Ulliveetil Abu and Another vs C.P. Beebi

V.R. Krishna Iyer, J.—The tenant of a building, against whom an order for eviction has been passed by the appellate authority, confirmed by the District Court in revision, in reversal of the order dismissing the petition of the landlord by the Rent Control Court, challenges that order before me u/s 115 C. P. C. The landlord, on an ambitious project for eviction, pleaded arrears of rent, destruction of the utility of the building by committing waste and sub-letting, as the grounds for throwing the tenant out of the premises. The first two failed even in the Court of first instance and were not pursued wisely in the higher Courts. The last ground of subletting, although did not find favour with the Rent Control Court, appealed to the appellate authority and was approved by the revisional authority. We are, therefore, concerned only with whether the 1st respondent in R. C. O. P. No. 23 of 1966 had sublet the building or a portion of the building to the 2nd respondent, his brother-in-law. Section 11 (4) states. A landlord may apply to the Rent Control Court for an order directing the tenant to put the landlord in possession of the building,--

(i) If the tenant after the commencement of this Act, without the consent of the landlord, transfers his right under the lease or sub-lets the entire building or any portion there in the base does not confer on him any right to do so;

There is no consent to granting a sub-lease or transfer of the lease in this case and indeed the only question we are concerned with is whether as a fact there has been a subletting to the 2nd respondent.

The appellate and the revisional authorities were wobbling, if I may say so, on the question as to whether there was a transfer of the leasehold right or subletting only. In view of the fact that there is no clear proof of any sub-lease, the appellate authority proceeded to hold: It can either be a case of sub-lease or a case of transfer of the rights of the first respondent in the building under the lease in his favour.

This was proceeded by a finding of fact in the following terms:

I have every reason to believe that the first respondent has put the 2nd respondent in possession of the building in dispute and that the first respondent has no control whatsoever aver the business which is being run by the 2nd respondent in the said premises.

In revision, the learned District Judge, affirming this finding, observed:

Thus, this is a case where the landlord has proved that in the premises in question the 2nd petitioner has been running a trade of his own from 1965. When a person other than the tenant was found to be in possession of the premises, it is for the tenant to explain bow these persons come into possession. The tenant was not able to offer a convincing explanation regarding the exclusive possession of the 2nd petitioner. That being so and in view of above findings, the conclusion can be safely reached that the tenant has transferred his rights under the lease to the 2nd petitioner.

The findings are attacked on various grounds. Firstly, counsel for the revision petitioner argues that in the absence of any averment of a transfer of the lease as distinguished from a subletting, it is not open to the authorities to direct eviction without finding specifically that there was subletting. The excerpts from the judgment extracted above reveal that the authorities were not prepared to find positively that there was subletting and so it is argued before me that the order for eviction amounts to mis-exercise of jurisdiction. It is also pointed out that under Rule 7 of the Kerala Buildings (Lease and Rent Control) Rules 1959 "Every application under the Act shall, in addition to the particulars necessary to support it, contain also the particulars prescribed in Rule 12 so far as they may be applicable and every application for eviction u/s 11 shall also state the grounds on which the application is made". The ground of transfer of the lease not having been stated, it is not open to the Rent Control authorities to order eviction on that ground. On a fair reading of the petition before the Rent Control Court and avoiding hypertechnical flaws one can say that there is no absence of allegation to found an eviction order on the ground of transfer or subletting. Subletting, of course, has been specifically pleaded. But the averments really amount to a case that the 2nd respondent is in possession, having obtained it by transfer from the 1st respondent by way of sublease. Whether the legal result of the transfer of possession by the 1st respondent to the 2nd respondent is a sub-lease or a transfer of a lease is immaterial. The factual foundation for either is the factum of transfer of possession which has been averred. In proceedings before quasi-judicial authorities, like the Rent Control Court, where meticulous application of the rules of pleading should not be insisted upon, the touchstone should be whether a party is prejudiced by insufficiency of particulars in the pleading of the other side. It is difficult to say that the 1st or the 2nd respondent in the rent control petition has been taken by surprise or otherwise adversely affected by want of a legal categorisation of the act of the 1st respondent as transfer of the lease. Even if you do not plead the legal result, if the facts necessary are found in the petition, Rule 7 can be said to have been substantially complied with. I do not therefore see force in this contention.

