Bhagwati Prasad Khaitan and ors. Vs. Turner Morrison and Company Limited - Court Judgment

Excerpt:
- bhaskar bhattacharya, j.1. this first appeal is at the instance of a plaintiff-landlord in a suit for eviction on the ground of default in payment of rent and subletting and is directed against the judgment and decree dated 6th december, 1978 passed by the learned judge, 12th bench, city civil court at calcutta in ejectment suit no. 356 of 1973 thereby dismissing the suit.2. the suit was initially filed on the ground of default in payment of rent but subsequently, by way of amendment, the plaintiff alleged that the defendant-tenant had sublet, assigned and/or transferred the suit premises to m/s. shalimar works limited and/or lodna colliery company (1920) in the year 1966 without the consent of the plaintiff.3. the suit was contested by the defendant by filing written statement thereby denying the material allegations made in the plaint and as regards the ground of subletting, it was stated that there was no subletting, assignment or transfer of the suit premises as alleged in the plaint and it was just a case of grant by the defendant company of permissive user and/or licence in favour of one of the companies within her own group of companies. according to the defendant, it happened to be the holding company of shalimar works limited and mr. balwant singh, the then administrative officer of the defendant company, in his official capacity as the chief executive of the said shalimar works limited, had been in use and occupation of the said flat. according to the defendant, through her nominee-directors, the defendant had been in charge of the management of the affairs of the shalimar works limited till september, 1972 and during the said period, as a licensee of the defendant company, the said shalimar works limited, in its turn, used to reimburse the defendant company the amount of rent of the said flat.4. according to the written statement, after december, 1972, the said mr. balwant singh joined m/s. lodna colliery company limited (1920) as its chief executive and the said lodna colliery co. (1920) ltd. is also another subsidiary and one of the erstwhile-managed companies of the defendant company and the same was also a licensee of the defendant company in respect of the use and occupation of the flat in suit. the said licence, however, expired and spent its force and stood unequivocally revoked with effect from november 8, 1973 and at the time of filing of written statement, the flat was in use and occupation of the defendant.5. at the time of hearing of the suit, one ganeshmal baid appeared as pw-1 and supported the allegations made in the plaint.6. on behalf of the defendant, one narayan chandra pathak, an employee of the defendant had deposed controverting the allegations made in the plaint. in his evidence the said dw-1 proved that shalimar works limited and lodna colliery were subsidiary company of the defendant company. he alleged that the subsidiary companies under the defendant did not have any separate secretary, that there were common directors and common secretaries of both the companies. he further stated that the balance-sheet of the subsidiary company used to be attached to the main balance-sheet of the defendant company and some of those balance-sheets were made ext.-a series. in cross-examination, he admitted that defendant company while appointing officers of the subsidiary company issued appointment letters to them. he further admitted that m/s. shalimar works limited and lodna colliery used to pay their staff out of their own account. so far the factory employees were concerned, the said witness conceded, the subsidiary companies had also their separate provident fund accounts. he further accepted the fact that the remunerations to their directors were paid by the different companies separately and each subsidiary company had their separate balance-sheet. it was further confided that for meetings of the board of directors, separate resolution-books were maintained and that from the year 1970, the defendant was accepting reimbursement from different subsidiary companies as service charges. he further made a clean breast of the fact that whenever the officers of shalimar works limited and lodna colliery occupied the suit premises, the defendant used to reimburse from them the rent by means of vouchers and that the defendant company and subsidiary company had their separate books of accounts. he acknowledged that during the years 1969-1970-1971, the officers mostly of m/s. shalimar works limited occupied the suit premises and copy of the bills were marked ext.-4 on his admission. he further confirmed that the rent realized from the subsidiary companies by way of reimbursement had been shown under the heading 'rents received and paid' in the balance-sheet.7. at the time of hearing of the suit, the plaintiff did not press the ground of default but only complained about the ground of subletting.8. the learned trial judge on consideration of the materials on record came to the conclusion that since the shalimar works limited and the lodna colliery were subsidiary companies and the defendant was the holding company, occupation of the officers of subsidiary companies in the premises did not amount to subletting, assigning of interest or transfer within the meaning of section 13 of the west bengal premises tenancy act as being the holding company, the defendant had control over its subsidiary companies and accordingly, the actual possession of the officers of the subsidiary