Santosh Anant Sabale v. Mathuradas Morarji

9) Plaintiffs' suit has been decreed by the Appellate Court on solitary ground of default in payment of rent. Earlier, the suit was decreed ex-parte and after remand of the suit, Defendant No.1 filed written statement and led evidence, after which the Trial Court proceeded to dismiss the suit by rejecting the ground of unlawful subletting. The Trial Court relied upon Court Commissioner's report to hold that Defendant No.3-Kalpesh Thakkar was not even present in the suit premises at the time of Court Commissioner's visit thereby disproving the allegation of subletting in his favour. The Trial Court held that Plaintiffs did not adduce katkam Page No. 7 of 16 documentary evidence in the form of voters list, postal correspondence, postal acknowledgments or service of summons on Defendant No.3 at the suit premises and was therefore unable to discharge the burden of parting of possession of the suit premises in favour of Defendant No.3. The Trial Court therefore rejected the theory of subletting of the premises to Defendant No.3. The ground of default in payment of rent has been concurrently rejected by both the Courts. The Small Causes Court accordingly dismissed the suit by decree dated 25 November 2015. The Appellate Court has reversed the finding of the Trial Court on the issue of unlawful subletting and has held that the Plaintiffs proved presence of Defendant No.3 in the suit premises and drew adverse inference against Defendant No.1 for having not produced any documents relating to conduct of business by Defendant No.1 during 2001 to 2005. The Appellate Court held that Plaintiff discharged his burden by proving that Defendant No.3 was in possession of suit premises. The Appellate Court further held that Defendant No.1 did not produce any documents relating to conduct of very business, changing the business to ready-made garments in the name of ‘Woods Fashion’ and thereafter in the name of ‘Body Shape-NX’. These are the broad findings on the basis of which, the Appellate Court has decreed the suit on the ground of unlawful subletting.

10) It appears that the Trial Court had appointed Mr. A. K. Kudtarkar, Advocate as a Court Commissioner for visiting the suit premises and to report about the factual condition. At that time, it appears that none of the Defendants had appeared in the suit. The order appointing Court Commissioner was passed on 11 July 2001 immediately after filing of the suit on 6 July 2001. The report of the Court Commissioner would indicate that he paid a visit to the suit premises on 13 July 2001 at 5 p.m. and noticed presence of Mr. Shailesh Jain. The Court Commissioner revisited the suit premises after one hour when katkam Page No. 8 of 16 Defendant No.1 was present in the suit premises. The Court Commissioner's Report indicates that he was informed by Mr. Shailesh Jain that Defendant No.3-Kalpesh Thakker had gone out for marketing. The Court Commissioner's Report further indicates that the Defendant No.1 had informed him that he had inducted Defendant No.3 as a partner in the business. The Court Commissioner also noticed presence of 4/5 salesmen in the shop. However, it appears that Plaintiffs did not examine Court Commissioner before the Trial Court.

11) So far as service of suit summons is concerned, it appears that the Bailiff could not find Defendant No.3 at the suit premises and accordingly pasted the summons of Defendant No.3 at the suit premises. The Trial Court has relied heavily on the factor of non-service of suit summons on Defendant No.3 at the suit premises for rejecting the ground of unlawful subletting.

12) Defendant No.1 had raised the plea that Defendant No.3 was his employee during May 2001 to November 2001 on monthly salary of Rs.3,000/- which was paid in cash. He changed the version of monthly salary to daily wages during cross-examination. The fact that Defendant No.1 contended that the Defendant No.3 was his employee shows that presence of Defendant No.3 in the suit premises is not really disputed. The only dispute is about the capacity in which his presence is noticed in the suit premises. Defendant No.1 admitted that he did not have any documentary evidence to show that the Defendant No.3-Kalpesh was his employee. He also admitted that there was no documentary evidence to show that Defendant No.3 was paid monthly wages of Rs.3,000/-. Thus Defendant No.1 failed to prove employment of Defendant No.3. katkam Page No. 9 of 16 13) Mr. Sabnis has submitted that the burden of proving the act of subletting rested on the shoulders of the Plaintiffs and has relied upon judgment of Apex Court in Celina Coelho Pereira (supra). In that judgment the Apex Court has summarized the principles deduced from various judgments in the past on the issue of unlawful subletting and has held in paragraph 25 as under:

25. The legal position that emerges from the aforesaid decisions can be summarised thus:

(i) In order to prove mischief of sub-letting as a ground for eviction under rent control laws, two ingredients have to be established, (one) parting with possession of tenancy or part of it by the tenant in favour of a third party with exclusive right of possession, and (two) that such parting with possession has been done without the consent of the landlord and in lieu of compensation or rent.

(ii) Inducting a partner or partners in the business or profession by a tenant by itself does not amount to sub-letting. However, if the purpose of such partnership is ostensible and a deed of partnership is drawn to conceal the real transaction of sub-letting, the court may tear the veil of partnership to find out the real nature of transaction entered into by the tenant.

