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Sunday, March 30, 2014

Sec. 13(1)(e) of the Bombay Rent Act, 1947 - Eviction petition - the employee of the tenant company was permitted to stay indirectly with out eviction even after his termination of employment amounts to subletting - and as such liable to be evicted - Trial court, lower appellant court sailed on surmises and presumptions over the disputes between the tenant company and it's employee - High court rightly set aside the same in revision - Apex court dismissed the civil appeal = M/s. S.F. Engineer ... Appellant Versus Metal Box India Ltd. and Anr. ...Respondents = 2014 (March. Part) -judis.nic.in/supremecourt/filename = 41353

 Sec. 13(1)(e) of  the Bombay Rent Act, 1947 - Eviction petition - the employee of the tenant company was permitted to stay indirectly with out eviction even after his termination of employment amounts to subletting - and as such liable to be evicted - Trial court, lower appellant court sailed on surmises and presumptions over the disputes between the tenant company  and it's employee - High court rightly set aside the same in revision - Apex court dismissed the civil appeal = 

Bombay
      High Court passed in Civil  Revision  Application  No.  355  of  2010,
      allowing the respondent-tenants’ appeal  and  –  in  reversal  of  the
      concurrent findings of the courts below that there was an unauthorized
      subletting – dismissing appellant’s application under 13(1)(e) of  the
      Bombay Rent Act, 1947 for an order for grant of possession.=

the  inaction  on
      the part of the plaintiff to take steps for eviction against defendant
      No.2 and  proceeded to deal with the contours of Section  13(1)(e)  of
      the Act and in that context opined thus: -
      “It covers different aspects under the heading of  subletting,  it  is
      not mere subletting, it includes assignment or  creating  third  party
      interest.  Non user of the premises in possession of defendant No.2 by
      the defendant No. 1 is clear.  Defendant No. 2 already found to be not
      in service after his resignation.  With a gap of about three  or  four
      years, litigation is started by the defendant No. 1 that  too  on  the
      count of arrears of provident fund.  No substantial suit  for  seeking
      possession was filed  immediately  and  act  continued  on  that  day.
      Aspect of subletting has its own  importance.   We  find  evidence  of
      defendant No.1’s witness is clear in itself.  Ld. Trial Court  arrived
      at the conclusion that this aspect attracts section 13(1)(e)  of  Rent
      Act.  We find said aspect required to be accepted.”

in Bharat  Sales  Ltd.  v.  Life  Insurance  Corporation  of
      India[1], Joginder Singh Sodhi v. Amar Kaur[2] and  Associated  Hotels
      of India Ltd. v. S.B. Sardar Ranjit Singh[3] and took note of  certain
      facts, namely, (i) defendant No. 2 was inducted as a licencee under  a
      licence agreement which was produced before  the  Courts;  (ii)  after
      cessation of his employment defendant No. 2 continued  to  occupy  the
      premises; (iii) applicant had filed a suit for recovery of  overstayal
      charges and, eventually, was allowed to recover a sum of Rs.4,17,000/-
      in terms of order of the Court dated 15.3.2007, in  Civil  Appeal  No.
      2425 of 2007; (iv) applicant had vacated the premises on  4.4.2007  in
      terms of the settlement; and (v) applicant was a sick company and  not
      in a position to receive any clandestine payment and concluded thus: -
      “These facts are so glaring, as are the attempts of applicant  to  get
      rid of respondent No.  2  that  it  would  be  inconsistent  with  any
      clandestine agreement of sub-letting.  True finding of  facts  by  the
      courts below may be respected.  But  the  conclusions  drawn  about  a
      jural relationship was thoroughly unwarranted  and  runs  in  conflict
      with the very requirement of a consensus.  Therefore,  the  decree  of
      eviction on the ground of sub-letting passed by the  trial  court  and
      maintained upon appeal  by  the  appellate  bench  cannot  at  all  be
      sustained.”
in  Renuka  Das  v.  Maya  Ganguly   and
      another[12] wherein it has been opined that it is  well  settled  that
      the High Court, in revision, is not entitled  to  interfere  with  the
      findings of the appellate court, until and unless  it  is  found  that
      such findings are perverse and arbitrary.  There cannot be  any  cavil
      over the said proposition of law.  But in  the  present  case,  as  we
      notice, the trial court as well as the  appellate  court  has  reached
      their conclusions on the basis of inferences.  As  has  been  held  by
      this Court, the issue of subletting can be established on the basis of
      legitimate inference drawn by a court.  In P. John Chandy and Co.  (P)
      Ltd. v. John P. Thomas[13], while dealing with a controversy under the
      rent legislation arising under the Kerala Buildings  (Lease  and  Rent
      Control) Act, 1965, it has been ruled that drawing inference from  the
      facts established is not purely a question of fact.  In  fact,  it  is
      always considered to be a point  of  law  insofar  as  it  relates  to
      inferences to be drawn from finding of fact.  We entirely  agree  with
      the aforesaid view.  When inferences drawn do not  clearly  flow  from
      facts and are not legally legitimate, any  conclusion  arrived  at  on
      that basis becomes absolutely legally fallible.  Therefore, it  cannot
      be said that the High Court has erred in exercise  of  its  revisional
      jurisdiction by substituting  the  finding  of  fact  which  has  been
      arrived at by the courts below.  Therefore, we have no  hesitation  in
      holding that the High Court has not committed any  illegality  in  its
      exercise of revisional jurisdiction  under  the  obtaining  facts  and
      circumstances.

  29. Consequently, we do  not  perceive  any  merit  in  this  appeal  and,
      accordingly, the same stands dismissed without any order as to costs.

2014 (March. Part) -judis.nic.in/supremecourt/filename = 41353   
ANIL R. DAVE, DIPAK MISRA

          IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 4189 OF 2014
               (Arising out of SLP (Civil) No. 29888 of 2010)

M/s. S.F. Engineer                                 ... Appellant

                                   Versus

Metal Box India Ltd. and Anr.                     ...Respondents





                               J U D G M E N T


Dipak Misra, J.


