Mere Change Of the Firm’s Name Does Not Imply Sub-Letting to a Third Party: Delhi District Court

- Advertisement -

Excerpt

In a judgment on April 16, 2021, it was observed by the Delhi High Court that the mere change of name of the tenant firm or the carrying on of business by the same partners or any one of the two joint tenants in the name of a different firm does not imply that the premises have been sub-let to a third party under Section 14(1)(b) of the DRC Act.

Facts of the Case

In the present case, the Petitioner was the landlord and the owner of the subject property. The said property was open from two sides and the said portions of the property had 2 shops adjacent to each other which were let out to two tenants namely, M/s Babu Lal Ghanshyam Das and M/s Lalu Prasad Babu Lal way back in 1966 and the rent receipts had been issuing to tenants from so many years. The Petitioner’s complaint was that the Respondent was a habitual rent defaulter, with rent only paid up to 31.03.2011 at Rs.110/- per month, and after that, despite service of a demand notice dated 29.09.2011, the tenant has neither paid nor tendered the rent since 01.04.2011.

As a result, the Respondent requested the tenant’s eviction under Section 14(1)(a) of the DRC Act. Furthermore, the Petitioner/landlord claimed that the Respondent sub-let the tenanted property to some of the other individuals who were operating under the name and style of M/s. Modi General Stores without the landlord’s permission. The tenant refused to disclose the names of the people who were doing business despite many demands, so eviction was pursued under Section 14(1)(b) of the DRC Act.

- Advertisement -

In the impugned Order, the eviction petition filed by the Petitioner/landlords on the grounds under Section 14(1)(b) of the Delhi Rent Control Act was allowed as a consequence, an appeal was preferred by the appellant who was Respondent-tenant under Section 38 of the DRC Act.

Pleadings before the Court

It was submitted by the Appellant/tenant that the firm in the name of M/s. Babu Lal Ghanshyam Dass had never existed, and hence the parties had no landlord-tenant relationship. Furthermore, the shop’s tenancy was in the names of two different individuals, Lal Babu Lal and Lala Ghanshyam Dass, and rent receipts had been given in their names up to this stage, and service of the demand notice dated 29.09.2011 had been refused. It was also denied that, as alleged in the Eviction petition, he had been in arrears of rent since April of 2011. It was further stated that the subject property was not sublet, assigned, or given someone else possession of the tenancy premises.  M/s. Modi General Store was merely the trade name of the shop in which he, Lala Babu Lal, has been conducting business, and he has been in real, physical, and constructive possession of the shop, with no parting of possession and/or vesting of possession in favour of an unspecified individual.

On the other hand, it was submitted by the Respondent/Petitioner that despite service of a demand notice dated 29.09.2011 Ex. PW-1/3, the Respondent was a habitual defaulter in rent payment, with rent only paid up to 31.03.2011 @ Rs.110/- per month, and afterwards, the tenant has neither paid nor tendered the rent w.e.f. 01.04.2011. It was further submitted that without the landlord’s permission, the Respondent even sublet the tenanted premises to other people who ran a company under the name and style of M/s. Modi General Stores. Also, despite many demands, the tenant refused to disclose the names of the people who were conducting business, and eviction of the tenant was sought under Section 14(1)(b) of the DRC Act.

Court’s Observation

- Advertisement -

It was observed by the learned judge of the District Court of Delhi that the impugned judgment cannot be upheld in law since it enabled the Eviction petition under Section 14(1)(b) of the DRC Act. The appellants were the actual tenants, and the firm’s reputation was not distinct from that of its associates. The Appellant and his brother were joint tenants with the community of ownership and interest in the tenancy property, as simple as that might seem.  Furthermore, the mere change of name of the tenant firm or the carrying on of business by the same partners or any one of the two joint tenants in the name of a different firm did not imply that the premises have been sub-let to a third party under Section 14(1)(b) of the DRC Act.

It was further observed that in view of the appellant’s categorical evidence that he has been running a company and has complete control over it, there was no inference on facts or in law that simply changing the name of the firm will lead to subletting or giving up ownership of the tenancy to a third party.

Court’s Judgment

The learned judge of the District Court of Delhi allowed the appeal in so far it challenges the eviction order and set that eviction order aside under Section 14 of Delhi Rent Control Act and directed the learned trial Court to consider the issue of deposit of rent in terms of Section 15(1) of DRC Act and pass appropriate direction under Section 14(2).


Libertatem.in is now on Telegram. Follow us for regular legal updates and judgments from the Court. Follow us on Google NewsInstagramLinkedInFacebook & Twitter. You can also subscribe to our Weekly Email Updates. You can also contribute stories like this and help us spread awareness for a better society. Submit Your Post Now.

- Advertisement -
- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

About the Author

- Advertisement -
- Advertisement -spot_img