Narayan Ratan vs Indian Mill Stores

A.P. Sen, J.—This appeal by the defendant is directed against a judgment and decree of the District Judge, Raipur, dated 16th April 1971, affirming the judgment and decree of the IVth Civil Judge, Class II, Raipur, dated 29th June 1970, decreeing the plaintiff''s suit for eviction u/s 12(1) (b) and (f) of the Madhya Pradesh Accommodation Control Act, 1961.

The relevant fact, in brief, is as follows: The parties stand in the relation of landlord and tenant. The plaintiff firm styled as M/s. Indian Mill Stores, Raipur is doing business of Oil Engines, Pumps, Electric motors, Machineries, Pipes, Spare parts etc., at Ganjpara-Raipur in a rented house. The plaintiff-firm purchased a building at Ganjpara Raipur consisting of 4 identical blocks of one room each of which the demised premises is one, by a registered sale-deed dated 20 3-1965. The defendant who is in occupation of one of the blocks is running a tailoring shop under the name "Chauhan Tailoring Shop" attorned to the plaintiff on 1-4-65 vide kiraya chithi, Ex. P.2.

The plaintiff''s case is that it is in bona fide need of the demised premises for continuing its business within the meaning of Section 12(1)(f) of the Madhya Pradesh Accommodation Control Act, 1561, i.e., for shifting the business of the partnership, from the rented house to its own building of which the suit accommodation forms a part, alleging that the partnership firm has no other reasonable suitable non-residential accommodation of its own for their requirement in the town. It, therefore, requires the entire building purchased by it for its business purposes, and was filing suits for ejectment against all the tenants including the defendant. The plaintiff''s case further is that the defendant had unlawfully sub-let assigned or parted with the possession of a part of the accommodation in his occupation and was earning profit thereby and was, therefore, liable to be evicted from the demised premises u/s 12(1)(b) of the Act. The defendant contested the plaintiff''s claim and denied that the plaintiff was in bona fide need of the demised premises, alleging that the plaintiff firm was already doing its business at its present site taken on lease, which is in the heart of the business locality since last so many years and has earned reputation and good-will in the market and, therefore, the alleged need was just a pretence to secure his eviction therefrom. He also denied that he had sub-let or assigned a part of the accommodation, and pleaded that he had in fact, started a side business in partnership.

The Courts below have relied on the testimony of Narsi Bhai (P.W. 1) and found, as a fact, that the plaintiff had established its bona fide need of the demised premises for continuing its business u/s 12(1)(f) of the Act. The finding is based on appreciation of evidence, and no other conclusion than the one reached by the Courts below is possible. The plaintiff firm has purchased the building for locating its business. The testimony of Narsi Bhai (P.W. 1) clearly shows that the plaintiff has filed separate suits against all the tenants and it is intended to pull down the intervening walls to convert the separate blocks into one accommodation, as otherwise the business of the firm cannot be located in the building. The Courts below rightly relied on the testimony of Narsi Bhai (P.W. 1) and granted to the plaintiff a decree u/s 12(1)(f) of the Act.

The question whether the plaintiff''s need was bona fide or not was a matter of inference of fact to be drawn from other facts. The finding reached by the Courts below is based on appreciation of evidence. In Mattuhl v. Radhe Lal A I R 1974 S C 1594., their Lordships have reiterated their earlier view in T.B. Sarvate v. Nemichand 1966 M P L J 26 (S C), that a finding as to whether the landlord does or does not bona fide require the premises for the purpose of starting or continuing his business, is a finding of fact, and unless it is shown that in reaching it the District Judge has committed a mistake of law, or it is based on no evidence, the finding is binding in second appeal. Their Lordships have further stated that the question whether in a given case, the burden of proving that he genuiaely requires the premises which lay upon the landlord, has or has not been discharged, is also a question of fact.

The Courts below have further found, as a fact, that the defendant has unlawfully sub-let, assigned or otherwise parted with possession of a part of the accommodation within the meaning of Section 12(1)(b) of the Act and was, therefore, liable to be evicted therefrom. That again is a finding of fact based on appreciation of evidence, and the finding is binding in second appeal.

Learned counsel for the appellant, however, assails the decree on the ground that there is no evidence of sub-letting and, therefore, no decree for eviction could be founded upon u/s 12(1)(b) of the Act. It is urged, placing reliance on Dulichand Lakshminarayan Vs. The Commissioner of Income Tax, Nagpur, . and Dulichand Lakshminarayan Vs. The Commissioner of Income Tax, Nagpur, ., that a firm is not a legal entity and, therefore, the presumption of sub-letting does not arise. It is also urged that the view taken to the contrary in Tansukhdas Chhagaidal v. Smt. Shyambai and another A I R 1954 Nag. 160. is no longer good law.

