M/S. S.F. ENGINEERversusMETAL BOX INDIA LTD. AND ANR.

                   [2014] 4 S.C.R. 1047


                   MIS. S.F. ENGINEER                           A
                             V.
            METAL BOX INDIA LTD. AND ANR.
             (Civil Appeal No. 4189 of 2014)
                     MARCH 28, 2014
                                                                B
        [ANIL R. DAVE AND DIPAK MISRA, JJ.)

     Bombay Rent Act, 1947 - s.13(1)(e) - Suit for eviction -
On ground of unlawful sub-letting - Principle of legitimate
inference - Invoking of - Held: Requisite conditions for C
establishing the factum of sub-letting are parting of legal
possession, and availing of monetary consideration which
could be in cash or kind and which fact might not be required
to be directly proven by the landlord in all circumstances - In
the case in hand, plaintiff-landlord let out premises to D
defendant no.1-company exclusively for providing residential
accommodation to its executive staff and not for any other
purpose - Defendant no. 1 handed over possession of the
premises to an employee, defendant no.2 - Handing over of
possession to defendant no. 2 was in accord with the terms E
and conditions of agreement entered between landlord and
tenant and, thus, entry of defendant no. 2 into the premises
was legal -· Trial Court and Appellate Court drew inference that
after defendant no. 2, employee, resigned from service but
remained in occupation while he was not entitled to, defendant
                                                                 F
no. 1 did not take any steps to get back the possession - But
such inaction cannot lead to the conclusion that sub-letting
was proved - Nothing to show that there was any kind of
arrangement between defendant 1 and 2 - Non-payment of
provident fund and gratuity and other retiral dues would not
amount to consideration or a kind of arrangement - Barring G
withholding of retiral dues, defendant no. 1 had not received
any thing either in cash or in kind or otherwise from the
defendant no. 2 and hence, under those circumstances, it
cannot be held that factum of sub-letting was established.
                               1047                              H
    1048     SUPREME COURT REPORTS                    (2014] 4 S.C.R.


A        Rent control and eviction:

       Sub-letting - Legitimate inference - Held: 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
8
  acceptance of monetary consideration either in cash or in kind
  or having some kind of arrangement - The transaction of
  subletting can be proved by legitimate inference though the
  burden is on the person seeking eviction - Constructive
  possession of the tenant by retention of control would not
C 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
D record from which such inference can be drawn.

         Sub-letting - Requisite conditions for establishing the
    factum of sub-letting - Discussed.

E         Revision: Scope of - Held: 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.

       The plaintiff-landlord had let out the premises in
F question to defendant no.1-company exclusively for the
  purpose of providing residential accommodation to its
  executive staff and not for any other purpose. The
  plaintiff-appellant filed suit for eviction of defendant no.1
  and its former employee, defendant no. 2, contending that
G defendant no.- 2 was an unlawful sub-tenant and thereby
  Section 13(1)(e) of the Bombay Rent Act, 1947 was
  attracted justifying the eviction. The defendant no.1 took
  stand that it had not breached the conditions in using the
  suit premises for the purpose of which the same was let
H out for continuous period of six months preceding the
     S.F. ENGINEER v. METAL BOX INDIA LTD.            1049
                   AND ANR.
date of the suit without reasonable cause and the suit         A
premises had been illegally and wrongfully occupied by
defendant no. 2 against the will of defendant no.1 by
remaining in the suit flat. It was the further case of
defendant no.1 that the defendant no. 2, as an officer of
defendant No. 1 was allotted flat as a part of his service     B
amenities. Defendant No. 1 became sick company and
thereafter defendant No.2 resigned from service.
Defendant No. 2 continued to occupy the premises while
the employer withheld his provident fund dues for which
the Commissioner of Provident Fund issued a notice to          c
defendant No. 1. Defendant No. 1 filed writ petition before
the High Court against the Regional Provident Fund
Commissioner and defendant No. 2 for settlement of
dues of defendant No. 2 and for handing over vacant
possession of the premises.                                    D

