1982CLC862 (PLP)

We are unable to find any justification from these 2 paragraphs for the submission that the respondent No. 1 had sub‑let the shop to respon dents Nos. 4 and

5. It is clearly asserted in paragraph 10 reproduced above that the Opponent No. 1 is there and is actually carrying his business jointly with Opponents Nos. 4 and

5. These assertions cannot amount to an admission by Opponent No. 1 that he is not in exclusive possession of the shop and had brought two other persons in possessions of the shop by virtue of the partnership. These two paragraphs on the other hand suggest that the respondent No. 1 is continuing in possession of the shop and it is only for the purposes of joint business that the opponents Nos. 4 and 5 have been allowed to carry on the business. In fact we find that in paragraph 8 of the written statement it was made very clear that the opponent No.1 was in possession of the said premises and had been sending the rent as usual. In paragraph 5 the sub‑letting had been clearly denied. At this stage it would be pertinent to refer to the relevant portion of the partnership dated 12‑4‑1963 between respondents Nos. 1, 4 and

5. In the second paragraph of this deed it is mentioned that 1st party viz. Abdul Aziz is in possession of the shop and has agreed to join with Suleman and Az:z as his partner. Paragraph 3 of the partnership stated that the partnership shall b! at will and for dissolution on one month notice. Paragraph 4 had stated that partnership shall be over on 31st March, 1964 and commences from 31st April, 1963. Paragraph 5 is important and is reproduced hereunder :‑‑ "That the tenancy right in the shop shall continue to remain of the first party alone and on dissolution of partnership the 2nd party mill be out of shop without any objection." The terms of this partnership, deed are therefore, clear in respect of the tenancy of the shop to continue for Abdul Aziz alone and this shop was not to be treated as assets of the partnership as there was a clear stipulation made that on dissolution of the partnership the second party will be out of shop without any objection. This partnership deed has received considera tion from the learned Single Judge and he came to the conclusion that the firm was not let into the shop as transferee of the lease or as sub‑lessee but only as licence and that the tenancy of the shop was saved in favour of respon dent No.

1. In these circumstances, there was a reasonable justification for the learned Single Judge to come to the conclusion that the arrangement contained in the partnership deed could reasonably be held to be consistent with the grant of licence only to the firm touse the shop for its business.

6. It would be relevant to note here that Sh. Motal Bai in her statement, had stated that Usman and Aziz were in possession of shop as Usman deceased had given them the possession and she had sated that Aziz respondent No. I was not in possession of the shop at that time. She had, however, admitted that respondent No. 1 had sent her money order but she refused the same as he had sublet her shop. In cross‑examination she stated that she did not know that respondents Nos. 1, 4 and 5 had got partnership business in the said shop. She did not remember if she had stated that she wants the shop for her personal use in the notice sent by her. She admitted that she did not file rent application between 1956 to 1951 against the opponents as they went on paying rent regularly.

7. As against the statement of Sh. Motal Bai the respondent No. I had made clear statement that he had never sub‑let the shop to Usman Bhai and Yahyah and had stated that Suleman was his partner and they were running he shop since April, 1963. He bad clearly stated that he did not sub‑let the shop to any one. In cross‑examination he admitted that his share was 4 Kannas in the partnership business and asserted that he had supplied furniture and Rs.5,000 towards capital of the shop and he had received Rs.2(,0 as profits after deducting the expenses. He stated that Suleman sits in the shop while he looked after the affairs of the shop out side the shop. He also asserted that he used to pay the rent to the applicant and she used pass on receipts to him. He denied that the partnership was bogus one or that he had sub‑let the shop. He had asserted that they maintained accounts books but the same had not been verified by the Income‑tax-Department.

8. Respondent No. 4 Muhammad Suleman had stated that he had a share in business of the shop but not in the rent of the shop. In cross -examination he had asserted that respondent No. 1 sits on the shop but 11 mostly he worked outside the shop and he alone worked on the shop. He denied that respondent No. 1 had no account in their ledger. He denied Aziz Abdullah was not a partner in the business. He also stated that he had tendered rent to the applicant by going to her house alone. From the statements of these witnesses it has not been clearly proved that Aziz son of Abdullah has gone completely out of possession of the shop in question and these statements read in the light of partnership deed show that respondent No. 1 is still continuing in possession of the said shop and he has allowed respondents Nos. 4 and 5 to run a joint business in partnership with him in the said shop. We, therefore, do not find a justification to hold that Abdul Aziz had created a sub‑lease or sub‑tenancy in respect of the said shop in favour of respondents Nos. 4 and 5.

