Poonam Srivastav, J. - (1.) THE order of vacancy in respect of premises No. 73/16, Collector Ganj, Kanpur Nagar dated 14.12.2006, Annexure-6 to the writ petition, passed by the Rent Control and Eviction Officer/City Magistrate, Kanpur Nagar in Case No. 80 of 2004 and judgment dated 10.10.2007, passed by the Additional District Judge, Court No. 5, Kanpur Nagar in Rent Revision No. 6 of 2007, M/s. Basant Lal Banarasi Lal Pvt. Ltd. v. Santosh Kumar Gupta and another, are impugned in the instant writ petition.
(2.) ACCORDING to the petitioner, he started business in the name and style firm M/s. Basant Lal Banarasi Lal in the year 1943. Initially the firm started with Basant Lal and his son. It was a registered partnership firm, registered in Bombay, Maharashtra and its branch was running in the premises in question. Learned counsel for the petitioner has detailed the pedigree in paragraph 4 of the writ petition as below : Further submission of senior advocate Sri Naveen Sinha, assisted by Sri Atul Dayal is that after death of original partners, their sons became partner and no outsider other than family members of the original tenant was inducted as partner. It is also brought to my notice that several other firms were constituted by sons and grandsons of the original tenant as M/s. Satya Narain Sekhsaria and Company, M/s. Radhey Shyam Textiles etc. but it is specifically pointed out by learned counsel that none of the firms conducted their business from the accommodation in dispute. The premises in respect of which vacancy has been declared, consists of four godowns, two tin shed godowns, four rooms, gaddi, open space, tin shed, besides other amenities at the rate of Rs. 1,275.87 per month. The premises being an old construction, Act No. 13 of 1972 (hereinafter referred as the Act) is applicable to the said building. On 9.3.1995, the firm M/s. Basant Lal Banarasi Lal operating business from the disputed premises was converted into a Private Limited Company. Learned counsel has also pointed out Articles of Association to substantiate his argument that three Directors of the said Private Limited Company were Bhagwati Prasad, Makkhan Lal Sekhsaria, Janardan Nagar Mal Sekhsaria and Pradeep Kumar Bhagwati Prasad Sekhsaria. It is therefore, assertion on the part of the petitioner that subsequent partners were heirs of the original tenant and there would be no difference whatsoever if the constitution was changed to a Private Limited Company. The firm was conducting business of Cotton Bales and related material and is still dealing in the same area. The respondents became landlord by virtue of three separate sale deeds dated 26.10.1996, 10.3.1997 and 27.3.1997 bearing different numbers, 73/16-A purchased by Santosh Kumar Gupta, 73/16B by Smt. Veena Devi and 73/16C by their son Shantanu Gupta. It is further averred that previously the landlords were accepting rent but later they refused to accept rent and consequent thereon, the rent was deposited in Misc. Case No. 433/70 of 2002. It is also claimed by the petitioner that the landlord all along adopted ways and means to oust the petitioner from the premises by initiating a number of proceedings. Finally a suit for injunction as O.S. No. 588 of 2004 was instituted. The present proceedings initiated after an intimation to the Rent Control and Eviction Officer was given by the landlord under Section 15 (1) of U. P. Act No. XIII of 1972 (hereinafter referred to as the Act) regarding existence of vacancy on the ground that the original firm M/s. Basant Lal Banarasi Lal stands dissolved and a Private Limited Company has taken over the premises without any allotment order. This application was moved on 1.7.2004. After getting the premises inspected and due verification as well as after entertaining objection and counter-objection which are all part of the record, the Rent Control and Eviction Officer vide order dated 14.12.2006 declared vacancy under Section 12 (1)(b) of the Act. A Writ Petition No. 70996 of 2006 was preferred in this Court challenging the aforesaid order which was dismissed vide order dated 3.1.2007 on the ground after it was brought to the notice of the Court that the petitioner has already filed a revision against the order declaring vacancy along with a stay application which is pending, therefore, since the petitioner is already pursuing an alternative remedy, no order was required exercising extraordinary jurisdiction. The revision was also dismissed on 10.10.2007 and two orders are under challenge. Sri Naveen Sinha appearing for the contesting respondent has argued that the provisions of Section 12 (2) of the Act would not be attracted for the reason that none other than the family members have been inducted as partner or Director of the Company. Thus, the provisions of Rule 10 (6) (a) does not come into play at all. Section 12 (2) of the Act is quoted below : "12 (2). In the case of a non-residential building, where a tenant carrying on business in the building admits a person who is not a member of his family as a partner or a new partner, as the case may be, the tenant shall be deemed to have ceased to occupy the building." The next argument is that the courts below completely ignored the aspect that the firm was the tenant in occupation prior to the advent of the Act in 1972 and subsequently conversion of the firm into Private Limited Company would not ipso facto create a legal vacancy. It is submitted next that no permission was required either from the landlord or the Rent Control and Eviction Officer before the firm was converted into Private Limited Company as all the Directors or the partners are family members of the original tenant Basant Lal. Learned counsel while challenging the revisional order submits that the revision was dismissed as not maintainable following the principles laid down in the case of Achal Mishra v. Rama Shanker Singh and others, 2005 (1) ARC 877 : 2005 (2) AWC 1585 (SC). It is true that initially a writ petition was filed in this Court which was dismissed on account of pendency of the revision and thereafter the revision was also dismissed as not maintainable and, therefore, the petitioner could not challenge order declaring vacancy. In view of this submission, I consider it fit and proper to examine the order declaring vacancy by the Rent Control and Eviction Officer on merits as well.