      Leave granted.

   2. This appeal, by special leave, by the landlord arises out  of  and  is
      directed against the judgment and order dated 12.8.2010 of the  Bombay
      High Court passed in Civil  Revision  Application  No.  355  of  2010,
      allowing the respondent-tenants’ appeal  and  –  in  reversal  of  the
      concurrent findings of the courts below that there was an unauthorized
      subletting – dismissing appellant’s application under 13(1)(e) of  the
      Bombay Rent Act, 1947 for an order for grant of possession.

   3. The appellant-plaintiff, owner of the suit premises, i.e.,  Flat  Nos.
      201 and 204 on second floor of the building known as “Marlow” and  two
      garages Nos. 7 and 8 on the ground floor of the suit building  situate
      at 62-B, Pochkhanwala Road, Worli, Mumbai, instituted RAE No. 45/84 of
      1997 for eviction of the first respondent (defendant No.  1)  and  its
      former employee, the respondent No. 2 (defendant No. 2).  For the sake
      of convenience, the parties hereinafter shall be referred  to  as  per
      the rank in the suit.

   4. The case of the plaintiff in the court below was  that  the  defendant
      No. 1 was a tenant under the plaintiff on a consolidated monthly  rent
      of Rs.1075/-.  The premises, as set forth in the plaint, was  let  out
      to the defendant No.  1  exclusively  for  the  purpose  of  providing
      residential accommodation to its executive staff and not for any other
      purpose.  Though the defendant  No.  2  had  no  right  to  remain  in
      possession of the flat No. 201, yet the  employer  company  unlawfully
      sublet the  said  flat  to  him.   The  plaintiff  vide  notice  dated
      19.1.1989 terminated the tenancy of defendant No. 1.  The said  notice
      was replied to  by  the  defendant  No.  1  through  its  advocate  on
      13.2.1989 denying the assertions made in the notice.   This  compelled
      the plaintiff to  initiate  the  civil  action  for  eviction  of  the
      defendants from the suit premises on the ground  of  subletting,  bona
      fide requirement and non-user for the purpose for  which  it  was  let
      out.

   5. The defendant No.  1  filed  its  written  statement  and  denied  the
      averments in the plaint.   Its  affirmative  stand  was,  it  had  not
      breached the conditions in using the suit premises for the purpose  of
      which the same was  let  out  for  continuous  period  of  six  months
      preceding the date of the suit without reasonable cause and  the  suit
      premises had been illegally and wrongfully occupied by  the  defendant
      No. 2 against the will of defendant No. 1 by  remaining  in  flat  No.
      201.  As far as flat No. 204 was concerned, the stand of the defendant
      No. 1 was that it was in occupation of  the  staff,  General  Manager,
      officers and executives of  the  Company.   The  claim  of  bona  fide
      requirement was seriously disputed on  many  a  ground.   It  was  the
      further case of defendant No.1 that the defendant No. 2, as an officer
      of defendant No. 1 was allotted flat No. 201 as a part of his  service
      amenities under the terms and conditions stipulated in agreement dated
      11.5.1982.  On 27.5.1988 the defendant  No.  1  was  declared  a  sick
      company by the  Board  for  Industrial  and  Financial  Reconstruction
      (BIFR) under the provisions of the Sick Industrial Companies  (Special
      Provision) Act, 1985 and thereafter on 11.2.1989 the defendant  No.  2
      resigned from his post which was accepted by the defendant No. 1.  The
      defendant No. 2 continued to occupy  the  premises  and  the  employer
      withheld his  provident  fund  dues  for  which  the  Commissioner  of
      Provident Fund on 19.10.1993 issued a notice to defendant No.  1.   At
      that juncture, the defendant No. 1 filed writ  petition  No.  2134  of
      1993 before  the  High  Court  against  the  Regional  Provident  Fund
      Commissioner and the defendant No. 2 for settlement  of  dues  of  the
      defendant No.  2  and  for  handing  over  vacant  possession  of  the
      premises.  The defendant No. 1 also filed a criminal  complaint  under
      Section 630 of the Companies Act, 1956 which was  dismissed  for  non-
      prosecution.  These asseverations were made to demolish the ground  of
      subletting as asserted by the plaintiff and, eventually, the dismissal
      of the suit was sought.

   6. The defendant No. 2 filed  his  separate  written  statement  stating,
      inter alia, that he was not concerned with flat No. 204 and garage No.
      8 and he was a statutory tenant in respect of flat No. 201 and he  had
      been in long continuous use and occupation of the suit premises, i.e.,
      flat No. 201 and garage No. 7.  It was his further stand that  he  was
      not unlawfully occupying the suit premises because he was  allowed  to
      use the suit premises as an employee of the defendant No. 1 and hence,
      he was occupying the part of the suit premises as a lawful  sub-tenant
      with the consent and knowledge of the plaintiff.

   7. The trial Judge initially framed the following issues: -
      “(1)  Whether the plaintiffs prove that the  suit  premises  have  not
           been used by the defendants without  reasonable  cause  for  the
           purpose for which they were let for a  continuous  period  of  6
           months immediately preceding the date of the suit?

     2) Whether the plaintiffs prove that they required the  suit  premises
        reasonably and bonafide for their own use and occupation?

     3) To whom greater hardship would be caused by passing the decree than
        by refusing to pass it?

     4) Whether the plaintiffs are entitled to recover  the  possession  of
        the suit premises from the defendants?

     5) What decree, order and costs?”

And thereafter framed the following additional issue:-
      “Do plaintiffs prove that the defendant No. 1 unlawfully  sub-let  the
      part of the suit premises to defendant no. 2?”

