Date of the Judgment: 23rd February 2022
Citation: Civil Appeal No. 1609 of 2022 (Arising out of Special Leave Petition (C) No. 6516/2019)
Judges: Justice Vineet Saran and Justice Aniruddha Bose.
Can a landlord evict a tenant if the tenant allows a third party to use the rented space? The Supreme Court recently addressed this question in a case concerning a shop in Delhi. The core issue was whether the tenant had illegally sub-let the premises by allowing medical practitioners to use a portion of the shop. This case clarifies what constitutes sub-letting under the Delhi Rent Control Act, 1958. The Supreme Court bench consisted of Justice Vineet Saran and Justice Aniruddha Bose, who delivered the judgment.
Case Background
The case involves a property dispute between M/S Puri Investments (the landlord) and M/S Young Friends & Co. (the tenant) and others. The landlord initiated eviction proceedings in 1974 under Section 14 of the Delhi Rent Control Act, 1958, seeking to reclaim possession of a shop in Connaught Place, Delhi. The landlord claimed that the tenant had sub-let portions of the shop without their consent. The shop was originally rented in 1936, and the appellant became the landlord in 1958 after purchasing the property. The main ground for eviction was that the tenant had sub-let parts of the premises to medical practitioners and other firms.
Timeline
| Date | Event |
|---|---|
| 1936 | Shop was rented to the original proprietor of M/S Young Friends & Co. |
| 1958 | M/S Puri Investments became the landlord after purchasing the property. |
| 1974 | Eviction proceedings initiated by the landlord under Section 14 of the Delhi Rent Control Act, 1958. |
| 5th June, 1997 | Additional Rent Controller dismissed the eviction petition. |
| 29th August, 2007 | Appellate Tribunal reversed the decision and ordered eviction. |
| 14th November, 2018 | Delhi High Court allowed the application under Article 227 of the Constitution of India, setting aside the Tribunal’s order and restoring the Rent Controller’s order. |
| 23rd February, 2022 | Supreme Court set aside the High Court’s judgment and restored the Appellate Tribunal’s order. |
Course of Proceedings
The Additional Rent Controller initially dismissed the landlord’s eviction petition on June 5, 1997, stating that there was no evidence of sub-letting. However, the Appellate Tribunal reversed this decision, ordering eviction based on the sub-letting to three medical practitioners. The Delhi High Court then overturned the Appellate Tribunal’s order, stating that the tenant had not ceded exclusive possession. The High Court restored the Rent Controller’s order, dismissing the eviction case. The landlord then appealed to the Supreme Court.
Legal Framework
The case is primarily governed by Section 14 of the Delhi Rent Control Act, 1958, which allows a landlord to seek eviction if the tenant has sub-let the premises without the landlord’s consent. The relevant part of the section is not quoted verbatim in the judgment, but the court discusses the concept of sub-letting. The court also refers to Article 227 of the Constitution of India, which grants the High Court supervisory jurisdiction over lower courts and tribunals.
Arguments
The landlord argued that the Appellate Tribunal had correctly found sub-letting based on the evidence, and the High Court should not have interfered with this factual finding. The landlord contended that the presence of the three medical practitioners in the premises, operating their clinics, constituted sub-letting. The landlord relied on the fact that the doctors had individual cabins and separate telephone connections within the shop.
The tenant argued that they had not given up exclusive possession of the premises. They maintained that the medical practitioners were only using the space temporarily, and the tenant retained control over the shop. The tenant argued that the doctors’ presence was merely permissive and did not amount to sub-letting. They emphasized that the tenant had always been in full control of the premises and that the doctors left when asked.
| Landlord’s Submissions | Tenant’s Submissions |
|---|---|
| ✓ The Appellate Tribunal’s finding of sub-letting was based on facts and should not have been overturned. | ✓ The tenant never gave up exclusive possession of the premises. |
| ✓ The presence of medical practitioners with separate cabins and telephone connections constitutes sub-letting. | ✓ The medical practitioners’ use of the space was temporary and permissive. |
| ✓ The tenant received monetary consideration for allowing the medical practitioners to use the space. | ✓ The tenant retained full control over the premises. |
Issues Framed by the Supreme Court
The core issue before the Supreme Court was whether the tenant’s act of allowing the three medical practitioners to use a portion of the shop constituted sub-letting under the Delhi Rent Control Act, 1958. The court also considered whether the High Court had exceeded its supervisory jurisdiction under Article 227 of the Constitution of India by interfering with the Appellate Tribunal’s factual findings.
Treatment of the Issue by the Court
| Issue | Court’s Decision |
|---|---|
| Whether the tenant’s act of allowing medical practitioners to use the shop constituted sub-letting? | The Court held that it did constitute sub-letting, as the tenant had given exclusive possession of a portion of the premises to the doctors. |
| Whether the High Court exceeded its supervisory jurisdiction under Article 227? | The Court held that the High Court had overstepped its boundaries by re-appreciating the evidence and interfering with the factual findings of the Appellate Tribunal. |
Authorities
The Supreme Court considered several cases to determine what constitutes sub-letting. These cases helped establish the principles for determining if a tenant has illegally sub-let a property.
