Rent control Case - Non- Joinder of Firm in eviction case default in payment of rents - When eviction case is filed against a Managing partner , Non- joinder of firm and other partners is not fatal to the case - Lower courts wrongly dismissed the case though held that the respondent committed willful default in payment of rents- High court set aside the Lower court orders and allowed the revision = Shivraj Sanghi ....petitioner Keshav Deo Dalmia.....Respondents = published in judis.nic.in/judis_andhra/filename=10466

Rent control Case - Non- Joinder of Firm in eviction case default in payment of rents - When eviction case is filed against a Managing partner , Non- joinder of firm and other partners is not fatal to the case - Lower courts wrongly dismissed the case though held that the respondent committed willful default in payment of rents- High court set aside the Lower court orders and allowed the revision = 
When once it is the admission of the respondent
that he is the Managing partner of the partnership firm and he is paying the
rents and also signed on the lease deed, in those circumstances, non-impleadment
of the Partnership firm or other partners is not fatal to the case as the
tenancy is not denied by the respondent.
 It is also not in dispute that the
respondent is in possession of the demises premises by virtue of the lease deed
dated 10.12.1986.
 Since the Partnership firm is an association of persons unlike
a Company, in the present case the respondent  would  fall within the definition
of "tenant" as per the provisions of Section 2(ix) of the Act and as such on
this sole ground it cannot be termed that  there is no relationship between the
revision petitioner and the respondent.
In S. VENKATA SUBBA RAO's case (1 supra) a learned single Judge of this Court  
considering the provisions of Section 4 of the Partnership Act and Order 30 of
CPC held that any partner while carrying on business of the firm acts as an
agent of other partners, thus, even assuming that the tenant is firm, eviction
petition filed against one of the partners is maintainable as in the eye of law
he represents all the partners.
 In SHANKAR HOUSING CORPORATION' s case (2 supra      
), it was held by the Supreme Court that - " A firm is not a legal entity but is
only a collective or compendious name for all the partners."  In view of the
above judgments, relied on by the learned counsel for the petitioners, in my
view, the eviction petition ought not to have been dismissed on the ground that
the Partnership firm was not made party.
For the foregoing discussion, though the Rent Controller came to a correct
finding of fact that the respondent-tenant committed willful default in payment
of rent, ought not to have dismissed the Eviction Petition on the premise that
it was filed against the respondent in the individual capacity instead of
Partnership firm. 
I am of the view that both the courts have erroneously
negatived the plea of the landlord only on the ground that the partnership firm
was not made party.  
As discussed above, the respondent would fall within the
definition of tenant as defined under section 2(ix) of the Act. 
In view of the
same, I hold that there is relationship of landlord and tenant between the
petitioner and the respondent and thus the findings of both the courts below are
liable to be set aside.
In view of the above, the orders under challenge are set side and the Eviction
Petition filed by the landlord is allowed on the ground of willful default.
Subject to above directions, the Civil Revision Petition is allowed. The
respondent shall vacate the premises within a period of three months from today
subject to conditions that he shall pay all arrears of rents and shall give an
undertaking that he will vacate the premises after expiry of three months period
as ordered above and continue to pay the rents for the said three months period.
No costs.

THE HON'BLE SRI JUSTICE A. RAJASHEKER REDDY          

CRP No.5998 of 2005

dated:11-10-2013

Shivraj Sanghi ....petitioner                  

Keshav Deo Dalmia.....Respondents


Counsel for the Petitioner:  Sri N. Chandradhar Rao.

