Supreme Court rules on eviction for parting with possession without consent: Bhairon Sahai vs. Bishamber Dayal (2017)

Introduction

Date of the Judgment: 18 July 2017
Citation: (2017) INSC 681
Judges: S. A. Bobde, J., L. Nageswara Rao, J.
Can a tenant be evicted if they allow someone else to use part of the rented property without the landlord’s permission? The Supreme Court of India recently addressed this issue in a case concerning a shop in Delhi. The core question was whether a tenant, who had allowed a third party to run a business on a portion of the rented premises, could be evicted for “parting with possession” without the landlord’s consent. The judgment was delivered by a two-judge bench comprising Justice S. A. Bobde and Justice L. Nageswara Rao, with Justice L. Nageswara Rao authoring the opinion.

Case Background

In 1963, Respondent No. 1 became the tenant of a shop in Karol Bagh, New Delhi, paying a monthly rent of Rs. 54. The Appellant purchased the property in 1974. The Appellant issued a notice to terminate the tenancy, alleging that Respondent No. 1 had parted with possession of the premises without consent and caused damage. The Appellant claimed that Respondent No. 1 had sublet a portion of the premises to Respondent No. 2, who was operating a ration shop. Respondent No. 1 denied these claims, stating that he ran a provision store and a fair price shop on the premises, with Respondent No. 2 as a partner since 1977, though the ration shop license was in Respondent No. 2’s name since 1964. The Appellant contended that the Respondent No.1 had parted with possession of the premises in favour of Respondent No. 2 without the consent of the landlord.

Timeline

Course of Proceedings

The Rent Controller initially ruled in favor of the Appellant, ordering the Respondents to vacate the premises, finding that Respondent No. 1 had parted with possession to Respondent No. 2 without the landlord’s consent. However, the Rent Control Tribunal reversed this decision, concluding that Respondent No. 1 was running the fair price shop. The High Court of Delhi upheld the Tribunal’s decision, stating it was not proven that Respondent No. 2 had exclusive possession of the premises. Aggrieved by the High Court’s decision, the Appellant appealed to the Supreme Court.

Legal Framework

The case revolves around Section 14 of the Delhi Rent Control Act, 1958. Specifically:

• Section 14(1)(b) of the Delhi Rent Control Act, 1958 states that a tenant can be evicted if they have sub-let, assigned, or otherwise parted with possession of the premises without the landlord’s written consent. “That the tenant has, on or after the 9th day of June, 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.”
• Section 14(4) of the Delhi Rent Control Act, 1958 provides that if a tenant allows someone to occupy the premises under the guise of a partnership, but it is actually a sub-letting arrangement, it will be deemed as sub-letting. “For the purposes of Clause (b) of the proviso to Sub-section (1), any premises which have been let for being used for the purposes of business or profession shall be deemed to have been sub-let by the tenant, if the Controller is satisfied that the tenant without obtaining the consent in writing of the landlord has, after the 16th day of August, 1958, allowed any person to occupy the whole or any part of the premises ostensibly on the ground that such person is a partner of the tenant in the business or profession but really for the purpose of sub-letting such premises to that person.”

The Delhi Rationing Order, 1964, also plays a role, as it prohibits the transfer of a fair price shop license.

Arguments

Appellant’s Arguments:

• The Appellant argued that Respondent No. 1 had parted with possession of a portion of the premises to Respondent No. 2 without the landlord’s consent, violating Section 14(1)(b) of the Delhi Rent Control Act, 1958.
• The Appellant contended that the partnership between Respondent No. 1 and Respondent No. 2 was not genuine and was a ruse to sub-let the premises, attracting Section 14(4) of the Delhi Rent Control Act, 1958.
• The Appellant relied on the judgment in Munshi Lal v. Smt. Santosh and Others (Civil Appeal No. 1327 of 2017), which clarified the scope of Section 14(1)(b) and Section 14(4) of the Delhi Rent Control Act, 1958, emphasizing the requirement of written consent for sub-letting or parting with possession.

Respondent’s Arguments:

• Respondent No. 1 argued that entering into a partnership does not automatically constitute sub-letting.
• Respondent No. 1 claimed he did not part with possession as he was running the fair price shop since 1964, even though the license was in Respondent No. 2’s name.
• Respondent No. 1 contended that there was no need for consent as there was no parting with possession.
• The Respondents relied on the judgment in Parvinder Singh v. Renu Gautam and Others (2004) 4 SCC 794, arguing that a tenant does not necessarily sub-let by entering into a partnership, especially if the tenant is actively involved in the business and retains control over the premises.

[TABLE] of Submissions

Issues Framed by the Supreme Court

The main issue before the Supreme Court was:

1. Whether a landlord is entitled to seek eviction of the Respondents on the ground of parting with possession without his consent.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Court considered the following authorities:

• Munshi Lal v. Smt. Santosh and Others (Civil Appeal No. 1327 of 2017, Supreme Court of India): This case was relied upon to interpret Section 14(1)(b) and Section 14(4) of the Delhi Rent Control Act, 1958, emphasizing that written consent from the landlord is required before a tenant can sub-let, assign, or part with possession. The Court in this case held that a partnership cannot be a ruse for sub-letting and that the requirement of consent in writing of the landlord is retained as a pre-requisite even for the purposes of Sub-section (4).
• Parvinder Singh v. Renu Gautam and Others (2004) 4 SCC 794, Supreme Court of India: This case was cited by the Respondents to argue that entering into a partnership does not automatically amount to sub-letting. However, the Court distinguished this case, stating that it was not relevant as the present case was decided on the ground of parting with possession and not sub-letting.

