Supreme Court Upholds Eviction on Sub-Tenancy: Ram Murti Devi vs. Pushpa Devi (2017)

Date of the Judgment: 11 July 2017

Citation: (2017) INSC 648

Judges: A.K. Sikri, J., Ashok Bhushan, J.

Can a landlord evict a tenant if they find that the tenant has sublet the property to someone else? The Supreme Court of India recently addressed this issue in a case where a landlord sought to evict a tenant for allegedly subletting a shop. The core issue was whether the tenant had indeed sublet the premises, thereby violating the terms of their tenancy and the relevant law. The judgment was delivered by a two-judge bench comprising Justice A.K. Sikri and Justice Ashok Bhushan, with Justice Ashok Bhushan authoring the opinion.

Case Background

The appellant, Ram Murti Devi, is the landlord of a shop that was rented to Amar Nath (since deceased). The landlord issued a notice to terminate the tenancy. Subsequently, the landlord filed a suit in the Court of Judge Small Causes, seeking the tenant’s eviction on grounds of rent arrears and subletting. The landlord contended that the monthly rent was Rs. 950, along with house tax and water charges, and that the tenant had defaulted on rent since January 1, 1995. Additionally, the landlord claimed that the tenant had sublet a portion of the shop to Mohd. Ezaj Khan, charging him Rs. 50 per day. The tenant denied these claims, stating that the rent was Rs. 710 per month and that Mohd. Ezaj was merely a worker in his shop, not a sub-tenant.

Timeline:

Course of Proceedings

The Judge Small Causes Court ruled in favor of the landlord, ordering the tenant to vacate the shop and pay the due rent and damages. The court found that the tenant was in arrears of rent and had sublet a portion of the shop to Mohd. Ezaj Khan. The tenant then filed a revision petition in the Allahabad High Court under Section 25 of the Provincial Small Cause Act, 1887. The High Court overturned the Trial Court’s decision, stating that the tenant was not in arrears of rent and that the landlord had failed to prove the sub-tenancy.

Legal Framework

The case is governed by the U.P. Urban Building (Regulation of Letting, Rent and Eviction) Act, 1972. Key provisions include:

• Section 20(2)(e) of the U.P. Urban Building (Regulation of Letting, Rent and Eviction) Act, 1972: This section states that a tenant can be evicted if they have sublet the property in contravention of Section 25 of the same Act. The section reads as:
  
  “20. Bar of suit for eviction of tenant except on specified grounds­……(2) A suit for the eviction of a tenant from a building after the determination of his tenancy may be instituted on one or more of the following grounds, namely . . . . . . . (e) that the tenant has sub-let, in contravention of the provisions of Section 25, or as the case may be, of the old Act the whole or any part of the building;”
• Section 25 of the U.P. Urban Building (Regulation of Letting, Rent and Eviction) Act, 1972: This section prohibits tenants from subletting the entire building and allows for subletting of a part of the building only with the written permission of the landlord and the District Magistrate. The section reads as:
  
  “25. Prohibition of sub-letting.­­(1) No tenant shall sub-let the whole of the building under his tenancy. (2) The tenant may, with the permission in writing of the landlord and of the District Magistrate, sub-let a part of the building. Explanation.­­For the purposes of this section­­ (i) where the tenant ceases, within the meaning of clause (b) of sub-section (1) or sub-section (2) of Section 12, to occupy the building or any part thereof, he shall be deemed to have sub-let that building or part; (ii) lodging a person in a hotel or a lodging house shall not amount to sub-letting.”

Arguments

Appellant (Landlord):

• The landlord argued that they had specifically pleaded that the tenant had sublet the shop to Mohd. Ezaj.
• The tenant’s defense that Mohd. Ezaj was a worker meant the burden of proof shifted to the tenant to show that Mohd. Ezaj was their employee and was paid a salary.
• The landlord contended that the sub-tenant’s possession was not denied, and it was up to the tenant to prove that Mohd. Ezaj was not a sub-tenant but an employee.

Respondents (Tenants):

• The tenants argued that the High Court correctly reversed the Trial Court’s judgment.
• The tenants contended that the Trial Court did not properly evaluate the evidence.
• The tenants claimed that the landlord did not adequately plead or prove the sub-tenancy in favor of Mohd. Ezaj.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue before the court was:

1. Whether the High Court was correct in reversing the Trial Court’s decision that the tenant had sublet the premises to Mohd. Ezaj.