Counsel for Respondents:

<Gist :

>Head Note:

?Cases referred:

1 1995(2) ALD 619
2 AIR 1978 DELHI 255
3 1976 THE ANDHRA WEEKLY REPORTER 426          
4 (2003) 8 Supreme Court Cases 413
5 1996(4) ALT 666
6 (1994) 2 Supreme Court Cases 289
7 1997 (3) ALT 511
8 1996 (4) ALD 95
9 2007(6) ALD 497
10 AIR 1998 SUPREME COURT 1395      


HON'BLE SRI JUSTICE A. RAJASHEKER REDDY        
       
CRP No.5998 of 2005

 ORDER:
        The revision petitioner herein is the landlord who filed RC No.712 of 1999
on the file of the Court of the I Additional Rent Controller, Hyderabad seeking
eviction of the respondent on the ground of willful default in payment of rents.
The case of the petitioner is that he filed RC alleging that he is the "Kartha"
of Shivraj and sons, the owner of the premises bearing No.5-1-1068/1, situated
at Gowliguda, Hyderabad and the respondent Keshav Deo Dalmia ( partner Dalmia
Brothers) is the tenant.  The lease deed was executed on 10.12.1986 for a period
of 11 months on a monthly rent of Rs.400/- and a sum of Rs.10,000/- was
deposited with the petitioner/landlord which is refundable at the time of
vacating the petition schedule premises. After the expiry of the period under
the said lease deed, no fresh lease was executed and the respondent has been
continuing as tenant on the same terms and conditions, except the rent, which as
per annexure 'A' shall be enhanced @ 10% of the rent at the end of the every
third year. The respondent paid the enhanced rent from May to July, 1997 under
receipt dated 10.7.1997 and thereafter, he did not pay the rent. The respondent
has not paid the property tax for 10 years. He paid the tax of Rs.12,307.50 ps
from 1996  on 10.7.1997.  According to the petitioner, the respondent committed
default in payment of rent and hence sought for eviction on that ground under
Section 10(2)(i) of the A.P. Buildings (Lease, Rent & Eviction ) Control Act,
1960 (for short "the Act").
The respondent filed the counter alleging that the eviction petition in the name
of individual is not maintainable. As per the averments in Para 3 of the
eviction petition a lease deed was executed on 10.12.1986 by M/s.Dalmia Brothers
represented by its Partner Keshav Deo Dalmia.  M/s.Dalmia Brothers is a
partnership firm and the firm has obtained the petition schedule premises under
the lease deed dated 10.12.1986 and the eviction petition filed in the name of
the respondent is not maintainable under law and is liable to be dismissed in
limini. The petitioner has not made all the partners of the firm as parties to
the eviction petition, hence, the same is not maintainable for non-joinder of
necessary parties. It was further alleged that  petitioner has not disclosed the
particulars of the members of the joint family. The lease deed dated 10.12.1986
disclosed that the petitioner entered into the lease agreement in his individual
capacity and not as a Kartha of the joint family. The other co-owners are proper
and necessary parties to the eviction petition. Hence, the eviction petition is
not maintainable on that ground also.  It is further stated that the lease deed
was executed on 10.12.1986 by the firm on payment of Rs.10,000/- as deposit with
the petitioner and that holding of the said deposit amount is in contravention
of Section 7 of the Act and the petitioner is liable to refund the said amount
forthwith. It is also stated that the petitioner used to collect the rents as
per his convenience once in three or four months at irregular intervals and he
even collected 11 months rent in lumpsum. The practice of collection of rents at
irregular intervals has been in existence since 1987. The rents sent by way of
cheques have been encashed by the petitioner without any protest, thereby the
petitioner by disowning his own conduct has given a go by to the terms and
conditions of the lease deed dated 10.12.1986.  Though the respondent sent the
rents by way of cheques, the petitioner has not presented the same for
encashment intentionally in order to create a ground for eviction.  It was also
stated that the petitioner has not presented the cheques sent to him for
encashment, thereafter the respondent addressed a letter dated 16.2.2000
narrating the true facts and enclosing a cheque No.158057 towards the rent for
the period from August, 1997 to January, 2000 and property tax for the year
1997-98 and 1998-99.  The respondent has also requested the petitioner to
furnish his bank account number and that in spite of receiving the said letter,
the respondent failed to give any reply. The petitioner is not entitled to the
payment of premium or other like sum in addition to the monthly rent and that
the petitioner is liable, either to adjust the amount from out of  monthly rents
or to return the same. For the first time, the petitioner demanded the property
tax on 10.7.1997 and the firm paid the same. The respondent after putting in
appearance on the date of hearing i.e. 3.7.2000 paid Rs.3,521.20 towards the
rent for the months of February, 2000 to July 2000 @ Rs.585.20 ps. per month and
Rs.1,225/- towards the property tax for the year 1999-2000. The rent for the
said period and the property tax were tendered by money orders and the same were
returned as 'refused' and the said amount was paid to the counsel for the
petitioner. Accordingly, it is stated that there is no default muchless willful
default in payment of rent. Hence, the respondent prayed that the eviction
petition may be dismissed with costs.
On the above pleadings, the Rent Controller framed the following points for
consideration.
i) Whether there is a jural relationship in between the parties as landlord and
tenant ?
ii) Whether the respondent committed willful default?"


