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Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section 14(2) of the Act
  • Sub-section (4) of Section 14 of the Delhi Rent Control Act
  • Article 136 of the Constitution
  • Order 6 Rule 17 of the Code of Civil Procedure
  • Section 14(1)(b) of the Act
  • Section 15(1) of the Act
  • Section 14(1)(b) of the Delhi Rent Control Act
  • Sections 14(1)(a) and 14(1)(b) of the Delhi Rent Control Act, 1958
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section 14(2) of the Act
  • Sub-section (4) of Section 14 of the Delhi Rent Control Act
  • Article 136 of the Constitution
  • Order 6 Rule 17 of the Code of Civil Procedure
  • Section 14(1)(b) of the Act
  • Section 15(1) of the Act
  • Section 14(1)(b) of the Delhi Rent Control Act
  • Sections 14(1)(a) and 14(1)(b) of the Delhi Rent Control Act, 1958
Smart Summary

Factual and Procedural Background

Jagan Nath became the tenant of one room in premises No. N-80, Kirti Nagar, New Delhi, on 1 January 1962. On 8 January 1976 the landlord issued a demand notice alleging non-payment of rent from 1 May 1975 to 30 April 1977 at Rs 75 per month, and further alleged that after 9 June 1962 Jagan Nath had without written consent sub-let or otherwise parted with possession of the premises to his sons, Baldev Raj Bindra and Sat Pal Bindra.

The landlord filed an eviction petition under Sections 14(1)(a) (non-payment of rent) and 14(1)(b) (sub-letting/parting with possession) of the Delhi Rent Control Act, 1958.

  • Additional Rent Controller: Dismissed the ground under Section 14(1)(a) because the tenant complied with Section 15(1) and obtained protection under Section 14(2). Allowed eviction under Section 14(1)(b) on the finding that the tenant had unlawfully parted with possession in favour of his sons.
  • Rent Control Tribunal: Dismissed the tenant’s appeal and refused his belated application to amend the written statement. The eviction order was affirmed.
  • Delhi High Court: Dismissed the second appeal, holding that no substantial question of law arose.
  • Supreme Court: Granted special-leave, heard the matter after the death of Jagan Nath (his sons were substituted), and delivered the present judgment.

Legal Issues Presented

  1. Whether the tenant had “sub-let, assigned or otherwise parted with possession” of the premises within the meaning of Section 14(1)(b) of the Delhi Rent Control Act, 1958, thereby justifying eviction.
  2. Whether the Rent Control Tribunal correctly refused the tenant’s application under Order VI Rule 17 of the Code of Civil Procedure to amend his written statement.

Arguments of the Parties

Appellant (Tenant)

  • The premises were never sub-let; the tenant retained legal possession and merely permitted his sons, who formed a joint Hindu family with him, to assist in the family business conducted in the same premises.
  • No written consent was needed because there was no transfer of the right to possess; mere user by family members does not amount to parting with possession.
  • The Tribunal erred in refusing the proposed amendment which would have clarified that “Bindra Tent House” originally took the premises on rent.

Respondent (Landlord)

  • Documents such as the tenant’s statement to the Income-tax Officer, partnership papers, stamp-vendor register entries, and an electricity-connection application showed that the tenant sold the business for Rs 18,000 to his sons, who thereafter exclusively possessed the premises.
  • The tenant had retired from the business, evidencing that he had divested himself of both physical and legal possession, thereby attracting Section 14(1)(b).
  • The proposed amendment was rightly rejected because it attempted to withdraw admissions already made in the original written statement.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Mt. Subashini Majumdar v. Krishna Prasad Mahatoo, AIR 1956 Ass 79 Late or belated amendments withdrawing admissions should not be allowed. Cited by the Tribunal and approved by the Supreme Court in upholding refusal of the tenant’s amendment application.
Modi Spinning and Weaving Mills Co. Ltd. v. Ladha Ram and Co., (1976) 4 SCC 320 An amendment introducing an entirely new case that displaces earlier admissions cannot be permitted. Relied on to affirm the Tribunal’s refusal to allow the tenant to alter his written statement.
Smt Krishnawati v. Shri Hans Raj, (1974) 1 SCC 289 “Parting with possession” requires the tenant to divest himself of both physical and legal possession; mere user by another without surrender of legal control is insufficient. Formed the central authority for holding that the tenant’s sons’ use of the premises did not amount to parting with possession under Section 14(1)(b).

