Holding

The occupation of the shop by the son‑in‑law without the landlord's written consent constitutes sub‑letting within the meaning of Section 14(1)(b) read with Section 14(4) of the Delhi Rent Control Act, 1958.

Summary

The landlord, Munshi Lal, sought eviction of his tenant, Hakim Rai (deceased) and his successors, alleging that the tenant had sub-let a Kiraria shop to his son‑in‑law Raj Kumar under a partnership deed without the landlord's written consent. The Rent Controller held the partnership to be a ruse and that the son‑in‑law was in exclusive possession, constituting sub‑letting. The Appellate Authority and the Delhi High Court disagreed, holding that because the sub‑tenant was a close relative there was no parting of possession and thus no sub‑letting. The Supreme Court examined Sections 14(1)(b) and 14(4) of the Delhi Rent Control Act, 1958 and held that written consent of the landlord is a mandatory pre‑condition even when a partnership is claimed, and that the arrangement was a sub‑letting within the meaning of the Act. Consequently, the Court set aside the High Court order, ordered eviction of the respondents, and directed payment of rent at a higher rate until vacated.

Issues considered

Whether the occupation of the premises by the son‑in‑law under a partnership deed amounts to sub‑letting under Section 14(1)(b) of the Delhi Rent Control Act, 1958.
Whether the relationship of a close relative (son‑in‑law) precludes the finding of parting of possession and sub‑letting.
Whether written consent of the landlord is required even when the tenant claims a genuine partnership, in view of Section 14(4).

Legislation cited

Delhi Rent Control Act, 1958s. 14(1)(b), s. 14(2), s. 14(4), s. 15(1)
Transfer of Property Act, 1882s. 106

Subjects

sub‑lettingDelhi Rent Control Actpartnership deedlandlord consentevictiontenancysham partnershipclose relative

Judgment

(20111 1 .s:c.R. 594

A MUNSHI LAL
v.
SMT. SANTOSH & ORS.
(Civil Appeal No.1327 of2017)
B FEBRUARY 01, 2017
[S. A. BOBDE AND L. NAGESWARA RAO, JJ.)
Delhi Rent ControlAct,1958- s. 14(1}(b) and 14(4) - On the
ground ofsub-letting of tenanted premises -Alleging that the tenant
had sub-let the tenanted shop to his son-in-law _: Rent-Contfoller
c
held that the son-in-law had been put in exclusive possession of the
tenanted shop in pursuance of a shain partnership deed and hence
liable to be evicted on the ground of sub-letting -Appellate Authority
held that since the alleged sub-tenant was a close relative i.e. son-
in-law of the tenant, there was no parting of possession and hence
D no sub-letting - High Court upheld the view of the appellate
authority -: On appeal, held: In view of clause (b)of the prov!so to
s.14(1), before a tenant can sub-let, assign or part with the
. possession of anypart of the premises or the whole, it must be
preceded by the consent in writing from t.he landlord - The
requirement of obtaining the consent in writing of the landlord is
E
retained as a pre-requisite even for the purposes of sub-section (4)
of s.14 - Thus, in either case, where a person has been inducted
genuinely as a partner or where the partnership is a ruse, the
requirement of consent in writing is necessary - Jn the present case,
there is no evidence for tenant having obtained consent in writing
F for the landlord before allowing the son-in-law to occupy the
premises in pursuance of the partnership deed - Therefore, the
occupation of the tenanted shop by son-in-law of the tenant amounts
to a sub-letting within the meaning of s.14(1) (b) r!w. s.14(4) and
hence tenants are liable for eviction - Appeal disposed of - Rent-
control and Eviction.
Smt. Krishnawati v. Shri Hans [?.aj 1974 (2) SCR 524 : ·
(1974) 1 sec 289 - referred . . to .
Case Law Reference
1974 (2) SCR 524 referred to Para8
H
594
MUNSHI LAL v. SMT. SANTOSH & ORS. 595

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1327 A
of2017.
From the Judgment and Order dated 05.12.2011 of the High Court
of Delhi in CM (M) No. 1574 of2010.
Dhruv Mehta, Sr. Adv., Manoj C. Mishra, Hrishikesh Chitaley,
B
Advs. for the Appellant.
Rauf Rahim, Mrs. Poulami Das Dey, Advs. for the Respondents.
The following Order of the Court was delivered
ORDER
c
1. Leave granted. ·
2. This appeal has been filed by the landlord against the judgment
and order of the High Court of Delhi in CM (M) No. 1574of2010. The
High Court held that the respondent-tenant, Hakim Rai had not sub-let
the premises to his son-in-law, Raj Kumar in pursuance of a partnership
D
deed dated 20.05.1983 entered into between them.
3. Hakim Rai died and was substituted by respondent Nos.I to 5
i.e. his widow and four daughters. The respondent No. I, Smt. Sumitra
~ Devi, was deleted from the array of parties upon her de'ath.

