/2023 INSC 0200/ 1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. 2855­2856 OF 2011 Yuvraj @ Munna Pralhad Jagdale & Ors.     ...Appellants Versus Janardan Subajirao Wide        ...Respondent WITH I.A Nos. 89837­89838 of 2021 & I.A Nos. 38142­38143 of 2023 J U D G M E N T SANJAY KUMAR, J. 1. These   civil   appeals   arise   out   of   the   judgment   dated 03.12.2008   of   the   Bombay   High   Court,   allowing   Writ   Petition   No. 1067   of   1992,   and   its   later   judgment   dated   09.09.2009,   dismissing Review Petition No. 75 of 2009 in W.P No. 1067 of 1992, respectively. In turn, W.P No. 1067 of 1992 filed by Janardhan Subajirao Wide, the 2 respondent herein, arose out of the judgment dated 21.12.1991 of the learned 13 th  Additional District Judge, Pune, in Civil Appeal No. 1030 of   1987,   confirming   the   judgment   dated   30.09.1987   of   the   learned II Additional S.C. Judge, Pune, in C.S. No. 386 of 1985. 2. C.S. No. 386 of 1985 was filed by late Ramachandra Maruti Jagadale,   plaintiff   No.2,   and   his   wife,   late   Sou.   Rangubai   Jagadale, plaintiff   No.1,   the   predecessors­in­title   of   the   appellants   herein,   for recovery of possession of the leased premises bearing C.T.S No. 1873 at Bhamburda, Pune, from the tenant, Janardhan Subajirao Wide. By judgment   dated   30.09.1987,   the   Trial   Court   decreed   their   suit, holding   them   entitled   to   claim   eviction   of   the   tenant   under   Section 13(1)(e)   of   the   Bombay   Rents,   Hotel   and   Lodging   House   Rates (Control)   Act,   1947   (for   brevity,   ‘the   Act   of   1947’).   Two   months’   time was   granted   to   the   tenant   to   vacate   the   premises.   This   judgment   of the Trial Court was confirmed in appeal by the learned 13 th  Additional District Judge, Pune, vide judgment dated 21.12.1991. 3. It   is   against   these   judgments   that   the   tenant,   viz.,   the respondent   herein,   filed   W.P.   No.   1067   of   1992   before   the   Bombay High Court. By its judgment dated 03.12.2008, the High Court opined that  a case of  sub­tenancy  was  not  made  out,  warranting  eviction  of 3 the   tenant   on   that   ground,   and   quashed   the   decree   of   eviction/ possession.   In   consequence,   C.S.   No.   386   of   1985   was   dismissed. Aggrieved thereby, the legal representatives of the deceased plaintiffs, who were on record in the writ petition, filed Review Petition No. 75 of 2009.   However,   by   its   judgment   dated   09.09.2009,   the   High   Court reiterated its finding that the tenant had never parted with possession of   the   leased   premises   and   had   never   left   the   premises,   being   a partner. Holding so, the High Court concluded that there was no error on the face of the record and dismissed the review petition. Presently, these two judgments are under appeal. 4. While   so,   the   tenant,   Janardhan   Subajirao   Wide,   the   sole respondent  in  these appeals,  expired on  16.02.2018. Thereupon,  the appellants   filed   I.A.   No.   89838   of   2021   seeking   condonation   of   the delay of 1169 days in taking steps and I.A. No. 89837 of 2021 to set aside the abatement of the appeals and to permit substitution of the legal   heirs   of   the   deceased   respondent.   Notice   having   been   ordered thereon,   Mr.   Sudhanshu   S.   Choudhari,   learned   counsel,   who   had earlier   appeared   for   the   deceased   respondent,   e­filed   his vakalatnama/appearance   on   behalf   of   the   legal   representatives   on 05.11.2022.   No counter  was  filed  by  him   opposing  the  applications. Sufficient   cause  having   been  shown,   delay  in   taking   necessary   steps 4 is   condoned;   abatement   of   the   appeals   is   set   aside;   and   legal representatives   of   the   deceased   sole   respondent   are   brought   on record.   Registry   shall   make   necessary   changes   in   the   cause   titles   in both the appeals before issuing certified copies of this judgment. 5. Heard Mr. Vinay Navare, learned senior counsel, appearing for   the   appellants;   and   Mr.   Sudhanshu   S.   Choudhari,   learned counsel, appearing for the respondents. 6. The   leased   premises,   consisting   of   two   blocks   with   an approximate   area   of   455   sq.   ft.,   are   situated   on   the   ground   floor   on the   eastern   side   of   the   cement­concrete   building,   bearing   C.T.S   No. 1873 at Bhamburda, Pune. These premises were let out to the tenant by the original landlord and landlady, the predecessors­in­title of the appellants, for the purpose of his hotel business under the name and style   of   Hotel   Ambika.   