The Commissioner of Income Tax V vs. M/s.Orchem Industries

C/CRA/79/2007 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/CIVIL REVISION APPLICATION NO. 79 of 2007

FOR APPROVAL AND SIGNATURE: Sd/-

HONOURABLE DR.JUSTICE A. P. THAKER

================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? No 2 To be referred to the Reporter or not ? Yes 3 Whether their Lordships wish to see the fair copy of the judgment ? No 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ? No ================================================================ CHANCHALBEN WD/O CHATURBHAI BABARBHAI & 2 other(s) Versus PRIYAKANT CHANABHAI PATEL - DECEASED & 2 other(s) ================================================================ Appearance: MR JF MEHTA(461) for the Applicant(s) No. 2.1 MR MEHUL S SHAH(772) for the Applicant(s) No. 1,2,3 for the Opponent(s) No. 1 MR HM PARIKH(574) for the Opponent(s) No. 2 MR RASESH H PARIKH(3862) for the Opponent(s) No. 2 RULE SERVED BY DS(65) for the Opponent(s) No. 1.1,3 ================================================================ CORAM: HONOURABLE DR.JUSTICE A. P. THAKER

Date : 24/10/2019

ORAL JUDGMENT Page 1 of 36

C/CRA/79/2007 JUDGMENT 1. Present civil revision application under Section 29(2) of the Bombay Rents, Hotel and Lodging House Rates, Control Act, 1947 (hereinafter be referred to as “the Rent Act”) is preferred by the applicants against the judgment and order dated 22.02.1988 passed by the learned District Judge, Kheda at Nadiad in Regular Civil Appeal No.89 of 1984. The applicants herein are the original plaintiffs and the respondents herein are the original defendants (for the sake of gravity, the parties are required to be referred to as “the plaintiffs” and “the defendants” respectively). 2. It is the case of the plaintiffs that they have filed Civil Suit No.186 of 1978 in the Court of Civil Judge at Anand and has prayed that defendant No.1 (since died) was the tenant of the suit premises belonging to the husband of plaintiff No.1 and it was let to defendant No.1 on monthly rent of Rs.150/- for business purpose. It is also alleged that since, original defendant No.1 has sub let the suit shop to defendants No.2 and 3, the plaintiffs have instituted the suit on the ground of subletting of the suit premises and on the ground of bonafide and reasonable requirement of the suit premises by the son of plaintiff No.2. Initially, the suit was filed against defendant No.1 only and, thereafter, defendants No.2 and 3 were subsequently added as defendants No.2 and 3 and the suit was resisted by the defendants denying the tenancy rights of the plaintiffs and prayed to dismiss the suit. After considering the evidence on record, the learned Civil Judge was pleased to pass the decree in favour of the plaintiffs, against which, the defendants have instituted Civil Appeal No.89 of 1984 in District Court, Kheda at Nadiad whereby after hearing both the parties, the learned District Judge was pleased to allow the appeal by quashing and setting aside the judgment and decree of the learned Civil Judge vide order dated 22.02.1988. Page 2 of 36

C/CRA/79/2007 JUDGMENT 2.1 Being aggrieved and dissatisfied with the judgment and order dated 22.02.1988 passed by the learned District Judge, Kheda at Nadiad in Civil Appeal No.89 of 1984, the plaintiffs have preferred this civil revision application inter alia contending that the judgment and decree passed by the Trial Court was just, legal and proper and the Appellate Court has not properly appreciated the facts that defendant No.1 - original tenant is not in India and has settled in Africa since last so many years and the business was being carried out in the name and style of defendant No.2 and it shows that defendant No.1 has sublet the suit premises to defendants No.2 and 3 and, therefore, it was a clear case of sub-letting which does not require any proof. It is contended that as defence of partnership between the defendants is wrongly believed as non-resident cannot carry on business in partnership in India without the permission of the competent authority and no such permission has been shown to have been obtained by the defendants. According to the plaintiffs, the Appellate Court has not properly appreciated ratio of the decisions cited and the impugned judgment and order of the Appellate Court is unjust and deserves to be quashed and set aside. The plaintiffs have prayed to quash and set aside the impugned judgment and order of the learned District Judge passed in Civil Appeal No.89 of 1984 and to confirm the judgment and decree passed by the learned Civil Judge. 3. Heard Mr.J. F. Mehta, learned advocate for the plaintiffs and Mr.H M. Parikh, learned senior advocate for the respondents at length. Perused the materials placed on record and the impugned judgment and orders of both the Courts below. 4. Mr.J. F. Mehta, learned advocate for the applicants – original plaintiffs has submitted that the only question to be decided is regarding issue of sub-letting the suit premises. While referring to the pleadings of the parties before the Trial Court, he has submitted Page 3 of 36

C/CRA/79/2007 JUDGMENT that initially, the plaintiffs have previously filed Civil Suit No.376 of 1977 for injunction against defendant No.1 for restraining him from sub-letting or transferring or assigning the suit premises to other person and, thereafter, notice for terminating the tenancy came to be issued on 04.11.1977 which is at Exhibit 46. According to him, the Court below has passed the interim order and that the defendant No.1 was restrained from transferring the tenancy right to anybody and, thereafter, the so-called partnership firm was established on 14.04.1978 as per the partnership agreement. While assailing the partnership, the learned advocate for the plaintiffs has submitted that the said partnership firm is sham, bogus and vague and created with an intention to show that the tenancy is not transferred to anybody and defendant No.1 was partner thereof, but considering the share of defendant No.1 is only 10%, whereas, he has to pay rent of the tenancy and tax and that fact is not logical. He has submitted that defendant No.2 firm is not registered one. According to him, defendant No.1 – original tenant has left India and he has no control over the finance of the alleged firm and he has no control over the premises and he has parted with possession of the shop to defendants No.2 and 3. He has submitted that no signature of defendant No.1 is obtained for operating bank / shroff account. While referring to the oral evidence on behalf of the parties, he has submitted that it is brought on record that defendant No.1 has left the India along with his family and the control over the suit premises is with defendants No.2 and 3 and the accounts produced are doubtful one as only corrections are made in the ledger account of defendant No.1. 4.1 Mr.Mehta, learned advocate has also referred to the panchnama of original suit premises dated 02.11.1977 and has submitted that it is revealed from the panchnama that only grocery shop was found there and now, at present, it is hardware shop. Page 4 of 36