   8. On consideration of the evidence brought on record  the  Small  Causes
      court came to hold that the plaintiff had  failed  to  prove  that  it
      required the suit premises reasonably and bona fide for  his  use  and
      occupation and also it had not been proven that greater hardship would
      be caused to the plaintiff.  Accordingly, the issue Nos. 2 and 3  were
      answered in the negative.  As far as issue No. 1 was  concerned,  i.e.
      non-user for a period of six months for the purpose  it  was  let  out
      which is a ground under Section 13(1)(k) of the Bombay Rent Act,  1947
      (for short “the Act”), the learned trial Judge came to hold  that  the
      plea of non-user in respect of flat No. 204 was  not  established  but
      the said plea had been proven as far as flat  No.  201  was  concerned
      but, regard being had to the language used in the provision  enshrined
      under Section 13(1)(k) of the Act to the effect that when  a  part  of
      the tenanted premises was not in use of the tenant, the said provision
      would not be applicable and, accordingly, he answered the  said  issue
      against the plaintiff.  While dealing with the  additional  issue  the
      learned trial Judge referred to Section 13(1)(e) of the Act  and  came
      to hold that no case of unlawful  subletting  had  been  made  out  in
      respect of flat No. 204 and one garage, but, as far as  flat  No.  201
      and  another  garage  are  concerned,   plea   of   subletting   stood
      established.  To arrive at the same conclusion he  took  note  of  the
      fact that the use and occupation of defendant No. 2 on the  said  part
      of the suit premises before 12.2.1989 was on the  basis  of  agreement
      Exh. 5A which  showed  that  the  defendant  No.  2  was  in  use  and
      occupation of flat No. 201  and  garage  No.  7  as  licencee  of  his
      employer-defendant No.1 and thereafter from 12.2.1989 on ceasing to be
      in service of the defendant No. 1, the use and occupation of defendant
      No.2 in respect of the said premises could neither  be  considered  as
      legal  nor  could  it  be  protected  under  any  provision  of   law.
      Thereafter, he considered the rival submissions and referred to clause
      13  of  the  agreement  dated  11.5.1982,  Exh.  5A,  the  factum   of
      resignation by the defendant No.  2  and  acceptance  thereof  by  the
      defendant No. 1, the liability on the part of defendant No. 1 to  take
      appropriate legal steps to evict the defendant No.  2  from  the  said
      part of the suit  premises  within  a  reasonable  time,  the  silence
      maintained by the defendant No.  1,  the  dismissal  of  the  criminal
      proceeding instituted under Section 630 of the Companies Act for  non-
      prosecution and filing of another criminal proceeding  only  in  2003,
      the use and occupation of the defendant No. 2 at  the  behest  of  the
      defendant No.1, the retention of provident fund by the defendant No. 1
      of the defendant No. 2, the stand of the defendant No. 2 that  he  was
      in lawful occupation as  a  sub-tenant,  the  admission  of  the  sole
      witness of the defendant No.1 to the effect that  the  defendant  No.2
      was in possession as a sub-tenant, and ultimately came  to  hold  that
      the plaintiff had been able to establish that the defendant No. 1  had
      unlawfully sublet a part of the suit premises, i.e., flat No. 201  and
      garage No. 7 and, accordingly, directed that the defendant Nos. 1  and
      2 jointly and severally to deliver the vacant possession of  the  suit
      premises, i.e., flat Nos. 201 and 204 along with garage Nos. 7 and 8.

   9. On an appeal being preferred the Division Bench of the appellate court
      basically posed two questions, namely, (i) whether the suit  premises,
      more particularly, flat No. 201 was illegally sublet by the  defendant
      No. 1 to the defendant No. 2; and (ii) whether the flat Nos.  201  and
      204 were not used for the purpose for which they were let out for more
      than 6 months without sufficient reason.

  10. The appellate court answered the question No. 2 in the  negative.   As
      far as question No. 1 is concerned, the appellate court took  note  of
      the admission of the witness of the defendant No. 1, the  inaction  on
      the part of the plaintiff to take steps for eviction against defendant
      No.2 and  proceeded to deal with the contours of Section  13(1)(e)  of
      the Act and in that context opined thus: -
      “It covers different aspects under the heading of  subletting,  it  is
      not mere subletting, it includes assignment or  creating  third  party
      interest.  Non user of the premises in possession of defendant No.2 by
      the defendant No. 1 is clear.  Defendant No. 2 already found to be not
      in service after his resignation.  With a gap of about three  or  four
      years, litigation is started by the defendant No. 1 that  too  on  the
      count of arrears of provident fund.  No substantial suit  for  seeking
      possession was filed  immediately  and  act  continued  on  that  day.
      Aspect of subletting has its own  importance.   We  find  evidence  of
      defendant No.1’s witness is clear in itself.  Ld. Trial Court  arrived
      at the conclusion that this aspect attracts section 13(1)(e)  of  Rent
      Act.  We find said aspect required to be accepted.”

  11. Being of this opinion, it affirmed the view expressed by  the  learned
      trial Judge and upheld the judgment  and  decree  passed  against  the
      defendants.

