Prakash Chand and Another vs Satpal Sood and Others

R.L. Khurana, J.—The Petitioners and proforma Respondent No. 4 are the landlords while Respondent No. 1 is the tenant. Respondents No. 2 and 3, who are the sons of Respondent No. 1, are alleged to be the sub-tenants under Respondent No. 1.

The tenanted premises are non-residential comprising of shop in front and a residential set of two rooms on the back, known as shop No. 77, Ghungar Dass Roshan Lal Building, at Sanjauli, Shimla. The tenanted premises were let out to Respondent No. 1 at a monthly rental of Rs. 50.

The landlords filed a petition u/s 14, H.P. Urban Rent Control Act, 1987 (for short : the Rent Act) for the ejectment of the tenant on the following grounds:

(a) sub-letting of the tenanted premises by the tenant in favour of Respondents No. 2 and 3;

(b) the tenant having committed such acts as to materially impairing the value and utility of the tenanted premises; and

(c) the tenant has changed the user of the tenanted premises.

The learned Rent Controller on the basis of the evidence led before him vide his order dated 4.8.1997 dismissed the petition of the landlords and declined to pass an order of ejectment of the tenant from the tenanted premises on any of the above referred to three grounds. It was held that the tenant has not sub-let the tenanted premises or any part thereof either in favour of Respondent No. 2 or in favour of Respondent No. 3; that the tenant has not committed any acts so as to materially impair the value and utility of the tenanted premises nor the tenant was guilty of change of user of the tenanted premises.

The appeal carried by the landlords before the learned Appellate Authority, Shimla was also dismissed on 10.5.1999. All the findings of the learned Rent Controller were affirmed by the learned Appellate Authority.

Feeling aggrieved by the orders passed by the two forums below, the landlords are before this Court by way of the present revision petition u/s 24(5) of the Rent Act.

It is well settled that a conclusion on the question of sub-letting is a conclusion on a question of law derived from the findings on the materials on record as to the transfer of exclusive possession and as to the said transfer of possession being for consideration. See Dev Kumar v. Smt. Swaran Lata 1996 (1) RCR 40 (SC).

The above ratio has been reiterated by the Hon''ble Supreme Court in Resham Singh Vs. Raghbir Singh and Another,

Following the above ratio, this Court in Sat Pal v. Dharam Pal and Ors. 1996 (2) CLJ (HP) 146; Salig Ram and Ors. v. Messrs. Kishori Lal Jagat Ram 1997 (1) SimLC 446 and Mohinder Singh and Ors. v. Kurnkshetra University and Anr. 2001 (2) SimLC 246, has also held that conclusion on the question of sub-letting is not a conclusion on a question of fact but a conclusion on a question of law.

It is well settled that in the case of eviction of a tenant on the ground of sub-letting, the initial onus always lies on the landlord to prove that the tenant has sub-let, assigned or otherwise parted with or transferred his rights under the lease in favour of the alleged sub-tenant.

While considering the nature of the onus placed upon the landlord, the courts should not, however, overlook the fact that it is by no means an easy task since direct evidence of sub-letting is seldom available. A sublease is a creation of an agreement between the tenant and the sub-tenant to which agreement the landlord, for obvious reasons is a complete stranger. The tenant and sub-tenant in order to safeguard their interests usually agree to throw a cloak over the transaction and the same is kept a guarded secret and no trace of evidence reflecting the same is allowed to leak out thereby exposing themselves to the risk of being evicted from the tenanted premises. No prudent tenant would, therefore, either enter into an agreement creating sub-tenancy or receive rent from his sub-tenant or pass receipt therefore in the presence of Ors. . Placed in such a situation, the landlord can only prove the attending circumstances which would raise inference of such subletting or assignment or parting with possession by the tenant in favour of a third party.

The expression "sub-letting" has not been defined in the Rent Act. As to the meaning of the expression "sub-letting" the Hon''ble Supreme Court in Jagdish Prasad Vs. Smt. Angoori Devi, in the proceedings under U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, had considered the same. It was held that merely from the presence of the person other than the tenant in the shop, sub-letting cannot be presumed and as long as control over the premises is kept by the tenant, sub-letting flowing from the presence of the person other than the tenant in the premises cannot be assumed. It was further held that in an application for eviction of a tenant from premises which is based on the allegation that the premises have been sub-let, the allegation has to be proved.

Again in Messrs. Shalimar Tar Products Ltd. v. H.C. Sharma 1987 (2) RCR 671 (SC), it has been held that in order to construe sub-letting there must be parting of legal possession by the lessee and parting of legal, possession means "possession with right to include and also right to exclude Ors. ".