(iii) The existence of deed of partnership between the tenant and alleged sub-tenant or ostensible transaction in any other form would not preclude the landlord from bringing on record material and circumstances, by adducing evidence or by means of cross-examination, making out a case of sub-letting or parting with possession in tenancy premises by the tenant in favour of a third person.

(iv) If the tenant is actively associated with the partnership business and retains the control over the tenancy premises with him, may be along with partners, the tenant may not be said to have parted with possession.

(v) Initial burden of proving sub-letting is on the landlord but once he is able to establish that a third party is in exclusive possession of the premises and that tenant has no legal possession of the tenanted premises, the onus shifts to the tenant to prove the nature of occupation of such third party and that he (tenant) continues to hold legal possession in tenancy premises.

(vi) In other words, initial burden lying on the landlord would stand discharged by adducing prima facie proof of the fact that a party other than the tenant was in exclusive possession of the premises. A presumption of sub-letting may then be raised and would amount to proof unless rebutted.

14) Thus, the law appears to be well settled that the initial burden rests on the landlord to prove that the party other than the tenant was in exclusive possession of the suit premises. That once the burden of proving katkam Page No. 10 of 16 exclusive possession of third party is discharged, the onus shifts on the tenant to prove the nature of occupation of such third party.

15) In Prem Prakash (supra) the Apex Court has held that subletting comes into existence when tenant gives up possession of the tenanted accommodation wholly or in part and puts some other person in exclusive possession thereof. The Apex Court held in paragraph 18 as under:

18. Sub-tenancy or sub-letting comes into existence when the tenant gives up possession of the tenanted accommodation, wholly or in part, and puts another person in exclusive possession thereof. This arrangement comes about obviously under a mutual agreement or understanding between the tenant and the person to whom the possession is so delivered. In this process, the landlord is kept out of the scene. Rather, the scene is enacted behind the back of the landlord, concealing the overt acts and transferring possession clandestinely to a person who is an utter stranger to the landlord, in the sense that the landlord had not let out the premises to that person nor had he allowed or consented to his entering into possession of that person, instead of the tenant, which ultimately reveals to the landlord that the tenant to whom the property was let out has put some other person in possession of that property. In such a situation, it would be difficult for the landlord to prove, by direct evidence, the contract or agreement or understanding between the tenant and the sub-tenant. It would also be difficult for the landlord to prove, by direct evidence, that the person to whom the property had been sub-let had paid monetary consideration to the tenant. Payment of rent, undoubtedly, is an essential element of lease or sub-lease. It may be paid in cash or in kind or may have been paid or promised to be paid. It may have been paid in lump sum in advance covering the period for which the premises is let out or sub-let or it may have been paid or promised to be paid periodically. Since payment of rent or monetary consideration may have been made secretly, the law does not require such payment to be proved by affirmative evidence and the court is permitted to draw its own inference upon the facts of the case.

16) In the present case, Plaintiff approached the Small Causes Court with a specific allegation that there was unlawful subletting in favour of Defendant No.3. Defendant in turn did not dispute presence of Defendant No.3 in the suit premises, but raised a defence that Defendant No.3 was his employee. Once Defendant No.1 admitted presence of Defendant No.3 in the suit premises, but sought to give justification of his katkam Page No. 11 of 16 status as employee, the burden shifted on the Defendant No.1 to prove employment of Defendant No.3. As observed above, no evidence is produced on record by Defendant No.1 to prove that Defendant No.3 was indeed his employee. Thus Defendant No.1 failed to discharge the burden which has shifted on him to justify presence of Defendant No.3 in the suit premises.

17) As held by the Apex Court in Prem Prakash (supra), subletting is often a clandestine act enacted behind the back of the landlord, concealing the overt-acts and transferring the possession clandestinely to a person who is an utter stranger to the landlord. Many times, it becomes very difficult for the landlord to prove the act of subletting as various kinds of defences such as employment, partnership etc. are raised to justify presence of outsider in the suit premises. It is therefore not appropriate in every case to expect Plaintiff-landlord to lead concrete evidence in support of allegation of subletting. In the present case, Defendant No.1 appears to have engaged several persons to carry out different businesses at different times in the suit premises. Plaintiff pleaded that the first subletting was in favour of a person operating Dairy. It is alleged in the plaint that the original business carried out in the suit premises by the Plaintiff’s father was that of a hair-cutting saloon which was inherited by Defendant No.1, who continued carrying on the said business of hair-cutting saloon and thereafter sublet the premises to a Dairy Operator who carried on business in the name of Ganesh Dairy. Defendant No.1 did not refute the allegation of shifting of business from hair-cutting saloon to Dairy but contended that 3/4 months after his father's death on 19 December 1997, Defendant No.1 did not want to continue the business of hair-cutting saloon and accordingly he set up the business of selling milk under name and style as 'Shri Gajanan Diary' in March 1998. Therefore, the allegation of Plaintiff of shifting of business from hair-cutting saloon to Gajanan Dairy was admitted by the Defendant katkam Page No. 12 of 16 No.1, however he contended that he himself carried out the said dairy business. However, no evidence was produced about Defendant No.1 himself carrying out the dairy business in the suit premises. Even otherwise the defence of shifting of family business of hair-cutting saloon to dairy immediately after death of father needs to be taken with a pinch of salt.