    The question which arose for consideration in the
present appeal filed by the landlord was whether there
was an unauthorized subletting under 13(1)(e) of the
Bombay Rent Act, 1947 warranting an order for grant of
possession.                                                    E

    Dismissing the appeal, the Court

     HELD: 1. 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
                                                               F
parting with the legal possession and acceptance of
monetary consideration either in cash or in .kind or
having some kind of arrangement. The transaction of
subletting can be proved by legitimate inference though
the burden is on the person seeking eviction. The              G
materials brought out in evidence can be gathered
together for arriving at the conclusion that a plea of
subletting is estabiished. The constructive possession of
the tenant by retention of control would not make it
parting with possession as it has to be parting with legal     H
    1050    SUPREME COURT REPORTS             [2014] 4 S.C.R.

A 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. [Para
B 23] [1067 -E-H; 1068-A]

       Bharat Sales Ltd. v. Life Insurance Corporation of India
  (1998) 3 SCC 1: 1998 (1) SCR 711; Joginder Singh Sodhi
  v. Amar Kaur(2005) 1 SCC 31: 2004 (5) Suppl. SCR 303;
C Smt. Rajbir Kaur and another v. Mis. S. Chokesiri and Co.
  (1989) 1 SCC 19: 1988 (2) Suppl. SCR 310; Dipak Banefjee
  v. Smt. Lilabati Chakraborty (1987) 4 SCC 161: 1987 (3)
  SCR 680; Bhairab Chandra Nandan v. Ranadhir Chandra
  Dutta (1988) 1 SCC 383; Mis. Shalimar Tar Products Ltd. v.
  H. C. Sharma and others (1988) 1 SCC 70: 1988 (1) SCR
D 1023; United Bank of India v. Cooks and Kelvey Properties
  (P) Limited (1994) 5 SCC 9: 1994 (1) Suppl. SCR 55; Shama
  Prashant Raje v. Ganpatrao(2000) 7 SCC 522: 2000 (3)
  Suppl. SCR 448; Celina Coelho Pereira (Ms) and others v.
  Ulhas Mahabaleshwar Kholkar and others (2010) 1 SCC 217:
E 2009 (15) SCR 558 and Vinaykishore Punamchand
  Mundhada and another v. Shri Bhumi Kalpataru and others
  (2010) 9 SCC 129: 2010 (9) SCR 963 - relied on.

        Associated Hotels of India Ltd. v. S. B. Sardar Ranjit
F   Singh (1968) 2 SCR 548 - referred to.

      2. In the case at hand, 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
G staff and not for any other purpose. Undisputedly,
  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, defendant No. 2
H resigned from his post and defendant No. 1 accepted the
     S.F. ENGINEER v. METAL BOX INDIA LTD.              1051
                   AND ANR.
same. The trial Judge applied the principle of legitimate       A
inference wtiich was accepted by the appellate Judge. 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          B
required to be directly proven by the landlord in all
circumstances. Defendant No. 2 was given possession
by 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                   c
agreement entered into by the landlord and the tenant,
i.e., the plaintiff and the defendant No.1. Submission of
the plaintiff-appellant was founded on inference made by
the trial Judge that the provident fund, gratuity and other
dues of the defendant No. 2 were withheld in lieu of            D
allowing defendant No. 2 for such occupation. [Paras 24,
25) [1068-B-D; 1069-E-H; 1070-A]

     3. Defendant No. 2 was put in possession by
defendant No. 1 while he was in service. There was an
agreement between defendant No. 2 and defendant No.             E
1. One of the stipulations in the agreement of tenancy
between the plaintiff and defendant No. 1 was that the
tenant was 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.          F
2 was in accord with the terms and conditions of the
agreement entered between the landlord and the tenant
and, therefore, the entry of the defen'dant No. 2 into the
premises was legal. The trial court as well as the appellate
court drew inference that after defendant No.2, the             G
employee, resigned from service and remained in
occupation while he was not entitled to, defendant No. 1
did not take any steps to get-baclythe possession and
the proceedings initiated under the Companies Act were
dismissed for non-prosecution and at a belated stage            H
   1052     SUPREME COURT REPORTS             [2014] 4 S.C.R.


