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A. Mahalakshmi v. Balavenkatram (D) through LR

Civil Appeal · 2020 INSC 12Decided 7 Jan 2020
Civil Appeal No. 9443 of 2019
Justice Ashok Bhushan · Justice M.R. Shah

Background

A landlady in Tamil Nadu let out her shop to a tenant to run a supermarket under a specific trade name. She later discovered the shop was being run under an entirely different trade name by a different person, who held the sales-tax registration, trading licence, and bank accounts in his own name. She sought the tenant's eviction for sub-letting and arrears of rent; the Rent Controller refused eviction, the Rent Control Appellate Authority reversed and ordered eviction for sub-letting, and the Madras High Court then reversed again, restoring the tenant's possession.

Decision Breakdown

The Supreme Court found the evidence, the tenant's own admissions in cross-examination that he had handed the shop over to the other person via a power of attorney, who ran it as owner with all licenses and accounts in his name, overwhelmingly established sub-letting, not a genuine business partnership as the tenant claimed. Citing its earlier precedents, the Court reiterated that merely inducting a partner is not sub-letting, but using a partnership as a cover to conceal a transfer of actual possession is. Since the High Court had failed to even engage with this evidence, the Supreme Court allowed the appeal, set aside the High Court's judgment, and restored the eviction decree, giving the occupants three months to hand over possession after paying arrears.

Lesson Learnt

A tenant cannot escape an eviction case for illegal sub-letting by merely labelling the arrangement a "partnership": courts look at who actually holds exclusive possession, licences, and control of the premises and money, regardless of what the parties call it.

Official source (sci.gov.in)View Judgment (PDF)

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