18) Plaintiff further alleged in the plaint that Defendant No.1 thereafter sublet the premises to Defendant No.3, who started carrying on the business of readymade garments in the name and style of ‘Woods Fashion’. This shift from dairy business to readymade garments is again not disputed by Defendant No.1, who once again took a stand that the said business of readymade garments was again conducted by Defendant No.1 himself in the name and style as ‘Woods Fashion’. Again, these frequent shifting of businesses from haircutting saloon to dairy to readymade garments appear bit difficult to digest. Shifting of business to that of readymade garments is not disputed by Defendant No.1. Presence of Defendant No.3 is also not disputed by him in the suit premises at the time of filing of the suit. In my view therefore, this material is sufficient for shifting of burden on Defendant No.1 to justify that he alone was conducting business in the suit premises. However, to make the case of Defendant No.1 worse, it appears that there is one more shift in the year 2005 and this time, claim of mere change in the brand name to ‘Body Shape-NX’ is claimed.

19) If Defendant No.1 was indeed carrying on the above businesses of dairy and readymade garments, he would have produced atleast some invoices, delivery challans etc. to prove conduct of business in his name. However, he failed to produce even a single document to justify any business being conducted by him in the suit premises upto the year 2004. He produced income tax returns for Assessment Year 2005-2006 showing katkam Page No. 13 of 16 ‘Nil’ income from the business. This itself shows that Defendant No.1 was not carrying out any business in the suit premises as falsely contended by him.

20) The sheet-anchor of Defendant No.1 is the reply given by Municipal Corporation of Greater Mumbai on 26 December 2014 under the RTI query forwarding copy of computer ledger showing history of renewal of Shop Act License. In my view, it is too dangerous to rely upon the entries made in that ledger. This is because the name of establishment in the ledger is reflected as ‘Body Shape NX’ and the date of application is shown as 1 January 1999. If name of the establishment was indeed changed to Body Shape NX in the year 2005, it is impossible that the business was registered in the name of ‘Body Shape-NX’ on 1 January 1999. On the contrary, submissions of Mr. Vyas appear to be believable that the Shop Act License is procured after the issuance of suit summons for the purpose of defeating lawful claim of the Plaintiffs. This is clear from the fact that the first Shop Act License in the name of Defendant No.1/Body Shape NX is issued on 17 July 2004. Defendant No.1 has not been able to produce any Shop Act License in his name prior to the year 2004.

21) Defendant No.1 gave a categorical admission in his crossexamination that “I had not obtained any such license prior to dated 07.12.2005 in respect of the business by name ''Woods Fashion''.” Thus there is an admission on the part of Defendant No.1 that prior to the year 2005 no license was issued under Shop Act in his name at the suit premises. This clearly shows that Defendant No.1 was not carrying out any business in the suit premises by himself prior to the year 2005.

22) It otherwise appears unbelievable that a person conducting business would not be in a position to procure a single document to prove katkam Page No. 14 of 16 actual conduct of business. This clearly appears to be a case of unlawful subletting by Defendant No.1 from time to time in favour of various third parties. In such circumstances, Plaintiffs cannot be blamed for their inability to identify the exact time when and entitles in whose favour, subletting was effected. The Appellate Court has rightly drawn adverse inference against Defendant No.1 for not having produced any documents relating to his business prior to the year 2005. The defence of loss of document in floods cannot be accepted in view of specific admission given that what was handed over to the Advocate were merely photocopies of the documents.

23) The conspectus of the above discussion is that Defendant No.1 admitted presence of Defendant No.3 in the suit premises. He is unable to prove conduct of any business by himself in the suit premises prior to the date of filing of the suit. Therefore, the Appellate Court has rightly drawn the inference of unlawful subletting in the facts and circumstances of the present case. I therefore do not find any valid reason to interfere in the findings recorded by the Appellate Court. Mere inability of the Plaintiffs to plead or prove every small detail about clandestine act of subletting by tenant cannot be a ground for denying decree of eviction. Reliance by Mr. Vyas on the judgment of the Apex Court in Jagdish Prasad (supra) is apposite as presence of Defendant No.3 in the suit premises coupled with inability to establish independent conduct of business by Defendant No.1 would necessarily result in drawl of inference of unlawful subletting.

24) I am of the view that no patent error is committed by the Appellate Court while decreeing the suit on the ground of unlawful subletting. Therefore, there is no warrant for interference by this Court in exercise of revisionary jurisdiction under Section 115 of the Code. katkam Page No. 15 of 16 25) Civil Revision Application is devoid of merits, and it is accordingly dismissed.

26) Considering the facts and circumstances of the case, Revision Applicant/Defendant No.1 is granted time upto 28 February 2025 to vacate the possession of suit premises, subject to the condition of non-creation of any third-party rights therein.

27) In view of the disposal of the Civil Revision Application, Interim Application would not survive and the same is also disposed of accordingly. (SANDEEP V. MARNE, J.) katkam Page No. 16 of 16