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AMICUS AI
Citation Codes
Neutral Citations
2008 INSC 248
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section 14(1)(b) of the Act
  • Section 14 of the judgment citation (no specific act/article title mentioned)
  • The Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (57 of 1947)
  • Section 14(1)(b) of the Delhi Rent Control Act, 1958
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Cites
Cited by
Citation Codes
Neutral Citations
2008 INSC 248
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section 14(1)(b) of the Act
  • Section 14 of the judgment citation (no specific act/article title mentioned)
  • The Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (57 of 1947)
  • Section 14(1)(b) of the Delhi Rent Control Act, 1958
Smart Summary

Factual and Procedural Background

Appellant 1 became tenant of Shop No. III-1/9, Gopi Nath Bazar, Delhi Cantonment in 1956 at a monthly rent of Rs 65 and ran “M/s Mitra Book Depot.” Over time, a portion of the shop was used by Appellants 2-4 to operate “M/s Mitra Stores” and “M/s Lucky Confectioners.” In 2000 the original landlords sold the shop to Anil Anand, who, later the same year, conveyed it to the present respondent. On 1-2-2002 the respondent filed an eviction petition under Section 14(1)(b) of the Delhi Rent Control Act, 1958 alleging unauthorised sub-letting.

The Rent Controller found sub-letting proved and ordered eviction. The Rent Control Tribunal and, thereafter, the High Court of Delhi upheld that finding. The present appeal challenged those concurrent decisions before the Supreme Court.

Legal Issues Presented

  1. Whether Appellant 1 had unlawfully sub-let a portion of the premises to Appellants 2-4 without the landlord’s written consent, thereby attracting eviction under Section 14(1)(b) of the Delhi Rent Control Act.
  2. Whether the right to seek eviction on the ground of sub-letting had been waived by the erstwhile landlord or by the respondent purchaser because of long-standing knowledge of the alleged sub-tenants’ occupation.
  3. Whether Appellants 2-4, being relatives of Appellant 1, could be treated as members of the tenant’s “family,” thereby negating the allegation of sub-letting.

Arguments of the Parties

Appellants’ Arguments

  • The respondent could not seek eviction because the alleged sub-letting, if any, was long known to the earlier owner, amounting to waiver of the right to evict.
  • Appellants 2-4 were family members assisting Appellant 1; hence no distinct tenancy or exclusive possession existed.
  • A subsequent purchaser who bought with knowledge of the existing occupants cannot rely on sub-letting as a ground for eviction when the previous landlord never acted upon it.

Respondent’s Arguments

  • Denied any waiver; emphasised absence of written consent as mandated by Section 14(1)(b).
  • Maintained that Appellants 2-4 were in exclusive possession and running independent businesses, satisfying all ingredients of sub-letting.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Kailasbhai Shukaram Tiwari v. Jostna Laxmidas Pujara (2006) 1 SCC 524 Criteria for deciding whether a relative qualifies as a “family member” under rent control legislation. Applied to hold that Appellants 2-4, though relatives, were not family members for exemption from sub-letting because they did not reside with Appellant 1.
Joginder Singh Sodhi v. Amar Kaur (2005) 1 SCC 31 Burden of proof: once landlord shows exclusive possession of alleged sub-tenant, onus shifts to tenant. Used to affirm that, after showing exclusive possession of Appellants 2-4, the burden shifted to Appellant 1, who failed to rebut it.
Duli Chand v. Jagmender Dass (1990) 1 SCC 169 Necessity of written consent and requirement of “conscious relinquishment” to establish waiver. Cited to reject appellants’ plea of waiver because no written consent or express relinquishment was proved.
Pulin Behari Lal v. Mahadeb Dutta (1993) 1 SCC 629 Reiteration that absence of conscious relinquishment negates waiver in sub-letting cases. Reinforced the conclusion that neither the original nor the subsequent landlord had waived the right to evict.
United Bank of India v. Cooks and Kelvey Properties (P) Ltd. (1994) 5 SCC 9 Example where tenant retained legal control, negating sub-letting. Distinguished on facts: unlike that case, Appellant 1 had surrendered control; therefore, the precedent did not assist the appellants.