Court's Reasoning and Analysis

The Supreme Court noted that there was no evidence of sub-letting or assignment, leaving “parting with possession” as the sole possible ground under Section 14(1)(b). It reiterated the settled principle that:

  • “Parting with possession” occurs only when the tenant transfers both actual and legal possession to another.
  • Mere occupation or user by family members, where the tenant retains the right to reclaim possession, does not satisfy the statutory requirement.

Examining the record, the Court observed that:

  • Although Jagan Nath stated he had “sold” the business to his sons, no material showed that he surrendered his legal right to occupy the premises.
  • The premises were residential-cum-commercial; the sons’ participation in the family business was consistent with a joint Hindu family arrangement.
  • The tenant’s less-than-candid conduct did not alter the legal position once the statutory test was applied.

Consequently, the findings of the Controller, Tribunal and High Court on Section 14(1)(b) were held unsustainable.

Holding and Implications

APPEAL ALLOWED; EVICTION ORDER SET ASIDE.

The tenant (now represented by his sons) retains possession of the premises, but must henceforth pay an enhanced rent/mesne profit of Rs 300 per month (four times the previous figure of Rs 75). The landlord remains entitled to pursue future eviction proceedings on bona-fide need or any other statutory ground under the Delhi Rent Control Act. No new precedent was created; the Court applied existing principles on “parting with possession” and amendment of pleadings.

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    Jagan Nath (Deceased) Through Lrs v. Chander Bhan And Others

    Sabyasachi Mukharji, J.— This appeal by special leave is directed against the judgment and order of the High Court of Delhi dated August 29, 1984. One Jagan Nath, since deceased, was the original tenant of the premises in question. He died during the pendency of this appeal here. His sons have been substituted. The tenancy in question started on January 1, 1962. It appears that on November 7, 1967 notice was addressed to Shri Baldev Raj, describing him as sole proprietor of Bindra Tent House, New Delhi, for eviction. There was an increase in rent in July 1970. The respondent herein filed the petition against the appellant herein Jagan Nath under Sections 14(1)(a) and 14(1)(b) of the Delhi Rent Control Act, 1958 (hereinafter called “the Act”) for eviction of the appellant from the premises consisting of one room forming part of premises No. N-80, Kirti Nagar, New Delhi, as the appellant herein had not paid rent with effect from May 1, 1975 till April 30, 1977 at the rate of Rs 75 per month despite service of the demand notice dated January 8, 1976. It was the further case of the respondent herein that the appellant had after June 9, 1962 sublet, assigned or otherwise parted with possession of the premises to Shri Baldev Raj Bindra and Sat Pal Bindra without the consent in writing of the respondent landlord. The suit was filed before the Additional Rent Controller and the same was contested on various grounds. It was contended that the petition was not maintainable because of non-joinder of Shri Baldev Raj Bindra and Sat Pal Bindra. The premises in question is residential-cum-commercial. It was stated that Shri Baldev Raj Bindra and Sat Pal Bindra are the sons of the original appellant, since deceased. The said tenant was in exclusive possession of the premises and was carrying on his business therein with which, it was stated, Baldev Raj and Sat Pal had no concern. They are the sons of the tenant, since deceased, and had constituted a Hindu Undivided Family. No demand notice was ever served upon the tenant. The tenant tendered the rent to the landlord by money order for an amount of Rs 450 which he refused to accept. The Additional Rent Controller so far as the ground of non-payment of rent was concerned held that there was a compliance with the order passed under Section 15(1) of the Act. The Additional Rent Controller gave the tenant the benefit under Section 14(2) of the Act. The petition of the landlord on the ground of non-payment of rent was, therefore, dismissed.