4. The landlord sought the eviction of the tenant'on the ground· E
that the tenant had sub-let the premises to his son-in-law in contravention. ·
of Section 14 of the Delhi Rent Control Act, 1958 (hereinafter referred.
to as 'the Act'). The landlord had also sought eviction of the tenant on
the ground of arrears of rent. As of now the only ground that stitvives is .
that of sub-letting the tenant having paid off the arrears according to ·
~ F

5. The tenancy was in respect of a Kiraria shop at the monthly
rent of RS. 501-. The tenant w~s an old .and infirm man, incapable of
running the business on his own. It has been found.that.the son-in-law .
sat in the shop and conducted business exclus.ively therefrom. The dispute
was whether he was doing business along .with his fatber,in-law or G
independent ofbim, i.e. whether be was doing business exclusively behind
the fa~ade of a partnership or as a genuine partner. It is an uncontroverted
fact before us that the landlord's permission in writing was not obtained
·before the tenant bad allowed the alleged sub-tenant to occupy the shop.
H
596 SUPREME COURT REPORTS [2017] 1 S.C.R.

A 6. The Rent Controller found that the partnership was a ruse and
that it was the son-in-law who was in exclusive possession of the shop
and running the business on his own. No books of accounts were
maintai"ned, no profit and loss accounts were maintained, and no stock
registers concerning the goods in the shop were maintained, as required
by the partnership deed. Moreover, the tenancy rights with respect to
B
·the lease of the shop were found to have been made property of the
partnership finn. The evidence of the widow of the tenant who inherited
the tenanted premises and Claimed to be running the business along with
her son-in-la·.v was held incredible. She was unable to give any details
of the amount invested in the shop, or any details of profit and loss.
c Thus, the Rent Controller clearly found that the son-in-law had been put
in possession of the shop in pursuance of a sham partnership deed and
was not merely assisting in the shop as a son-in-law.
7. With regard to the arrears ofrent, it was an undisputed position
that the tenant had been granted the benefit of Section 14(2) of the Act,
D a& it was a case of first default and the tenant had complied with the
order passed under Section 15( 1) of the Act.
8. The landlord contested the appeal on the only remaining ground
of sub-tenancy. The Appellate Authority observed that it could not be
said that there was a parting of possession if an alleged sub-tenant was
E closely related to a tenant, or if he was a person whose assistance was
a matter ofnecessity forthe survival of the business of the tenant. Thus,
since the alleged sub-tenant was a close relative i.e. a son-in-law of the
tenant, there was no parting of possession and therefore no sub-letting.
The appellate authority relied on Smt. Krishnawati Vs. Shri Hans Raj
F (1974) I SCC 289 in which it was held that in ar. arrangement where
the premises was rented by the husband, and the wife was allowed to
carry out business in a part of the premises, would not amount to sub-
letting.
9. The High Court concurred with the finding of the appellate
G authority that the son-in-law had come to Delhi to assist his father-in-
law in business for which a partnership deed had been executed between
them, and he resided at the same premises as his father-in-law. The
partnership was a genuine partnership as it could not be said that it had
been entered into for the purpose of subletting. The father-in-law had
not in any manner given the possession of the shop in question exclusively
H
MUNSHI LAL v. SMT. SANTOSH & ORS. 597

to his son-in-law thereby divesting himself ofit. Thus the mere occupation A
of his son-in-law was not sufficient to establish a case of subletting.
I 0. Having heard the learned counsels for both parties, we find
that a significant fact which has not been controverted by the respondents
has been completely overlooked in the proceedings of the courts below.
That fact is that no consent in writing was obtained from the landlord B
before the so called partnership was entered into between the tenant
and the sub-tenant, and before the sub-tenant was allowed to occupy
the premises.
11. Section 14(1) of the Act reads as under:-
c
"(14)(1) Notwithstanding anything to the contrary contained in
any other law or contract, no order or decree for the recovery of
possession ofany premises shall be made by any court or Controller
in favour of the landlord against a tenant:
Provided that the Controller may, on an application made to him in
D
the prescribed manner, make an, order for the recovery of
possession of the premises on one or more of the following grounds
only, namely:-
(a) That the tenant has neither paid nor tendered the whole of the
arrears of the rent legally recoverable from him within two months
E
of the date on which a notice of demand for the arrears of rent
has been served on him by the landlord in the manner provided in
section I 06 of the Transfer of Property Act, 1882;
(b) that the tenant has, on or after the 9"' day ofJune, 1952, sub-
let, assigned or otherwise parted with the possession of the whole
F
or any part of the premises without obtaining the consent in writing
of the landlord''.
Clause (b) of the proviso to sub-section (1) provides for the eviction of e
tenant who has sub-let, assigned or 0th~rwise parted with the possession
of the premises without obtaining th~ consent in writing of the landlord.
G
Section 14 (4) reads as follows:-
.,
"( 14)(4 )For the purposes ofclause (b) 'Jf the proviso to sub-section
(1 ), any premises which have been let for being used for the
purposes of business or profession shall be deemed to have been
sub-let by the tenant, if the Controller is satisfied that the tenant H'
598 . SUPREME COURT REPORTS [2017] I S.C.R.