Court's Reasoning and Analysis

The Supreme Court examined the concurrent factual findings of sub-letting by three lower forums and found no error warranting interference. It held:

  • Statutory ingredients satisfied: Appellant 1 had parted with exclusive possession of a portion of the premises to Appellants 2-4 without written consent of any landlord, fulfilling Section 14(1)(b).
  • Family member argument rejected: Relying on Kailasbhai, mere blood relationship is insufficient; absence of co-residence and evidence of independent business established that Appellants 2-4 were not “family” for rent control purposes.
  • Burden of proof correctly applied: Landlord established exclusive possession of sub-tenants; Appellant 1 failed to show control or supervisory rights, aligning with Joginder Singh Sodhi.
  • No waiver proved: Waiver requires conscious relinquishment; none was shown. The sale deed to the respondent mentioned only Appellant 1 as tenant, indicating lack of knowledge or consent to sub-letting. Decisions in Duli Chand and Pulin Behari Lal guided this conclusion.
  • Distinction from United Bank of India: That case involved continued control by the tenant over the premises; here, control had effectively shifted to Appellants 2-4.

Holding and Implications

APPEAL DISMISSED. The eviction order stands affirmed. However, the Court granted the appellants time until 30-6-2008 to vacate the premises upon filing an undertaking within four weeks. No costs were awarded.

Implications are confined to the parties: the appellants must vacate the premises, and the respondent landlord may recover possession. The judgment reinforces settled principles on sub-letting—particularly the necessity of written consent, the burden-shifting mechanism, and the stringent test for waiver—but does not create new precedent beyond reiterating existing law.

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    Vaishakhi Ram And Others v. Sanjeev Kumar Bhatiani .

    Tarun Chatterjee, J.— Leave granted.

    2. This appeal is directed against the final judgment and order dated 23-1-2007 passed by the High Court of Delhi in CM (M) No. 126 of 2007 whereby the eviction of the appellants from a shop bearing No. III-1/9, Gopi Nath Bazar, Delhi Cantonment, Delhi (in short “the suit shop”) was affirmed on the ground of sub-letting under Section 14(1)(b) of the Delhi Rent Control Act, 1958 (for short “the Act”).

    3. Appellant 1 was inducted as a tenant in the year 1956 by the erstwhile owners of the suit shop viz. Som Nath and Mohinder Nath. He was all along in continuous possession of the suit shop and was conducting the business from the same along with his brother Chunni Lal of Chunni Lal and Sons under the name and style of M/s Mitra Book Depot. The rent receipts issued by the landlord were in the name of M/s Mitra Book Depot as tenant at the rate of Rs 65 per month.

    4. Subsequently, a business was started in a portion of the suit shop in the name of M/s Mitra Stores and M/s Lucky Confectioners. In the year 2000, Som Nath and Mohinder Nath sold the suit shop to one Anil Anand. However, the rent of the suit shop was continued to be paid to Som Nath and Mohinder Nath by Appellant 1 up to the month of September 2000. Thereafter, the rent was deposited by Appellant 1 in the court in different proceedings.

    5. On 20-10-2000, Anil Anand sold the suit shop to the respondent by a registered deed of sale. However, Appellant 1 went on depositing the rent in the name of the original landlord. Finally, on or about 1-2-2002, the respondent filed an eviction petition under Section 14(1)(b) of the Act on the ground of sub-letting before the Rent Controller, Delhi. According to the respondent, although the tenancy was given to Appellant 1 in the name of M/s Mitra Book Depot but subsequently, Appellant 1 had sub-let the suit shop to Appellants 2 to 4 who were carrying on the business in a portion of the suit shop in the name of M/s Mitra Stores and M/s Lucky Confectioners. Accordingly, the respondent sought for eviction of the appellants on the ground of sub-letting.

    6. A written statement was filed by the appellants denying the material allegations made in the eviction petition filed before the Rent Controller, Delhi by the respondent.