However, the petitioner''s counsel argues before me that there must be at least a transfer of the lease or a subletting by the lessee. All that has been proved in this case is a mere transfer of possession which can be explained even without a transfer of lease or a sub-lease. In this connection, Shri Bhaskaran Nambiar, learned counsel for the petitioner, drew my attention to a decision reported in Petroleum Workers Union Vs. A. Mohamed and Co., Madras, . Venkatadri J. quoted a passage from Jackson v. Simons ( 1923 1 Ch. 373) wherein Romer J. had observed thus:

A covenant against assigning the demised premises, a covenant against underletting the demised premises, and a covenant against parting with the possession of the demised premises are therefore three distinct covenants, though all belonging to the same class, and if there be any other method of disposing of the demised premises that would not amount to an assignment, underletting or parting with possession....In the same way, a covenant against sharing the possession is another distinct covenant, for, as already pointed out, a covenant against the possession is another distinct covenant, for, as already pointed out, a covenant against parting with possession of the demised premises is not broken by sharing the possession with another.

It is obvious from this decision that the law makes a clear distinction between a mere privilege or licence to use premises and possession thereof and trifurcates even the transfer of possession as assignment, subletting and parting with possession not falling under the previous two categories. In B.M. Lall (Dead) by Lrs. Vs. Dunlop Rubber and Co. Ltd. and Others, Bachawat J. observed in the context of a transaction as amounting to a lease or a licence.

The question is whether the occupier under this agreement is a tenant or a licensee. The distinction between a lease, and a license is well known. Section 105 of the Transfer of Property Act defines a lease. Section 52 of the Indian Easements Act defines a license. A lease is the transfer of a right to enjoy the premises; whereas a license is a privilege to do something on the premises which otherwise would be unlawful. If the agreement is in writing it is a question of construction of the agreement having regard to its terms and where its language is ambiguous, having regard to its object, and the circumstances under which it was executed whether the rights of the occupier are those of a lessee or a licensee. The transaction is a lease if it grants an interest in the land; it is a license if it gives a personal privilege with no interest in the land. The question is not of words but of substance and the label which the Parties choose to put upon the transaction, though relevant is not decisive. The test of exclusive possession is not conclusive, see Errington v. Errington and Woods, (1952) 1 KB 290 (208) Associated Hotels of India Ltd. Vs. R.N. Kapoor, Associated Hotels of India Ltd. Vs. R.N. Kapoor, though it is a very important indication in favour of tenancy.

Again Sikri J., dealing with a similar point, put the proposition in the following way.

In Associated Hotels of India Ltd. Vs. R.N. Kapoor, -- Associated Hotels of India Ltd. Vs. R.N. Kapoor, Subba Rao J., as he then was, summarised the propositions as follows:

The following propositions may, therefore, be taken as well-established: (1) 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; but, 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''.

Lord Denning, speaking for the Judicial Committee of the Privy Council in Isack v. Hotel De Paris, 1960 1 All ER 348-352 observed:

There are many cases in the books where exclusive possession has been given of premises outside the Rent Restriction Acts and yet there has been held to be no tenancy. Instances are Errington v. Errington and Woods, 1952--1 All ER 149 and Cobb v. Lane, 1952-1 All ER 1199 which were referred to during the argument. It is true that in those two cases there was no payment or acceptance of rent, but even payment and acceptance of rent--though of great weight--is not decisive of a tenancy where it can be otherwise explained: see Clarke v. Grant, 1949--1 All ER 768. A Lord Greene, M.R., said in Booker v. Palmer, 1942--2 All ER 674--677.

There is one golden rule which is of very general application, namely, that the law does not impute intention to enter into legal relationship where the circumstances and the conduct of the parties negative any intention of the kind. Konchada Ramamurthy Subudhi and Another Vs. Gopinath Naik,

Halsbury Vol. 23 at paragraph 1334 states:

A covenant ''not to assign or ''not to assign'' or otherwise part with'', the premises is only broken by a legal assignment for the entire residue of the term..........a covenant ''not to assignor part with the possession of the premises'' goes further and is broken if the tenant makes an equitable assignment of the lease and places the assignee in possession............