  12. The non-success compelled the defendant No.  1  to  invoke  the  civil
      revisional jurisdiction of the High Court.  The learned  single  Judge
      referred to the filing  of  the  writ  petition  with  regard  to  the
      provident fund dues, appeal by way of special leave preferred  by  the
      defendant No. 1 and the ultimate settlement arrived at between the two
      defendants on 4.4.2007, the stand of the defendant No.  1  that  there
      was no consensus between it and the defendant No. 2 allowing to occupy
      the premises after he ceased to be in Company’s employment  and  later
      to initiate action to  evict  him,  and  thereafter  referred  to  the
      decisions in Bharat  Sales  Ltd.  v.  Life  Insurance  Corporation  of
      India[1], Joginder Singh Sodhi v. Amar Kaur[2] and  Associated  Hotels
      of India Ltd. v. S.B. Sardar Ranjit Singh[3] and took note of  certain
      facts, namely, (i) defendant No. 2 was inducted as a licencee under  a
      licence agreement which was produced before  the  Courts;  (ii)  after
      cessation of his employment defendant No. 2 continued  to  occupy  the
      premises; (iii) applicant had filed a suit for recovery of  overstayal
      charges and, eventually, was allowed to recover a sum of Rs.4,17,000/-
      in terms of order of the Court dated 15.3.2007, in  Civil  Appeal  No.
      2425 of 2007; (iv) applicant had vacated the premises on  4.4.2007  in
      terms of the settlement; and (v) applicant was a sick company and  not
      in a position to receive any clandestine payment and concluded thus: -
      “These facts are so glaring, as are the attempts of applicant  to  get
      rid of respondent No.  2  that  it  would  be  inconsistent  with  any
      clandestine agreement of sub-letting.  True finding of  facts  by  the
      courts below may be respected.  But  the  conclusions  drawn  about  a
      jural relationship was thoroughly unwarranted  and  runs  in  conflict
      with the very requirement of a consensus.  Therefore,  the  decree  of
      eviction on the ground of sub-letting passed by the  trial  court  and
      maintained upon appeal  by  the  appellate  bench  cannot  at  all  be
      sustained.”
  13. Criticizing the judgment and order passed by the learned single Judge,
      learned senior counsel for the appellant  submitted  that  though  the
      defendant No. 2, the employee, retired from service, yet the defendant
      No. 1, employer, did not take any steps for a period of more than four
      years from February, 1989 till October, 1993 and allowed the complaint
      filed under Section 630 of the Companies Act to be dismissed for  non-
      prosecution  and  was  constrained  to  prefer   the   writ   petition
      challenging the direction of the Regional Provident Fund  Commissioner
      only when it faced a statutory consequence and these circumstances  go
      a long way to  establish  its  conduct  of  tacit  acceptance  of  the
      position of defendant No. 2 as a sub-tenant.  He has also  highlighted
      that the defendant No. 1 filed the second complaint under Section  630
      of the Companies Act after a span of seven years and filed the summary
      suit under Section 37, CPC only for recovery of occupation charges and
      not for eviction after  fourteen  years  of  the  resignation  of  the
      defendant No.2 from service of the  defendant  No.1  which  ultimately
      resulted in  a  settlement  before  this  Court,  and  these  aspects,
      considered cumulatively, do clearly show that in effect the  defendant
      No. 1, tenant, had sublet the premises in question and the High  Court
      has fallen into grave  error  in  overturning  the  finding  based  on
      legitimate inferences in exercise of revisional jurisdiction which  is
      a limited one. It is his further submission that the finding  recorded
      by the learned trial Judge and concurrence given to the same in appeal
      establish two aspects, namely, the defendant  No.  2  was  allowed  to
      remain in exclusive use and occupation of the premises; and that there
      was involvement of consideration inasmuch as the employer withheld the
      provident fund  to  appropriate  the  same  towards  the  occupational
      charges and the arrangement is obvious.  The  learned  senior  counsel
      would also contend that the  sole  witness  of  defendant  No.  1  has
      categorically admitted that defendant No. 2 is an unlawful  sub-tenant
      and after such an admission any  stand  to  the  contrary  has  to  be
      treated as paving the  path  of  tergiversation.   He  has  also  laid
      immense emphasis on the fact that the defendant No. 2 in  his  written
      statement has clearly admitted that  he  was  a  sub-tenant  with  the
      consent of the landlord, but  the  factum  of  consent  has  not  been
      proven.

  14. Mr. Ganesh, learned senior counsel, per  contra,  in  support  of  the
      decision of the High Court would contend that necessary ingredients of
      subletting have not been fulfilled and when the reasonings ascribed by
      the trial court and the appellate court are absolutely on the basis of
      perverse consideration of the materials  brought  on  record,  it  was
      obligatory on the part of the  High  Court  to  rectify  the  same  in
      supervisory jurisdiction and that having been done the impugned  order
      is absolutely flawless and totally infallible.  It is put forth by him
      that reliance on some  evidence  and  the  stand  and  stance  of  the
      defendant No. 2 who had an axe to grind against the  defendant  No.  1
      and further had an ambitious motive to get the flat from the plaintiff
      on ownership basis would not establish the plea of subletting.  It  is
      further contended that the defendant No. 1 had taken appropriate steps
      at the relevant time to prosecute the defendant No.  2  under  various
      laws and hence, it is inapposite to say that there was a tacit consent
      allowing the employee to occupy the premises.  In  any  case,  submits
      Mr. Ganesh, that withholding of provident fund dues or  settlement  as
      regards the same before this Court  would  not  make  out  a  case  of
      subletting as proponed by the plaintiff-appellant.

  15. To appreciate the revalised submissions raised at the Bar it is  first
      necessary to have a survey of authorities of this  Court  which  state
      the position of law as to how subletting of a premises  alleged  by  a
      landlord are to be established.

  16. In Smt. Rajbir Kaur and another v. M/s. S. Chokesiri and Co.[4], after
      referring  to  the  decision  in  Dipak  Banerjee  v.  Smt.   Lilabati
      Chakraborty[5] and other decisions the Court opined that 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  has  been
      further observed that such transactions of subletting in the guise  of
      licences are in their very nature,  clandestine  arrangements  between
      the tenant and the subtenant and there cannot be direct  evidence  got
      and it is not, unoften, a matter  for  legitimate  inference.  Dealing
      with the issue of burden it held that: -
      “The burden of making good a case of subletting 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.”

