Tenant challenged ejectment decree on grounds of subletting. High Court held that despite lower court findings, lack of evidence for exclusive possession and consideration meant no subtenancy existed. Revision allowed; decree quashed.
Revision application allowed and decree of ejectment set aside.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION CIVIL REVISION APPLICATION NO.355 OF 2010
Metal Box India Limited .. Applicant -versus M/s S.F. Engineer & Anr .. Respondents .
S/Shri Aspi Chinony, Senior Counsel with Ms Preeti Ramani, Sarosh Bahrucha S. Srivastava and S. Pandey i/b M/s D.H. Law Associates for the Applicants.
S/Shri D.D. Madon, Senior Counsel with Atul Daga and Amit Mehta i/b M/s Mahimtura & Co. for respondent No.1.
CORAM: R.C. CHAVAN, J. DATED: 12th August, 2010
P.C.
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premises bearing flat Nos 201 and 204 on the 2nd floor and garage Nos 7 and 8 on the ground floor which were let to the applicant company for providing residential accommodation to its executives. Defendant No.2 was employed by Applicant and was allowed to occupy flat No.201 in 1979. In l987, a lock out was declared in a company and on 27.5.1988 the company was declared a sick company. On 12.1.1989 defendant No.2 resigned and his resignation was accepted on 11.2.1989, but continued to occupy the premises.
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premises which was rejected by the learned Additional Chief Metropolitan Magistrate on 28.2.2006 against which applicant filed Criminal Writ petition No.2154 of 2006. Applicant filed a Summary suit against respondent No.2 seeking liquidated damages for overstaying in which this Court granted unconditional leave to defend. This was challenged by applicant before Supreme Court by filing Special Leave Petition, which was settled on 15.3.2007
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to use the premises during his employment. It was pointed out that since leave to defend was granted to respondent No.2, applicant preferred a Special Leave Petition, wherein a settlement was reached on 15.3.2007. According to the settlement on 4.4.2007, Respondent No.2 handed over vacant possession of the premises to applicant. These developments were brought to the notice of appellate bench and yet the bench upheld the decree against the applicant. It was submitted that there was never any consensus that respondent No.2 was to be allowed to occupy the premises after he ceased to be in the company’s employment and in fact applicant had been continuously seeking to evict him. Therefore, it was submitted that the courts below were totally wrong in holding that the applicant had sublet the premises to respondent No.2.
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pay rent and sub tenancy was rightly inferred. The learned Senior Counsel pointed out that respondent No.2 had specifically admitted in cross examination by respondent No.1 that personal Manager of the applicant had asked respondent No.2 to continue to live in the flat even after he resigned. He relied on judgments of Hon’ble Supreme Court in case of Bharat Sales Ltd -vs- LIC of India reported in (1998) 3 SCC 1 , and in Joginder Singh Sodhi -vsAmar Kaur reported in (20050)1 Supreme Court Cases, 31, wherein the Hon’ble Supreme Court had considered the ingredients of subletting. For limits of revisional jurisdiction, he placed reliance on judgment of Supreme Court in N. Eswari w/o Adinarayana -vs- K. Swarajya Lakshmi w/o Late K.V.L.N.A. Sastry, reported in (2009) 9 Supreme Court Cases 678.
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Court considered the difficulties of the landlord in proving sub
tenancy and therefore held in para Nos 4 and 5 as under:
“4. 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 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 over the demised property. It is the actual, physical and exclusive 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 into 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 sublease. It may be paid in cash or in kind or may have been paid or promises to
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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 compromised 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 proved at the trial, including the delivery of exclusive possession to infer that the premises were sub let.
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Cooks and Kelvey Properties (P) Ltd upon which, as we shall presently see, reliance has been placed by the petitioner.
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“constructive possession” for and on behalf of the bank. Reliance was placed on the observation that, “the existence of consideration, an ingredient of subletting, had not been present to hold that there was sub-letting”. In the background of the facts of the case, this observation does not purport to lay down that in every case payment of consideration must be established by the landlord to prove sub letting by the tenant.”
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monetary consideration.”
2 continued to occupy the premises.
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of Supreme Court dated 15.3.2007, in Civil Appeal
No.2425 of 2007.
iv) applicant has vacated the premises on 4.4.2007
in terms of the settlement.
v) Applicant is a sick company, and not in a position
to receive any clandestine payments.
of ejectment is set aside.
(R. C. CHAVAN, J.)
2 issues framed by the court
Whether concurrent findings of fact regarding subletting can be upset in revision when inconclusive of the legal conclusion.
Whether mere possession by a third party after termination of employment establishes subtenancy without proof of exclusive possession and consideration.
Colour shows how this judgement treated each authority
Bharat Sales Ltd vs LIC of IndiaExplained¶27
Bharat Sales Ltd vs- LIC of India (1998) 3 SCC 1 · Who else cites this
Joginder Singh Sodhi vs Amar KaurExplained¶27
Joginder Singh Sodhi vs Amar Kaur (2005) SCC 31 · Who else cites this
V. N. Eswari w/o Adinarayana vs K. Swarajya Lakshmi w/o Late K.V.L.N.A. SastryExplained¶27
V. N. Eswari w/o Adinarayana vs K. Swarajya Lakshmi w/o Late K.V.L.N.A. Sastry (2009) 9 SCC 678 · Who else cites this
United Bank of India v Cooks and Kelvey Properties (P) LtdDistinguished¶43
United Bank of India v Cooks and Kelvey Properties (P) Ltd
Associated Hotels of India Ltd vs S. B. Sardar RanjitsinghExplained¶49
Associated Hotels of India Ltd vs S. B. Sardar Ranjitsingh (1968) 2 SCR 548 · Who else cites this
Metal Box India Limited
M/s S.F. Engineer & Anr
R. C. CHAVAN
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