Civil   Suit   No.   386   of   1985   was   filed   by   the landlord and landlady for eviction of the tenant on two grounds. Their claim was that the tenant carried out unauthorized construction of a toilet in the leased premises, thereby violating the mandate of Section 13(1)(b)   of   the   Act   of   1947.   It   was   also   their   case   that   the   tenant parted   with   the   running   of   the   hotel   and   possession   of   the   leased premises   in   favour   of   one   Krishna   B   Shetty,   thereby   committing 5 breach of Section 13(1)(e) of the Act of 1947. These grounds are borne out   by   the   plaint   filed   in   the   suit,   which   is   sought   to   be   placed   on record,   by   way   of   I.A.   No.   38142   of   2023,   along   with   a   photocopy   of Section 15 of the Act of 1947. I.A. No. 38143 of 2023 was filed seeking exemption from filing an official translation of the plaint. The I.A.s are allowed.   The   documents   are   taken   on   record   and   exemption,   as prayed for, is granted. 7. The   tenant   filed   a   Written   Statement   denying   the   suit claims.   Thereupon,   the   Trial   Court   settled   three   issues   for consideration.   The   plaintiffs   examined   three   witnesses,   including plaintiff No. 2, while the defendant examined himself as DW1. 8. Plaintiff   No.   2,   speaking   as   PW1,   stated   that   the   suit premises   was   leased   out   to   the   tenant   in   the   year   1975   for   running his hotel business. He asserted that the tenant constructed a toilet in the leased premises in January, 1985, without obtaining his consent and 2­4 days later, he sold his rights in the hotel to Krishna B Shetty for a sum of   ₹ 2,00,000/­ and accepted   ₹ 50,000/­ as earnest money. He claimed that Krishna B Shetty was running the hotel in the leased premises thereafter for about eleven months. He further stated that in November, 1985, there was a dispute between the tenant and Krishna 6 B Shetty, which led to the sealing of the premises, and finally the key thereof   was   handed   over   by   the   Sub­Divisional   Magistrate   to   the tenant and, thereafter, Krishna B Shetty did not operate the hotel. 9. PW2, the Advocate­Commissioner, stated in her first report (Exh.8)   that   Krishna   B   Shetty   was   in   occupation   of   the   leased   hotel premises   when   she   visited   the   same.   In   her   subsequent   report (Exh.23), she stated that she found no trace of a toilet constructed in the leased premises. 10. Krishna B Shetty was examined as PW3. He stated that he intended   to   purchase   the   hotel   from   the   tenant   and   had   taken possession in January, 1985. He stated that the price was settled at ₹ 2,00,000/­   and   he   paid   ₹ 50,000/­   by   way   of   earnest   money   at   the time   of   execution   of   the   agreement.   He   asserted   that   the   tenant illegally evicted him from the hotel premises, constraining him to file a complaint and also a suit for specific performance. 11. The  tenant  examined  himself as  DW1. In  his examination­ in­chief,   he   claimed   that   he   had   not   given   the   hotel   business   to Krishna   B   Shetty   or   anyone  else  and   that   Krishna   B   Shetty  was   not given possession of the leased premises at any time. However, during 7 his   cross­examination,   he   admitted   that   he   was   carrying   on   hotel business in the leased premises with the name ‘Hotel Ambika' and in the year 1984, he thought of admitting a partner to run the hotel. As Krishna   B   Shetty   was   also   in   the   same   business,   he   stated   that   he had   talks   with   him   about   joining   the   business.   He   denied   that Krishna B Shetty was allowed by him to join as a partner in January, 1985.   He,   however,   admitted   his   signatures   in   the   partnership agreement   executed   in   that   regard   (Exh.48)   and   conceded   that   his own   Advocate   had   purchased   the   stamp   paper   and   drafted   the   said agreement. He denied that Krishna B Shetty performed Satyanarayan Pooja   on   07.01.1985,   after   execution   of   the   partnership   agreement, but   admitted   that   the   Invitation   Card   (Exh.44)   issued   on   that occasion   bore   his   name.   He   also   admitted   his   signatures   in   the assignment   agreement   dated   15.01.1985   (Exh.49).   