    7. After the issues were framed and the evidence was adduced, the Rent Controller held on facts that Appellant 1 had sub-let a portion of the suit shop in which the business in the name of M/s Mitra Stores and M/s Lucky Confectioners was carried on by Appellants 2 to 4 and, therefore, the appellants were liable to be evicted under Section 14(1)(b) of the Act. The Rent Controller passed the order of eviction by holding, inter alia, that the case of sub-letting was duly proved as from the evidence on record, both oral and documentary, it was clear that an independent business was run by Appellants 2 to 4 and that they were in exclusive possession of a portion of the suit shop.

    8. Feeling aggrieved, the appellants filed an appeal before the Rent Control Tribunal, which also dismissed the same by affirming the findings of the Rent Controller. Against this order of the Rent Control Tribunal, the appellants filed a writ petition before the High Court of Delhi and the High Court by the impugned judgment also dismissed the same. Aggrieved by the aforesaid judgment and order of the High Court, the instant special leave petition has been filed, in respect of which leave has already been granted.

    9. On behalf of the appellants, at the first instance, Mr Rajesh Aggarwal contended that even if sub-letting was done by Appellant 1 in favour of Appellants 2 to 4, then also, the respondent was not entitled to an order of eviction on the ground of sub-letting under Section 14(1)(b) of the Act for the simple reason that since Appellants 2 to 4 have been carrying on their business in the suit shop for a long time with the knowledge of the respondent as also the erstwhile owner, the ground of sub-letting for eviction of the appellants must be held to have been waived by the erstwhile landlord of Appellant 1 and finally by the respondent as he had, at the time of his purchase, knowledge of the sub-letting. Therefore, Mr Aggarwal contended that even if sub-letting was done by Appellant 1 in favour of Appellants 2 to 4, either in whole or in part, it must be held that the right to evict the appellants by the respondent purchaser on the ground of sub-letting was waived.

    10. It was next contended by Mr Aggarwal that Appellants 2 to 4, being the family members of Appellant 1 and carrying on business in the name of M/s Mitra Stores and M/s Lucky Confectioners in a part of the suit shop, the sub-letting as made out by the respondent for eviction cannot be said to have been proved. In any view of the matter, the question of sub-letting of the suit shop to Appellants 2 to 4 could not arise as Appellant 1 had the exclusive possession and legal control of the same.

    11. It was lastly contended by Mr Aggarwal that in any view of the matter, the respondent, who is a subsequent purchaser of the suit shop was not entitled to take advantage of the ground of sub-letting when the erstwhile landlord had not taken any steps to evict the appellants and therefore, had waived the right to evict the appellants on the ground of sub-letting.

    12. These submissions of Mr Aggarwal were hotly contested by Mr Ranjit Kumar, the learned Senior Counsel appearing on behalf of the respondent.

    13. Having heard the learned counsel for the parties and after going through the impugned judgment of the High Court as well as of the courts below and the other materials on record, including the oral evidence, we are of the view that the concurrent findings of fact on the question of sub-letting cannot be upset for the reasons hereinafter.

    14. Let us first deal with the question whether on account of the continuous exclusive possession of Appellants 2 to 4 in a part of the suit shop from the time of the original erstwhile landlord, the respondent purchaser was entitled to evict the appellants from the suit shop on the ground of sub-letting as the said right was waived by the erstwhile landlord or even by the subsequent respondent purchaser.

    15. Before deciding the question of waiver, we must look into the provision made in Section 14(1)(b) of the Act, which reads as under:

    “14. (1)(b) that the tenant has, on or after 9-6-1952, sub-let, assigned or otherwise parted with the possession of the whole or any part of the premises without obtaining the consent in writing of the landlord;”

    A plain reading of this provision would show that if a tenant has sub-let or assigned or otherwise parted with the possession of the whole or any part of the premises without obtaining the consent in writing of the landlord, he would be liable to be evicted from the said premises. That is to say, the following ingredients must be satisfied before an order of eviction can be passed on the ground of sub-letting:

    (1) the tenant has sub-let or assigned or parted with the possession of the whole or any part of the premises;
    (2) such sub-letting or assigning or parting with the possession has been done without obtaining the consent in writing of the landlord.