The Court also considered the following legal provisions:

• Section 14(1)(b) of the Delhi Rent Control Act, 1958: This provision allows for the eviction of a tenant who has sub-let, assigned, or otherwise parted with possession of the premises without the landlord’s written consent.
• Section 14(4) of the Delhi Rent Control Act, 1958: This provision states that if a tenant allows someone to occupy the premises under the guise of a partnership, but it is actually a sub-letting arrangement, it will be deemed as sub-letting.

[TABLE] of Authorities

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Court relied on Munshi Lal v. Smt. Santosh and Others (Civil Appeal No. 1327 of 2017)* to interpret that the requirement of written consent from the landlord is a pre-requisite for sub-letting or parting with possession.
• The Court distinguished the case of Parvinder Singh v. Renu Gautam and Others (2004) 4 SCC 794*, stating that it was not relevant to the present case as the issue was not about sub-letting but about parting with possession.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the fact that Respondent No. 1 had allowed Respondent No. 2 to operate a fair price shop on a portion of the premises without obtaining the Appellant’s consent. The Court emphasized that the license for the fair price shop was in Respondent No. 2’s name since 1964, indicating that Respondent No. 1 had indeed parted with possession of that portion of the premises. The Court also noted that the partnership between Respondent No. 1 and Respondent No. 2 was formed in 1977, after the fair price shop was already being operated by Respondent No. 2. The Court focused on the fact that the tenant had parted with possession of a part of the premises without the landlord’s consent, which was sufficient for eviction under Section 14(1)(b) of the Delhi Rent Control Act, 1958. The Court did not find it necessary to delve into the genuineness of the partnership or whether it amounted to sub-letting, as the parting of possession was a clear violation.

Fact:Law Ratio

Logical Reasoning

The Court did not consider alternative interpretations, such as whether the partnership between the respondents constituted sub-letting, as the ground of parting with possession was sufficient for eviction. The Court emphasized that the tenant had parted with possession of a portion of the premises without the consent of the landlord, which was a clear violation of Section 14(1)(b) of the Delhi Rent Control Act, 1958.

The Supreme Court held that the tenant, Respondent No. 1, had indeed parted with possession of a portion of the premises to Respondent No. 2 without the landlord’s consent. This was sufficient ground for eviction under Section 14(1)(b) of the Delhi Rent Control Act, 1958. The Court did not find it necessary to delve into the genuineness of the partnership between the respondents or whether it amounted to sub-letting, as the parting of possession was a clear violation. The Court stated, “Parting with the possession of the premises without consent of the landlord was sufficient for eviction of the tenant without getting into the question of sub-letting or assignment.” The Court also noted that, “No consent was sought before the Respondents entered into partnership.” The Court further stated, “We are of the opinion that the Rent Controller was right in finding that Respondent No.2 was carrying on the business as Authorised Ration Distributor in a portion of the premises from 1964 as he was the licensee.”

Key Takeaways

• A tenant can be evicted if they allow another person to use part of the rented premises without the landlord’s written consent.
• The act of “parting with possession” is a distinct ground for eviction under the Delhi Rent Control Act, 1958, separate from sub-letting.
• Even if a tenant claims to be running a business on the premises, if the license for that business is in another person’s name, it can be considered as parting with possession.
• Landlords must ensure that tenants do not transfer possession of the rented premises to any other person without obtaining written consent.
• Tenants must seek written consent from the landlord before allowing another person to use the rented premises.

Directions

The Supreme Court directed the Respondents to vacate the premises within two months. The Court also directed that the amount of Rs. 16,500/- deposited by the tenant during the pendency of the appeal be given to the Appellant.

Development of Law

The ratio decidendi of this case is that a tenant can be evicted for parting with possession of the rented premises without the landlord’s written consent, as per Section 14(1)(b) of the Delhi Rent Control Act, 1958. This judgment clarifies that “parting with possession” is a distinct ground for eviction, separate from sub-letting, and that the landlord’s consent is necessary before a tenant allows another person to use any part of the rented premises. The Court distinguished the case from Parvinder Singh v. Renu Gautam and Others (2004) 4 SCC 794, which dealt with sub-letting, emphasizing that the present case was decided on the ground of parting with possession. This judgment reinforces the importance of obtaining written consent from the landlord before allowing any third party to use the rented premises and clarifies the scope of Section 14(1)(b) of the Delhi Rent Control Act, 1958.

Conclusion

The Supreme Court allowed the appeal, ruling that the tenant, Respondent No. 1, had parted with possession of a portion of the premises to Respondent No. 2 without the landlord’s consent, which is a ground for eviction under Section 14(1)(b) of the Delhi Rent Control Act, 1958. The Court emphasized that the license for the fair price shop was in Respondent No. 2’s name since 1964. The Court ordered the Respondents to vacate the premises within two months, thereby settling the dispute in favor of the landlord.