It may also be noted that 1926--1 K. B. 198 visualises a sale of the business on the premises, the lessee retaining possession of the premises. From what I have quoted above, it is fairly clear that when a business is transferred, it does not inevitably imply transfer of possession, and, when possession is transferred, it does not inevitably imply transfer of the lease or subletting. And, indeed, when the right to use is made over to another, it is perfectly consistent with the transferor being still in legal possession. Mr. Bhaskaran Nambiar, therefore, argues that the mere circumstance that the licence for the tea shop has been transferred from the 1st respondent to the 2nd respondent (in the R. C. O. P.) cannot compel the Court to the only conclusion that Section 11 (4)(1) has been attracted. After all, under the Kerala Panchayats Act (the building is situated within the Panchayat limits of Kuthuparamba) an owner or occupier is entitled to get a licence for starting a tea trade which was the business run in these premises (Vide Section 96 and Rule 5 of the Kerala Panchayats (Licensing of Dangerous and Offensive Trades and Factories) Rules, 1963. The 2nd respondent who is the licensee must therefore be either an owner or an occupier; an owner he is not, an occupier therefore he must be. What is the legal inference from a man becoming an occupier in relation to a building? The term ''occupier'' is not defined in the Kerala Panchayats Act or the Rules and as rightly pointed out in Ratilal Bros v. The Govt. of Mysore (A. I. R. 1951 Mys 66) "The word ''occupy'' is a word of uncertain meaning". Nevertheless, an occupier who acquires a licence for carrying on a dangerous or offensive trade has to comply with certain conditions imposed on him by the statute, for instance, Rule 24 of the relevant Rules makes it obligatory on his part to keep the premises clean, in good order and repair. The licensee shall also cause the means of drainage to be maintained in good order or repair. There are still other obligations cast by the statute on him and penalties prescribed for non-compliance therewith. It is a fair inference to draw that a licensee who has to comply with the statutory prescriptions and the directions of the authorities must be an occupier in an effective sense. He must have control over the place to the exclusion of everyone so that he may carry out what is expected of him by the law. He must, in short, be in possession. An occupier is one who is in occupation, and occupation often implies more than a mere licence. The ordinary meaning of the word ''occupation of land'' is exercise of physical control over land. Occupation of a dwelling house means possession thereof and, at any rate, cannot be divorced from possession. Therefore it is not possible to say that the inference drawn by the Courts below that when a person is a licensee of a tea shop in his capacity as occupier he is in possession thereof is wrong. The ruling reported in 1960 K. L. T. 895, on the facts, gives some support for the contention of Mr. Khalid, counsel for the respondent, that when there is a licence in the name of the 2nd respondent (in the rent control petition) for doing the business on the premises an inference of a sub-lease in his favour is neither far-fetched nor untenable. In that particular case one vital piece of evidence is stated to be a radio licence issued in the name of the alleged sub-lessee. Similarly, a recent decision of the Supreme Court reported in 1969 K. L. T. 348 also lends strength to the submission that sub-letting can be inferred from the facts present in our case. In the Supreme Court case it was observed, with reference to the facts therein,

Lastly, Mr. Daftari argued that on the facts the Courts below should not have come to the conclusion that there was a subletting within the mischief of the Act. The buildings were let out as a lodging house and the evidence showed that one of the rooms was in the occupation of a lawyer who had teen there for years and had put up his name board outside the room. Besides the name board of the lawyer, there were the name boards of other persons and the lawyer paid rent on a daily basis. The lawyer had installed a telephone in his room. In our opinion there was sufficient evidence to hold that the lawyer was in exclusive possession of the room and although the rent was paid on a daily basis it was not a case of the grant of a licence. In any event, the finding as to subletting does not call for interference in this case seeing that the District Court and the High Court both accepted the evidence as conclusive of subletting.