C/CRA/79/2007 JUDGMENT 4.2 While referring to the suit notice, it has been submitted by Mr.Mehta, learned advocate that after termination of tenancy w.e.f. 30.11.1977, the original tenant has transferred his tenancy right in favour of defendants No.2 and 3. It is submitted that the partnership firm is created after defendant No.1 left India for abroad. While referring to the oral testimony on behalf of the defendants, learned advocate for the original plaintiffs has submitted that there are correction in the books of account and there is no withdrawal from the firm by the tenant. He has submitted that defendant No.1 has not come into witness box and the power of attorney holder has deposed on his behalf, therefore, the adverse inference need to be drawn against the original tenant. He has submitted that as there was stay against the defendant No.1, he ought not to have transferred the tenancy rights to anybody else. He has submitted that there is no actual possession or control over the suit premises by the original tenant. According to him, now the possession is with the third party and, therefore, it is a clear case of sub-letting. While referring to the alleged receipt said to be signed by deceased Chaturbhai Babarbhai, he has submitted that the amount which was deposited as alleged was required to be repaid at the time of taking over the possession of the tenancy right and, therefore, the tenant has to first handover the vacant possession of the suit premises is condition precedent. According to him, the learned Civil Judge has properly appreciated the evidence and passed the order in favour of the plaintiffs which ought not to have been quashed and set aside by the Appellate Court and the Appellate Court has committed serious error of facts and law. He has submitted that though the defendants have claimed of refund of deposit, they have not filed any counter suit. He has submitted that the impugned judgment and order of the Appellate Court is perverse one and is required to be interfered with by this Court exercising the revisional power under Section 29 of the Rent Act. Page 5 of 36

C/CRA/79/2007 JUDGMENT 4.3 According to him, considering overall facts of the case, there is necessity to lift the veil of the partnership. If this is done, then it would be revealed that the tenant had virtually lost the control over the suit shop and under the guise of partnership, he had transferred exclusive possession of and rights in the premises in favour of defendants No.2 and 3. According to him, as the tenant had no active and effective participation in the firm so as to retain the control over the premises and exclusive possession in favour of the firm and defendants No.2 and 3 the partner was able to exercise his own right in the business using the premises exclusively and, therefore, the ingredients of Section 13(1)(e) were satisfied and were proved, on the basis of evidence on record, which has been properly believed by the Trial Court. 4.4 In support of his submissions, Mr.Mehta, learned advocate has relied upon the following decisions. 1. Vaishakhi Ram and Others Vs. Sanjeev Kumar Bhatiani, AIR 2008 SC 1585; 2. Mohammedkasam Haji Gulambhai Vs. Bakerali Fatehali, AIR 1998 SC 3214; 3. Santosh Ajit Sachdeva and others Vs. Anoopi Shahani, AIR 2007 SC 3231; 4. Celina Coelho Pereira and others Vs. Ulhas Mahabaleshwar Kholkar and others, AIR 2010 SC 603; 5. Kumbhar Kurji Gokalbhai Vs. Memon Haji Ali, 2013 GLHEL – HC 230163; 5. Per contra, Mr.H. M. Parikh, learned counsel for the respondents – original defendants has submitted that this is a revision application wherein the power of this Court is very much limited and the scope of interference in the finding of facts is limited Page 6 of 36

C/CRA/79/2007 JUDGMENT one. He has submitted that if from the record the two views are possible and one is taken by the Trial Court on the basis of the evidence on record, the Revisional Court cannot substitute its view in place thereof. He has submitted that the lower Appellate Court has believed the facts of relationship of the partnership and every aspect has been considered by the Appellate Court and has properly quash and set aside the judgment and decree of the Trial Court. He has submitted that the suit premises was rented to defendant No.1 for business purpose and at present, the business is going on in the nature of partnership firm wherein defendant No.1 is a partner. According to him, merely one partner has 10% share cannot be said to be illegal. According to him, the partnership firm clearly contains agreement that the rent of the suit premises is to be paid by defendant No.1 and also paid by him. He has submitted that as a partner of the firm, it can be said that defendant No.1 is also in control and possession of the suit premises. According to him, one may be out of station and yet he might be in actual possession and control over the suit premises. He has submitted that all these aspects have been considered by the Appellate Court by quashing and setting aside the judgment and decree of the Trial Court. He has submitted that the Trial Court has not properly appreciated the evidence on record and passed the decree in favour of the landlord and there was perversity and due to that on re-appreciation of evidence, the Appellate Court has come to the conclusion that there was partnership between defendants and defendant No.1 has not subletted the suit premises to anybody else. According to him, one cannot sublet the thing to oneself. He has submitted that though defendant No.1 has gone abroad, he does not loose the legal control over the suit premises and possession thereof. 5.1 Mr.Parikh, learned counsel has submitted that the findings recorded by the Appellate Court cannot be said to be perverse and considering the limited jurisdiction of interference under Section Page 7 of 36

C/CRA/79/2007 JUDGMENT 29(2) of the Rent Act, this Court may not disturb the finding of facts as arrived at by the Appellate Court. He has submitted that though during the pendency of this revision, the original defendant died, this fact could not be taken into consideration at this point of time. Regarding the decisions relied upon the learned counsel for the applicants, Mr.Parikh, learned counsel has submitted that in these cases, there was consisting finding of facts of both the Courts below and,therefore, the decree was passed in respective suits and, therefore, these decisions are not applicable in the present case. 5.2 Mr.Parikh, learned counsel has submitted that at the time of taking the suit shop on rent basis, defendant No.1 has deposited the amount with Chaturbhai Babarbhai, who has given receipt thereof in favour of the tenant and has agreed that the amount of deposit would be repaid to the tenant and on such repayment, he has to vacate the suit premises and, therefore, the refund of deposit is precondition for vacating the premises and in this case, the plaintiffs have not shown their readiness and willingness to refund the amount to the tenant and, therefore, this precondition is not satisfied, and, therefore, the tenant cannot be compelled to vacate the suit premise. He has prayed to dismiss the revision application and confirm the impugned order of the first Appellate Court. 5.3 Mr.Parikh, learned counsel has also submitted that the revisional jurisdiction of the High Court under Section 29 of the Rent Act extends only to correct the errors of law or to remove legal infirmities in the impugned decree passed under the Bombay Rent Act. According to him, if the High Court accepts that the facts as they are referred to in the decision and finds no errors of law or infirmities, than which it can correct or not and if the record does not disclose any such error or infirmity, it has no jurisdiction to interfere with the appellate decision. He has submitted that the High Court subsequent even to the record and appellate decision is not Page 8 of 36

C/CRA/79/2007 JUDGMENT according to him. 5.4 In support of his submissions, Mr.Parikh, learned counsel has relied upon the following decisions. 1. Helper Girdharbhai Vs. Saiyed Mohmad Mirasaheb and others, 1987 (2) GLH 261; 2. Manchharam Sobhraj Vs. Jamnadas Mulchand, 1975 GLR 898; 3. Bhagwandas Trilokchand Vs. Bhungodomal Zamatmal, 2000 (3) GCD 2348; 4. Lilaram Jamiatrai and others Vs. Meghraj Hardasmal Kalwani and others, AIR 1972 Gujarat 66; 6. In rejoinder, Mr.Mehta, learned counsel for the applicants has submitted that the decisions cited by the otherside are factually different and, therefore, they are not applicable to the facts of the present case. He has submitted that for deciding the question that whether there is a genuine partnership at all or bogus or sham all factors are required to be taken into consideration and in this case from facts on record, it appears that the partnership is sham and it is used as a devise to protect the tenacy right. Regarding revisional jurisdiction, he has submitted that the powers of the revisional court though limited but if it is found from the record that the Court below has misread the evidence on record and has committed any error of law then definitely, the Revisional Court can interfere with the findings of fact and decisions of the Court below. He has prayed to allow the revision application. 7. In the case of Vaishakhi Ram (supra), the tenant parted with possession of part of suit shop in favour of sub-tenants. No consent in writing was obtaining either of erstwhile landlord or purchaser of Page 9 of 36