The approach to be adopted in the case of sub-letting has been indicated by I.D. Dua, J. (as his Lordship then was) in Kishan Chand v. Kundan Lal 1967 PLR 57, as under:

...a landlord is almost a stranger to agreements of sub-letting between his tenant and sub-lessee and he has generally to rely on attending circumstances to establish sub-letting by necessary inference. It must be very rarely that direct evidence of sub-letting without the landlord''s consent whether in the form of lease deed or of testimony of witness to whose presence the sub-lease is created, can come to the hands of the landlord. The proof of sub-letting thus depends upon the probability of the premises having been sub-let and all that is required is material on which the court can, like a prudent person guided by his own experience and judgment, regard being has to the ordinary course of human conduct, reasonably act upon the supposition that the premises have been sub-let.

The landlord, therefore, would be deemed to have discharged the initial burden placed upon him, if he succeeds in showing that someone else, other than the tenant, was in possession of the tenanted premises. It is, therefore, for the tenant to prove and explain the circumstances leading to such transfer of possession, since the circumstances under and the terms on which the possession was transferred by the tenant are within his special knowledge and burden of proving the same would legitimately lie on him. It, therefore, follows that in a situation of this kind, the onus would shift on to the tenant to show that the transfer of possession was not by way of sub-letting or assignment and that despite such transfer of possession, the tenant retains the legal right of possession with him. The landlord must be held to have established his plea if the tenant fails to satisfy the court and discharge the onus placed on him.

In Rajbir Kaur and Another Vs. S. Chokesiri and Co., while considering the question of sub-letting it was held that the burden of making a case of sub-letting is on the landlord. It was further held that transactions of sub-letting in the guise of licences are in the very nature clandestine arrangements between the tenant and the sub-tenant and it would be difficult to get direct evidence on the same. If exclusive possession of the alleged sub-letting is established then it may not be impermissible for the court to draw an inference that the transaction was entered into with monetary consideration in mind. It was observed as under:

...If exclusive possession is established and the version of the Respondent as to the particulars and the incidents of the transaction is found acceptable 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, un often, a matter for legitimate inference. The burden of making good a case of sub-letting is, 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-persuasion. If at the conclusion of the trial, a party has failed to establish these to the appropriate standard, he will lose. Though the burden of proof as a matter of law remains constant throughout 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 party during the trial....

The principle laid down in Rajbir Kaur''s case (supra) was followed and reiterated in Nihal Chand Rameshwar Dass and Another Vs. Vinod Rastogi and Others, and in United Bank of India Vs. Cooks and Kelvey Proerties (P) Ltd., It was observed that once it is established that the tenant had parted with exclusive possession with right to include and exclude Ors. in favour of a third party without the landlord''s consent, rebuttable inference would arise in favour of the landlord and against the tenant, that the latter had inducted third party for valuable consideration and if the tenant fails to rebut such inference by satisfactory explanation, a decree can be passed by a competent court on the ground of sub-letting.

Again, in M/s. Bharat Sales Ltd. Vs. Life Insurance Corporation of India, in a case for ejectment on the ground of sub-letting, a contention was raised that unless payment of consideration between the tenant and sub-tenant was established, eviction could not be granted on the ground of sub-letting. Rejecting the contention and following the principle laid down in Rajbir Kaur''s case (supra), the Hon''ble Supreme Court observed:

Sub-tenancy or Sub-letting comes into existence when the tenant gives up possession of the tenanted accommodation, wholly or in part, and puts Anr. person in exclusive possession thereof. This arrangement comes about obviously under a mutual agreement or understanding between the tenant and the person to whom the possession is so delivered. In this process, the landlord is kept out of the scene. Rather, the scene is enacted behind the back of the landlord, concealing the overt acts and transferring possession clandestinely to a person who is an utter stranger to the landlord, in the sense that the landlord had not let out the premises to that person nor had he allowed or consented to his entering into possession over the demised property. It is the actual, physical and exclusive possession of that person, instead of the tenant, which ultimately reveals to the landlord that the tenant to whom the property was let out has put some other person into possession of that property. In such a situation, it would be difficult for the landlord to prove, by direct evidence, the contract or agreement or understanding between the tenant and the sub-tenant. It would also be difficult for the landlord to prove, by direct evidence, that the person to whom the property had been sub-let had paid monetary consideration to the tenant. Payment of rent, undoubtedly, is an essential element of lease or sub-lease. It may be paid in cash or in kind or may have been paid or promised to be paid. It may have been paid in lump sum in advance covering the period for which the premises is let out or sub-let or it may have been paid or promised to be paid periodically. Since payment of rent or monetary consideration may have been made secretly, the law does not require such payment to be proved by affirmative evidence and the court is permitted to draw its own inference upon the facts of the case proved at the trial, including the delivery of exclusive possession to infer that the premises were sublet.