    16. So far as these conditions are concerned, we find that in the facts of this case, Appellant 1 has parted with the exclusive possession of a part of the suit shop in favour of Appellants 2 to 4 without obtaining the consent in writing, either of the erstwhile landlord or the respondent purchaser. Now the question is whether the respondent or the erstwhile owner of the suit shop had waived the right of evicting the tenant on the ground of sub-letting or not. As noted hereinearlier, Appellants 2 to 4 were inducted in a part of the suit shop without obtaining the consent in writing, either of the original landlord of the suit shop or of the present respondent.

    17. Before deliberating further on this question, let us, at this stage, consider a short submission of the learned counsel for the appellants. According to Mr Aggarwal, the learned counsel appearing on behalf of the appellants, since Appellants 2 to 4 are the family members of Appellant 1, it cannot be said that Appellants 2 to 4 were inducted as sub-tenants under Appellant 1. In Kailasbhai Shukaram Tiwari v. Jostna Laxmidas Pujara (2006) 1 SCC 524 while dealing with a case of sub-letting under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (57 of 1947) this Court observed that the question as to whether a person is a member of the family of the tenant must be decided on the facts and circumstances of the case. It observed as follows:

    “14. … Apart from the parents, spouse, brothers, sisters, sons and daughters, if any other relative claims to be a member of the tenant's family, some more evidence is necessary to prove that they have always resided together as members of one family over a period of time. The mere fact that a relative has chosen to reside with the tenant for the sake of convenience, will not make him a member of the family of the tenant in the context of rent control legislation.”

    18. Admittedly, in this case, Appellants 2 to 4 are neither the spouse, brothers, sisters, sons or daughters of Appellant 1. Although they are related to Appellant 1, there is nothing on record to show that Appellants 2 to 4 were residing with Appellant 1 for a considerable period of time as members of the family of Appellant 1. Therefore, only because they were related to Appellant 1, in the absence of Appellants 2 to 4 residing with Appellant 1, it cannot be said in the context of rent control legislation that they were residing as family members of Appellant 1 and therefore, the question of sub-letting would not arise at all.

    19. The three courts concurrently held on facts that Appellant 1 had no exclusive possession in a part of the suit shop where Appellants 2 to 4 had been carrying on their separate independent business.

    20. In view of the admission made by Appellant 1 to the extent that he had got nothing to do with the firm M/s Mitra Stores and M/s Lucky Confectioners nor had any control and supervision over the said business, the onus had shifted to Appellant 1 to prove that there was no sub-letting and that Appellant 1 had legal possession and control over the suit shop or that Appellants 2 to 4, being the family members, were assisting him in the business of M/s Mitra Stores and M/s Lucky Confectioners. Both the courts below, namely, the Rent Controller and the appellate authority, on consideration of the entire evidence on record, including the admission of Appellant 1 in respect of the business carried on in a part of the suit shop in the name of M/s Mitra Stores and in the name of M/s Lucky Confectioners and in view of the onus having been shifted to Appellant 1, held that it could not be proved by cogent evidence that there was no sub-letting. The courts below were fully justified in holding that sub-letting as alleged was proved since Appellant 1 had failed to prove that Appellants 2 to 4 were not conducting their business in the suit shop independently but in fact doing the business of Appellant 1 or assisting him.

    21. It is well settled that the burden of proving sub-letting is on the landlord but if the landlord proves that the sub-tenant is in exclusive possession of the suit premises, then the onus is shifted to the tenant to prove that it was not a case of sub-letting. Reliance can be placed on the decision of this Court in Joginder Singh Sodhi v. Amar Kaur (2005) 1 SCC 31. Therefore, we are in full agreement with the High Court as well as the courts below that since Appellants 2 to 4 had been in exclusive possession of the suit shop and Appellant 1 could not prove that it was not a case of sub-letting, the suit shop had been sub-let by Appellant 1 in favour of Appellants 2 to 4. Therefore, no interference can be made with the findings arrived at by the High Court as well as the courts below on the question of sub-letting.

    22. Let us now revert to the question whether long exclusive possession of Appellants 2 to 4 in the suit shop would invite the court to hold that the respondent or the erstwhile owner of the suit shop had waived the right to evict the tenant on the ground of sub-letting.