C/CRA/79/2007 JUDGMENT suit shop and sub-tenants were in exclusive possession of suit shop and carrying on independent business and right to eviction was not proved to have been waived either by erstwhile landlord or by purchaser. While dealing with various decisions, the Supreme Court has observed that it is well settled that the burden of proving the facts of sub-letting is on the landlord but if the landlord proves that the sub-tenant is in exclusive possession of the suit premises, then the onus is shifted to the tenant to prove that it was not a case of subletting. 7.1 In the case of Mohammedkasam Haji Gulambhai (supra) which has arisen from the decision of this Court, the Supreme Court, while considering Section 13(1)(e) of the Rent Act, has held and observed in para-3 as under:- 3. At this stage, we may also refer to Section 15 of the Act which puts an embargo on the tenant “to sublet the whole or any part of the premises let to him or to assign or transfer in any other manner his interest therein”. This is, however, subject to any contract to the contrary. Thus, irrespective of there being no clause in the rent note entitling the tenant to sublet the premises the law forbids him from doing so. He cannot even assign or transfer in any other manner his interest in the tenanted premises.” 7.2 In the said decision, the Apex Court has also referred to its earlier decision rendered in the case of Harshachandra Narsibhai Patel Vs. Ibrahim Haji Khubanbhai, 1984 GLH 965 wherein it

was observed that “moreover, it must be remembered that Section 13(1)(e) of the Rent Act is much wider and it is not confined merely to the acts of unlawful sub- letting. It also provides that if a tenant has assigned or transferred in any other manner his interest in the premises taken on lease by him, then also the landlord will become entitled to a Page 10 of 36

C/CRA/79/2007 JUDGMENT decree for possession of the said premises. The words “transfer in any other manner” are much wider and would include within their meaning and ambit a transfer made in favour of a relative or a known person, once it is proved that he has left the premises and the transferee is put in exclusive possession. To give these words a restricted meaning and equate such a transfer with sub-letting is to make that part of the sub-section redundant. The facts of this case clearly show that defendant No.1 had transferred his interest in the suit premises to defendant No.2. If it is found that the premises were transferred for valuable consideration then it will certainly amount to sub-letting. Even if it is not possible to come to that conclusion, then also it amounts to a transfer in any other manner.” 7.3 In the case of Mohammedkasam Haji Gulambhai (supra), the Apex Court has held and observed in para-12 as under:- “12. Clause (e) of Section 13(1) of the Act is couched in widest terms. There is absolute prohibition on the tenant from subletting, assigning or transferring in any other manner his interest in the tenanted premises. There appears to be no way around this subject of course if there is any contract to the contrary between the landlord and the tenant. In partnership where tenant is a partner, he retains legal possession of the premises as partnership is a compendium of names of all the partners. In partnership the tenant does not divest himself of his right in the premises. On the question of subletting etc. law is now very explicit. There is prohibition in absolute terms on the tenant from subletting, assignment of disposition of his interest in the tenanted premises.” 7.4 In the case of Santosh Ajit Sachdeva and others (supra) wherein the Trial Court has dismissed the suit of the landlord filed under Section 13(1)(e) of the Bombay Rent, Hotel and Lodging House Rates Control Act for eviction on the ground of sub-letting, Page 11 of 36

C/CRA/79/2007 JUDGMENT the landlord has preferred an appeal wherein the judgment was reversed and it was held that mere fact that tenant is a majority shareholder does not sufficient to disprove sub-letting. It was shown that tenant is actually controlling and managing business of the company. 7.5 In the case of Pravinder Singh (supra), the case was relating to the provisions of Section 14(2)(ii)(a) of the H.P. Urban Rent Control Act. The provisions there of are similar to the provisions of Section 13(1)(e) of the Bombay Rent Act. Wherein the original tenant has died and his heirs not only inherited tenancy but also rights and obligations of tenancy. The successor in interest entered into partnership business in leased premises with stranger. It was observed that it amounts to subletting and breach of obligation of tenant and tenant is liable to be evicted. It was observed therein that to defeat the provisions of law, a device is at times adopted by unscrupulous tenants and sub-tenants of bringing into existence a deed of partnership which gives the relationship of tenant and sub- tenant an outward appearance of partnership while in effect what has come into existence is a sub-tenancy or parting with possession camouflaged under the cloak of partnership. It was further held and observed that merely because a tenant has entered into a partnership he cannot necessarily be held to have sublet the premises or parted with possession thereof in favour of his partners. If the tenant is actively associated with the partnership business and retains the use and control over the tenancy premises with him, may be along with the partners, the tenant may not be said to have parted with possession. However, if the user and control of the tenancy premises has been parted with and deed of partnership has been drawn up as an indirect method of collecting the consideration for creation of sub-tenancy or for providing a cloak or cover to conceal the transaction not permitted by law, the Court is not estopped from tearing the veil of partnership and finding out the Page 12 of 36

C/CRA/79/2007 JUDGMENT real nature of transaction entered into between the tenant and the alleged sub-tenant. The existence of deed of partnership between the tenant and the alleged sub-tenant would not preclude the landlord from bringing on record material and circumstances, by adducing evidence or by means of cross-examination, making out a case of sub-letting or parting with possession or interest in tenancy premises by tenant in favour of a third person. The rule as to exclusion of oral by documentary evidence governs the parties to the deed in writing. A stranger to the document is not bound by the terms of the document and, is, therefore, not excluded from demonstrating the untrue or collusive nature of the document or the fraudulent or illegal purpose for which it was brought into being. An inquiry into reality of transaction is not excluded merely by availability of writing / reciting the transaction. A lease of immovable property is transfer of a right to enjoy such property. Parting with possession or control over the tenancy premises by tenant in favour of a third person would amount to the tenant having transferred his rights under the lease within the meaning of Section 14(2)(ii) of the Act and therefore he would be liable to be evicted. 7.6 In the case of Celina Coelho Pereira and others (supra), the partnership firm was found to be not genuine and was formed to cover up sub-letting and the tenant has no control over the premises, concurrent findings based on evidence by both the Courts, the High Court has entertained and passed an order setting aside the order of the Trial Court which give rise to the Special Leave Petition before the Supreme Court. After referring catena of decisions, the Apex Court has observed in para-28 as under:- 28. The legal position that emerges from the aforesaid decisions can be summarised thus : (i) In order to prove mischief of sub-letting as a Page 13 of 36

