RAM SARAN versus PYARE LAL AND ANR.

Citation: [1996] 1 S.C.R. 501 · Decided: 16-01-1996 · Supreme Court of India · Bench: G.N. RAY, G.T. NANAVATI · Disposal: Appeal(s) allowed

Judgment (excerpt)

. ,, 
RAM SARAN 
v. 
PYARE LAL AND ANR. 
JANUARY 16, 1996 
[G. RAY AND G.T. NANAYATI, JJ.] 
H.P. Urbo 
R, 
"ntrol Act, 1971 : Section 14. 
Sub-letting-.\'hop let out to tenant in personal capacity-Tenant carry-
ing onfarni(v business-Sllbsequent(v tenant.forming a registered society com-
prising of hilnse~f and.fan1ily 1nembers-Society carrying on diverse activities 
but notfmni(v business ~{tenant-Rent paid by Society thrm1gh President-Held 
in the circu1nsta1zces tenant surrendered his right of tenancy a1Ul possession in 
.favour qf society--Held acceptance qf rent tendered by tenant in the name qf 
Society does not create a 11eiv le1ta11cy--Landlnrd held entitled to eviction order 
A 
B 
c 
011 the ground ~f sub-letting. 
D 
Tena11t--Unilateral action of surrendering tenancy in favour of third 
party by delivering possession-field does not create a new tenancy--Landlord 
not bound by such a tenancy. 
Estoppel-Not applicable URainsl statute. 
The appellant-landlord filed an application under section 14 of the 
Himachal Pradesh Urban Rent Control Act, 1971 for eviction of the 
respondent-tenant and his sub-tenant, His case was that he let out his shop 
room to respondent No, I who had been carrying on business of soap in 
E 
the name and style of Ashoka Jain Industry, However, without appellant's 
F 
written consent the tenant created sub-tenancy in favour of respondent 
No, 2 viz, Mahavir Gram Udyog Samiti in violation of Section 14 of the 
Act, The tenant contested the case by stating that he was still carrying on 
the soap business in the said premises but had only changed the nomen-
clature of the firm from Ashoka Jain Industry to Mahavir Gram Udyog 
G 
Samiti by forming a registered society comprising of himself and his family 
members, Being fully aware of the said fact the landlord had been 
accepting rent from the said Samiti and therefore he was estopped from 
seeking eviction. 
The Rent Controller passed an eviction order against the respond-
H 
501 
502 
SUPREME COURT REPORTS 
[1996] 1 S.C.R. 
A 
ents holding that 
(i) the tenant had no exclusive control of the suit 
premises as he had parted with possession of the same in favour of the 
~ 
Samiti which was a distinct legal entity not representing Ashoka Jain 
.(Ill 
B 
Industry; (ii) in terms of the Memorandum of Association ·of the said 
society the samiti could not only include new members but also could 
remove from membership any existing member as a result of which 
respondent no. 1, who was then a member of the said registered society, 
could also be renioved from the said society; and (iii) the rent was paid 
by tenant from the funds of the society in his capacity as President and 
not on his behalf or on behalf of Ashoka Jain Industry. 
C 
The Appellate Authority reversed the decision of Rent Controller 
D 
E 
F 
and dismissed the landlord's suit holding that although the society had 
been carrying on its business activities in the snit premises it could not be 
held that the tenant had lost control and possession over the premises in 
question. Hence, the case of sub-letting could not be accepted. A Revision 
petition filed by the land lord was dismissed by the High Court. 
In appeal to this court it was contended for the appellant-landlord 
that: (i) the Appellate Authority and the High Court erred in proceeding 
on the footing that the tenant himself being President of the society was 
controlling the affairs of the society and hence he had not parted with 
possession of the shop room; (ii) the very fact that a distinct entity had 
been possessing the shop room and carrying on its activities in the said 
shop room makes it abundantly clear that the tenant had parted with 
possession of the snit shop in favour of the society; and (iii) not only 
possession of the suit shop had been handed over to the said registered 
society but also the rent was paid by respondent No. 1 in his capacity as 
President from out of the funds of the society. 
Allowing the appeal and setting aside the impugned order of the 
High Conrt, this Court 
HELD : 1. The eviction order passed by the Rent Controller is af-
G 
firmed. The Rent Controller has rightly indicated that from the Memoran-
dum of Association of the said registered society, which has been exhibited 
in the eviction case, it clearly transpires that any member may be removed 
and new members may be taken in the society by decision of 2/3rd majority 
of members. It is, therefore, not unlikely that in cours

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