A without obtaining the consent in writing of the landlord has, after
the l 6'h day of August, 1958, allowed any person to occupy the
whole or any part of the premises ostensibly on the ground that
such person is a partner of the tenant in the business or profession
but really for the purpose of sub-letting such premises to that
person."
B
This sub-section provides that if a person is allowed to occupy the
premises ostensibly as a partner of the tenant but really for the purpose
of sub-letting it, suc;h an arrangement would be deemed to be sub-letting.
Therefore, ifthe tenanthas allowed any person to occupy the whole or
c ·any part of the premises; actually for the purpose of sub-letting but
· speciously by entering into a partnership with him, such an arrangement
shall be deemed to be subletting. In other words, subletting is not permitted
by camouflaging it as a partnership.
The combined reading of clause (b) of the proviso to Section 14(1) read
D with Section 14(4) makes it clear that before a tenant can sub-let, assign"
or part with the possession of any part of the premises br the whole, it
must be preceded by the consent in writing from the landlord. In other
words, the requirement of obtaining the consent in writing of the landlord
is retained as a pre-requisite even for the purpose~ of sub-section (4).
What ·is of importance is; in either case whether a person has been .
E inducted genuinely as a partner and therefore allowed to occupy .the
premises or whether the partnership is a ruse, the requirei:nent of consent
in writing as in sub-section (1) is retained. In the present case, there is
no evidence that the tenant obtained the consent in. writing from the
landford before: allowing the son-in-law to occupy the premises in
F pursuance of the Partnership deed.
12. We are satisfied that the respondents-tenants have been founi!
to have inducted the son-in-law·as a sub-tenant for the purpose of doing
business under a partnership agreement. The arrangement between Hakim
Rai and his son-in-law Raj Kumar was not a casual arrangement wherein
G the latter was requested to conduct business at the shop because the
former was old and infirn'l. There was no need of entering into a·
partnership agreement .in that case.
13. We find upon scrutiny of the evidence in this case that the
learned Rent Controller was right in coming to the conclusion that the
parties .had not acted on the partnership wliich was shown, and that
H
MUNSHI LAL v. SMT. SANTOSH & ORS. . ·599

there was a parting of possession of the premises in which the son-in- A
law was allowed to occupy the premises and carry out business
exclusively. There is no evidence on record that the account books were
maintained and the profits were shared between the parties as partners.
The son:it:!-law had aqcepted that he was carrying out a business of sale
of merchandise from the shop.
.B
14. It is not possible for us to appreciate the view of the appellate
· authority that there would be no parting of possession if the alleged sub-
tenant is a close relative like a son-in-la,w, In this case; the relationstip
is not like that of a spouse being allpwedto carry qut a business in. the
same house. The relationship is of a son-in-Jaw aqd father-in-law who
had entered into a partnership agreement..
c
IS. In any case, there was a failure to obtain consent in writing
from the appellants which is a clear pre-requisite for allowing any person
to occupy the premises. In other words, a tenant cannot be allowed to
employ a subterfuge and permit another person to occupy the premises
: by claiming that he is a partner when the real intention is to sublet, without D
obtaining the consent in writing of the landlord.
16. In these circumstances, we find that the occupation of the
shop by Raj Kumar amounts to a sub-letting within the meaning of Section
14( 1) (b) read with Section 14(4) of the Act and the respondents are
liable for eviction. E

17. We accordingly, set aside the ord~r of the High Court and
direct that the respondents shall be evicted. However, time to v.acate.
the scheduled premises is granted till 31" October, 2017 on filing the
usual .undertaking by them within four weeks from· today. Till such a
time, the rent atthe rate of Rs. 1-0,000/- per month shall be paid by the F
respondents to the appellant.
18. The appeal is disposed of with above observations and
directions.

G
• Kalpana K Tripathy Appeal dipsosed of.