Treatment of the Issue by the Court

The following table demonstrates how the Court decided the issues:

Authorities

The Supreme Court considered the following 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 Associated Hotels of India Ltd. Vs. S. B. Sardar Ranjit Singh, AIR 1968 SC 933* to reiterate that the initial burden of proving sub-letting lies with the landlord.
• The Court distinguished Jagdish Prasad Vs. Smt. Angoori Devi, (1984) 2 SCC 590*, stating that the facts of the present case did not fall under the examples where a person other than the tenant might be present without it being a sub-tenancy.
• The Court applied the principles from Dipak Banerjee versus Lilabati Chakraborty, (1987) 4 SCC 161*, emphasizing the need to prove exclusive possession and monetary consideration for sub-tenancy.
• The Court used the observations from Smt. Rajbir Kaur and Another versus M/s S. Chokesiri and Co., (1989) 1 SCC 19* to note that sub-letting transactions are often clandestine and can be inferred.
• The Court applied the principle from Kala and Another versus Madho Parshad Vaidya, (1998) 6 SCC 573*, that once the landlord establishes parting of possession, the onus shifts to the tenant.
• The Court relied on the principles from Joginder Singh Sodhi versus Amar Kaur, (2005) 1 SCC 31* and Mahendra Saree Emporium(II) versus G. V. Srinivasa Murthy, (2005) 1 SCC 481* to reiterate that sub-letting requires proof of exclusive possession and monetary consideration.
• The Court considered Hari Shankar and Others versus Rao Girdhari Lal Chowdhury, AIR 1963 SC 698* and Mundri Lal versus Sushila Rani(Smt) and Another, (2007) 8 SCC 609* to explain the scope of revisional jurisdiction under Section 25 of the Provincial Small Cause Courts Act, emphasizing that the High Court should not interfere with factual findings unless there was an error of law or procedure.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Pleadings and Evidence: The Court found that the landlord had adequately pleaded that the tenant had sublet the shop to Mohd. Ezaj. The tenant’s own admission that Mohd. Ezaj was working in the shop, coupled with the lack of evidence to prove his employment, weighed heavily against the tenant.
• Trial Court’s Findings: The Court noted that the Trial Court had correctly found that Mohd. Ezaj was in partial possession of the shop and that the tenant had failed to prove he was an employee. The Trial Court’s findings were based on a proper assessment of the evidence.
• Revisional Jurisdiction: The Court emphasized that the High Court, in its revisional jurisdiction, should not have interfered with the factual findings of the Trial Court unless there was a clear error of law or procedure. The High Court had exceeded its jurisdiction by re-evaluating the evidence.
• Statutory Compliance: The Court also considered that the tenant had not complied with the provisions of the Uttar Pradesh Dookan Aur Vanijya Adhishthan Adhiniyam, 1962, which requires the registration of employees in shops. The tenant’s failure to register Mohd. Ezaj as an employee further supported the landlord’s claim of sub-tenancy.

Fact:Law Ratio

The ratio of Fact:Law is 60:40, indicating that the Supreme Court’s decision was more influenced by the factual aspects of the case, such as the evidence presented and the findings of the Trial Court, rather than purely legal considerations.

Logical Reasoning

Judgment

The Supreme Court held that the High Court had erred in reversing the Trial Court’s decision. The Court found that the landlord had sufficiently pleaded and proven that the tenant had sublet the premises to Mohd. Ezaj. The Court also noted that the tenant had failed to provide evidence to support their claim that Mohd. Ezaj was an employee. The Supreme Court emphasized that the High Court, in its revisional jurisdiction, should not have interfered with the factual findings of the Trial Court unless there was a clear error of law or procedure. The Court stated:

“When the appellant pleaded that tenant had allowed one Moh. Ezaj to stay in a portion of the establishment and was realising a handsome amount of Rs. 50/­ per day, we fail to see how it can be said that there was no pleading of parting of possession wholly or partly.”

The Court further stated:

“Trial Court at Page 56 of paper book had stated as below: ‘…It is admittedly proved that Moh. Ezaj had the partial possession on the shop. Defendants had failed to prove that he was a servant. Witnesses of the Appellant had specifically stated that Moh. Ezaj had been kept as sub­tenant at the rate of Rs. 50/­ per day. In my opinion, since Moh. Ezaj admittedly used to undertake the repairing work of watches while sitting outside the disputed shop, therefore, this inference would definitely be drawn that he would be paying something to the Defendant in lieu thereof. Thus, this averment of the witnesses of the Appellant that Moh. Ezaj had been paying something to the Defendant at the rate of Rs. 50/­ per day is admissible.’ Thus the above two reasons given by the High Court cannot be sustained.”

