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
-----------------------
33
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.
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
-----------------------
33