(Emphasis supplied)

In Kala and Another Vs. Madho Parshad Vaidya, ''again it was held that the onus to prove sub-letting is on the landlord and if he establishes parting of with possession in favour of a third party, the onus would shift to the tenant to explain.

Thus, the well settled legal position is that whenever a landlord approaches the Court for the eviction of a tenant on the ground of subletting, such landlord has to prove to the satisfaction of the court that the tenant has parted with exclusive possession of the demised premises in favour of a third party. Once the landlord is able to establish and prove such fact, it is open to the court to draw an inference that such parting of possession by the tenant in favour of the third party is for consideration. It is then for the tenant to rebut such inference by leading evidence to show to the court that there is no sub-letting. If the tenant fails to rebut the inference, it is permissible to the court to draw an inference of sub-letting and to pass an order of ejectment against him on the ground of sub-letting.

In the present case, the two forums below on consideration of the evidence led by the parties, have concurrently held that the tenant has not sub-let the tenanted premises or any part thereof in favour of Respondents No. 2 and 3 and that the tenant continues to be in possession and control of the tenanted premises.

The above findings of the two forums below are based on proper appreciation of evidence and the same do not call for any interference by this Court in exercise of revisional jurisdiction u/s 24(5) of the Rent Act.

Admittedly, Respondents No. 2 and 3, the alleged sub-tenants, are the sons of Respondent No. 1 tenant. PW 5 Bali Ram, the witness of the landlords, has categorically admitted that the tenant is in possession of the tenanted premises and that he sits in the shop and is being assisted by his sons in running the business since the very beginning. PW 6 Annad Kumar, Anr. witness of the landlords, have admitted to the following facts:

(i) the three Respondents are living together;

(ii) the tenant Respondent No. 1 has no other business except the one being run in the tenanted premises;

(iii) the business is in the tenanted premises is being nrutnaged and looked-after by Respondents No. 2 and 3; and

(iv) the tenant Respondent No. 1 also sits in the shop.

PW-7 Arun Sood could not deny that Respondent No. 1 tenant has the over all control over the tenanted premises and the business being run therein. PW-10 Sohan Lal has stated that the Respondent-tenant who was earlier carrying on the business of green-grocer, is presently carrying on the business of medicine on one side of the shop while on the other side he is carrying on the business of sweats. To the similar effect is the statement of PW-11 Krishan Kumar.

The landlord Prakash Chand (Petitioner No. 2) while appearing as PW 8 has admitted that he has been seeing the Respondent tenant running a business in the tenanted premises for the last 40/42 years. Such admission coming from the landlord goes to show that the tenant-Respondent continues to be in possession and control over the tenanted premises and that the business therein is being run by him.

On the basis of the above referred to evidence led by the landlords themselves, the two forums below have, therefore, rightly concluded that the tenant has not sub-let or parted with the possession of the tenanted premises or any part thereof.

In so far as the other two grounds, namely, the tenant having changed the user of the tenanted premises and the tenant being guilty of having committed such acts so as to materially impair the value and utility of the tenanted premises, are concerned, the two forums below have concurrently decided the same against the landlords. Such concurrent findings on a question of fact are not open to interference by this Court in exercise of revisional jurisdiction u/s 24(5) of the Rent Act. See : Dr. Gyan Parkash v. Som Nath and Ors. 1996 (1) RCR 342 (SC).

This Court has gone through the evidence coming on record and it can be safely held that there has been neither misreading nor mis-appreciation of evidence by the two forums below. The orders of the two forums below do not suffer from any illegality or impropriety.

It is the admitted case of the landlords that the tenanted premises are non-residential. Therefore, using the whole of such premises for business purposes would not amount to change of user. Prakash Chand, Petitioner No. 2 while appearing as PW 8 has admitted that the tenanted premises are in the same form in which the same were let out. He has not been able to spell out the acts committed by the Respondent-tenant which resulted in material impairment of the value and utility of the tenanted premises.

Resultantly, the present petition fails and the same is, accordingly, dismissed leaving the parties to bear their own costs.