Holding

Allowing the club to occupy the premises amounted to parting with possession under Section 13(1)(e), making the tenant liable for eviction, and the belated documents were not admissible.

Summary

The appellant, Roop Chand, leased a building from Gopi Chand Thalia with a covenant not to sublet. He allowed the Lokpriya Social Club to occupy part of the premises for recreational activities, claiming he retained exclusive possession and received no rent. The landlord sued for eviction on the ground of subletting and conversion of use. While the trial court held there was no subletting, the appellate and High Courts found that the tenant had "parted with possession" of a portion of the premises, which under Section 13(1)(e) of the Rajasthan Premises (Control of Rent & Eviction) Act, 1950 amounts to subletting, and ordered eviction. The landlord later sought to introduce the club’s audited reports as additional evidence; the Supreme Court dismissed this request, noting the documents could have been produced earlier, and upheld the earlier finding that the tenant had part with possession, dismissing the appeal.

Issues considered

Whether allowing a social club to use part of the leased premises without rent constitutes "parting with possession" under Section 13(1)(e) of the Rajasthan Premises (Control of Rent & Eviction) Act, 1950, thereby amounting to subletting.
Whether the tenant is liable for eviction despite the absence of rent received from the club.
Whether additional documents (auditor's reports, balance sheets) can be admitted as evidence at the appellate stage under Order 41 Rule 27 of the CPC.

Legislation cited

Code of Civil Procedure, 1908s. Order 41 Rule 27
Companies Act, 1956s. 143, s. 144, s. 146, s. 163, s. 20, s. 303
Rajasthan Premises (Control of Rent & Eviction) Act, 1950s. 13(1)(e)

Subjects

sublettingpossessionleaseevictionRajasthan Premises Actlicence vs leaseadditional evidenceOrder 41 Rule 27Companies Actregistered office

Judgment

A ROOP CHAND
v.
GOPI CHAND THALIA

MARCH 29, 1989

B [R.S. PATHAK CJ AND S. NATARAJAN, J.]

Rajasthan Premises (Control of Rent & Eviction) Act, 1950:
Section 13( J)(e)-Parting with possession; whether user by a Social club
amounts to parting with possession-Permission to file additional
documents in this Court-No satisfactory explanation for not filing in
Courts below-Hence no justification.
c
The appellant/tenant took on lease a building from the respon-
dent. In the Deed of Rent there was an express provision that the tenant 1
should not sublet the premises to anyone. However, shortly thereafter a
social club came to be opened i_n the premises, where members played
D cards, chess etc. every evening till about midnight. The respondent
thereupon filed· a suit against the tenant seeking his eviction inter alia on
the ground of sub-letting the premises contrary to the terms of the lease
deed. The tenant admitted the factum of the opening of the club but
contended that he had neither sublet the premises for rent nor other-
wise parted with its possession to the club. Y-
E
The Trial Court held that the respondent had failed to prove that
the appellant had sublet the premises to the Club for rent, and that the ,.
evidence only warranted an inference that the appellant had allowed the
club to use the premises as a licencee and as such, the appellant was not
liatle to be evicted. The Appellate Court held that the evidence did not
j-
F establish any subletting of the premises for rent, but nevertheless there
were adequate materials to hold that the appellant had parted with the
possession of the premises in 1'avour of the club and such parting of
.,
possession would amount to subletting within the meaning of section
13(l)(e) of the Rajasthan Premises (Control of Rent & Eviction) Act,
1950 and as such the appellant was liable to be evicted. Consequently,
G the Appellate Court passed a decree for eviction. The High Court
dismissed the second appeal of the appellant. !---

After the filing of the appeal in this Court the respondent filed a
civil miscellaneous petition seeking permission to produce certain
documents in the nature of the Auditor's reports ~nd the Managing
H Committee's reports of the club as additional evidence to establish that
184
ROOP CHAND v. GOP! CHAND 185

there existed a stipulation for the payment of rent by the club to the
A
appellant, and the club was bound to pay rent to the appellant for the
user of the premises, but such payment was being deferred in view of the
pendency of the eviction suit between the respondent and the appellant.