9. Mr. Akbtar Mahmood had contended that the learned Single Judge had decided the IInd Appeal on the basis of the law 'laid down under section 108 of the Transfer of the Property Act and not after construing the provision of section 13 (2)(h)(a) which is reproduced hereunder :‑ "(ii).the tenant has without the written consent of the landlady ; (a) transferred his right under the lease or sub‑let the entire building or rented land or any portion thereof." He relied upon P L D 1978 Lah. 1054 where it was held that the tenant debars himself of the rights of exclusive possession when he parts with a portion of his right as a tenant. But the facts and circumstances of that case were completely different from the present one as in that case the tenant had assigned 3/4th of his lease right in favour of other partner while in present case before us the respondent No. 1 has clearly retained his right under the lease and has clearly provided in the partnership deed that on dissolution of the partnership the partner shall go out of the shop without any objection, therefore, the precedent case of P L D 1978 Lah. 1054 cannot be usefully applied to the facts of the case before us. We are of the view that in order to attract the provision of section 13(2)(ii)(a) it is necessary to prove that the right under the lease has either been transferred by the tenant or the entire building or any portion thereof has been sublet by the tenant. Of course the sub‑letting and the transfer would be a question of fact in the circumstances of every case.

10. Mr. Akhtar Mahmood finally submitted that the judgment of the learned Single Judge which is impugned before us has met with criticism from their Lordships of the Supreme Court in case of Akhtar All v. Mst. Umatul Islam (P L D 1979 9 G 815). We do not agree with Mr. Akhtar Mahmood that the judgment of the learned Single Judge has been criticised by their Lordships of the Supreme Court. On the other hand we find that their Lordships have observed that the said case turns upon its own peculiar facts and circumstances and specially clause 5 of the relevant partnership agreement which laid down that the principal tenant will remain the tenant of the premises and on dissolution of the firm the other partners will vacate the premises without 'making any claim thereto. The Supreme Court further went to observe that relying on the aforesaid clause the High Court held that was a clear indication that there was no transfer or assignment of tenancy and as such there was no sub‑letting either but it was only a case of licence. However, it is correct that the Supreme Court had observed in that case of 1979 Supreme Court 815 that the High Court in the case of Motal Bai had failed to determine "(a) The exact factual arrangement and possession during the subsistence of the partnership. (b) Arrangement or agreement with regard to contribution and payment of loan by other partners. (c) Had the principal tenant a right during subsistence of partnership to ask the other partner to vacate the premises?, (d) Was the principal tenant receiving pecuniary return for allowing the other partners and the firm to occupy the shop. (e)'If a firm in the eye of law is a person or entity distinct from its partnership then what was the effect on the tenancy of the principal tenant which he allowed firm to occupy and share, and on what terms, viz. by making it stock in trade or assets of the firm etc.? (f) Even though legal possession is always of the principal tenant but in case of sub‑letting is it not the de facto possession which is to be taken note of as against the legal possession ; and (g) Whether it is inflexible rule that where lease rights remain the property of the principal tenant then that factor is enough to hold that there has not been any‑letting, assignment of tenancy or does this arrange ment rather points to the contrary because in sub‑letting the leasehold right will always legally remain the property of the principal tenant." The above factors which have been shown by the Supreme Court to have been omitted from consideration in the case of Motal Bal v. Abdul Aziz are all relevant factors which should be considered in a case of partnership agreement between a principal tenant and the other partners provided that there are facts available in a particular case to ascertain those factors and to arrive at conclusion in respect of the same. But that does not mean that in the case of Motal Bai their Lordships had observed that such factors were available for consideration before the High Court and they had not been given a finding upon. We do not find in the present case before us that the parties have really supplied a basis for resolving those points which is have been noted by the Supreme Court. In fact, the parties in the present case had confined themselves to argue the matter before the High Court only on the basis of the effect of partnership and even in respect of legal position the learned Single Judge in the High Court has based his judgment mostly on paragraph 5 of the partnership deed, but we have gone through the whole evidence in the case and we do not find a justification for a finding that there was in fact a transfer of interest in the lease by respondent Abdul Aziz in favour of either the firm or his partners, 11_. In fact from perusing the judgment in P L D 1979 S C 815 we find that the judgment in the case of Motal Bai has received a tacit approval from their Lordships of the‑ Supreme Court on the point which has been decided in the case of Motal Bai in the peculiar circumstances of its own case. The reservation as noted above in the earlier part have been expressed by their Lordships in view of the submission made before them by the counsel in that case that if a person started a joint partnership business in a shop of which he is sole tenant and lets other partner occupy and enter upon that shop then that can never and in no circumstances amount to sub‑letting of .the shop or transfer or assumption of any its lease right partly or wholly to the other partner or partners of the firm. For this extreme proposition the counsel in that case before the Supreme Court had wrongly relied upon the case of Motal Bai before us and had submitted that the case of Motal Bai as decided by the learned Single Judge had established that proposition although it was not so. That was repealed by their Lordships clearly and they bad observed that the contention has no merit and thereafter it had been further observed that if the precedent aforesaid (case of Motal Bai as reported in P L D 1968 Kar. 635) lays down such sweeping statement, the same cannot be endorsed without `reservations as listed above. But their Lordships had made it clear in the very next sentence that their, own reading of that case (case of Motal Bai) however, shows that it clearly lays down that each case should be examined with reference to its own facts and circumstances and that the said case turned upon its peculiar facts and circumstances specially clause 5 of the relevant partnership agreement and it was only thereafter that their Lordships pointed out the reservations from (a) to (g) as mentioned by us above which could not have . been determined in the case of Motal Bai because of it's own peculiar facts. ‑ It is, therefore, obvious that these reservations are not in fact a criticism of the case of Motal Bai in the circumstances of this case, but only reservations to be kept in view in the cases where principal tenant alleges partnership and allows his partners to make use of the premises. Those reservations can be considered in only those cases where the circumstances have made out facts which can be the determining factor of those reservations. But those facts were not established in the present case before us and, therefore, we do not find any justification to‑ interfere in this L. P. A. against the very elaborate judgment written by the learned Single Judge in this case.