He   denied   that Krishna   B   Shetty   was   running   the   hotel   as   his   own   business   in   his individual capacity and that he forcibly dispossessed   him in January, 1986. He admitted that proceedings were initiated under Section 145, Cr.P.C. but asserted that final orders were passed in his favour. 12. Upon consideration of the pleadings and evidence, the Trial Court answered the three issues framed by it as under: ­ 8 “1. It   is   proved   that   the deft.   has   without   the plffs.   consent   given   in writing   erected   on   the suit   premises   any permanent structure. No 2. It   is   proved   that   the deft.   has   after   the   date of   commencement   of the   B.R.   Act (Amendment   Act   of 1973)   unlawfully   given on licence whole  or part  of   the   premises  or assigned or  transferred in   any   other   manner his   interest   in   the   suit premises? Yes 3. If   plff.   entitled   to decree for possession? Yes” 13. The   Trial   Court   held   against   the   plaintiffs   in   so   far   as   the ground   under   Section   13(1)(b)   of   the   Act   of   1947   was   concerned,   as the Advocate Commissioner's second report (Exh.23) showed no trace of   a   toilet   having   been   constructed   in   the   leased   premises.   However, as   regards   the   ground   raised   under   Section   13(1)(e)   of   the   Act   of 1947,   the   finding   was   otherwise.   The   Trial   Court   took   note   of   the admitted   execution   of   the   partnership   agreement   dated   01.01.1985 (Exh.48), whereby the tenant accepted Krishna B Shetty as a partner in   his   hotel   business.   Further,   the   Trial   Court   noted   that   the 9 Invitation   Card   (Exh.44)   for   the   Satyanarayan   Pooja,   mentioned   the name   of   Hotel   Ambika,   the   name   of   the   tenant   and   the   name   of   the new   partner,   Krishna   B   Shetty.   The   Trial   Court   also   noted   that   the tenant   admitted   his   signatures   in   the   assignment   agreement   dated 15.01.1985 (Exh.49), whereby  he had assigned his  hotel  business in the leased premises to Krishna B Shetty for  ₹ 2,00,000/­ and accepted ₹ 50,000/­ as earnest money. It was accordingly  held that  Krishna  B Shetty was taken as a partner in the business initially but, thereafter, the   business   was   sold   to   him   for   ₹ 2,00,000/­.   The   Trial   Court observed   that   the   original   lease   deed   dated   22.01.1975   (Exh.55) stated clearly in page 4 that the tenant would not assign the business and   would   not   allow   third   persons   to   conduct   the   said   business   in any way nor would he transfer the said business in any way in favour of a third person. The Trial Court then adverted to Section 15(1) of the Act of 1947, which provides that, in the absence of a contract to the contrary, the tenant would not be entitled to sublet or transfer or give on   licence   the   leased   premises   and   also   the   proviso   thereto,   which allowed   the   Government,   by   way   of   a   notification   in   the   Official Gazette,     to   permit   in   any   area   transfer   of   interest   in   premises   held under   leases or a class of leases to such extent as may be specified in the notification. As the conditions of the   proviso   were not satisfied on 10 facts   and   in   the   light   of   the   clear   prohibition   of   assignment   in   the lease deed, the Trial Court decreed the suit. 14. The   learned   13 th   Additional   District   Judge,   Pune,   affirmed these findings of the Trial Court and dismissed Civil Appeal No. 1030 of   1987   filed   by   the   tenant. The   Bombay   High   Court,   however, reversed   the   findings   of   both   the   Courts   below.   While   accepting   that there was material to show that the tenant had assigned his business in   favour   of   Krishna   B   Shetty,   the   High   Court   took   recourse   to   the proviso   to   Section   15(1)   of   the   Act   of   1947   and   held   that   it   was permissible thereunder for a statutory tenant to transfer his tenancy rights   even   though   the   lease   agreement   prohibited   such   a   transfer. Further, the High Court took note of the fact that Civil Suit   No. 623 of 1986   filed   by   Krishna   B   Shetty   against   the   tenant   for   specific performance   had   been   dismissed.   