    2. The other ground was the ground of eviction claimed by the landlord for subletting, assignment or parting with the possession of the premises in question by the tenant in favour of his sons Baldev Raj and Sat Pal Bindra. The landlord in his deposition had stated that since July 1, 1971 Baldev Raj and Sat Pal were running their business in the name of Bindra Tent House in partnership and they were in possession of the premises in question. The tenant had no concern with the business carried on in the demised premises and the tenant had retired. The tenant in his cross-examination had stated that he had sent partnership document and Form II to the Income Tax Department. The landlord had denied the suggestion that the said Jagan Nath was in possession of the premises and his sons had been helping him from the very beginning. The landlord had produced on the record one statement made by the appellant herein, Jagan Nath before the Income Tax Officer, photostat copy of which Ex. AW-3/1 on the record which indicated that Jagan Nath who was the proprietor of the Bindra Tent House sold the same for Rs 18,000 on January 1, 1970 to his sons Baldev Raj and Sat Pal and he got cash of Rs 8000 and he gifted the other amount into two equal shares to his sons Baldev Raj and Sat Pal. In his statement, Jagan Nath had stated that Sat Pal and Baldev Raj had entered into a partnership in the same name Bindra Tent House in the same premises. This document was heavily relied upon before us by Shri Sachhar in aid of his submissions that the tenant had parted with possession.

    3. There is another document Ex. A.W-2/1. According to this document which is a photostat copy of the stamp vendor register, non-judicial papers for Rs 13, Rs 2 and Rs 20 were purchased by Baldev Raj for partnership purposes in the name of Bindra Tent House. Our attention was also drawn to the fact that an application for electricity connection was made by Sat Pal Bindra in the name of Bindra Tent House on July 25, 1975 as the sole proprietor of the same. From these and other documents, it was contended that there was parting of possession and as such the tenant was liable to be evicted. The Additional Rent Controller ordered the eviction under Section 14(1)(b) of the Act. He held that there was no subletting by the tenant, Jagan Nath since deceased but he had unlawfully parted with the possession of the demised premises in favour of his sons Sat Pal and Baldev Raj without the consent in writing of the landlord.

    4. During the pendency of the appeal the tenant preferred an application under Order 6 Rule 17 of the Code of Civil Procedure seeking permission to amend his written statement. The appellant contended that the landlord filed eviction petition in respect of the said premises against the appellant and his two sons which was assigned to Shri A.P Chaudhary, Additional Rent Controller. Another objection raised was that the property was taken on rent by Bindra Tent House and, therefore, the petition for eviction was not maintainable. The application had been contested in which it had been admitted that the earlier petition for eviction was filed but according to the respondent it was not properly instituted and the same was withdrawn. It was denied that the application was not maintainable. The Tribunal on an analysis of the matter came to the conclusion that belated amendment could not be permitted. It was emphasised that the tenant had admitted in the written statement that he was a tenant in the property in question. He could not subsequently be allowed to wriggle out of this situation and withdraw the admission. If the amendment was allowed, they would take valuable right of the other side and altogether a new plea would be taken, it was held. This cannot be permitted. In this connection, the Rent Tribunal relied upon the observations of the Assam High Court in Subashini Majumdar v. Krishna Prasad Mahatoo AIR 1956 Ass 79. The same view was reiterated by this Court in Modi Spinning and Weaving Mills Co. Ltd. v. Ladha Ram and Co. (1976) 4 SCC 320, AIR 1977 SC 680, (1977) 1 SCR 728 where the proposed amendment introduced an entirely new case seeking to displace the other side completely from the admission made then. It was held that such an amendment could not be allowed. We are of the opinion that the Rent Tribunal was therefore right in refusing the amendment on the basis of the aforesaid principle. The Tribunal on an analysis of evidence and facts came to the conclusion that there was no merit in the appeal and dismissed the appeal and affirmed the eviction order.