company was also under the control of the defendant. the learned trial judge, thus, dismissed the suit.9. being dissatisfied, the plaintiff-landlord has come up with the present first appeal.10. mr. tandon, the learned advocate appearing on behalf of the appellant has vehemently contended before us that once it is established that for the occupation of the two subsidiary companies of the defendant it had accepted rent from those two companies which was reflected in the balance-sheet and also admitted by the dw-1, such act amounted to subletting within the meaning of section 13 of the west bengal premises tenancy act. in support of such contention, mr. tandon, relied upon two decisions of the supreme court one in the case of singer india limited v. chander mohan chadha reported in : air2004sc4368 and ors. in the case of general radio and appliances co. limited and ors. v. m.a. khader reported in : [1986]2scr607 .11. none appears on behalf of the respondents to oppose the aforesaid contention of mr. tandon.12. after hearing mr. tandon, appearing on behalf of the appellant and after going through the materials on record we are of the view that for the purpose of ascertaining whether there has been a mischief committed by the defendant within the meaning of section 13(1)(a) of the west bengal premises tenancy act, assignment, transfer or subletting of the tenancy or part thereof in favour of a third party is required to be proved.13. therefore, the only question that arises for determination in this appeal is whether the transfer of possession in favour of a subsidiary company at the instance of a holding company in lieu of payment of money amounts to transfer, assignment or subletting within the meaning of section 13(1)(a) of the west bengal premises tenancy act.14. according to the provisions contained in section 4 of the companies act, it is true that the holding company has control over the subsidiary companies but the fact remains that both the holding company and subsidiary company are separate entity. once it is established that money taken in the shape of rent has been reimbursed for the occupation of the officers of the subsidiary company, though the self-same officer may also hold the office of the holding company, in our view, the said act amounts to transfer, assignment of interest or subletting within the meaning of the act. here payment of consideration money is proved and once such amount has been shown to be rent accepted from a different legal entity by the defendant, it amounts to transfer of legal possession in favour of that particular company.15. therefore, merely because the companies in whose favour subletting have been done are the subsidiary companies of the defendant that does not mean that the defendant was still in actual control and possession of the premises. moreover, acceptance of money in lieu of possession has been proved and in order to bring a case under section 13(1)(a) of the act even subletting of part of the tenanted property is sufficient.16. we, therefore, find that in this case, the plaintiff has proved subletting in favour of shalimar works limited and lodna colliery on payment of rent, although those two companies are the subsidiary company of the defendant.17. at this stage it will not be out of place to refer to the two decisions cited by mr. tandon, one in the case of singer india limited v. chander mohan chadha (supra) and the other in the case of general radio and appliances co. limited and ors. v. m.a. khader (supra).18. in both the cases, the question was if the tenant company is amalgamated with another company in terms of sections 391 and 394 of the companies act with the approval of the high court, whether such amalgamation amounts to subletting by the original company.19. in both the aforesaid decisions, the supreme court has laid down that such amalgamation came within the purview of subletting or assignment of interest of the tenant within the meaning of rent control legislation. in the case before us, however, the tenant company has though not amalgamated with any other company, yet, has permitted its subsidiary company, which is a separate legal entity altogether, to use the tenanted property on acceptance of rent from the latter. therefore, this is a worse case than the case of amalgamation where the tenant company maintaining its separate identity has permitted a different juristic person to occupy the property in lieu of payment of money.20. we, thus, find that the decisions cited by mr. tandon although did not exactly apply to the fact of the present case support his contention that the tenant company cannot put into possession another company on payment of rent.21. we, thus, set aside the judgment and decree passed by the learned trial judge and grant a decree for eviction on the ground of creation of illegal sub-tenancy in favour of two subsidiary companies without taking consent from the landlord.22. it is needless to mention that in order to get a decree for eviction on the ground of subletting it is not necessary that even at the time of institution of the suit, such subletting must continue. therefore, even if, at the time of institution of the suit those subsidiary companies had returned back the possession to the defendant, for that reason, the defendant cannot evade the mischief of subletting.23. the defendants are directed to vacate the property within two months from today.24. the appeal is, thus, allowed. in the facts and circumstances, there will be, however, no order as to costs.pravendu narayan sinha, j.25. i agree.