  17. In this context, reference to a two-Judge Bench  decision  in  Bhairab
      Chandra Nandan v. Ranadhir Chandra Dutta[6] would be apposite.  In the
      said case the tenant had permanently shifted his  residence  elsewhere
      leaving the rooms completely to his brother for his occupation without
      obtaining the landlord’s  permission.   In  that  context,  the  Court
      observed thus: -
      “5. Now coming to the question of sub-letting, once again we find that
      the courts below had adequate material to conclude that the respondent
      had sub-let the premises, albeit to his own brother and quit the place
      and  the  sub-letting  was  without  the  consent  of  the  appellant.
      Admittedly, the respondent was living elsewhere and it is his  brother
      Manadhir who was in occupation of the rooms  taken  on  lease  by  the
      respondent. The High Court has taken the view that because Manadhir is
      the brother of the respondent, he will only be a licensee  and  not  a
      sub-tenant. There is absolutely no warrant for this reasoning.  It  is
      not as if the respondent is still  occupying  the  rooms  and  he  has
      permitted his brother also to reside with him in  the  rooms.  On  the
      contrary, the respondent has  permanently  shifted  his  residence  to
      another place and left the rooms completely to  his  brother  for  his
      occupation without obtaining the consent of the  appellant.  There  is
      therefore no  question  of  the  respondent’s  brother  being  only  a
      licensee and not a sub-tenant.”

  18. In M/s. Shalimar Tar Products Ltd. v. H.C. Sharma and others[7], while
      dealing with parting of legal possession, the two-Judge Bench observed
      that there is no dispute in the legal proposition that there  must  be
      parting of the legal possession. Parting to the legal possession means
      possession with the right to include and also right to exclude others.



  19. In United Bank of India v. Cooks and Kelvey Properties (P)  Limited[8]
      the question arose whether the appellant-Bank had sublet the  premises
      to the union.  This Court set aside  the  order  of  eviction  on  the
      ground that : -
      “....though the appellant  had  inducted  the  trade  union  into  the
      premises for carrying on the trade union activities, the bank has  not
      received any monetary consideration from the trade  union,  which  was
      permitted to use and enjoy it for its trade union  activities.  It  is
      elicited in the cross-examination of the President of the trade  union
      that the bank had retained its power to call upon the union to  vacate
      the premises at any  time  and  they  had  undertaken  to  vacate  the
      premises. It is also elicited in the cross-examination that  the  bank
      has been maintaining the premises at its own expenses and also  paying
      the electricity charges consumed by the  trade  union  for  using  the
      demised premises. Under these circumstances, the inference that  could
      be drawn is that the appellant had retained its legal control  of  the
      possession and let the trade union to  occupy  the  premises  for  its
      trade union activities. Therefore, the only conclusion that  could  be
      reached is that though exclusive possession of  the  demised  premises
      was given to the trade union, the possession  must  be  deemed  to  be
      constructive possession held by it on behalf of the bank for using the
      premises for trade union activities so long  as  the  union  used  the
      premises for trade union activities. The bank retains its control over
      the trade union whose membership is only confined to the employees  of
      the bank. Under these circumstances,  the  inevitable  conclusion  is,
      that there is no transfer of right to enjoy the premises by the  trade
      union exclusively, for consideration.”

  20. In this context we may fruitfully refer to the  decision  in  Joginder
      Singh Sodhi (supra) wherein the Court, dealing  with  the  concept  of
      subletting, has observed that to establish a plea  of  subletting  two
      ingredients,   namely,   parting   with   possession   and    monetary
      consideration, therefor have to be  established.   In  the  said  case
      reliance was placed on Shama Prashant Raje v.  Ganpatrao[9]  and  Smt.
      Rajbir Kaur (supra).  The  Court  also  extensively  referred  to  the
      principle stated in Bharat Sales Ltd.  (supra)  wherein  it  has  been
      observed that 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.   Though  payment  of
      rent, undoubtedly, is an essential element of lease or sub-lease,  yet
      it may be paid in cash or in kind or may have been paid or promised to
      be paid, or 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.   The  Court  further
      observed that 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
      sub-let.

  21. In this regard reference to Celina Coelho Pereira (Ms) and  others  v.
      Ulhas Mahabaleshwar Kholkar and others[10] would be pertinent.  In the
      said case a two-Judge Bench, after referring to number of  authorities
      and the rent legislation, summarized the legal  position  relating  to
      issue of sub-letting or creation  of  sub-tenancy.   The  two  aspects
      which are of relevance to the present case are:
      “(i)  In order to prove  mischief  of  sub-letting  as  a  ground  for
      eviction  under  rent  control  laws,  two  ingredients  have  to   be
      established.  (one parting with possession of tenancy or part of it by
      the tenant in  favour  of  a  third  party  with  exclusive  right  of
      possession, and (two) that such parting with possession has been  done
      without the consent of the landlord and in  lieu  of  compensation  or
      rent.

      (ii), (iii) & (iv)     ………

      (v)   Initial burden of proving sub-letting is  on  the  landlord  but
      once he is able to establish  that  a  third  party  is  in  exclusive
      possession of the premises and that tenant has no legal possession  of
      the tenanted premises, the onus shifts to  the  tenant  to  prove  the
      nature of  occupation  of  such  third  party  and  that  he  (tenant)
      continues to hold legal possession in tenancy premises.”

  22.  In  Vinaykishore  Punamchand  Mundhada  and  another  v.  Shri  Bhumi
      Kalpataru and others[11] it has been held that it is well settled that
      sub-tenancy or  sub-letting  comes  into  existence  when  the  tenant
      voluntarily surrenders possession of the tenanted premises  wholly  or
      in part and  puts  another  person  in  exclusive  possession  thereof
      without the knowledge of the landlord.  In all such cases,  invariably
      the landlord is kept out of the scene rather, such arrangement whereby
      and whereunder the possession is parted away by the tenant  is  always
      clandestine and such arrangements takes place behind the back  of  the
      landlord.  It is the actual physical and exclusive possession  of  the
      newly inducted person, instead of the tenant, which is material and it
      is that factor which reveals to the landlord and that the  tenant  has
      put some other person into possession of the  tenanted  property.   It
      has been further observed that it would not be possible  to  establish
      by direct evidence as to whether the person inducted  into  possession
      by the tenant had paid monetary consideration to the tenant  and  such
      an arrangement cannot be proved by affirmative evidence  and  in  such
      circumstances the court is required to draw its own inference upon the
      facts of the case proved at the enquiry.