C/CRA/79/2007 JUDGMENT ground for eviction under rent control laws, two ingredients have to be established, (one) parting with possession of tenancy or part of it by tenant in favour of a third party with exclusive right of possession, and (two) that such parting with possession has been done without the consent of the landlord and in lieu of compensation or rent. (ii) Inducting a partner or partners in the business or profession by a tenant by itself does not amount to sub-letting. However, if the purpose of such partnership is ostensible and a deed of partnership is drawn to conceal the real transaction of sub-letting, the Court may tear the veil of partnership to find out the real nature of transaction entered into by the tenant. (iii) The existence of deed of partnership between tenant and alleged sub-tenant or ostensible transaction in any other form would not preclude the landlord from bringing on record material and circumstances, by adducing evidence or by means of cross-examination, making out a case of sub-letting or parting with possession in tenancy premises by the tenant in favour of a third person. (iv) If tenant is actively associated with the partnership business and retains the control over the tenancy premises with him, may be along with partners, the tenant may not be said to have parted with possession. (v) Initial burden of proving sub-letting is on landlord but once he is able to establish that a third party is in exclusive possession of the premises and that tenant has no legal possession of the tenanted premises, the onus shifts to tenant to prove the nature of occupation of such third party and that he (tenant) continues to hold legal possession in tenancy premises. (vi) In other words, initial burden lying on landlord would stand discharged by adducing prima facie proof of the fact that a party other than tenant was in exclusive possession of the premises. A presumption of sub-letting may Page 14 of 36

C/CRA/79/2007 JUDGMENT then be raised and would amount to proof unless rebutted. 7.7 In the case of Celina Coelho Pereira and others (supra), regarding the powers of the High Court under Article 227 of the Constitution, the Supreme Court has held and observed in paras-32, 33 and 34 as under:- 32. In Bathutmal Raichand Oswal v. Laxmibai R. Tarta and another, (AIR 1975 SC1287) this Court held : "The High Court cannot in guise of exercising its jurisdiction under Article 227 convert itself into a Court of appeal when the Legislature has not conferred a right of appeal and made the decision of the subordinate Court or Tribunal final on facts." 33. In State through Special Cell, New Delhi v. Navjot Sandhu alias Afshan Guru and others(2008 AIR SCW 2442) this Court explained the power of the High Court under Article 227 thus : "Thus the law is that Article 227 of the Constitution of India gives the High Court the power of superintendence over all Courts and Tribunals throughout the territories in relation to which it exercises jurisdiction. This jurisdiction cannot be limited or fettered by any Act of the State Legislature. The supervisory jurisdiction extends to keeping the subordinate Tribunals within the limits of their authority and to seeing that they obey the law. The powers under Article 227 are wide and can be used, to meet the ends of justice. They can be used to interfere even with an interlocutory order. However the power under Article 227 is a discretionary power and it is difficult to attribute to an order of the High Court, such a source of power, when the High Court itself does not in terms purport to exercise any such Page 15 of 36

C/CRA/79/2007 JUDGMENT discretionary power. It is settled law that this power of judicial superintendence, under Article 227, must be exercised sparingly and only to keep subordinate Courts and Tribunals within the bounds of their authority and not to correct mere errors. Further, where the statute bans the exercise of revisional powers it would require very exceptional circumstances to warrant interference under Article 227 of the Constitution of India since the power of superintendence was not meant to circumvent statutory law. It is settled law that the jurisdiction under Article 227 could not be exercised "as the cloak of an appeal in disguise"." 34. The aforesaid two decisions and few other decisions, namely, Chandavarkar Sita Ratna Rao v. Ashalata S. Guram (AIR 1987 SC117); State of Maharashtra v. Milind and Ors., (2000 AIR SCW 4503) Ranjeet Singh v. Ravi Prakash, (2004 AIR SCW 4221) came to be considered by this Court in the case of Shamshad Ahmad and Ors. v. Tilak Raj Bajaj (Deceased) through L.Rs. and others (2008 AIR SCW 6201) and this Court held : "Though powers of a High Court under Articles 226 and 227 are very wide and extensive over all Courts and Tribunals throughout the territories in relation to which it exercises jurisdiction, such powers must be exercised within the limits of law. The power is supervisory in nature. The High Court does not act as a Court of appeal or a Court of error. It can neither review nor re-appreciate, nor re- weigh the evidence upon which determination of a subordinate Court or inferior Tribunal purports to be based or to correct errors of fact or even of law and to substitute its own decision for that of the inferior Court or Tribunal. The powers are required to be exercised most sparingly and only in appropriate cases in order to keep the subordinate Courts and inferior Tribunals within the limits of law.” Page 16 of 36

C/CRA/79/2007 JUDGMENT 7.8 In the case of Kumbhar Kurji Gokalbhai (supra), since this Court passed an order in Civil Revision Application No.26 of 2008 dated 22.10.2013 which is cited in 2013 JX (Guj) 777 : 2013 GLHEL HC 230163, the Court, after following various decisions, has held and observed in paras-6.3, 6.4, 6.5 and 6.6 as under:- 6.3 True it may be that the percentage of sharing in the partnership business is not the sole yardstick to decide on the genuineness of the partnership. All these aspects lifted the veil of the partnership, and suggested that the tenant had virtually divested of control over the suit shop and under the clock of partnership, had transferred exclusive possession of and rights in the premises in favour of said Ramniklal Karsandas. Considering the above aspects of the matter and the circumstances coming from the evidence led by the parties read with the total effect of the conditions of partitioning deed (Exh.52), it is to be held that the partnership business was only a device. The tenant had no active and effective participation in the firm so as to relegate the control and the premises and exclusive possession in favour of the third party, partner. The said partner was able to exercise his own right in the business and using the premises exclusively. The ingredients of Section 13(1)(e) were satisfied and were proved on the basis of evidence on record. 6.4 When on the basis of above evidence, the Courts below having held that the tenant had exclusively parted with possession and the retention of tenancy rights by him could not be inferred in the facts of the case the aspect that the tenant was paid his share at the year end on Diwali would only be a consideration received by the tenant. In any case, the facts and circumstances and the evidence on record, established that there was an illegal transfer or assignment of interest in the rented premises. 6.5 The above features emerging from the evidence on record lead to an unfailing conclusion that the tenant had desisted from Page 17 of 36

C/CRA/79/2007 JUDGMENT associating himself in the partnership business. When there was no active participation shown of the tenant in the business of the firm, it was one of the consideration to infer that he had given up his control. In the suit shop the sub-tenant and his two sons used to sit to do the business. The tenant was not aware of the affairs of the daily business in the provision store and was not abreast of the happenings in the business. It amounted to divesting himself of legal possession and parting with the exclusive possession of the suit shop to the third party partner. 7.9 In the case of Kumbhar Kurji Gokalbhai (supra), this Court has further held and observed in para-7 as under:- “When tenant enters into partnership, his intention to continue and retain the tenancy rights in respect of the premises being used for the partnership business, may be judged by his conduct and other criteria, which may find revelation in the agreement of partnership. As far as Exhibit 52 is concerned, on a closure reading thereof, a condition regarding retention of tenancy rights by the defendant-tenant was not found. Even if the tenant was to do business in the suit premises with another person by creating a partnership, in such arrangement, it was pre-requisite that the tenancy rights in the premises were retained by the tenant. Retention of tenancy rights was to be crucial for judging the intention of the tenant, and also whether had kept with him legal possession of the premises. In order that there is no subletting and/or there is no illegal assignment or transfer in the premises, essential it was that the tenant had retained his rights as tenant therein. There has to be an intention to reserve and retain tenancy on part of the tenant. When the partnership business was created and said was raised as defence to counter the ground of subletting, the intention of the tenant for retaining his tenancy and retaining legal possession was to primarily stem from the recitals in the partnership deed. Page 18 of 36

