TMI Blog1975 (3) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... vertising Agency. After the formation of the company in 1964 the company started paying rent. Rent was being paid by pre-receipted cheques. At the reverse of the cheque a receipt was printed. The receipt is in these terms: Received from M/s. Interads Advertising (P.) Ltd. the sum stated on the other side of this cheque Signature of Payee ......... Date ....................................... Note: The above Signatures are intended to be a receipt only. 4. In the beginning Vishwa Nath, appellant No. 1, and later on the company appellant No. 2 used to send the pre-receipted cheques to the landlords. Mr. Chaman Lal Khanna, respondent No. 1, would sign the cheques, on the reverse and obtain payment thereof. The cheques used to be returned to the company so that these may serve as receipts. 5. On January 25, 1969, the Landlords brought a petition for ejectment of Vishwa Nath, appellant No. 1 and Interads Advertising (P.) Limited respondent No. 2, mainly on the around that Vishwa Nath had sub-let, assigned and parted with the Possession of premises in favor of the company. In the ejectment petition other grounds were also taken. The lan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Vishwa Nath was validly terminated. 4. that Vishwa Nath had parted with the possession of the room in favor of the company. 5. that the bathroom was not included in the tenancy. 6. that only one room was let. No essential supply was withheld. 12. On these findings he ordered ejectment under clause (b) as I have said. The petition under Section 45 was dismissed with an additional finding that the company was not competent to make the petition as it was Vishwa Nath who was the tenant and only a tenant could move an application for restoration of amenity. 13. Both Vishwa Nath and the company went in appeal to the rent control tribunal. While the appeal was pending an application under O. 6. R. 17 of the Code of Civil Procedure was made on January 14, 1974, by the appellants. in this application written statement was sought to be amended. In their original written statement Vishwa Nath and the company had taken the stand that the company was the tenant. Since in evidence before the controller it had been Proved that the Premises were in fact taken by Vishwa Nath in his own name in 1962 it seemed necessary to the appellants to amend their written st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19. After the premises were taken on rent what happened was this. Interads Advertising Agency continued business till 1963. In 1964 the company was formed. Then the company started paving rent as I have said. Pre-receipted cheques were issued and on the reverse the landlord, respondent No. 1 signed the cheques acknowledging that he received the amount from Interads Advertising (P.) Limited. This state of affairs continued right from 1964 till 1968. Towards the end of 1968 the landlords stopped accepting rent though the company tendered it time and again. The landlords brought a petition for ejectment in January. 1969. They alleged subletting. The case of the tenant was that there is no subletting. The company in the tenant and the company is in the possession of the premises they said. The controller and the tribunal both found that the tenant was Vishwa Nath and he was the sole proprietor of Interads in 1962 when he took the premises on rent, they found that the company was never the tenant. Since in the written statement it was admitted that the company was the tenant and was in possession of the premises both the controller and the tribunal held, as a matter of syllogist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the premises on rent remains in possession though he forms a company and ceases to be the sole proprietor. He does not cease to be in possession. He has not parted with the possession with any one. He has changed the form of his business. In Interads Vishwa Nath was the sole proprietor. In Interads Private Limited he has the controlling interest and his wife and his two sons are the other shareholders along with two other strangers. He was all in all in his proprietorship concern. Now also he is the chief executive, chairman and the managing director of the company. It is true that the company is a juristic person but in each case what we have to see is whether Possession has been parted with and whether there is an ouster of the tenant. If the company is a facade concealing the true facts it may be necessary for the Court to pierce the corporate well. 23. In (1926) 1 Kb 198 (supra) a lessee had covenanted with his Lesser that he will not assign or underlet or part with possession of the demised premises or any part thereof. The lessee then assigned his business to a company of which he was a managing director and in which he held a controlling interest. Subsequently a secon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases recently in C. D. Chaudhary Anand Sarup, 1966 Delhi Lt 28. 28. Chaplin's case (1926) 1 Kb 198 , was decided 50 years age correctness has never been questioned or doubted so far as I know. It applies fully to the present case. In this Court it has been followed in a recent decision Gurdial Singh v. Brij Kishore, 1970 DLT 592. 29. Vishwa Nath is in possession as director having a controlling the company. No doubt he has let the company into possession but parted with the possession so Iona as it is true in fact Nath has not contravened the law. He has not gone out of possession. Possession has been retained by him. If he has allowed the company to use the premises while he himself has remained in possession of them as managing director and chief executive of the company I cannot accede to the argument that he has parted with possession. Be has not assigned nor has he sublet. 30. So long as the lessee retains the legal possession of the whole of the premises he does not commit a breach of law against parting with the possession by allowing other people to use the same. A tenant cannot be said to part with the possession of any part of the premises unless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement the authorities under the Act thought that there was parting with possession. The tribunal rejected the application for amendment. The tenant's own written statement was held to be the basis of his ejectment. It became a trip wire of procedure. This resulted in miscarriage of justice. 34. Under a bona fide mistaken belief Vishwa Nath thought that the company was the tenant. This idea, which Vishwa Nath entertained, cannot be said to be entirely unfounded. He formed the company in 1964. He started paying rent from 1964 in the name of the company. Rw, 113 R4 and R1 are all cheques issued by the company to which are appended receipts at the back signed by Chaman Lal Khanna acknowledging the receipt of rent from the company. Vishwa Nath, Therefore thought that his landlords have accepted and recognised the company as a tenant in his evidence he said: When my sole proprietorship, was converted into private concern in 1964 it was within the knowledge of Chaman Lal petitioner I cannot persuade myself to believe that the landlords never knew that Vishwa Nath had formed a company. Rent was accepted from the company with full knowledge for four years or so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dlords' own case. It was the holding of the controller as well as the tribunal. The Courts do not punish the litigants for the mistakes they make. Courts of law are not Courts of Penal jurisdiction. They exist for the sake of doing justice. If truth was as I think it was that Vishwa Nath was the tenant the tribunal should have allowed the amendment. Landlords' own case was this. The tenant accepted that case in his application for amendment so that ejectment order is not passed against him on the, around of his own admission that the company is the tenant. 37. The counsel for the landlords cited an unreported decision in Shyam Sunder v. Jaswant Rai Berry, Civil Revision No. 165 of 1967, decided on November 14, 1968, by Mehar Singh. C. J. of Punjab and Haryana High Court. In that case the tenant had sublet the demised shop to a co-operative industrial society limited without the consent of the landlord. The tenant became the salaried officer of the society and the society was in occupation of the shop. The Court came to the conclusion that the tenant had sublet the shop to the society as the books of the society showed that the society was paving rent to the tenant. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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