(3.) LEARNED counsel has also substantiated his argument on the basis of Articles of Association of Company Basant Lal Banarasi Lal Pvt. Ltd. in Clause 35 the Directors are Sri Bhagwati Prasad Makhanlal Sekhsaria, Sri Janardan Nagarmal Sekhsaria and Sri Pradeep Kumar Bhagwati Prasad Sekhsaria. LEARNED counsel has also pointed out that in pursuance of the Memorandum and Articles of Association, the following persons were allotted their respective shares in the capital of company : Names, address, description and occupation of each subscriber. Number of Equity shares taken by each subscriber. 1. Narottam Satyanarayan Sekhsaria s/o Late Satyanarayan Sekhsaria Bhagwati Bhavan, 2nd Floor, 31B, Carmichael Road, Bombay-400 026 BUSINESS 10,185 2. Bhagwatiprasad Makhanlal Sekhsaria as Trustee of Makhanlal Sekhsaria Family Trust, s/o Late Makhanlal B. Sekhsaria, 19, Bhuleshwar Road, Bombay-400 002 BUSINESS 10,185 3. Janardan Nagarmal Sekhsaria s/o Late Nagarmal Sekhsaria Sekhsaria Building, 448, S.V.P. Road, Bombay-400 004 BUSINESS 210 4. Pradeep Kumar Bhagwati Prasad Sekhsaria s/o Bhagwatiprasad Sekhsaria, Shivner Building, 84B, Nepeansea Road, Bombay-400 006 BUSINESS 210 5. Surendra Kumar Nagarmal Sekhsaria as Director of M/s. Radhagirdhar Builders and Holdings Pvt. Ltd. s/o Late Nagarmal, 11A, Mittal Chambers, Nariman Point, Bombay-400 021 BUSINESS 84 6. Janardan Nagarmal Sekhsaria as a Director of M/s. Udhav Holdings Pvt. Ltd. s/o Late Nagarmal Sekhsaria, 11A, Mittal Chambers, Nariman Point, Bombay-400 021. BUSINESS. 84 7. Surendra Kumar Nagarmal Sekhsaria as Director of M/s. Divine Properties and Investments Pvt. Ltd. s/o Late Nagarmal 11-A, Mittal Chambers, Nariman Point, Bombay-400 021 BUSINESS 42 Sri Naveen Sinha has placed reliance on a case decided by Delhi High Court, Vishwanath and another v. Chaman Lal Khanna and another, AIR 1975 Del 117. While placing this judgment, he has also submitted at the very outset that the provisions of U. P. Act No. 13 of 1972 are pari materia to that of the Delhi Rent Control Act. The facts of the Delhi case was that one Vishwanath, who was the tenant thought of expanding his business and finally constituted a Private Limited Company. Previously the business was running in the name and style of Interads International Advertising Agency and subsequently a private limited company styled as Interades Advertising (P.) Limited Company was constituted. Subsequent to the formation of the firm in the year 1964, rent was paid by pre-receipted cheques to the landlord. Subsequently in the year 1969, the landlord brought a suit for eviction on the ground that the tenant had sublet, assigned and parted with the possession of premises in favour of the company. The Delhi High Court was of the view that the tenant has not completely effaced himself. He continues in legal possession and controlling interest in the company. Paragraph 22 of the said judgment is quoted hereinbelow : "22. If an individual takes the premises on rent and then converts his sole proprietorship concern into a private limited company in which he has the controlling interest he cannot be evicted from the premises. On the proved facts this is the inevitable conclusion. The person who took the premises on rent remains in possession though he forms a company and ceases to be the sole proprietor. He does not cease to be in possession. He has not parted with the possession with any one. He has changed the form of his business. In Interads Vishwa Nath was the sole proprietor. In Interads Private Limited he has the controlling interest and his wife and his two sons are the other shareholders alongwith two other strangers. He was all in all in his proprietorship concern. Now also he is the Chief Executive Chairman and the Managing Director of the Company. It is true that the company is a juristic person but in each case what we have to see is whether possession has been parted with and whether there is an ouster of the tenant. If the company is a facade concealing the true facts it may be necessary for the Court to pierce the corporate veil." ;