C/CRA/79/2007 JUDGMENT 7.10 In the case of Kumbhar Kurji Gokalbhai (supra), this Court has further held and observed in para-7.1 as under:- 7.1 In a partnership agreement wherein the tenant of the premises to be used for partnership business is one of the partners, and the partnership deed not reserving by way of express condition, the tenancy in the premises for the tenant partner, then in such case and such circumstance, it would be difficult to hold that the tenant had not parted with legal possession in favour of the other partner-third party. Though it is a strong signaling condition it is not invariably suggested that absence of such stipulation would in all cases render the partnership a sham arrangement and sub- tenancy would have to be necessarily inferred, as in a given case the other circumstances may strongly lead inference of a genuine partnership. But as obtained in the present case, the absence of stipulation that the tenant was retaining his tenancy right in the premises was further feeded by the evidence on record. More particularly given the context that this important recital and condition being not found in the terms of the partnership deed and the other conditions of the partnership agreement read conjointly had led the courts to draw a conclusion that there was a transfer/assignment of interest in the suit shop, it could hardly be faulted. 8. In the case of Helper Girdharbhai (supra), as relied upon by Mr.Parikh, learned counsel, it was held therein that it is well settled that if there was a partnership firm of which tenant of the premises in which the business of the firm was carried on was a partner, the fact of carrying on of business of the partnership in the premises would not amount to subletting leading to the forfeiture of the tenancy. Regarding existence of partnership, it has been held in para-8 as follows:- “8. Whether there was a partnership or not may in certain cases be a mixed question of law and Page 19 of 36

C/CRA/79/2007 JUDGMENT fact, in the sense that whether the ingredients of partnership as embodied in the law of partnership were there or not in a particular case must be judged in the light of the principles applicable to partnership. The first question, therefore, is what is a partnership. That has to be found in S. 4 of the Partnership Act, 1932, it says “Partnership is the relation between person who have agreed to share the pro-fits of a business carried on wholly by all or any of them acting for all” (Emphasis applied). Section 6 of the said Act, reiterates that in determining whether a group of persons is or is not a firm, or whether a person is or is not a partner in a firm, regard shall be had to the real relation between the parties, as shown by all relevant facts taken together. The following important elements must be there in order to establish partnership (1) there must be an agreement entered into by all parties concerned, (2) the agreement must be to share profits of business, and (3) the business must be carried on by all or any of the persons concerned acting for all. The partnership deeds were there entitling the petitioner to share in the partnership. It is true that in the partnership deeds the bank accounts were not to be operated by the appellant, and further that irrespective of the profit the clause of the partnership deed provided that there should be a fixed percentage of profit to be given to the partner appellant No.1. The appellant was not to share the losses. But, there is nothing illegal about it.......” 8.1 In the said decision, there was partnership deed in existence and there was evidence of suit of dissolution of the partnership has been considered by the Trial Court and it was held that there was nothing intrinsically wrong in law in constituting a partnership in the manner it was done. Regarding powers of the High Court under Section 29(2) of the Bombay Rent Act, the Court has held and observed in paras 13, 14 and 15 as under:- Page 20 of 36

C/CRA/79/2007 JUDGMENT 13. The question is, can the High Court do so in law. The power of the High Court to revise the order is contained in section 29(2) of the Bombay Rent Act as applicable at the relevant time to Gujarat, The said provision reads as fol- lows: "29(2) no further appeal shall lie against any decision in appeal under sub-section (1) but the High Court may, for the purpose of satisfying itself that any such decision in appeal was according to law, call for the case in which such decision was taken and pass such order with respect thereto as it thinks fit." 14. The ambit and power of revision generally and in particular with respect to the provisions with which we are concerned have from time to time come up for consideration by this Court. This Court in Hari Shankar v. Rao Girdhari Lal Chowd – hurry, [1962] 1 Suppl. SCR. 933 had to consider section 35(1) of the Delhi & Ajmer Rent Conntrol Act, 1952. The said section reads as follows:- "35(1) The High Court may, at any time, call for the record of any case under this Act for the purpose of satisfying itself that a decision made therein is according to law and may pass such order in relation thereto as it thinks fit." 15. It was held in the majority judgment by HidayatuIIah, J. as the learned Chief Justice then was, that though section 35 of the Delhi and Ajmer Rent Control Act was worded in general terms but it did not create a right to have the case re-heard. This Court emphasised that the distinction between an appeal and revision is a real one. A right to appeal carries with it right of re-heating on law as well as fact, unless the statute conferring the right to appeal limits the re-hearing in some 302 way. The power to hear a revision is generally given to a superior court so that it may satisfy itself that a particular case is decided according to law. The expression "ac- cording to law" in section 35 of the said Act Page 21 of 36

C/CRA/79/2007 JUDGMENT referred to the decision as a whole, and was not to be equated to errors of law or of fact simpliciter. This Court was of the view that what the High Court could see is that there has been no miscarriage of justice and that the decision was according to law in the sense mentioned. Kapur, J. who delivered a separate judgment, however, observed that the power under section 35(1) of the said Act of interference by the High Court is not restricted to a proper trial according to law or error in regard to onus of proof or proper opportunity of being heard. It is very much wider than that, when in the opinion of the High Court the decision is erroneous on the question of law which affects the merits of the case or decision was manifestly unjust the High Court is entitled to interfere. The revisional authority could ensure that there was no miscarriage of justice and the principles of law have been correctly borne in mind, the facts had been properly comprehended in that light. If that was done in a particular case then the fact that the revisional authority or the High Court might have arrived to a different conclusion is irrel- evant. This view had also been expressed in the decision of this Court in Puranchand v. Motilal, [1963] Supp. (2) S.C.R. 906 : (AIR 1964 SC 461). This principle was reiterated in Krishnawati v. Hans Raj, (1974) 2 S.C.R. 524; (AIR 1974 SC 280) which was dealing with section 39(2) of the Delhi Rent Control Act, 1958 in second appeal. It was observed that under section 39(2) of the said Act, the High Court could interfere in second appeal only if there was a substantial question of law. In that case, the question whether the appellant was legally married no finding was necessary in the eviction suit. It was sufficient for the rent court to proceed on the finding that the appellant and S were living together as husband and wife, whether they were legally married or not. It was further held that whether there was subletting was not a mixed question of law and fact. In Phiroze Bamanji Desai v. Chandrakant M. Patel & Ors., (1974) 3 SCR 267: (AIR 1974 SC 1059) the question involved was whether there was reasonable and bona fide requirement of premises for personal use and occupation as also the question of greater Page 22 of 36