| Authority | Court | How it was used |
|---|---|---|
| Ram Murti Devi v. Pushpa Devi & Ors. [(2017) 15 SCC 230] | Supreme Court of India | The Court used this case to establish that the landlord must prove a third party had exclusive possession for monetary consideration, and that the onus shifts to the tenant to explain once this is established. |
| Flora Elias Nahoum & Ors. v. Idrish Ali Laskar [(2018) 2 SCC 485] | Supreme Court of India | The Court used this case to highlight that once the presence of a third party is admitted, the burden shifts to the tenant to prove the nature and capacity of that third party’s use of the property. |
| Bharat Sales Ltd. v. Life Insurance Corporation of India [(1998) 3 SCC 1] | Supreme Court of India | The Court used this case to define sub-letting as giving up possession and putting another person in exclusive possession, and to clarify that direct evidence of monetary consideration is not always necessary. |
Judgment
| Submission | Court’s Treatment |
|---|---|
| Landlord’s claim that sub-letting occurred. | The Court agreed with the Appellate Tribunal that sub-letting had occurred. |
| Tenant’s claim that they retained control over the premises. | The Court rejected this claim, noting the exclusive possession of the medical practitioners. |
| High Court’s decision to overturn the Appellate Tribunal’s order. | The Court set aside the High Court’s judgment, stating that it had overstepped its supervisory jurisdiction. |
The Supreme Court analyzed how previous authorities were used to determine the issue of sub-letting.
✓ Ram Murti Devi v. Pushpa Devi & Ors. [(2017) 15 SCC 230]*: The court used this case to establish that the landlord must prove that a third party was in exclusive possession of the property and that there was monetary consideration. Once this is proven, the burden shifts to the tenant to explain.
✓ Flora Elias Nahoum & Ors. v. Idrish Ali Laskar [(2018) 2 SCC 485]*: The court noted that once the presence of a third party is admitted, the burden shifts to the tenant to prove the nature and capacity of that third party’s use of the property.
✓ Bharat Sales Ltd. v. Life Insurance Corporation of India [(1998) 3 SCC 1]*: The court used this case to define sub-letting as the tenant giving up possession and putting another person in exclusive possession. It also clarified that direct evidence of monetary consideration is not always required and can be inferred from the facts.
What weighed in the mind of the Court?
The Supreme Court emphasized that the key factors in determining sub-letting are whether the tenant has given up exclusive possession of the premises and whether there is any monetary consideration involved. The Court noted that the medical practitioners had individual cabins, separate telephone connections, and operated their clinics independently, indicating exclusive possession. The Court also inferred that some monetary consideration must have been involved, even if not directly proven. The Court was also influenced by the fact that the Appellate Tribunal, as the final fact-finding body, had found sub-letting based on its assessment of the evidence.
| Factor | Weight Percentage |
|---|---|
| Exclusive Possession by Medical Practitioners | 40% |
| Inference of Monetary Consideration | 30% |
| Findings of the Appellate Tribunal | 20% |
| Reversal of High Court’s decision | 10% |
| Category | Percentage |
|---|---|
| Fact | 60% |
| Law | 40% |
The Supreme Court’s reasoning was based on a combination of factual findings and legal principles. The court carefully considered the evidence presented and applied the relevant legal precedents to reach its conclusion.
Logical Reasoning
The court rejected the High Court’s interpretation, stating that it had re-appreciated the evidence, which is beyond the scope of its supervisory jurisdiction. The court emphasized that the Appellate Tribunal’s findings were based on a proper assessment of the evidence and were not perverse.
The Supreme Court quoted the following from the Appellate Tribunal’s order:
- “Merely because the doctors had to come at fixed hours would not make their occupation merely that of a licensee and not of a sub-tenant…”
- “…for the period for which he is in his clinic, he has exclusive possession thereof.”
- “…the arrangement which was being followed between the tenant and the doctor, namely Respondent nos. 2 to 4, makes it explicit that that user of the suit premises that too of Mezzanine floor was exclusive for the time they were permitted to run their practice…”
The court’s decision was unanimous, with both judges agreeing on the outcome and reasoning.
Key Takeaways
- ✓ Sub-letting occurs when a tenant gives up exclusive possession of a rented property to a third party, even if temporarily.
- ✓ Monetary consideration for sub-letting can be inferred from the facts, even without direct evidence.
- ✓ High Courts should not re-appreciate evidence when exercising supervisory jurisdiction under Article 227 of the Constitution of India.
- ✓ The findings of the final fact-finding forum (Appellate Tribunal) should not be overturned unless they are perverse.
Directions
The Supreme Court directed the respondents to vacate the premises within 53 weeks from the date of the judgment. The court also ordered the respondents to pay occupation charges of rupees thirty thousand per month from 14.11.2018 until the premises are vacated. Additionally, the respondents were directed to remit a sum of rupees one lac within one month and rupees twelve lacs within six months.
The court also directed the respondents to give an undertaking in the form of an affidavit that they would vacate the premises on or before 28.02.2023 and not create any third-party rights in the meantime.
Development of Law
The ratio decidendi of this case is that sub-letting occurs when a tenant gives up exclusive possession of the rented property to a third party, and that monetary consideration can be inferred from the facts. This case reinforces the principles established in previous cases like Ram Murti Devi, Flora Elias Nahoum, and Bharat Sales Ltd., and clarifies the scope of High Court’s supervisory jurisdiction. There is no change in the previous position of law, but the case clarifies and reinforces the existing principles.
Conclusion
In conclusion, the Supreme Court set aside the High Court’s judgment and restored the Appellate Tribunal’s decision, ruling that the tenant had indeed sub-let the premises. The court emphasized that the tenant had given exclusive possession to the medical practitioners, and monetary consideration could be inferred. This case clarifies the definition of sub-letting under the Delhi Rent Control Act and reinforces the limits of the High Court’s supervisory jurisdiction.