  23. We have referred to the  aforesaid  decisions  only  to  reaffirm  the
      proposition that the Court under certain circumstances  can  draw  its
      own inference on the basis of materials brought at the trial to arrive
      at  the  conclusion  that  there  has  been  parting  with  the  legal
      possession and acceptance of monetary consideration either in cash  or
      in kind or having some kind of arrangement.  The aforesaid authorities
      make it further spectacularly clear that the transaction of subletting
      can be proved by legitimate inference though  the  burden  is  on  the
      person seeking eviction.   The materials brought out in  evidence  can
      be gathered together for arriving at the conclusion  that  a  plea  of
      subletting is established.  The constructive possession of the  tenant
      by retention of control  like  in  Cooks  and  Kelvey  Properties  (P)
      Limited (supra) would not make it parting with possession as it has to
      be parting with legal possession.  Sometimes emphasis has been laid on
      the fact that the sub-tenancy is created in a clandestine  manner  and
      there may not be direct proof on the part of a landlord  to  prove  it
      but definitely it can  bring  materials  on  record  from  which  such
      inference can be drawn.

  24. Coming to the case at hand, on a studied scrutiny of the  evidence  it
      is quite vivid that an agreement was entered into by the landlord  and
      the tenant in respect of the premises with  the  stipulation  that  it
      would be used only for providing the residential accommodation of  the
      executive staff and not for any other purpose.  It is not  in  dispute
      that the defendant No. 2 was a member of  the  executive  and  he  was
      provided  the  premises  as  a  part  of  the  amenities  towards  his
      perquisites.  As the company sustained  loss  and  was  declared  sick
      under SICA, the defendant No. 2 resigned from his  post  on  11.1.1989
      and the defendant No. 1 accepted  the  same.   As  is  evincible,  the
      plaintiff had terminated the tenancy on 19.1.1989.  Submission of  Mr.
      Sundaram, learned senior counsel, is that though the defendant  No.  2
      resigned from service and there was termination of  tenancy,  yet  the
      defendant chose not to take any steps for evicting the defendant No. 2
      from the premises in question.  He has also highlighted on the  factum
      that the application under Section 630 of the Companies Act, 1956  for
      seeking possession of the premises was  filed  after  the  notice  for
      eviction was issued and the same was allowed to be dismissed for  non-
      prosecution.  It has also come out  in  evidence  that  only  after  a
      proceeding was initiated by the Regional Provident Fund  Commissioner,
      the defendant No. 1 filed the writ petition and the controversy  ended
      by way of settlement before this Court in an appeal.  The summary suit
      was filed only for recovery of occupational charges after a span of 14
      years wherein a decree  was  obtained.   That  apart,  learned  senior
      counsel has drawn our attention to the stand and stance put  forth  by
      the defendant No. 2 claiming himself as a sub-tenant.  He has also, as
      has been stated earlier, referred to  the  admission  of  the  witness
      cited by the defendant No. 1.  It is apt to note here  that  from  the
      aforesaid circumstances  the  learned  trial  Judge  as  well  as  the
      appellate court has drawn inferences to come to  the  conclusion  that
      the defendant No. 2 was an unlawful sub-tenant thereby attracting  the
      frown of Section 13(1)(e) of the Act  justifying  the  eviction.   Mr.
      Ganesh, learned senior counsel, submitted that mere procrastination on
      the part of the defendant No. 1 to take steps  cannot  be  treated  to
      have given rise to the legitimate inference to come  to  a  conclusion
      that there was sub-letting in view of the authorities of  this  Court.
      He has also drawn inspiration from some parts of the  assertions  made
      by the defendant No. 2 in  the  written  statement.   To  bolster  the
      stand, he has pointed out that the defendant No.2 has clearly admitted
      that his possession was as sub-tenant  as  his  entry  was  legal  and
      further he had claimed that he had entered into negotiation  with  the
      plaintiff to become a tenant and thereafter to acquire ownership.

  25. The facts being admitted, it really requires whether  the  High  Court
      was justified in unsettling the conclusion arrived at  by  the  courts
      below by taking note of certain factors into consideration. As we have
      stated earlier, the learned trial Judge has applied the  principle  of
      legitimate inference which has been given the stamp of approval by the
      learned  appellate  Judge.   The  basic  question  that  emerges   for
      consideration is whether in the obtaining factual matrix the principle
      of  legitimate  inference  could  have  been  invoked  to  come  to  a
      conclusion that the defendant No. 2 had been inducted as a sub-tenant.
       It is settled in law that the requisite conditions  for  establishing
      the factum of sub-letting are  –  parting  of  legal  possession,  and
      availing of monetary consideration which can be in cash  or  kind  and
      which fact may not be required to be directly proven by  the  landlord
      in all circumstances.  As is perceptible,  the  defendant  No.  2  was
      given possession by the defendant No.1 as an executive of the company.
       It was made available to him under the conditions of service and such
      provision was in consonance with the agreement  entered  into  by  the
      landlord and the tenant, i.e., the plaintiff and the  defendant  No.1.
      Submission of the learned senior counsel  for  the  appellant,  as  is
      clear, is founded on inference made by the learned  trial  Judge  that
      the provident fund, gratuity and other dues of  the  defendant  No.  2
      were withheld in lieu  of  allowing  the  defendant  No.  2  for  such
      occupation.  The aforesaid foundation needs to  be  tested.   For  the
      said purpose it is essential to refer to the stand put  forth  in  the
      written statement by the defendant No. 2 which has  been  emphatically
      referred to by Mr. Sundaram: -
      “This defendant submits that this  defendant  is  occupying  the  suit
      premises as a lawful sub-tenant, sub tenancy having  been  created  in
      favour of this  Defendant  with  the  knowledge  and  consent  of  the
      plaintiffs.”