C/CRA/79/2007 JUDGMENT hardship under the Bombay Rent Act and the ambit and scope of the power of Section 29(3) of the said Act with which we are concerned came up for consideration. Bhagwati, J. as the learned Chief Justice then was, referred with approval the observations of Hidayatullah, J. referred to hereinbefore in Hari Shankar's case (supra). Bhagwati, J. observed that the ambit of section 35(1) of the Delhi & Ajmer Rent Control Act which fell for consideration in Hari Shanker's case (supra) was the same as section 29(3) of the Bombay Rent Act and therefore, he expressed the opinion that the 303 High Court could interfere only if there was miscarriage of justice due to mistake of law. 8.2 In the said decision, while referring to the earlier decisions, the Apex Court has observed that a right to appeal carries with it right of re-hearing on law as well as fact, unless the statute conferring the right to appeal limits the re-hearing in some way. The power to hear a revision is generally given to a superior court so that it may satisfy itself that a particular case is decided according to law. The expression “according to law” in Section 35 of the said Act referred to the decision as a whole, and was not to be equated to errors of law or of fact simpliciter. The Apex Court was of the view that what the High Court could see is that there has been no miscarriage of justice and that the decision was according to law in the sense mentioned. It is very much wider than that when in the opinion of the High Court the decision is erroneous on the question of law which affects the merits of the case or decision was manifestly unjust the High Court is entitled to interfere. The revisional authority could ensure that there was no miscarriage of justice and the principles of law have been correctly borne in mind, the facts had been properly comprehended in that light. If that was done in a particular case then the fact that the revisional authority or the High Court might have arrived to a different conclusion is irrelevant. It has also further observed that the jurisdiction of the Page 23 of 36

C/CRA/79/2007 JUDGMENT High Court is to correct all errors of law going to the root of the decision which would, in such cases, include even perverse findings of facts, perverse in the sense that no reasonable person, acting judicially and properly instructed in the relevant law could arrive at such a finding on the evidence on the record. It was further observed that the ambit of the power was expressed in rather wide amplitude and the High Court must ensure that the principles of law have been correctly borne in mind. Secondly, the facts have been properly appreciated and a decision arrived at taking all material and relevant facts in mind. It must be such a decision which no reasonable man could have arrived at. Lastly such a decision does not lead to a miscarriage of justice. As an evidence, the Apex Court has observed that under the guise of revision substitution of one view where two views are possible and the Trial Court has taken a particular view. If a possible view has been taken, the High Court would be exceeding its jurisdiction to substitute its own view with that of the Courts below because it considers it to be a better view. The fact that the High Court would have taken a different view is wholly irrelevant. 8.3 In the case of Manchharam Sobhraj (supra), the question arise therein was regarding subletting by the tenant while taking partnership firm. Considering the facts of the case, it has been held and observed in para-6 that it is true that if a tenant walks out of the suit premises and leaves the suit premises to a stranger who carries on his own business, it may lead to an inference that the tenant has sub-let his premises to a sub-tenant. That is so because it is a stranger who carries on his own business which shows that the tenant who has left the premises to him is no longer interested in those premises. Similarly, if a tenant walks out of the premises in his possession and allows a third party to carry on his own business under sham or camouflage partnership with the tenant it may Page 24 of 36

C/CRA/79/2007 JUDGMENT amount to an act of unlawful sub-letting by the tenant if the camouflage partnership has been entered into for the purpose of screening the act of unlawful sub-letting. Similarly, if a tenant has parted with possession of his premises and put his another partner in exclusive possession thereof, it will amount to an act of unlawful sub-letting because such an act connotes a transfer of legal interest in the premises from the tenant to someone else. Similarly, if a third party is allowed by a tenant to carry on his own business in the premises it may lead to an inference of unlawful sub- letting because the tenant who has no interest in the profit and loss of business can be said to be no longer interested in the premises. 8.4 It was also observed in para-13 of the said decision that there is no restriction against a tenant allowing the use of his premises to his partners for carrying on a business in which he has a share alone with his partners. It was observed that therefore as long as the right of occupancy as a monthly tenant in respect of the premises remains with the tenant and does not form part of the assets of the partnership firm there cannot be said to be any sub-letting. Different considerations will certainly prevail if the tenancy rights have been amalgamated in the pool of partnership assets and all partners are entitled to a share therein upon the dissolution of the partnership. It was also observed that even if the rent of the premises let to a tenant in payable under the deed of partnership, by the partnership firm of which the tenant is a partner it does not amount to un lawful sub-letting but it is mere1y a matter of partnership accounts. Such a provision does not constitute any transfer sub-letting or assignment of any interest in the premises within the meaning of Sections, 13(1) (e) and 15 of the Bombay Rent Act. 8.9 In the case of Bhagwandas Trilokchand (supra), it was observed that ordinarily, factual conclusions would not be interfered Page 25 of 36

C/CRA/79/2007 JUDGMENT with by the appellate court unless there are misreadings, or wrong principles are applied. However, it was also observed that it cannot be said that the power of the first appellate court is restricted in any manner. The first appellate court has got very wide power to appreciate the evidence on record and the first appellate court is the final court in so far as appreciation of evidence is concerned. The powers of the first appellate court cannot be equated with the power of the revisional court or that of the High Court in second appeal. In the aforesaid case, the original property was purchased by the landlord who became the owner of the suit property in which the tenant was received the profit and there was partnership bearing share of the tenant was just 10% only. The suit was filed for eviction under Section 13(1)(e) of the Bombay Rent Act. On the evidence produced in the matter, it was held by the Appellate Court that there was no camouflage partnership and there was no subletting which decision of the Appellate Court was upheld by this Court on the factual aspect. 8.10 In the case of Lilaram Jamiatrai and others (supra), wherein the jurisdiction of the High Court under Section 29 of the Bombay Rent Act was examined. It was observed that the revisional jurisdiction of the High Court under Section 29 extends only to correction of errors of law or to removal of legal infirmities in the appellate decrees passed under the Bombay Rent Act. It means that the High Court has to accept the facts of the case as they are not find out whether the decision contains any errors of law or legal infirmities which it can correct or remove. If the record does not disclose any such error or infirmity, it has no jurisdiction to interfere with the appellate decision. It cannot add new and subsequent events to the record and say that the appellate decision is not according to law. Regarding permissibility of additional evidence of new and subsequent events, the Apex Court has held and observed Page 26 of 36

C/CRA/79/2007 JUDGMENT in para-7 as under:- “7. Additional evidence of new and subsequent events also cannot be allowed to be led in a revisional application for very good and cogent reasons. New events which may be attempted to be brought on record will require investigation and proof. How will High Court investigate into them in a revisional application? One of the ways is to receive affidavits from parties and to decide upon them. If this course is followed, it will firstly disregard the best method of investigation of facts-known to our system of law - under which oral and documentary evidence is received from parties and is subjected to searching scrutiny and rigorous churning in order to discover the grains of truth lying hidden therein. Will the High Court set at naught such an investigation into truth carried out by the Courts below even though they contain no errors and adopt a weak and facile method of receiving proof of subsequent events by affidavits? Shall it totally disregard what the Courts below have done and substitute its decision, based on affidavits disclosing subsequent facts, for the decisions of the Courts below? I do not think it can be done. If it cannot be done, shall it hold in a revisional application a fresh trial on new events, summon witnesses, examine and cross-examine them and convert a revisional application into an original action? If this course is followed, every revisional application will have to be converted into an original action to be tried on new events. It also cannot be done. Section 29 of the Bombay Rent Act does not permit it to be done. Shall it then set aside the decisions of the Courts below even though there are no errors of law therein and remand the suit for a fresh trial on new and subsequent events producing in its wake a fresh decree, a fresh appeal and a fresh revisional application? And is there any guarantee that no new events will occur during this fresh trial, fresh appeal and fresh revisional application? If this probability cannot be ruled out, shall we again set aside decrees of Courts below and order a fresh trial and fresh investigation into more recent and subsequent events? Shall we Page 27 of 36

