Decided on August 31,1965

Seth Lakshmi Chand Appellant
Firm Nathmal Dulichand And Another Respondents

Referred Judgements :-



B. Dayal, J. - (1.)This Second Appeal has been referred to this Bench by a learned single Judge of this Court. The facts of the case may shortly be stated. The present suit was filed by Seth Lakshmi Chand for ejectment against the Defendants National and Dulichand on the allegations that the original tenants Nathmal and Dulichand had sublet the shop to one Sriram and the Plaintiff was, therefore, entitled to eject the Defendants. It is not denied that the Plaintiff let out the shop to the two Defendants who are brothers on a monthly rental of Rs. 65/ -. The defence, on the other hand, was that the Defendants had not sublet the shop to Sriram bat that Nathmal had started business in partnership with Sriram in the same premises and they were still carrying on the old business which Nathmal and Dulichand were doing in the shop. The Plaintiff also claimed recovery of Rs. 195/ -/ - from the date of termination of the notice to the date of the filing of the suit as damages for use and occupation. The trial court decreed the suit for ejectment and also passed a decree for Rs. 150/ as damages at Rs. 50/ -per mensem and also decreed future damages at the same rate. The Defendants filed an appeal which was heard by the 1st Civil Judge of Kanpur. The learned Civil Judge in the circumstances of the case came to the conclusion that no subletting had been proved in favour of Sriram by the Defendants. He therefore dismissed the suit for ejectment and also dismissed the claim for damages on the ground that the Defendants were entitled to remain in possession. The Plaintiff has now come up in Second Appeal.
(2.)The main contention raised by the learned Counsel for the Appellant is that the fact of Defendants Nathmal and Duilchand being the tenants of the shop is not denied and it is also proved on evidence that Nathmal entered into partnership with Sriram and it must be assumed in the absence of any evidence on behalf of the Defendants that there was no agreement to pay rent by Sriram, that Sriram had entered into an agreement of sub tenancy with Nathmal and he, therefore, contends that the lower appellate court was wrong in holding that the sub tenancy had not been proved. The very fact of partnership coming into existence and using the shop according to him establishes a sub tenancy within the meaning of the U.P. (Temporary) Control of Rent and Eviction Act. After hearing learned Counsel for the Appellant, we are of the opinion that no such inference can be drawn. There being no evidence to prove the sub tenancy, it cannot be assumed merely on the basis that Sriram had been taken as a partner in some business carried on by the tenant in chief. Learned Counsel Strenuously relied upon a decision of the Nagpur High Court reported in Tansukhdts Chhaganlal v/s. Smt. Shambai(1)(AIR 1954 Nag. 160). In that case it was held by a Division Bench of the Nagpur High Court that where a tenant of a premises had permitted several other persons to occupy the premises to run some business in the partnership with the tenant, it must be held that the tenant had created a sub tenancy. The only reason given for coming to that conclusion was that the partnership which the partner entered into along with third persons was clearly a personality in law distinct from that of the Petitioner himself. With due respect, to the opinion of the learned Judges, we are unable to see how a tenant by taking third persons as partners in his business creates any right in favour of third per sons in the tenancy itself. To our mind, rights regarding tenancy are distinct from the business which is run in this premises. A tenant is entitled to use the premises for whatever business he likes and it instead of running his own personal business, he takes a partner in his business and carries it on, the partner does not get any right in the title as a tenant. The tenant remains a tenant of the premises and instead of working alone he at the best takes the help of a partner whose position can only be mat of a license permitted to work together in the premises for the mutual benefit of both. A sub tenancy cannot be created unless rights in the tenancy itself are transferred in favour of third persons. The matter was considered in detail by the Madras High Court in Gundalapalli Rangamannar Chetty v/s. Desu Rangiah (2) ( : AIR 1954 Mad. 182). After considering a number of decisions, Subba Rao, J. observed as follows:
It is clear from the aforesaid decisions that there cannot be a sub letting, unless the lessee parted with legal possession. The mere fact that another is allowed to use the premises while the lessee retains the legal possession is not enough to create a sub lease.

We respectfully agree with this observation. A tenant under the Transfer of Property Act is entitled to assign his lessee rights. He is also entitled to mortgage and sub let the same and unless these rights are transferred it is not possible to hold that a sub lease is created. Learned Counsel also referred to us an unreported decision of this Court in Satya Deo Gupta v/s. Ram Chandra (3), (Second Appeal No. 814 of 1951 decided by a Bench of this Court on 9th of January, 1958). Upon the facts and evidence produced the Bench held that the tenant Ram Chandra had created a sublease in favour of Binod Kumar Poddar and Co. The Bench expressed its findings as follows: "Therefore in this case it is evident that there was an agreement between Ram Chandra and Binod Kumar Poddar that there would be paid by Firm Binod Kumar Podar and Company an equivalent amount to the rent which was payable by Ram Chandra to his landlord". After discussing several cases, the learned Judges observed, "We recognize that it is possible for a tenant in possession to allow the use of the premises by other persons without bringing a sub lease into existence . A person who is an original tenant may allow a partnership to come into existence of (in) premises of which he himself is a partner without a sub leases necessarily com ing into existence . It will all depend upon what was the express of implied agreement in regard to the use of the premises by the partnership.' This case, therefore, can be of no hell in deciding the present case.

(3.)Ram Bharose v/s. Ajet Kumar (4) (1952 AWR 276) was a decision by a learned single Judge of the Court and the only question that was decided in the case was that the lane lord when he brings a suit for ejectment need only prove that the tenor has put the premises into possession another man and he need not further prove that the third person is actually paying rent to the tenant before a inference of sublease can be made of
In Radha Kishan v/s. Data Ram (5)(1961 AWR 641) a Division Bench of this Court had to consider this matter again. On farts, the learned Judges found that there was an agreement of partnership in writing and one of the terms of the agreement was that from the date of the agreement of partnership, the shop would be treated as in the tenancy of the partnership. Upon those terms, they held that in that case an inference of sub -letting could be drawn. While discussing the law on the subject, the learned Judges observed as follows:

What is therefore to be seen in the case of subletting is whether the lessee has by means of a contract with third persons sub -let the whole or any part of his interest in the property.

The learned Judges then goon to distinguish between a case where a sublease has been created and a case where no such lease has been created and they observed:

In view of this terms of the agreement of partnership it is obvious that what was done by Defendant No. 1 in admitting Defendant No 2 to partnership was making him a partner in the tenancy. It is not the case in which another person has been permitted to occupy without any interest. For this purpose we have to look to the distinction between a lease and a license..." Later on, it was also observed:

No hard and fast rule can be laid down as to whether in all cases of partnership the admission of another partner to the joint possession of the shop will or will not amount to sub cetting. Each case will depend upon its own facts. The intention of the parties and particularly whether any interest of the other partner created is in the tenancy by the agreement bet when the parties will have to be seen". With respect, we entirely agree with his observation. A mere creation of partnership in the business does not necessarily create any interest in the tenancy. Upon the facts of each case, (sic)has to be seen whether there was any transfer of interest in the tenancy to the members of the partnership. In another case of Puran Chand v/s. RC and EO, Kanpur (6) (1959 ALJ . 343), learned single Judge of this Court served as follows:

A tenant has the right to make use of the accommodation rented by him in any lawful manner. He may start a business and close it down, and start a fresh business. None of these changing activities can have the effect of terminating his tenancy or of making the accommodation vacant.

Although in this case, the question of the fact of entry into partnership was not considered but it has been made clear that the question of right is the tenancy is entirely different from the use to which the tenant puts the premises and with this we entirely agree with due respect to the learned Judge.


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