It must be admitted that if the Courts below have drawn an inference of transfer of possession primarily from the circumstance of the 2nd respondent being the licensee, reinforced of course by admissions in the witness box by the respondents which have been extracted in the judgments of the Courts below, I cannot say that there is no legal evidence justifying such a finding. If there is no legal evidence I can interfere with the finding, but if there is, I have no jurisdiction u/s 115 C. P. C, even though the evidence may not be reliable. The revisional power u/s 115 is narrower than u/s 20 of the Act.

It has been argued with considerable force that even assuming that there is transfer of possession in favour of the 2nd respondent--an inference drawn from the circumstance of the issue of the licence--it is still explicable on a hypothesis unconnected with a sub-lease or a transfer of a lease. Therefore, why presume that every transfer of possession is either a transfer of lease or a subletting and why draw such an inference where a different one is possible in law, while construing a statute meant to protect tenants from unreasonable eviction? It is true--although I am not at all sure whether there is agreement among Judges on this pint--that where there are two constructions possible in the rent control law that which will further the object of the legislation viz., to prevent unreasonable eviction, should be preferred. Anyway, my inclination is to take that view. Moreover the burden under the statute, is on the landlord to make out the ground for eviction and not on the tenant to forestall and rebut such grounds. I completely agree that unless the landlord makes out such a ground he cannot be given an order putting him in possession. But the manner of proof of a fact depends also upon the Evidence Act or, at any rate, the principles embodied therein. While the initial onus of proving subletting or a transfer of the leasehold is one the landlord, once the Court is satisfied that there has been a transfer of possession the onus may shift and the tenant, within whose special knowledge the facts explaining the manner in which such possession has been transferred lie may have to bear the burden thereafter. As the Supreme Court has pointed out in the passages I have extracted, transfer of exclusive possession is prima facie evidence of tenancy although circumstances may be established which negative the intention to create a lease. Where there is any fact, especially within the knowledge of any person, the burden of proving that fact is upon him (Section 106 of the Evidence Act). It cannot be denied that where the transfer of possession can be accounted for either by a transfer by the 1st respondent to the 2nd respondent or by a sub-lease by one to the other or by any other arrangement, it is pre-eminently a fact within the knowledge of these two and comparatively outside the ken of the landlord. Under these circumstances, the onus rests upon the tenant to make out that the 2nd respondent''s possession need not be attributed to a sub-lease or transfer of the lease but to some other arrangement. No such case has been put forward by the respondent before the Rent Control Court the only plea being that there has been no transfer of possession at all but that certain contrivances had been resorted to, to defeat the sales-tax law, and alternatively, to enable the tenant to attend to his daughter''s illness and, thirdly, to give proper medical treatment to repair his own deteriorating health. These three alternative grounds the three Courts had no difficulty to reject. And the tenant did not put forward any constructive or illuminating explanation regarding the possession of the 2nd respondent and so the conclusion was arrived at that there was a sub-lease or transfer. In fact, the decision of the Supreme Court referred to by me (1969 KLT 348) goes a long way to help the landlord in persuading the Court to the conclusion that there was a subletting. In these circumstances, it is not permissible for this Court to hold that under its considerably restricted revisional jurisdiction a finding of fact arrived at concurrently by the appellate and revisional authorities should be upset on the basis that alternative inferences are available. The revisional jurisdiction vested in this Court applies only to cases involving question of jurisdiction, such as the irregular exercise, non-exercise or illegal assumption thereof and cannot extend to interfering with conclusions of law or of fact, however wrong, where jurisdictional facets are not present. For these reasons I decline to interfere with the order under revision. The building, which the landlord seeks to recover--on grounds untenable, which have been rejected and on a ground tenable which has been upheld--is situated in a bazar where the 2nd respondent, the brother-in-law of the respondent, is carrying on his business. Naturally, avoidance of hardship would involve grant of some reasonable time to find alternative accommodation. Therefore, while affirming the eviction order, I direct that a period of six months be given to the respondents before they are ejected from the premises. Subject to this direction, the revision petition is dismissed. There will be no order as to costs.