C/CRA/79/2007 JUDGMENT produce endless trials and never-ending litigations between the same parties in respect of the same prayers? The attempt to reopen a case on account of subsequent occurrences, for the aforesaid reasons, appears to me to be fraught with serious consequences and contrary to and inconsistent with the system of law and justice we have in this country. “ 9. Having taken into consideration the submissions of learned counsel for the parties and considering the materials placed on record, it reveals that prior to the present suit, the landlord has filed earlier suit for declaration against the original tenant No.1 wherein interim injunction was passed and in that suit, the panchnama of the rented premises was made where the grocery business was going on and that panchnama was prepared on 02.11.1977. It also reveals that the original tenant has come forward with a case that he has changed the business from the grocery to the hardware in the partnership business and he is partner of defendant No.2 – firm and he has not parted with the possession of the tenanted premises to anybody else and he is having control over the premises. It also reveals that after appreciation of the evidence of both the sides, the Trial Court has passed the decree of eviction in favour of the landlord which was challenged by the tenant by filing appeal before the first Appellate Court wherein the decree of the Trial Court has been set aside. It was held by the Trial Court that the partnership is sham and camouflage which was created with a view to conceal the subletting of the suit premises. Against that, it is observed by the Appellate Court that the partnership is a real one and tenant has not parted with any possession to anybody else and he is carrying on business in partnership firm and he has having share in it. 10. On perusal of the evidence on record, it is found that the landlord has deposed the fact that Priyakantbhai was the tenant of the suit shop and he came to know that he has to go abroad, he Page 28 of 36

C/CRA/79/2007 JUDGMENT approached Priyakantbhai and told him that if he was leaving India then the possession of the suit shop be handed over to him. Therefore, he has filed the suit restraining the defendant from transferring and assigning the suit property in any manner, wherein the Court has granted interim injunction. However, the original tenant has subletted his tenancy right in favour of defendants No.2 and 3 and since then, the possession of the suit shop is with defendant No.3 Ashokbhai Patel and he is doing the business in the name and style of Vikram Hardware Store. He has stated that Priyakantbhai has left India and settled in abroad. He has stated that the legal notice was issued to the tenant at Exhibit 46. He has stated that Ashokbhai and Priyakantbhai and Vikram Hardware Store are not the tenant and defendant No.1 has never come in India, thereafter, and settled in abroad. It appears from his cross- examination that he has admitted that the suit shop was rented by his grandfather. But, he has denied the suggestion that at the time of subletting the suit, his grandfather has received deposit of Rs.10,000/- from the original tenant. He has admitted that Vikram Hardware Store is a partnership firm. According to him, the tenant himself has told him that after taking consideration, he will hand over the possession of the suit shop to somebody else and he left for abroad. He has stated that he has not inquired from the Nagarpalika as to whether the partnership firm is registered under the Shops and Establishments Act or not. He has denied the suggestion that the tenant is a partner in the Vikram Hardware Store. He has denied the suggestion that one Vasantbhai is looking after the interest of the tenant in the partnership firm. He has denied the suggestion that the tenant has not transferred his tenancy right in favour of Vikram Hardware Store or its any person. 11. So far as the evidence on the part of the tenant is concerned, one Vasantkumar Shanabhai Patel, D.W.1 has examined wherein he has deposed that Priyakantbhai is his real brother and he is power Page 29 of 36

C/CRA/79/2007 JUDGMENT of attorney holder of Priyakantbhai. He has stated that Priyakantbhai has 10 percent share in the partnership firm - Vikram Hardware Store. He has stated that at the time of taking the suit shop on rent, Priyakantbhai has paid an amount of Rs.10,000/- as deposit to Chaturbhai Babarbhai. He has produced the receipt thereof. He has produced the partnership deed at Exhibit 58. He has stated that the possession of the suit shop is with Priyakantbhai and he has not transferred his right or interest in the suit shop to anybody else. He has stated that the rent of the suit shop has been paid from the account of Priyakantbhai. During his cross- examination, he has stated that Priyakantbhai was in foreign prior to 1976 and he came back to India in the year 1977 and resided for at least 7-8 months and at the end of the year 1977, he left for abroad and since then, he has not returned from Africa. He has stated that Priyakantbhai has invested Rs.2,000/- in the partnership firm, Ashokbhai has invested Rs.4,000/- and Mahendrabhai has invested Rs.4,000/-, whereas, Kantibhai has not invested any amount. He has stated that he has seen the books of account of the partnership firm. He has stated that the partnership firm has also obtained loan from Shroff Anilkumar Kantilal and there was a bank account in Anand Peoples Cooperative Bank. He has admitted that when the accounts were opened in the Shroff and Anand Peoples Bank, his signatures have not been obtained as power of attorney holder of partner No.1. He has stated that the partnership firm came to be existence in the year 1978. He has stated that when the partnership deed was executed, he was not present and he has no personal knowledge regarding the conditions of the partnership. According to him, the books of account are kept in the suit shop and at the end of the year, they are preparing the profit and loss account and the balance sheet, but they are not giving the copy of accounts to anyone thereof. He has stated that they have obtained the signatures of all the partners in the balance sheet. He has shown his ignorance as to the profit and loss account of the firm Page 30 of 36

C/CRA/79/2007 JUDGMENT since 1978. According to him, he has seen last balance sheet in the year 1982, but he is not in a position to show whether there is any profit or loss. He has stated that initially, Priyakantbhai has invested Rs.2,000/- as capital and except his share in the profit, he has not invested anything in the partnership firm. He has shown his inability to state regarding the turn over of the partnership firm. He has stated that except paying the rent, Priyakantbhai has not made any transaction in the partnership firm. According to him, when he has seen last balance sheet, the amount was credited in the account of Priyakantbhai. He has denied the suggestion that the family of Priyakantbhai was with him, but now they are gone to Africa with Priyakantbhai. He has admitted that Priyakantbhai has not returned from Africa after he went there in 1978. He has admitted that the key of the shop was remaining with Ashokbhai and the balance and books of account were also lying with Ashokbhai and administration of the shop is being carried out by Ashokbhai. 11.1 He has stated that the books of account written by one Hariprasad Joshi. But he is unable to state as to what salary has been paid to him. He has shown his ignorance whether any sales tax or income tax has been paid by the firm or not. He has stated that they are not required to file return in the case of Priyakantbhai. He has stated that he is visiting the shop for 15 to 16 times in the year. He has accepted that he and Priyakantbhai has no knowledge of business. He has denied that no any licence has been obtained under the Bombay Shops and Establishments Act by the firm. 12. On the defendants side, Ashokbhai Kalidas has been examined at Exhibit 60, who in his deposition, has stated that he is defendant No.3 and Vikram Hardware Store is a partnership firm and he along with Priyakantbhai, Mahendrabhai and Kantibhai were the partners of the firm. He has stated that the partnership deed was also registered which is at Exhibit 58. He has stated that the Page 31 of 36