The petitioner in support of his case examined himself as PW 1 and got marked
Exs. P 1 to P4.  The respondent examined himself as RW1 and got marked Exs.R.1  
to R.8, apart from that Exs.X1 to X.3, X.3(a), X.3(b), X3(c), X3(d), X3(e), X4,
X5, Ex.X5(a), Ex.X.6, X7, and Exs.X7(a) to X7(n) were also got marked.
The Rent Controller on  consideration of the evidence on record held that the
respondent committed willful default in payment of rent but dismissed the
petition on the premise that the eviction petition was filed against the
individual instead of filing the same against the firm M/s.Dalmia Brothers
represented by its Managing Partner Keshav Deo Dalmia; that the firm was not
made party and there is no jural relationship between the petitioner and the
respondent/individual.
Aggrieved by the same, the petitioner preferred appeal in RA No.369 of 2002 on
the file of the court of the Chief Judge, City Small Causes Court, Hyderabad.
The Rent Appellate Court by its order dated 9.9.2005 dismissed RA No.369 of 2002
holding that there is no jural relationship between the revision petitioner and
the Managing Partner of the Partnership firm and therefore question of
committing of default does not arise.
Aggrieved thereby, the present Civil Revision Petition has been filed by the
landlord.
Sri Chandradhar Rao, learned counsel for the revision petitioner vehemently
contended that even though the firm is not made as party, the respondent being
the Managing Partner of the partnership firm is doing the business of the firm
and that the respondent was  paying the rents to the landlord.  It is further
contended that it is not as though the respondent is a stranger to the said
Partnership firm and Partnership firm is not a legal entity unlike a company.
Since lease was obtained by the respondent herein under the lease deed dated
10.12.1986 and when the respondent himself signed the lease deed on behalf of
the partnership firm and other partners, non-impleadment of the Partnership firm
or the other partners is not fatal to the case. Learned counsel referring to the
definition of "tenant" contained in Section 2(ix) of the Act,  would contend
that on behalf of the Partnership firm the respondent was paying the amounts;
that the respondent as RW 1 has deposed that he used to pay the rents,  as such,
for all practical purposes he can be treated as tenant for the purpose of rent
control proceedings.  It is further contended by the learned  Counsel that
though the Rent Controller has gave a specific finding that the respondent has
committed willful default in payment of rents, but dismissed the Eviction
Petition on the ground that the firm was not made party.  The appellate Court in
a mechanical manner confirmed the order of the Rent Controller on the ground
that the Partnership firm was not made party and therefore willful default in
payment of rent by the respondent cannot be decided. He also contends that the
order 30 Rule 1 of CPC applies to the Rent Control Proceedings and as such only
on the technical ground the eviction petition ought not to have been dismissed
by the Courts below.
Learned counsel for the petitioner in support of his contentions has placed
reliance on the decisions reported in S. VENKATA SUBBA RAO v. P.V.V.JAGANNADHA      
RAO 1, SHANKAR HOUSING CORPORATION v. MOHAN DEVI 2, C. R. PATEL V. STAE OF A.P.              
3, and the decision of the Supreme Court reported in ILLACHI DEVI v. JAIN
SOCIETY, PROTECTION OF ORPHANS INDIA 4.        
On the other hand, learned counsel for the respondent contended that P.W.1-
revision petitioner in his cross examination admitted about receipt of cheque
issued by the respondent-tenant for the default period as such there is no
willful default committed by the respondent-tenant for the default period as
alleged by the revision petitioner. When once the cheque is received by P.W.1,