      Thereafter, the stand of the defendant No. 2 is as follows: -
      “In February, 1988, there was a lock-out in defendant No.  1  company.
      The financial position of defendant No. 1 deteriorated.  The defendant
      No. 1 was not even able to fulfill their minimum and urgent  financial
      obligations and commitments.  Since  there  was  no  scope  of  future
      progress with the defendant No. 1, this defendant  resigned  from  the
      employment of Defendant No. 1 in January, 1989  on  the  understanding
      that he will continue to occupy the flat No. 201 and Garage No.  7  as
      Defendant No. 1 had no more use for the same and also  the  dues  were
      still not settled.  The defendant No. 1 was not even able to pay  this
      defendant’s dues like Provident Fund, Gratuity, Leave Salary etc.  The
      defendant No. 1 was not even in a position to pay rent in  respect  of
      the suit premises as also other  outgoings  in  respect  of  the  suit
      premises as also other outgoings  incurred  by  the  Marlow  Residents
      Association.  At the request of the  Defendant  No.1,  this  defendant
      continued to use and occupy the suit premises.”

      Mr. Ganesh, learned senior counsel has also drawn immense  inspiration
from the written statement.  The relevant part on which emphasis is  put  is
as follows: -
      “This defendant thereafter approached the Plaintiffs’ office to tender
      the rent in respect of part of suit premises.  However, this defendant
      was told and assured by the plaintiffs that as soon as the  plaintiffs
      would be able to settle with the Defendant No.1, they would accept the
      entire arrears of rent proportionately, i.e. rent of Flat No. 201  and
      Garage No. 7 from this defendant.   Till  1994  and  even  till  date,
      neither the plaintiffs nor the defendant no.2 has settled the accounts
      to enable this defendant to pay  the  rent  in  respect  of  the  suit
      premises to the plaintiffs.”
                  xxx        xxx        xxx
            The defendant No. 1 has been declared as a sick  unit  by  BIFR.
      The Defendant No. 1 is now acting in collusion  with  the  Plaintiffs.
      The plaintiffs and the defendant No. 1 are  acting  in  collusion  and
      falsely denying rights of this defendant in respect of Flat  No.  201.
      This defendant is ready and willing to pay the rent in respect of  the
      suit premises to the Plaintiffs.

            The  residents  of  Marlow  Building  formed  Marlow  Residents’
      Welfare Fund.  This defendant has also contributed  towards  the  said
      Welfare Fund since its inception and continues to contribute like  any
      other member including the Plaintiffs who is also a member.  The  said
      Welfare Fund has also carried out major repairs of the building.  This
      defendant has contributed  his  share  towards  major  repair  of  the
      building.  These facts are known to the plaintiffs.”

  26. On a close perusal of the assertions made by the defendant No. 2 it is
      luminous that he was allowed to occupy the premises as an executive by
      the company and thereafter as his dues could not be paid  to  him,  he
      remained in occupation and also tried  to  become  the  owner  of  the
      premises.  True it is, the defendant No. 1 did not initiate action  at
      an early stage but in 1993 when the Provident Fund Commissioner made a
      demand, it moved the writ court and ultimately the matter was  settled
      before this Court.  The terms of the settlement in  CA  No.   1425  of
      2007 are reproduced hereinbelow: -

      “(i)  The respondent shall pay to the appellant a sum of Rs. 3,24,000/-
            (Three Lakhs and Twenty Four Thousand only) in full  and  final
           settlement  of  the  amount  payable  by  the   respondent   for
           overstaying in the premises in question.

      (ii)  A sum of Rs.4,17,000 (Rupees Four Lakhs and  Seventeen  Thousand
           only) has been deposited by the appellant in the High  Court  of
           Bombay in Writ Petition  No.  2134/1993.   The  said  amount  of
           Rs.4,17,000/- together  with  interest  that  may  have  accrued
           thereon, after deducting the amount of Rs. 3,24,000/-  shall  be
           paid to the respondent.  The sum of Rs.3,23,000/- shall be  paid
           to the appellant.

      (iii) The respondent shall handover vacant possession of the  premises
           in question to the appellant on a date and time to be  fixed  by
           the senior Prothonotary of the  High  Court  of  Bombay  in  the
           presence of a representative  of  the  Senior  Prothonotary  who
           shall record  a  memorandum  signed  by  the  respondent  and  a
           representative of the appellant.  The possession shall be handed
           over by the respondent to the appellant within a period of three
           weeks from today.  The amount payable to the respondent shall be
           handed over to him forthwith, or soon after  the  possession  of
           the premises in question is handed over to the appellant.

      (iv)  The parties agree that Summary Suit No. 947/2004 pending  before
           the High Court of Bombay; Complaint Case No.1195/S/2003  pending
           before the  Metropolitan  Magistrate,  Dadar,  Bombay  which  is
           challenged before the High Court  of  Bombay  in  Criminal  Writ
           Petition No. 2514/2006 and Writ Petition No. 2134/1993 shall  be
           withdrawn  by  moving  appropriate  applications  by  the  party
           concerned.  Two suits, namely,  RAE  Suit  No.  45/1984  pending
           before the Small Causes Court, Bombay giving rise to Appeal  No.
           372/2005 and TE&R Suit No. 153/165 of 2001  pending  before  the
           Small Causes Court, Bombay which have been filed by the landlord
           of the premises in question shall  continue  and  the  appellant
           herein may contest the same, if  so  advised.   So  far  as  the
           respondent herein is concerned, he shall stand absolved  of  any
           liability in the said wo suits before the Small Causes Court.”