C/CRA/79/2007 JUDGMENT possession of the suit shop is with Priyakantbhai and Priyakantbhai is tenant thereof and Priyakantbhai is paying rent. He has denied that he is in possession of the suit shop. He has denied the fact that Priyakantbhai has subletted the suit shop to him. According to him, the administration of the suit shop of Priyakantbhai is carried out by his brother Vasantbhai, who is frequently visiting the shop. He has stated that the books of account are maintained in due course which are being written by Hariprasad Shanker. It reveals from the cross-examination that he has denied the fact that the key of the suit shop is kept with him. According to him, the books of account and files of the firm are kept with him in the shop. According to him, the partnership firm was started from 10.05.1978. He has stated that the amount has been invested in the ledger account of the firm. He has stated that one Ashishbhai Kantibhai is a shroff of the firm. He has denied that he has no knowledge of the facts that whether any receipt is given to Priyakantbhai for investment of Rs.2,000/- or not. While referring to the entry in the rojmel at Exhibit 61, he is unable to explain that as to what purpose, the date 17.04.1978 mentioned in the entry. He has admitted that Priyakantbhai is settled in Africa and since leaving India in the year 1978, he did not return back. He has stated that they are not sending any statement of books of account to Priyakantbhai, but his brother came to see the same. He has stated that whenever Vasantbhai visited the shop and verified the profit and lost account and balance sheet, they obtained the signature of Vasantbhai. He has also admitted that for opening the account in his Shroff, all partners have put their signatures in the form. Regarding no signature of Priyakantbhai, he has stated that it might be left out. He has stated that probably, when they have started first transaction with Ashishbhai Kantibhai regarding Vikram Hardware Store, Priyakantbhai might be in India. 12.1 He has also stated that there is a current account in Anand Page 32 of 36

C/CRA/79/2007 JUDGMENT Peoples Bank where the signatures are required to be obtained and except Priyakantbhai, the signatures of three parters have been obtained. He has also stated that he has record of the ledger account of Priyakantbhai which is at Exhibits 61, 62, 63, 64, 65 and 66 and has accepted that the credit entry is erased and Rs.2007.89 paisa was outstanding against Priyakantbhai and he had to pay the partnership firm. He has admitted that except in the ledger account of Priyakantbhai, there is no correction or eraser used in respect of other entries. He has admitted that page No.69 is the ledger account wherein first entry is different from other entries. He has admitted that in Exhibits 66 and 67, the entries are first being written down and, thereafter, erased and, thereafter, written down and such erasers are not found in the ledger account of other partners. He has admitted that the amount of Rs.1,34,776/- was outstanding against Priyakantbhai at the end of Vikram Samvat 2037, but this amount has not been carried forward to Vikram Savmvat 2038. He has admitted that in Exhibit 67, the credit of Rs.6127.69 paisa has been shown in ledger account of Priyakantbhai and this is a mistake. He has admitted that no such mistake has been happened in the account of other partners. He has stated that the house tax, municipal tax, professional tax, rent have been debited from the account of Priyakantbhai. He has admitted that except this amount, no other amount has been entered in the ledger account of Priyakantbhai. He has stated that they are paying salary of Rs.500/- to Kantibhai, who is one of the partner of the partnership firm. He has stated that there is condition in the partnership deed that no remuneration is to be paid to the partners. However, it is clarified that there is also condition that the remuneration is to be paid to working partners. He has admitted that the possession of the suit shop is with naming three partners except Priyakantbhai. 13. In view of the aforesaid evidence on record coupled with the Page 33 of 36

C/CRA/79/2007 JUDGMENT documentary evidence, it clearly appears that the version of the defendants side is to creation of the partnership firm is devised to seal the decree of eviction in the suit shop. It reveals from the evidence that Priyantbhai – original tenant has left India and he has never come back in India and he is settled in Africa. It reveals that initially, there was grocery shop which is found from the panchnama prepared in earlier suit. There is no dispute as to the effect that the landlord has, initially, filed the suit against the tenant for declaration and injunction restraining the tenant from parting with the possession and there was interim injunction. During the pendency of that suit, the plaintiff – landlord has also issued notice to the defendant – tenant terminating his tenancy. This is found from the notice at exhibit 46 dated 04.11.1977. Now, admittedly, the partnership firm has been evolved in the year 1978. Thus, the partnership firm is created after receipt of notice at Exhibit 46 when the tenancy right of the tenant has already been terminated by the landlord. 14. It is pertinent to note that the brother of the original tenant has no idea regarding day to day business of the firm and he has even not signed the balance sheet or any papers thereof. It also appears from the evidence of defendants side that to show that there is a partnership deed have created of accounts wherein only in the ledger account of Priyakantbhai there are corrections made in such accounts, whereas, no such correction or eraser has been made in the ledger account of other partners. Not only that but the amount which was outstanding in ledger account of Priyakantbhai in one year has not been carried forward in the beginning of the next year. All these facts suggest that in reality there is no partnership firm between the Priyakantbhai and other respondents in the name of Vikram Hardware Store. It appears that the sham and camouflage partnership firm has been created to protect the possession of the suit shop. It clearly finds that in reality the original tenant has no Page 34 of 36

C/CRA/79/2007 JUDGMENT control over the business and he has parted with the possession in favour of respondents No.2 and 3. 15. On considering the impugned judgments and decrees of the Appellate Court as well as Trial Court, it clearly appears that the Trial Court has properly appreciated the evidence on record. Whereas, the Appellate Court has not properly appreciated the evidence as led by the parties. The learned Appellate Court has misdirected itself and has misread the evidence on record. The impugned judgment and decree of the Appellate Court is legally not tenable especially, when there is crystal clear evidence suggesting that the partnership is sham and camouflage, the burden lies on the tenant to prove that he is in actual possession of the suit shop. But in this case, as observed hereinabove, the entire possession of the suit shop is with defendant No.3 and he is in actual possession thereof. Considering overall facts and circumstances of the case, it is clearly found that the original tenant has subletted the suit premises to respondents No.2 and 3 and, therefore, they are liable to evict the suit shop. 16. In view of the above, the impugned judgment and order of the Appellate Court is not sustainable in law and the order and judgment of the Trial Court is required to be restored. 17. In view of the above foregoing reasons, the present Civil Revision Application is hereby allowed. The impugned judgment and order dated 22.02.1988 passed by the learned District Judge, Kheda at Nadiad in Regular Civil Appeal No.89 of 1984 is hereby quashed and set aside and the judgment and decree dated 08.03.1984 passed by the learned Civil Judge, Anand in Regular Civil Suit No.186 of 1978 is hereby restored. Page 35 of 36

C/CRA/79/2007 JUDGMENT The tenants are directed to handover vacant and peaceful possession of the suit property to the landlord on or before 31.01.2020 and to pay mesne profits at the rate of Rs.150/- till the possession is handed over to the landlord. The parties are directed to bear their costs own. Decree be drawn accordingly. Rule is made absolute. Sd/- (A. P. THAKER, J) V.R. PANCHAL Page 36 of 36