11. Mr. Akhtar Mahmood had wanted us to remand the case back to the Single Judge of the High Court for determination of the points (a) to (g) as stated above on the basis of the judgment of P L D 1979 S C 814, but we do not find any justification to do so as those factors cannot be determined on the basis of the present record and since the parties have themselves not been able to establish those factors, therefore, it is no use sending the case back for a fresh trial in order to allow the parties to fill in gaps. The Letters Patent Appeal had to be decided on the basis of the relevant material before us and hence we do not find any justification for remanding the case back.

13. The important point to note in respect of the case relied upon by Mr. Akhtar Mabmood namely 1970 S C 815 is that in that case principal tenant had entered into a partnership with other persons and that the principal tenant in consideration of Rs.10,000 gave up his own possession from half of the shop and passed it on to appellant No. 2 in that case exclusively who onward became solely liable for payment of rent thereof and responsible for all consequential liabilities, and the agreement in that case had further recited that even earlier also he was liable for the proportionate rent of the whole shop, and even in the written statement of the same appellant No. 2 in that case it had been admitted that it was he who was the tenant of the main landlady and that principal tenant Akhtar Ali Shah had no concern whatsoever with the disputed shop and inspite of those circumstances having been established the learned counsel for the appellants had relied upon observations of the learned Single Judge in the case of Motal Bai and had submitted that it was a case of mere licence and in such circumstances their Lordships of the Supreme Court had‑ repelled the contention of the appellant in that case and with, very great respect we feel that those contentions had been rightly repelled as the case of Motal Bai decided by the learned Single Judge before us had never laid down the extreme position that a partnership case, in no circumstance amount to sub‑letting of the shop and therefore the judgment of the learned Single Judge before us could not be relied upon in the circumstances of the case ‑of Akhtar Ali Shah. The Letters Patent Appeal is, therefore, dismissed. M.Y.M. Appeal dismissed.