According   to   the   High   Court,   so long as the legal possession remained with the tenant, mere creation of   a   partnership   agreement   by   the   tenant   for   the   purpose   of   jointly carrying   on   business   in   the   leased   premises   would   not   amount   to sub­letting.   Holding   so,   the   High   Court   set   aside   the   decree   of eviction/possession   and   dismissed   the   suit.   By   its   later   judgment dated 09.09.2009, the High Court dismissed the Review Petition filed by the appellants herein, reiterating that the tenant had never parted 11 with or left the premises and, being a partner, he was also involved in the business. Observing that the dominant purpose of the agreement executed   by   the   tenant   was   not   to   sub­let   the   premises,   the   High Court   opined   that   there   was   no   error   on   the   face   of   the   record warranting exercise of review jurisdiction. 15. At   this   stage,   we   may   note   that   neither   of   the   parties thought it appropriate to place on record all the documents that they considered   relevant.   The   original   lease   deed   dated   22.01.1975 (Exh.55), relied upon by Mr. Vinay Navare, learned senior counsel, is not   available   for   scrutiny.   Similarly,   the   judgment   in   Civil   Suit   No. 623 of 1986, filed against the tenant by Krishna B Shetty, relied upon by   the   High   Court   and   Mr.   Sudhanshu   S.   Choudhari,   learned counsel, was not produced prior to conclusion of the hearing of these appeals. However, the learned counsel deemed it fit to enclose a copy of   the   said   judgment   along   with   his   Written   Submissions,   after   this judgment   was   reserved.   As   the   said   document   was   not   placed   on record in keeping with due procedure and at the appropriate time, it is   liable   to   be   eschewed   from   consideration.   More   so,   as   the   sole respondent   entered   appearance   through   counsel   as   long   back   as   in January,  2011, and  had  ample opportunity  to  do  the needful  even  if the   said   judgment   did   not   form   part   of   the   record   before   the   High 12 Court.   This   Court   is,   therefore,   constrained   to   adjudicate   on   the strength of the material available on record. 16. The   issue   for   consideration   is   whether   the   tenant committed breach of the lease condition with regard to assignment of his   business   in   the   leased   premises,   warranting   his   eviction   under Section   13(1)(e)   of   the   Act   of   1947.   Though   the   tenant   denied   the same,   Mr.   Vinay   Navare,   learned   senior   counsel,   would   assert   that the   admissions   made   by   him   during   his   deposition   as   DW1   speak volumes   to   the   contrary.   He   would   point   out   that   the   tenant categorically   admitted   execution   of   the   partnership   agreement   dated 01.01.1985 (Exh.48) and the assignment agreement dated 15.01.1985 (Exh.49),   apart   from   conceding   that   the   Invitation   Card   (Exh.44), issued   in   connection   with   the   Satyanarayan   Pooja   performed   in   the hotel,   mentioned   his   name   along   with   those   of   Hotel   Ambika   and Krishna B Shetty. 17. Countering   these   contentions,   Mr.   Sudhanshu   S. Choudhari,   learned   counsel,   would   argue   that   execution   of   a partnership   deed   by   the   tenant,   whereby   a   third   party   was   inducted into the business as a partner, is of no consequence. He would point out   that   the   partnership   agreement   dated   01.01.1985   (Exh.48) 13 mentioned   that   the   business   would   be   undertaken   as   a   partnership with   the   tenant;   his   brother,   Laxman;   and   Krishna   B   Shetty,   as partners  and   that   the   relevant   clause  in   the   said   document,  marked as   Exh.51,   indicated   that   Krishna   B   Shetty   would   look   after   the business  transactions.  He  would   place  reliance  on   Parvinder   Singh Vs. Renu Gautam and others 1   and  Mahendra Saree Emporium (II) Vs. G.V. Srinivasa Murthy 2   in support of his contention that such a business   arrangement   would   not   amount   to   creation   of   an assignment or sub­tenancy. 