A 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
B 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 filed by defendant
    No.2, i~ fact, was a series of self serving assertions for
c 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
0
    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
E as a consideration or any kind of arrangement. The
    settlement before this Court shows that the defendant
    r;.Jo.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
F defendant No. 2 after deducting overstayal charges. The
    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
G 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. The
    settlement only shows that barring withholding of the
H retiral dues, the employer had not received any thing
      S.F. ENGINEER v. METAL BOX INDIA LTD.              1053
                    AND ANR.
either in cash or in kind or otherwise from the defendant         A
No. 2 and hence, under these circumstances, it is
extremely difficult to hold that the factum of sub-letting
has been established. [Para 27) [1073-E-H; 1074-A-H]

     4. It is well settled that the High Court, in revision, is   8
not entitled to interfere with the findings of the appellate
court, until anc4 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, the trial
court as well as the appellate court has reached their
conclusions on the basis of inferences. The issue of              C
subletting can be established on the· basis of legitimate
inference drawn by a court. 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.           D
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 r~visional jurisdiction by substituting the       E
finding of fact which has been arrived at by the courts
below. Therefore, the High Court has not committed any
illegality in its exercise of revisional jurisdiction under the
obtaining facts and circumstances. [Para 28) [1075-B-F]
                                                                  F
    Renuka Das v. Maya Ganguly and another (2009) 9 SCC
413 and P. John Chandy and Co. (P) Ltd. v. John P. Thomas
(2002) 5 sec 90: 2002 (3) SCR 549 - relied on.
                     Case Law Reference:
                                                                  G
    1998 (1) SCR 711               relied on        Para 12
    2004 (5) Suppl. SCR 303        relied on        Para 12
    (1968) 2 SCR 548               referred to      Para 12
                                                                  H
    1054    SUPREME COURT REPORTS                  [2014] 4 S.C.R.

A       1988 (2) Suppl. SCR 310        relied on        Para 16
        1987 (3) SCR 680               relied on        Para 16
        (1988) 1 sec 383               relied on        Para 17
        1988 (1) SCR 1023              relied on        Para 18
B
        1994 (1) Suppl. SCR 55         relied on        Para 19
        2000 (3) Suppl. SCR 448        relied on         Para 20
        2009 (15) SCR 558              relied on         Para 21
c
        2010 (9) SCR 963               relied on         Para 22
        (2009) 9 sec 413               relied on         Para 28
        2002 (3) SCR 549               relied on         Para 28
D       CIVIL APPELLATE JURISDICTION : Civil Appeal "No.
    4189 of 2014.

        From the Judgment and Order dated 12.08.2010 of the
    High Court of Bombay in CRA No. 355 of 2010.
E
        C.A. Sundaram, Jatin Zaveri, Amit Mehta, Neel Kamal
    Mishra for the Appellant.

         S. Ganesh, J.K. Sethi, Preeti Ramani, Siddharth
    Srivastav, Indra Sawhney for the Respondents.
F
        The Judgment of the Court was delivered by

        DIPAK MISRA, J. 1. Leave granted.

       2. This appeal, by special leave, by the landlord arises out
G 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
H appellant's application under 13(1 )(e) of the Bombay Rent Act,
     S.F. ENGINEER v. METAL BOX INDIA LTD.                     1055
           · AND ANR. [DIPAK MISRA, J.]

