LexK. ACHUTA BHAT versus VEERAMANANI MANGA DEVI
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K. ACHUTA BHAT
v.
VEERAMANANI MANGA DEVI
SEPTEMBER 23, 1988
[R.S. PA1HAK, CI. AND S. NATARAJAN, J.]
Andhra Pradesh Buildings (Lease, Rent and Eviction) Con-
trol Act, 1960. Section JO-Tenant-Eviction on ground of sub-lett-
ing-Transfer of managing rights of the business and transfer of
business in toto with right to occupy the leased premises-Ascertain-
c · mentof.
The appellant had taken the demised premises on lease in 1953 for
running a hotel. In August 1969 the hotel came to be run by the second
respondent. Thereupon, the landlady-1st respondent terminated the
D tenancy as she had reasons to believe that the appellant had either
transferred his rights under the lease or sublet the ·premises. On the
appellant refusing to vacate, the first respondent filed petition under
section fl) ol' the Andhra Pradesh Buildings (Lease, Rent and Eviction)
Control Act, 1960 seeking eviction on the ground of sub-letting. Tlie
Rent Controller ordered eviction. The appeals before the Appellate
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Authority failed. The High Court, in revision, affirmed the finding of
sub-letting.
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Before this Court, it was contended on I.he basis of the terms of the
agreement entered into between the appellant and the second respon-
dent, that the appellant transferred only the management rights of the
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hotel and had retained his rights under the lease. It was urged that the
courts must look at the dominant intention of the parties. On the other
hand, the first respondent contended that the true nature of the trans-
action was the handing over of the hotel on a permanent basis together
with the tenancy rights of the appellant.
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Dismissing the appeal, it was,
HELD: (1) On a conspectus of all the terms of the agreement the
High Court was fully justified in taking the view that the appellant and
the second respondent had used all the ingenuity at their command to
camouflage the real nature of the transaction and made it appear that
H there was only a transfer of the managing right• ofthe business and not
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K A. BHAT v. VEERAMANANI
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a transfer of the business in toto together with the right to occupy the
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leased premises. [208G-H]
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(2) It was patent that the burden of paying the rent had been
passed on to the second respondent and this could occur only if the
premises had been sublet to him. 12088]
(3) Though the agreement was initially for 11 months, the
renewal clause would enable its extension for any length of time
which was binding upon the heirs, successors, and assigns of the
parties. [207G] .
( 4) The agreement conferred proprietary rights on the second
respondent over the hotel business inasmuch as he was made the sole
authority to appoint the staff as well as terminate their services and
empowered him to run the business on his own account and res-
ponsibility. {2088-C]
(5) Besides the agreement, the manner in which the second
respondent had been conducting the business would also show that he
was not a transferee .of the managing rights alone but was a transferee of
the business together with the appellant's interest in the leased premises
also. [209C I
Dwarka Prasad v. Dwarka .Das Barar, [1976] .I SCR 277; Md.
Salim v. Ma: Ali, [1987] 4 SCC 270, distinguished.
M. Rodgers v. N. Prakash Rao Naidu, [1969] 1 MLJ 352 and
Bhagwan Das v. S. Rajeev Singh, [1971] 3 S.C.C. 852, referred to.
( 6) At the end of the arguments In the case It was represented at
the Bar that the second respondent has since vacated the premises and
handed over the business to the appellant and that the appellant himself
was now running the hotel through his son. The changed circumstances
could not, In the Court's opinion, affect the rights of the first respon-
dent In any manner to have the appellant evicted on the ground of
subletting. [211C-DJ
CIVIL APPELLATE JURISDICllON: Civil Appeal No. 2468
of 1982.
From the Judgment and Order dated 8.3.1982 of the High Court
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of Andhra Pradesh in C.R.P. Nos. 3726, 3727, 3910 and 4883 of 1979.
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SUPREME COURT REPORTS
[ 1988] Supp. 3 S.C.R.
Dr. Y.S. Chitale and G. Narasimhulu for the Appellant.
T.S. Krishnamurti Iyer, Krishan Kumar and Rajeshwar Rao for
the Respondents.
The Judgment of the Court was delivered by
NATARAJAN, J. This appeal by special leave by a tenant arises
out of a common judgment rendered by l the High Court of Andhra
Pradesh in four Civil Writ Petitions. Two of the Revision PExcerpt shown. Read the full judgment & AI analysis in Lexace.