vs. Mahadeo

Marwari and Others, . On my findings on the above points that the plaintiff is not otherwise entitled to a decree for ejectment, this point of law

need not be finally adjudicated upon but nonetheless the authorities have to be discussed as they were cited at the bar.

Katha Bhatt Nand Kumar Vs. Chotey Lal, says that if before any rent becomes due, anything is paid in advance to the former landlord, it is a

simple loan to him and it cannot be taken as discharge for the rent becoming due after notice of transfer to the tenant.

In AIR 1928 Sindh 95 it was held that a lessee cannot resist a suit for ejectment at the instance of an auction purchaser from a prior mortgagee

or refuse to pay rent which has accrued due since the purchase on the ground that it has been paid to the mortgagor in advance. The same is the

finding in Ram Lal Marwari Vs. Mahadeo Marwari and Others, .

In Tiloke Chand Surana and Another Vs. J.B. Beattie and Co., it was held that in order to get the benefit of the protection of Section 50 the

tenant must pay rent as rent and must not pay rent in advance which otherwise becomes a mere loan to the mortgagor.

But these cases were cases where the landlord had transferred the property to somebody else. These authorities have no application to the

facts of this case because in this case there is a term of contract itself that whatever amount is received in advance, half of it would be appropriated

towards the rent and the remaining half would be paid in cash by the tenant The rent deed is of 3-12-1964. The receipt Ex. D. A. for Rs. 2,000/-

is also of the same date and this receipt clearly says that the plaintiff had received Rs. 2,000/- as advance rent out of which Rs. 50/- would be

appropriated towards rent every month. This assertion in the rent deed and in the receipt would create an estoppel against the landlord as he has

recovered Rs. 2,000/- as advance rent as such and the tenant is given protection u/s 50 of the Transfer of Property Act. I am supported in my

view by an authority reported as (1914) 24 Ind Cas 693 : (AIR 1914 lb 276). In that case it was said that if a lessee pays his rent before it is due

it may well be said that he does not pay in fulfilment of an obligation upon him and that such payment must be regarded as an advance to the lessor

with an agreement that on the day when the rent becomes due such advance shall he treated as a fulfilment of the obligation to pay rent. But when it

is part of the contract, as it was in the present case, that the lessee should pay rent in advance, and the lessee pays in advance, he does so in

fulfilment of an obligation under the contract. In such a case Section 50 of the Transfer of Property Act protects the tenant from having to pay over

again to a person who may subsequently become entitled to the rents or profits of the property leased.

Here the terms of the agreement of lease and the receipt are clear. The money has been paid in advance under the terms of the lease and it

would be treated as rent on the date when the suit was brought, admittedly there was a considerable amount which had yet to be given credit for

as rent. That means that on the day of the institution of the suit the plaintiff had received rent for a term beyond the date of the suit also, as such his

suit on that date is premature.

So from all points of view, the appellant is not entitled to any decree for ejectment. The appeal though very well argued by Mr. Sethi is hereby

dismissed but without any order as to costs.

Jaswant Singh, J.

I agree.

Appeal dismissed.