    23. As noted hereinearlier, an order of eviction can be passed under Section 14(1)(b) of the Act only if the ingredients enumerated hereinearlier are satisfied. In order to prove sub-letting, it must be shown that Appellants 2 to 4 were inducted without the consent in writing of the landlord. In this case, admittedly, no consent in writing, either of the erstwhile owner of the suit shop or of the respondent, who was the subsequent purchaser of the same, was taken in writing.

    24. It is now well settled that to constitute waiver of benefit conferred by the provisions of the Act, conscious relinquishment of such benefit must be proved. In Duli Chand v. Jagmender Dass (1990) 1 SCC 169 this Court while dealing with a case of sub-letting and waiver on the part of the landlord, emphasised that the consent in writing of the landlord for sub-letting or parting with possession was essential under Section 14(1)(b) of the Act. The view expressed in the aforesaid decision was also the view of this Court in Pulin Behari Lal v. Mahadeb Dutta (1993) 1 SCC 629 in which this Court reiterated the principle that in the absence of conscious relinquishment of right to eviction, the question of waiver on the ground of sub-letting for eviction by the landlord did not arise at all.

    25. It is not in dispute in the present case that the respondent had purchased the suit shop from the erstwhile owner of the same. The sale deed dated 20-10-2000 evidencing the purchase of the suit shop by the respondent from the erstwhile owner of the same was exhibited. A perusal of the sale deed would show that Appellant 1 was a tenant in respect of the suit shop and there was no mention that Appellants 2 to 4 were also in possession of the suit shop, either in its entirety or in a part of it. That being the position and in the absence of any evidence on record to show that there was any conscious relinquishment of the benefit conferred by the provisions of the statute, we do not find any reason to hold otherwise to the extent that the sub-letting made in favour of Appellants 2 to 4 by Appellant 1 was proved and the right to eviction was not waived, either by the erstwhile landlord or by the respondent.

    26. Mr Aggarwal, the learned counsel appearing on behalf of the appellants had strongly relied on a decision of this Court in United Bank of India v. Cooks and Kelvey Properties (P) Ltd. (1994) 5 SCC 9 and submitted that since Appellant 1 was in exclusive possession and legal control of the suit shop, the case of sub-letting could not be proved. In our view, that decision of this Court has no manner of application in the facts and circumstances of the present case. In that case, although the tenant appellant Bank had inducted the trade union in the tenanted premises for carrying on the trade union activities, the bank had not received any monetary consideration from the trade union which was permitted to use and enjoy the same for its trade union activities. The bank had retained its power to call upon the trade union to vacate the premises at any time and the Union had also given an undertaking to vacate the same when required. In that decision, the bank was maintaining the premises at its own expense and also paying the electricity charges consumed by the trade union for using the demised premises. Basing on the aforesaid facts, it was held in that case that the bank had retained its control over the trade union whose membership was only confined to the employees of the bank and, therefore, the court held that the inference that could only be drawn was that the appellant had retained the legal control and possession of the suit premises in that case. As noted hereinearlier, this is not the situation in the present case. The findings of the three courts were that Appellant 1 had no legal control over the suit shop and also that Appellants 2 to 4 were in exclusive possession of the suit shop or at least, in a portion of the same and were carrying on a different independent business in the suit shop. Such being the position and in view of the fact that Appellants 2 to 4 were conducting their independent business in the suit shop and had exclusive possession of the same and that Appellant 1 had no legal control or possession over the suit shop, the aforesaid decision of this Court, as relied on by Mr Aggarwal, could not be taken to be of any help to the appellants. Accordingly, these submissions of the learned counsel for the appellants have no legs to stand upon and thus rejected.

    27. For the reasons aforesaid, there is no merit in this appeal and the appeal is, therefore, dismissed. However, considering the facts and circumstances of the case, the appellants are given time to vacate the suit shop by 30-6-2008 subject to filing of usual undertaking before this Court within a period of four weeks from this date. There will be no order as to costs.

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    Vaishakhi Ram And Others v. Sanjeev Kumar Bhatiani .
    (Feb 25, 2008)