Dismissing the appeal and the civil miscellaneous petition, the
Court, B
l

• HELD: (1) On a reading of sub-clause (e) of Section 13(1) it is
seen that a tenant will render himself liable for eviction if he has

- "assigned, sublet or otherwise parted with the possession of, the whole
or any part of the premises without the permission of landlord."
Consequently, even if a tenant parts with possession of the whole or
any part of the premises without assigning or subletting the pre- c
mises, he would still be liable to be evicted from the premises under
the Act. If from this perspective the user of the premises by the club
is examined, it can certainly be held that the appellant had parted with
the possession of the premises as envisaged in clause (e) of sub-section
(l)ofsection 13. [I88E-G] D

(2) There is no evidence to show that the appellant had at
any time exercised his right to exclusive possession and kept the
premises locked and denied the members of the club entry to the
premises. [I88H; 189A]
E

- (3) Section 146 bf the Companies Act enjoins every company to
have a registered office and certain requirements of the Companies Act
have to be complied with by the club by virtue of its registered office
being situated in the leased premises. The appellant cannot prevent the
club from performing its statutory duties so long as the club has its
registered office in the premises. [l89B, DI F
•i
Smt. Rajbir Kaur v. Mis. S. Chokesiri & Co., JT 1988(3) SC 593,
distinguished.

(4) The additional documents could have been obtained and
tiled before the Trial Court, the Appellate Court or the High Court G
and no satisfactory explanation has been offered for having failed to
do so. Hence there is no justification to allow the civil miscellaneous
petition. [l9IC]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 855
of 1978. H
186 SUPREME COURT REPORTS [1989] 2 S.C.R.

From the Judgment and Order dated 21.3.1978 of the Rajasthan
A
High Court in S.B. Civil Second Appeal No. 59 of 1978.

Tapas Ray, Sushi! Kumar Jain, Sudhanshu Atrey and L.C.
Agrawalas for the Appellant.

B G.L. Sanghi, Parmod Dayal, A.O. Sangar, Ajay K. Jain and
K.K. Jain for the Respondent.

The Judgment of the Court was delivered by

NATARAJAN, J. This appeal by special leave is by a tenallt and
is directed against the judgment of the High Court of Rajasthan in
-
c Civil Second Appeal No. 59 of 1978 confirming the judgment of the
Appellate Court whereby the appellant was held liable to be evicted · -1;
from the premises leased to him by the respondent on the ground of
having parted with the possession of the premises.

D C.M.P. No. 906 of 1973 has been filed by the respondent under
Order 41 Rule 27 C.P.C. for certain documents being received as
additional evidence.

In so far as the facts .are concerned, there is no controversy
whatever. In January 1963, the appellant took on lease from the
E respondent a building situate in Rasla Ka Gheewalan in the city of
Jaipur. In the Deed of Rent executed by the appellant, there was an
express provision that he should not sublet the premises to anyone.
However, in March 1968, a social club known as the Lokpriya Social
Club came to be opened in the premises and the members of the club
began using the premises for playing cards, chopar, chess etc. every
F evening till about midnight or even till 1 a.m. The functioning of the
club in the premises led to the respondent filing a suit against the
appellant seeking his eviction on two grounds viz. (1) sub-letting the
premises contrary to the terms of the lease deed and (2) conversion of
the user of the premises from residential to non-residential purposes.
As it has been concurrently held by the first two courts that the
G premises had not been leased for residential purposes, no further
advertance is called for to the second ground on which the eviction was
sought for.

As regards the first ground, the appellant did not dispute but on
the other hand admitted the factum of the Lokpriya Social Club being
H opened in the leased premises in March 1968 and the club functioning
ROOP CHAND v. GOP! CHAND {NATARAJAN, J.J 187
"Y in the premises since then. He however contened that he had neither
A
sublet for rent nor otherwise parted with the possession of the
premises to the club. His case was that he continued to have possession
of the premises for doing business in gold jewellery and cloth on com-
mission basis in a small portion of the building but being the founder of
the club, he had provided the club a room to have its office and a hall
' for the club members to assemble and play games such as cards, chess, B
+ chopar etc .
• In the trial of the suit, the respondent examined himself and an

- Assistant in the office of the Registrar of Companies as witnesses on
his side. The appellant examined himself and three other witnesses on
his side to substantiate his contentions.
c
'}--- The Trial Court held that the respondent had failed to prove that
the appellant had sublet the premises to the Lokpriya Social Club for
rent and that the evidence only warranted an inference that the appel-
Ian! had allowed the club to use the premises as a licencee and as such,
the appellant was not liable to be evicted. The Appe)late Court, while D
concurring with the Trial Court that the evidence did not establish any
subletting of the premises for rent, nevertheless held that there were
adequate materials to hold that the appellant had parted with the
>I possession of the premises in favour of the club and such parting of
possession would amount to subleting within the meaning of the Act
and as such the appellant was liable to be evicted. Consequently, the E
Appellate Court passed a decree for eviction against the appellant.
The Second Appeal to the High Court by the appellant did not meet
with success and hence he has approached this Court by way of appeal
by special leave .
..-\
' Since the first ground on which eviction was sought for was the F
~ subletting of the premises to the Lokpriya Social Club, the question
whether the appellant was receiving any rent or not from the club had
loomed large in the proceedings before the Trial Court and the Appel-
late Court. The appellant's categoric stand that he was not receiving
any rent from the Club and his permitting the club to use the premises
A,
was not for any monetary return could not be dislodged by the respon- G
dent by specific materials. However, after the appellant had filed this
appeal, the respondent has been able to obtain copies of the Managing
Committee's reports, balance sheets and autitor's reports of the club
for the years 1968 to 1976. It is relevant to mention here that the club
has been registered as a limited company under the Indian Companies
Act, 1956. As a registered company, it had to prepare audited balance H
188 SUPREME COURT REPORTS 11989] 2 S.C.R.