    5. The High Court on an analysis of the evidence and relevant authorities came to the conclusion that there was no substantial question of law and dismissed the second appeal. Hence this appeal.

    6. The question for consideration is whether the mischief contemplated under Section 14(1)(b) of the Act has been committed as the tenant had sublet, assigned, or otherwise parted with the possession of the whole or part of the premises without obtaining the consent in writing of the landlord. There is no dispute that there was no consent in writing of the landlord in this case. There is also no evidence that there has been any subletting or assignment. The only ground perhaps upon which the landlord was seeking eviction was parting with possession. It is well settled that parting with possession meant giving possession to persons other than those to whom possession had been given by the lease and the parting with possession must have been by the tenant; user by other person is not parting with possession so long as the tenant retains the legal possession himself, or in other words there must be vesting of possession by the tenant in another person by divesting himself not only of physical possession but also of the right to possession. So long as the tenant retains the right to possession there is no parting with possession in terms of clause (b) of Section 14(1) of the Act. Even though the father had retired from the business and the sons had been looking after the business, in the facts of this case, it cannot be said that the father had divested himself of the legal right to be in possession. If the father has a right to displace the possession of the occupants i.e his sons, it cannot be said that the tenant had parted with possession. This Court in Smt Krishnawati v. Hans Raj (1974) 1 SCC 289 had occasion to discuss the same aspect of the matter. There two persons lived in a house as husband and wife and one of them who rented the premises, allowed the other to carry on business in a part of it. The question was whether it amounted to subletting and attracted the provisions of sub-section (4) of Section 14 of the Delhi Rent Control Act. This Court held that if two persons live together in a house as husband and wife and one of them who owns the house allows the other to carry on business in a part of it, it will be in the absence of any other evidence, a rash inference to draw that the owner has let out that part of the premises. In this case if the father was carrying on the business with his sons and the family was a joint Hindu family, it is difficult to presume that the father had parted with possession legally to attract the mischief of Section 14(1)(b) of the Act.

    7. Shri Ganguli appearing for the landlord contended that the conduct of the tenant, Jagan Nath had been as sitting on the fence and avoiding the issue. It is true that Shri Ganguli rightly pointed out that Jagan Nath, the erstwhile tenant had not been fair and frank. But this is no ground to disentitle him to the benefit of the law if the facts have been proved that he had not parted with possession. After all, it has to be borne in mind that this is a residential-cum-commercial premises. Jagan Nath was carrying on business in part of the building with his two sons. Jagan Nath had died, therefore, it will be just and proper to presume that they were carrying on business, though perhaps the stand of Jagan Nath was not always fair. In these days of acute shortage of accommodation both for living and for vocation, one has to take the reality with a pinch of salt and the manner in which Shri Jagan Nath has conducted himself would not disentitle him the benefit of the law in the present climate.

    8. In the view we have taken, this appeal must be allowed and the judgment and order of the High Court of Delhi and the courts below are set aside. The eviction order is accordingly set aside.

    9. It has, however, to be borne in mind that rent in these areas has increased enormously. So while exercising our jurisdiction under Article 136 of the Constitution, we will enhance the rent to four times. We are told that the mesne profit at present payable was Rs 75 per month. We direct that mesne profit/rent should be Rs 300 per month. We further direct that this will not prejudice the rights of the respondent herein to file any proceedings for eviction on the ground of bona fide need, if there is such a need or on any other ground available to the respondent for eviction under the Act. We give this direction in view of the facts alleged in the affidavit of Shri Chander Bhan Mehta affirmed on April 26, 1988. About the correctness or validity of the statements made therein, we had no occasion to examine in this appeal. We have also taken into consideration the affidavit of Shri Baldev Raj Bindra affirmed on May 2, 1988 about the veracity of which also we express no opinion.

    10. In the facts of this case, the appellants will pay to the respondent the costs of the appeal.

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    Jagan Nath (Deceased) Through Lrs v. Chander Bhan And Others
    (May 11, 1988)