1947 for an order for grant of possession.                              A
      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,
                                                                        B
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.
                                                                        c
      4. The case of the plaintiff in the court below was that the
defendant No. 1 was a tenc;int 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           D
executive staff and not for any other purpose. Though the
defendant No. 2 had no right tQ 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          E
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           F
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 ptemises for
the purpose of which the same was let out for continuous period         G
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          H
    1056    SUPREME COURT REPORTS                 [2014) 4 S.C.R.


A 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
B 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
c 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
0
  filed writ petition No. 2134 of 1993 before the High Courf
  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
E 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.

F       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
G 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.
H
     S.F. ENGINEER v. METAL BOX INDIA LTD.                 1057
            AND ANR. [DIPAK MISRA, J.]
    7. The trial Judge initially framed the following issues: -     A

     "(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            B
            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?
                                                                    c
      (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
                                                                    D
            defendants?

      (5)   What decree, order and costs?"

And thereafter framed the following additional issue:-
                                                                    E
    "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        F
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     G
is a ground under Section 1"3(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 wa;; concerned but, regard being had to the language        H
    1058     SUPREME COURT REPORTS                 [2014] 4 S.C.R.


A   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
B   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
c   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. SA 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-
D   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
E   11.5.1982, Exh. SA, 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
F   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
G   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 t-Jo.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
H   been able to establish that the defendant No. 1 had unlawfully
      S.F. ENGINEER v. METAL BOX INDIA LTD.                  1059
             AND ANR. [DIPAK MISRA, J.]
sublet a part of the suit premises, i.e., flat No. 201 and garage     A
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.
                                                                      B
     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          C
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      D
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: -
                                                                      E
    "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,         F
    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         G
    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         H
    1060      SUPREME COURT REPORTS                   [2014] 4 S.C.R.


A   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
8
    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
C   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 lndia 1, Joginder Singh Sodhi v. Amar Kaur and Associated
    Hotels of India Ltd. v. S.B. Sardar Ranjit Singh 3 and took note
D   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
E   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
F   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.
G
          But the conclusions drawn about a jural relationship was
          thoroughly unwarranted and runs in conflict with the very

    1.   (1998) 3 sec 1.
    2.   (2005) 1 sec 31.
H   3.   (1968) 2 SCR 548.
      S.F. ENGINEER v. METAL BOX INDIA LTD.                1061
             AND ANR. [DIPAK MISRA, J.]
    requirement of a consensus. Therefore, the decree of            A
    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          8
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         C
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-       D
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     E
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   F
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      G
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     H
    1062      SUPREME COURT REPORTS                 [2014] 4 S.C.R.


A   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
B   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
c 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
D 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
E 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.
F 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
G   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. Mis. S. Chokesiri
    and Co. 4 , after referring to the decision in Dipak Banerjee v.
H   4.   (1989) 1 sec 19.
       S.F. ENGINEER v. METAL BOX INDIA LTD.                   1063
             .AND ANR. [DIPAK MISRA, J.]
Smt. Lilabati Chakraborty5 and other decisions the Court                A
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        B
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 itis not, unoften, a matter for legitimate      C
inference. Dealing with the issue of burden it held that: -

      "The burden of ma.king 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             D
      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          E
      of the evidence adduced by the party during the trial."

     17. In th is 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
                                                                        F
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        G
       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-
5.   (1987) 4 sec 161.
6.   (1988) 1 sec 383.                                                  H
    1064      SUPREME COURT REPORTS                 [2014] 4 S.C.R.


A        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,
B        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
c        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."

D      18. In M/s. Shalimar Tar Products Ltd. v. H. C. Sharma
  and others7, 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
E to include and also right to exclude others.