sheets every year and present the same together with the Auditor's
A
Report to the members of the club and have the same approved. The
respondent seeks permission of the Court to have the Managing
Committee's reports, the Auditor's Reports and the balance sheets
filed as additional evidence in the appeal and for that purpose he has
filed CMP No. 906/79 under Order 41 Rule 27 C.P.C. The learned
B counsel for the appellant vehemently opposed the filing of additional
documents by the respondent as additional evidence on the ground
these documents ought to have been filed before the trial court or the
Appellate Court and hence they cannot be filed now. It was also
contended that if additional documents are received in evidence at this
stage, the appellant will have no opportunity to adduce contra·
-
evidence. We will take up the question whether CMP No. 906/79
c should be allowed or not for consideration later. We will first examine
whether even without these docullll'nts the order of eviction passed by
the Appellate Court and confirmed by the High Court can be sustained
or not.

D It may be recalled that the decree for eviction against the appel-
lant has been passed on the ground that though subletting of the
premises for rent has not been proved, yet the appellant must be
held to have parted with possession of a· portion of the premises to the
club and such parting with possession would attract Section 13(l)(e) of
the Rajasthan Premises (Control of Rent & Eviction) Act, 1950 (for
E short the Act). On a reading of sub-clause(e) of Section 13(1), it is
seen that a tenant will render himself liable for eviction if he has
"assigned, sublet or otherwise parted with the possession of, the whole
or any part of the premises without the permission of landlord."
Consequently even if a tenant parts with possession of the whole or
any part of the premises without assigning or subletting the premises,
F he would still be liable to be evicted from the premises under the Act.
If from this perspective, the user of the premises by the club is
examined, it can certainly be held that the appellant had parted with
the possession of the premises as envisaged in clause (e) of sub-section
1 of Section 13. This conclusion is warranted by several factors.
Admittedly, when the club began to function in the leased premises, a
G name board carrying the n.ame of the Club came to be exhibited in the
premises. It is also admitted that the members of the club assemble at
the premises everyday and play cards and other indoor games from
evening till about midnight. Though the appellant would say that the
club members cannot have access to the premises unless he or in his
absence his brother or son opens the premises, there is no evidence to
H show that the appellant had at any time exercised his right to exclusive
ROOP CHAND v. GOP! CHAND [NATARAJAN, J.] 189
-y possession and kept the premises locked and denied the members of
the club entry to the premises. That apart there is a significant fact A
which has escaped the notice of the Appellate Court and the High
Court viz that the club has its registered office at the leased premises.
Section 146 of the Indian Companies Act enjoins every company to
have a registered office to which all communications and notices may
be addressed. Once a company has a registered office it is bound to B
t comply with several provisions of the Companies Act, viz. (a) the
~ register of members is to be kept there (Section 163; (b) the right of
inspection has to take place there (Section 163); (c) the register of

- directions, etc., is also to be kept there (Section 303): (d) the account
books are to be maintained there unless the directors decide otherwise
(Section 20): (e) the register of mortgages and charges and copies of
registered documents are also to be kept there (Section 143); and the c
r- right of inspection of them is to be exercised there (Section 144). (f)
service of documents should be effected there. These requirements of
the Act have to be complied with by the club by virtue of its registered
office being situated in the leased premises. The appellant cannot
prevent the club from performing its statutory duties so long as the D
club has its registered office in the premises. Hence this factor also
warrants the view that the appellant had parted with possession of the
major portion of the premi,:es to the club. In such circumstances we
see no merit in the contention of the appellant that the user of a
>/ portion of the premises by the club is only of a permissive nature and
that there was no parting with possession of the premises to the club. E