18. In  Parvinder Singh  ( supra ), this Court observed that if the tenant   is   actively   associated   with   the   partnership   business   and retains   the   use   and   control   over   the   tenanted   premises   with   him, maybe along with partners, the tenant may not be said to have parted with possession, but if the user and control of the tenanted premises has been parted with and the deed of partnership has been drawn up as an indirect method of collecting consideration for creation of a sub­ tenancy   or   for   providing   a   cloak   to   conceal   a   transaction   not permitted   by   law,   the   Court   is   not   estopped   from   tearing   the   veil   of partnership and finding out the real nature of the transaction entered into between the tenant and the alleged sub­tenant. 1 (2004) 4 SCC 794 2 (2005) 1 SCC 481 14 19. This   Court   observed   in   Mahendra   Saree   Emporium ( supra ) that the transfer of a right to enjoy immovable property to the exclusion of all others during the term of the lease is the  sine qua non of   a   lease   under   Section   105   of   the   Transfer   of   Property   Act,   1882, and a sub­lease would imply parting with, by the tenant, of the right to enjoy such property in favour of his sub­tenant. This Court further noted that the phraseology employed for inferring sub­letting is quite wide and would  embrace within  its scope sub­letting  of  the  whole  or part   of   the   premises   as   also   assignment   or   transfer   in   any   other manner   of   the   lessee's   interest   in   the   tenanted   premises.   On   facts, however,   it   was   held   that   the   tenant   therein   had   not   created   a sub­tenancy merely by converting his sole proprietary business into a partnership   business   and   as   the   tenant   never   dissociated   himself from the business activity. 20. It   would   be   apposite   at   this   stage   to   peruse   the   relevant statutory provisions, viz., Section 13(1)(e) and Section 15(1) of the Act of 1947. They read as under: ­ ‘Section   13   (1)   Notwithstanding   anything   contained   in   this Act,   but   subject   to   the   provisions   of   Section   15,   a   landlord shall be  entitled to recover possession of any premises if the Court is satisfied­  (a)  ­ (d) …… 15   (e)   that   the   tenant   has,   since   the   coming   into   operation   of this Act unlaw­fully sub­let the whole or part of the premises or  assigned   or  transferred  in  any  other  manner   his  interest therein; or (ee)……..’ ‘Section   15   (1)   Notwithstanding   anything   contained   in   any law, but  subject   to   any  contract  to  the   contrary,  it  shall   not be  lawful  after the  coming into operation of  this  Act  for any tenant to sub­let the whole or any part of the premises let to him or to assign or transfer in any other manner his interest therein and after the date of  commencement  of  the  Bombay Rents, Hotel and Lodging House Rates Control (Amendment) Act, 1973, for any tenant to give on licence the whole or part of such premises Provided   that   the   State   Government   may   by notification   in   the   Official   Gazette   permit   in   any   area   the transfer   of   interest   in   premises   held   under   such   leases   or class of leases or the giving on licence any premises or class of   premises   and   to   such   extent   as   may   be   specified   in   the notification.’ The aforestated provisions make it crystal clear that, in the ordinary course and notwithstanding anything contained in any other law,   unless   the   contract   itself   permits   sub­letting,   it   shall   not   be lawful, after coming into operation of the Act of 1947, for a tenant to sub­let   the   premises   let   out   to   him   or   to   assign   or   transfer   in   any manner   his   interest   therein.   The   proviso   to   Section   15(1),   however, authorizes   the   State   Government   to   permit,   in   any   area,   transfer   of interest in premises held under leases or a class of leases, by issuing a   notification   in   the   Official   Gazette,   duly   delineating   the   extent   to which such transfer is permitted. Presently, it is nobody's case that a notification was issued by the State Government having application to 16 the   case   on   hand.   Viewed   thus,   reliance   placed   by   the   High   Court upon this provision was wholly misconceived. In the absence of such a   notification   by   the   State   Government,   the   issue   is   whether   the tenant could have assigned his leasehold interest in favour of Krishna B Shetty under the assignment agreement dated 15.01.1985 (Exh.49), overriding the condition in the lease deed to the contrary. 21. It   is   in   this   context   that   the   prohibitory   condition   in   the lease deed dated 22.01.1975 (Exh.55) assumes importance. The Trial Court   and   the   Appellate   Court   extracted   the   gist   of   the   said   lease condition   in   their   judgments.   