       19. In United Bank of India v. Cooks and Kelvey
  Properties (P) Limited8 the question arose whether the
  appellant-Bank had sublet the premises to the union. This Court
F 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
G        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

    1.   (1988) 1 sec 10.
H   8    (1994) s sec 9.
       S.F. ENGINEER v. METAL BOX INDIA LTD.                  1065
              AND ANR. [DIPAK MISRA, J.]
     vacate the premises at any time and they had undertaken           A
     to vacate the premises. It is also elicited in the cross-
     exam ination 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              B
     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 prer!Jises             c
     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     D
     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   E
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            F
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
difficu!t for the landlord to prove, by direct evidence, that the
person to whom the property had been sub-let had paid                  G '
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
9.   (2000) 7 sec 522.                                                 H
    1066      SUPREME COURT REPORTS                   [2014] 4 S.C.R.


A 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
B   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.

C        21. In this regard reference to Celina Coelho Pereira (Ms)
    and others v. U/has Mahabaleshwar Kho/kar 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
D 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
E       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)
F
         (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
G        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
H   10. (2010) 1 sec 217.
      S.F. ENGINEER v. METAL BOX INDIA LTD.                    1067
             AND ANR. [DIPAK MISRA, J.]
another v. Shri Bhumi Kalpataru and others11 it has been held           A
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     B
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,         C
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         D
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                   E
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          F
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          G
of the tenant by retention of control like in Cooks and Kelvey
Properties (P) Limited (su.pra) 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-
11. (201 OJ g sec 12s.                                                  H
    1068     SUPREME COURT REPORTS                   [2014] 4 S.C.R.


A   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
B   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
C   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
D   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
E   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
F   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
G   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
H
      S.F. ENGINEER v. METAL BOX INDIA LTD.                   1069
            AND ANR. [DIPAK MISRA, J.]
trial Judge as well as the appellate court has drawn inferences        A
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         B
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           c
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                  D
consideration whether the High Court was justified in unsettling
the conclusion arrived at by the courts below by taking 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            E
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      F
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
                                                                       G
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
                                                                       H
    1070     SUPREME COURT REPORTS                  [2014] 4 S.C.R.


A   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
B   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
C        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:-
         "ln February, 1988, there was a lock-out in defendant No.
D        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
E        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
F
         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
G        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: -
H        "This defendant thereafter approached the Plaintiffs' office
      S.F. ENGINEER v. METAL BOX INDIA LTD.                   1071
             AND ANR. [DIPAK MISRA, J.]
    to tender the rent in respect of part of suit premises.            A
    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          B
    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
            The defendant No. 1 has been declared as a sick
                                                                       c
     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       D
     premises t.o the Plaintiffs. ·
           The residents of Marlow Building formed Marlow
     Residents'. Welfare .Fund. This defendant has also
     contributed towards the said Welfare Fund since its               E
     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
                                                                       F
     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                   G
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                 H
    1072          SUPREME COURT REPORTS              [2014] 4 S.C.R.


A   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
B                  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
c                  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.
D          (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
E                  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
F                  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;
G                  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
H                  moving appropriate applications by the party
      S.F. ENGINEER v. METAL BOX INDIA LTD.                 1073
             AND ANR. [DIPAK MISRA, J.]
            concerned. Two suits, namely, RAE Suit No. 45/           A
            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        B
            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."                                           C
     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     D
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.          E
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         F
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    G
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
                                                                     H
    1074      SUPREME COURT REPORTS                      [2014] 4 S.C.R.

                                                     I
A   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
B   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-
e   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 asseveratiqn that he had
    negotiated with the landlord to purchase the property to become
    the owner. The High Court has noted that the tenant, defendant
0
    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
E   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
F   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
G   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
H   sub-letting has been established.
       S.F. ENGINEER v. METAL BOX INDIA LTD.                      1075
              AND ANR. [DIPAK MISRA, J.]
        28. At this juncture, we are obliged to deal with the              A
  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 Oas v. Maya Ganguly and another12 wherein it has               B
  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        C
  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           D
   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            E
  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 Jhat 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.           F
  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.
 Bibhuti. Bhushan Bose                                 Appeal dimissed.
 12. (2009) 9 sec 413.
 13. (2002) 5 sec 90.