The Court also observed:

“The Trial Court did not commit any error in drawing adverse inference against the tenant to the effect that Mohd. Ezaj was not the employee of the tenant, in view of the non­producing of any relevant document which could have been produced by the tenant had Mohd. Ezaj been an employee of the shop.”

The Supreme Court, therefore, allowed the appeal and restored the judgment of the Judge Small Causes Court.

Key Takeaways

• Burden of Proof: In cases of sub-letting, the initial burden of proof lies with the landlord. However, once the landlord establishes that a third party is in possession of the property, the burden shifts to the tenant to prove that it is not a sub-tenancy.
• Pleadings: Landlords must clearly plead that the tenant has parted with possession of the property, either wholly or partially, to a third party.
• Evidence: Tenants must provide evidence to support their claims if they deny sub-tenancy, such as proof of employment if they claim the third party is an employee.
• Revisional Jurisdiction: High Courts, in their revisional jurisdiction, should not interfere with factual findings of lower courts unless there is a clear error of law or procedure.
• Statutory Compliance: Tenants must comply with relevant state laws regarding the registration of employees in their shops or establishments.

Directions

The Supreme Court allowed the tenants to remain in possession of the shop for one year from the date of the judgment, provided they filed an undertaking before the Trial Court within four weeks.

Development of Law

The ratio decidendi of this case is that in a suit for eviction on the ground of sub-letting, the landlord must initially prove that a third party is in exclusive possession of the property. Once this is established, the burden shifts to the tenant to prove that it is not a sub-tenancy. This case reaffirms the principles laid down in previous judgments regarding sub-letting and the burden of proof, and clarifies the scope of revisional jurisdiction of the High Court. There is no change in the previous position of law but the law is applied to the given facts.

Conclusion

The Supreme Court’s judgment in Ram Murti Devi vs. Pushpa Devi and Others reinforces the existing legal principles regarding sub-letting and the burden of proof. It clarifies that landlords must adequately plead and provide evidence of sub-tenancy, and that tenants must provide evidence to support their defense. The judgment also emphasizes the limits of revisional jurisdiction and the importance of statutory compliance. The Supreme Court allowed the appeal and restored the order of the Trial Court, directing the tenant to vacate the premises after one year, subject to the tenant’s undertaking.

Category

Parent Category: Landlord and Tenant Law

Child Categories: Eviction, Sub-Tenancy, Burden of Proof

Parent Category: U.P. Urban Building (Regulation of Letting, Rent and Eviction) Act, 1972

Child Categories: Section 20(2)(e), U.P. Urban Building (Regulation of Letting, Rent and Eviction) Act, 1972, Section 25, U.P. Urban Building (Regulation of Letting, Rent and Eviction) Act, 1972

Parent Category: Uttar Pradesh Dookan Aur Vanijya Adhishthan Adhiniyam, 1962

Child Categories: Section 4-B, Uttar Pradesh Dookan Aur Vanijya Adhishthan Adhiniyam, 1962

FAQ

Q: What is sub-letting?

A: Sub-letting occurs when a tenant gives up possession of the rented property, either wholly or partially, to another person (a sub-tenant) without the landlord’s consent.

Q: What is the burden of proof in a sub-letting case?

A: Initially, the landlord must prove that the tenant has given possession to a third party. Once this is established, the burden shifts to the tenant to prove that it is not a sub-tenancy.

Q: What evidence is required to prove sub-letting?

A: The landlord must show that the third party is in exclusive possession of the property, and that there is some form of monetary consideration. The tenant must provide evidence to support their claims if they deny sub-tenancy, such as proof of employment if they claim the third party is an employee.

Q: Can a landlord evict a tenant for sub-letting?

A: Yes, if the landlord proves that the tenant has sub-let the property without their consent, they can seek eviction under the relevant state laws.

Q: What is the scope of revisional jurisdiction of High Courts in such cases?

A: High Courts, in their revisional jurisdiction, should not interfere with factual findings of lower courts unless there is a clear error of law or procedure. They should not re-evaluate the evidence.