- The Appellate Court and the High Court were therefore, right in
holding that the user of the premises by the club would amount to the
appellant having parted with possession of a portion of the premises"
as contemplated under Section 13(1)(e) of the Act.
·---' \
Learned counsel for the appellant referred us to Smt. Rajbir F
d Kaur & Anr. v. M/s. S. Chokesiri & Co., JT 19,88 3 SC 593 and argued
that even if the appellant had conferred rights of exclusive possession
to the club over a portion of the leased premises, the club would not be
a sub-lessee but only a licencee of the appellant. We are unable to
accept this argument because of various factors. In the first place, in
.J,, Smt. Rajbir Kaur, (supra) it was clearly found that in the documents G
which had been brought about between the parties. the occupants
were inducted into possession only as licencees and not as lessees.
Secondly, the case arose under the East Punjab Rent Restriction Act
in which Section 13 refers only to a tenant transferring his right under
the lease or subletting the entire building or any portion thereof
whereas in Section 13(1)(e) of the Rajasthan Premises (Control H

,,
190 SUPREME COURT REPORTS [1989] 2 S.C.R.

of Rent and Eviction) Act with which Wf} are concerned, there is
A
reference to a tenant assigning, subletting or otherwise parting with
the possession of the whole or any part of the premises without the
permission of the landlord. In such circumstances, the judgment in
· Smt. Rajbir Kaur & Anr., (supra) cannot be of any avail to the
appellant.
B
Coming now to C.M.P. No. 906/79 filed by the respondent for f
receiving certain documents as additional evidence, we have already J
stated that these documents consist of the reports of the Managing
Committee, the balance sheets and the auditor's reports for the years
1968 to 1976. Though there are as many as 25 documents filed along
with the application they really constitute 8 sets of documents pertain-
c ing to the period 1963 to 1976 except for the year 1969. The purpose of
filing these documents is to show that in each of the years in question it ~
has been stated in the auditor's report that the rent of the club
premises has not been determined and provided for as the matter is
under litigation. Mr. Sanghi, learned counsel for the respondent
D submitted that the explanation given in the auditor's reports for provi-
sion not having been made in the balance sheet for payment of rent by
the club was not because the club had been allowed free user of the
premises without payment of rent but because there was litigation
regarding the user of the premises by the club. The further argument y_
was that the auditor's report clearly showed that the club was bound to 1
E pay rent to the appellant for the user of the premises but such payment
was being deferred in view of the pendency of the eviction suit
between the respondent and the appellant. Mr. Sanghi stated that
there cannot be any objection to the additional documents being
received in evidence because they were reports and balance-sheets
submitted by the club, of which the appellant is a member, to the >--
-
F Registrar of Companies and hence there is no question of the appellant . (
being taken by surprise by the contents of the documents. On th~ other II'
hand, the learned counsel for the appellant vehemently contended that
the respondent is not entitled under Jaw to file documents by way of
additional evidence at this belated stage of matters because the
documents were in existence even when the parties went to trial before
G the Trial Court and as such the respondent should have acted
diligently and either summoned for the documents from the office of l
the Registrar of Companies or obtained copies of them and filed them
in Court during the trial or atleast when the matter was before the first
Appellate Court.

H On a consideration of the matter we think the objections raised
ROOP CHAND v. GOP! CHAND [NATARAJAN, J.J 191
y' by the appellant's counsel for the filing of additional evidence by the A
respondent in the appeal proceedings before us merjts acceptance. It
is true that the documents sought to be filed by way of additional
evidence are indisputably the audited balance sheets and reportes sub-
mitted by the club but even so the fact remains that all the documents
could have been obtained and filed by the respondent before the Trial
Court itself since the judgment had been rendered by the Trial Court B
r only on 22.2.1977. Even if the respondent was not able to file the
~ documents before the Trial Court, he could have filed the documents

-
before the Appellate Court and sought its permission to file them as
additional evidence. Even before the High Court there was no attempt
in this behalf. No satisfactory explanation has been offered by the
respondent for having failed to produce the documents before the c
Courts below or the High Court. In such circumstances, we see no
'r-. justification to allow C.M.P. No. 906/79 a;id permit the respodent to
file the documents in question as additiohal evidence in the proceed-
ings. Accordingly C.M.P. No. 906/79 is dismissed.

In spite of the dismissal of C.M.P. No. 906/79, since we have D
sustained the view taken by the first Appellate Court and the High
Court that the appellant had parted with possession of a major portion
of the leased premises in favour of the Lokpriya Social Club and such
parting with possession would attract the operation of Section 13(1)(e)
>i of the Act, we find no merit in the appeal and accordingly it will stand
dismissed. The appellant is, ho"Cever, given three months time from E

- today to vacate and deliver vacant possession of the premises to the
respondent subject to his filing an undertaking in the usual terms
within a period of four weeks from today. There will be no order as to
costs.

..
--"
R.S.S. Appeal & Petition dismissed . F