The   Lease   Deed   is   stated   to   have recorded unequivocally in page 4 that the business of Hotel Ambika is the independent business of the tenant and that he would not assign the   business   and   would   not   allow   third   persons   to   conduct   the   said business  in  any  way  nor  would   he  transfer  the  said  business in   any way in favour of a third person. Therefore, there is a clear interdiction against   transfer   or   assignment   by   the   tenant   of   the   business   being run in the leasehold premises in favour of a third person. 22.  Given   the   clear   proscription   in   the   lease   deed,   duly endorsed by the explicit language of Sections 13(1)(e) and 15(1) of the Act   of   1947,   the   very   execution   of   the   assignment   agreement   dated 17 15.01.1985   (Exh.49),   whereby   the   tenant   admittedly   assigned   his business in the leasehold premises in favour of Krishna B Shetty for ₹ 2,00,000/­ and accepted a sum of  ₹ 50,000/­ as earnest money, was sufficient in itself to establish transgression of the lease condition and the   statutory   mandate.  No  doubt,  the   earlier  decisions  of  this   Court, referred   to   hereinabove,   laid   down   the   principle   that   the   mere execution of a genuine partnership deed by a tenant, whereby he/she converted   a   sole   proprietary   concern   into   a   partnership   business, while continuing to actively participate in the business and retaining control over the tenanted premises wherein the business is being run, would not amount to sub­letting. However, that principle has no role to   play   in   the   case   on   hand   as   the   tenant   did   not   stop   short   at executing   the   partnership   agreement   dated   01.01.1985   (Exh.48)   but went   on   to   execute   the   assignment   agreement   dated   15.01.1985 (Exh.49),   whereby   he   assigned   his   hotel   business   in   the   leased premises   to   Krishna   B   Shetty   and   received   earnest   money   also.   The very   act   of   execution   of   this   document   was   sufficient   in   itself   to complete the breach of the lease condition and the statutory mandate and   did   not   require   anything   further.   Therefore,   the   subsequent failure   of   Krishna   B   Shetty   in   his   specific   performance   suit   in   Civil Suit   No.   623   of   1986,   be   it   for   whatever   reason,   is   of   absolutely   no relevance   or   consequence.   All   the   more   so,   as   the   landlord   and 18 landlady   were   admittedly   not   parties   thereto   and   the   judgment rendered   in   the   said   suit   was   not   even   placed   on   record   as   per   due procedure   and   at   the   relevant   time.   Irrespective   of   the   result   in   the said   suit,   the   ineluctable   fact   remains   that   the   tenant   admitted execution   of   the   assignment   agreement   (Exh.49)   and   that   singular fact settled the issue as to whether there was an act of assignment on his   part.   The   High   Court   seems   to   have   lost   sight   of   this   crucial aspect. 23. We,   therefore,   find   on   facts   that   the   tenant   admitted committing a breach of the lease condition with regard to assignment of his leasehold interest in favour of a third party, when he signed the assignment agreement dated 15.01.1985 (Exh.49) for a consideration of  ₹ 2,00,000/­ and received  ₹ 50,000/­ as earnest money. The breach being   complete   on   his   part   upon   such   execution   itself,   the   failure   of the   assignee,   Krishna   B   Shetty,   in   his   suit   for   specific   performance against the tenant is of no import. 24. The   impugned   judgments   of   the   Bombay   High   Court   are accordingly set aside and the judgment of the Trial Court, as affirmed by   the   Appellate   Court,   shall   stand   restored.   In   consequence,   the respondents   herein,   being   the   legal   representatives   of   the   deceased 19 tenant,   shall   vacate   the   suit   premises   and   hand   over   vacant   and peaceful possession thereof to the appellants within 2 months, failing which   the   appellants   shall   be   at   liberty   to   initiate   execution proceedings before the competent court. 25. The   appeals   and   the   I.As   are   allowed.     There   shall   be   no order as to costs. ……………………………………….J [ SUDHANSHU DHULIA ] ………………………………………...J [SANJAY KUMAR] NEW DELHI; MARCH  21, 2023.