  27. We have referred to the written statement in  extenso  and  the  terms
      that have been recorded by  this  Court  solely  for  the  purpose  of
      appreciating the plea whether creation of sub-tenancy by the  landlord
      has really been established.  The thrust of the matter is whether  the
      trial court and the appellate court  have  correctly  arrived  at  the
      conclusion of sub-letting on the foundation  of  legitimate  inference
      from the facts proven.  As is evincible, the defendant No. 2  was  put
      in possession by the defendant No. 1 while he was in  service.   There
      was an agreement between the defendant No. 2 and the defendant  No.  1
      which has been brought on record.  The agreement  of  tenancy  between
      the plaintiff and the defendant No. 1 is not disputed and one  of  the
      stipulations in the agreement is that the tenant has  been  given  the
      premises on lease for the  purpose  of  occupation  of  its  executive
      staff.  Thus, handing over of the possession of the  premises  to  the
      defendant No. 2 is in accord with the  terms  and  conditions  of  the
      agreement entered between the landlord and the tenant and,  therefore,
      the entry of the defendant No. 2 into  the  premises  is  legal.   The
      trial court as well as the appellate court has  drawn  inference  that
      after the defendant No.2, the  employee,  resigned  from  service  and
      remained in occupation while he was not entitled to, the defendant No.
      1 did  not  take  any  steps  to  get  back  the  possession  and  the
      proceedings initiated under the Companies Act were dismissed for  non-
      prosecution and at a  belated  stage  only  a  suit  for  recovery  of
      occupational charges was instituted.  The emphasis is on the  inaction
      on the part of the defendant No. 1 to institute a suit  for  eviction.
      Such inaction would not by itself persuade a  court  to  come  to  the
      conclusion that the sub-letting was proved.  Nothing has been  brought
      on record by way of documentary or oral evidence to suggest that there
      was any kind of arrangement  between  the  defendant  No.  1  and  the
      defendant No. 2.  The written statement which has been  filed  by  the
      defendant No.2, in fact, is a series of self  serving  assertions  for
      his own benefit.  His stand would show that non-payment  of  provident
      fund and gratuity and other retiral dues amounted to consideration  or
      a kind of arrangement.  That apart, he has claimed himself to become a
      tenant  under  the  landlord  and  also  had   put   an   aspirational
      asseveration that he had negotiated with the landlord to purchase  the
      property to become the owner.  The  High  Court  has  noted  that  the
      tenant, defendant No.1, was a sick company under the  SICA  and  could
      not have received any money in a clandestine manner.  Be  that  as  it
      may,  withholding  of  retiral  dues  cannot  be   considered   as   a
      consideration or any kind of arrangement.  The settlement before  this
      Court shows  that  the  defendant  No.  2  had  paid  the  amount  for
      overstaying in the premises in question and the deposited amount  with
      the High Court was required  to  be  paid  towards  the  dues  of  the
      defendant No. 2 after deducting  overstayal  charges.   Mr.  Sundaram,
      learned senior counsel for  the  appellant,  has  contended  that  the
      settlement before this Court was between the defendant  No.1  and  the
      defendant No. 2 to which the landlord was not a party  and  hence,  it
      cannot have any effect on the issue of sub-letting.  True it is, it is
      a settlement between the defendant No. 1 and defendant No.2, but it is
      a settlement between  an  employer  and  an  erstwhile  employee  and,
      therefore, the landlord had no role.  We  have  noted  the  settlement
      only to show that barring withholding of the retiral dues the employer
      had not received any thing either in cash or in kind or otherwise from
      the defendant No. 2  and  hence,  under  these  circumstances,  it  is
      extremely difficult to hold that the factum of  sub-letting  has  been
      established.

  28. At this juncture, we are obliged to deal with the  submission  of  Mr.
      Sundaram, learned senior counsel for  the  appellant,  that  the  High
      Court in exercise of its civil revisional jurisdiction could not  have
      dislodged the concurrent findings of the courts below.  We  have  been
      commended  to  an  authority  in  Renuka  Das  v.  Maya  Ganguly   and
      another[12] wherein it has been opined that it is  well  settled  that
      the High Court, in revision, is not entitled  to  interfere  with  the
      findings of the appellate court, until and unless  it  is  found  that
      such findings are perverse and arbitrary.  There cannot be  any  cavil
      over the said proposition of law.  But in  the  present  case,  as  we
      notice, the trial court as well as the  appellate  court  has  reached
      their conclusions on the basis of inferences.  As  has  been  held  by
      this Court, the issue of subletting can be established on the basis of
      legitimate inference drawn by a court.  In P. John Chandy and Co.  (P)
      Ltd. v. John P. Thomas[13], while dealing with a controversy under the
      rent legislation arising under the Kerala Buildings  (Lease  and  Rent
      Control) Act, 1965, it has been ruled that drawing inference from  the
      facts established is not purely a question of fact.  In  fact,  it  is
      always considered to be a point  of  law  insofar  as  it  relates  to
      inferences to be drawn from finding of fact.  We entirely  agree  with
      the aforesaid view.  When inferences drawn do not  clearly  flow  from
      facts and are not legally legitimate, any  conclusion  arrived  at  on
      that basis becomes absolutely legally fallible.  Therefore, it  cannot
      be said that the High Court has erred in exercise  of  its  revisional
      jurisdiction by substituting  the  finding  of  fact  which  has  been
      arrived at by the courts below.  Therefore, we have no  hesitation  in
      holding that the High Court has not committed any  illegality  in  its
      exercise of revisional jurisdiction  under  the  obtaining  facts  and
      circumstances.

  29. Consequently, we do  not  perceive  any  merit  in  this  appeal  and,
      accordingly, the same stands dismissed without any order as to costs.


                                                           …..…………………………….J.
                                                                  [Anil   R.
    Dave]



                                                           ……………..………………….J.
                                                               [Dipak Misra]
New Delhi;
March 28, 2014.
-----------------------
[1]    (1998) 3 SCC 1
[2]    (2005) 1 SCC 31
[3]    (1968) 2 SCR 548
[4]    (1989) 1 SCC 19
[5]    (1987) 4 SCC 161
[6]    (1988) 1 SCC 383
[7]    (1988) 1 SCC 70
[8]    (1994) 5 SCC 9
[9]    (2000) 7 SCC 522
[10]   (2010) 1 SCC 217
[11]   (2010) 9 SCC 129
[12]   (2009) 9 SCC 413
[13]   (2002) 5 SCC 90

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