The question whether there is unlawful sub-letting is, in most cases, a matter of inference to be drawn from the facts of each case. The initial onus of proving unlawful sub-letting, in the first instance, lies upon the plaintiff. Sub-tenancy can hardly be proved by direct evidence. All that the plaintiff can do is to place on record certain circumstances from which an inference has to be drawn. When such circumstances are proved, prima facie, the burden placed on the plaintiff is discharged, and the onus shifts on the defendant not to prove any negative fact but establish a positive aspect about the capacity in which the alleged sub-tenant is occupying the premises, and that he has not parted with the whole or a part of the tenanted accommodation. It follows that the pleading of the defendant must be clear and explicit as the facts, in which a third person has been inducted into the whole or any part of the premises, are within his knowledge. The defendant must, therefore, specifically plead all the facts necessary to disprove the inference of sub-letting.

In the instant case, the defendant merely alleged that he had formed a partnership. The nature of that partnership was not disclosed. That was a fact especially within his knowledge. He couid have established that fact by placing on record the deed of partnership, if any, or the account-books of the partnership showing that funds were provided by the partners for starting the business, or that there was sharing of profit and loss between them. That evidence has been withheld by the defendant and an adverse inference must be drawn against him. Besides this, the circumstances can lead to no other inference than of sub-letting. The evidence on record reveals that a part of the premises is in occupation of Daulal (D.W. 2) and he is running a hotel therefrom. My attention is, however, drawn to the statement of Narsi Bhai (P.W. 1) in his cross examination, where he admits that he has led no evidence to prove that the defendant has parted with a half-portion of the suH accommodation to Daulal (D.W. 2) or that the defendant is recovering Rs. 40 as rent from him. Nothing really turns on this. This witness could only depose to facts within his knowledge. He has stated that almost daily he passes-along the road, and he has seen Daulal (D.W. 2) occupying a half-portion of the suit accommodation.

The fact of partnership is sought to be spelled out from the testimony of Narayan Bhai (D.W. 1) and Daulal (D.W. 2). Their testimony does not inspire confidence, and the Courts below have disbelieved them for cogent reasons. Although both assert the factum of partnership but Narayan Bhai (D. W, 1) claims to be the exclusive owner of all the material and goods of the partnership business viz. hotel, and names Daulal only as a working partner, he does not say as to what is the arrangement between the partners of the firm for the sharing of the profits in the partnership business. Contrary to the defendant''s veision, Dauial (D.W. 2) has claimed himself to be the full and exclusive owner of all the goods and material of the hotel, and claims to be paying to the defendant half-share of profits, but no rents. In view of this, the learned District Judge has rightly observed that the story of the alleged partnership was a complete myth. More so, for the reason that Daulal (P.W. 2) who is himself running a separate and independent hotel business in the adjoining premises, would not embark upon any partnership for another hotel business, in a portion of the suit premises. I, therefore, affirm the finding of the learned District Judge that the occupation of Daulal (D.W. 2) of a portion of the suit accommodation was not in the nature of partnership business but obviously by reason of unlawful sub-letting. The decree of the Courts below for the eviction of the defendant u/s 12(1)(b) of the Act is, therefore, upheld.

In my view, the existence of the partnership not having been proved, the question whether the creation of a partnership amounts to unlawful subletting, does not arise. The decision in M/s Tulsiram Vishnudatta v. Rent Controlling Authority, Jabalpur and Another. (supra), is, therefore, not attracted. That decision is wholly, indeed, inapposite as the point decided there was clearly different. The decision of the Supreme Court in Dulichand Laxmi-narayan v. Commissioner of income tax (supra), is also distinguishable. There, it was held that a firm is a distinct entity from its partners for income tax purposes. That decision turned on the peculiar provisions of the Income Tax Act, 1922 which are radically different from the provision contained in section 12(1)(b) of the Madhya Pradesh Accommodation Control Act, 1961. That case is, therefore, not helpful in deciding the point involved.

I may refer to Tansukhdas Chhaganlal v. Shyambai and Another. (supra), where Sinha C.J. and Bhutt J. made the following observation:--

Where, in the first instance ''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.

The decision that a presumption of sub-letting arises, under such circumstances, has throughout been followed. The recent decision of the Supreme Court in D.N. Sanghavi and Sons Vs. Ambalal Tribhuwan Das, . where their Lordships have held, interpreting Section 4 (h) of the Madhya Pradesh Accomodation Control Act, 1955, that the requirement by the landlord of a nonresidential accommodation, for starting or continuing a business in partnership, is not a need; directly or substantially, of his own, and, therefore, cannot be a ground for ejectment, lends supports to the view taken in Tansukh das Chhaganlal v. Smt. Shyambai and Another. (supra). In the present case, there is overwhelming evidence to establish that there was subletting or at any rate, parting of possession of the premises within the meaning of section 12(1)(b) of the Act.

When his attention was drawn to the finding of the Courts below that the plaintiff-firm had also established its bona fide need for continuing its business u/s 12(1)(f) of the Act, the only comment of learned counsel for the appellant was that: "It is all absurd." lean see no absurdity in this. Presumably, the learned counsel felt that he could not assail the finding because it is a finding on a pure question of fact, in view of the decisions of their Lordships in Mattulal v. Radhelal (supra) and T. B. Sarvate v. Nemichand (supra).

In the result, the appeal must, therefore, fail and is dismissed with costs. counsel''s fee as per schedule, if certified.