it is deemed that he has accepted the amount and as such there cannot be any
default for the same period. She also contended that the revision petitioner-
landlord used to receive the rents once in two months or sometimes for 11 months
at once and when the landlord himself was receiving the rents at irregular
intervals, the clause mentioned in the lease deed that the rents shall be paid
regularly gets waived.  She also contended that when the landlord himself
received the rents irregularly, it is not open to the landlord to contend that
there is willful default in payment of the rents. She also contended that under
Section 7 of the Act, landlord is entitled to take one month amount as deposit
but he cannot deposit of Rs.10,000/- and the same should have been adjusted by
the landlord towards arrears for the rents.  In support of her contentions, she
places reliance on the judgments reported in  RAMALA RAMAIAH v. M. NARASIMHA RAO      
5, KRANTI SWAROOP MACHINE TOOLS PVT LTD v. KANTA BAI ASAWA 6,  K. VENKATA                
RAMAIAH V. P. RUKMINAMMA 7, BHAGI BAI v. SWASTIK ROLLER FLOUR MILLS 8,  MOHAN                
LAL v. SHAJJIA SULTANA 9 and  K.A. RAMESH v. SUSHEELA BAI 10.        
In the present case the Rent Controller after considering the evidence of PW 1
revision petitioner herein and respondent held that the respondent has committed
willful default in payment of rents and inspite of the said findings that the
respondent committed willful default in payment of rents, curiously it dismissed
the eviction petition on the sole ground that the respondent was shown in the
individual capacity where as the tenancy is between the Partnership firm and the
landlord.  The Rent Controller also found that there is no jural relationship
between the revision petitioner and the respondent. The Rent Appellate Court
also proceeded on same footing and the dismissed the eviction petition holding
that there is no jural relationship between the revision petitioner and the
respondent.
In this context it is apt to refer to Section 2(ix) of the Act wherein "tenancy'
is defined as under :
" 2(ix)   'Tenant' means any person by whom or on whose account rent is payable
for a building and includes the surviving spouse, or any son or daughter, of a
deceased tenant who had been living with the tenant in the building as a member
of tenant's family up to the death of the tenant and a person continuing in
possession after the termination of the tenancy in his favour, but does not
include a person placed in occupation of a building, by its tenant or a person
to whom the collection of rents or fees in a public market, cart-stand or
slaughter-house or of rents for shops has been framed out or leased by a local
authority."

RW 1 has admitted that he is paying rents and it is also fact that he is the
Managing Partner of the firm.
When once it is the admission of the respondent
that he is the Managing partner of the partnership firm and he is paying the
rents and also signed on the lease deed, in those circumstances, non-impleadment
of the Partnership firm or other partners is not fatal to the case as the
tenancy is not denied by the respondent.
 It is also not in dispute that the
respondent is in possession of the demises premises by virtue of the lease deed
dated 10.12.1986.
 Since the Partnership firm is an association of persons unlike
a Company, in the present case the respondent  would  fall within the definition
of "tenant" as per the provisions of Section 2(ix) of the Act and as such on
this sole ground it cannot be termed that  there is no relationship between the
revision petitioner and the respondent.
In S. VENKATA SUBBA RAO's case (1 supra) a learned single Judge of this Court
considering the provisions of Section 4 of the Partnership Act and Order 30 of
CPC held that any partner while carrying on business of the firm acts as an
agent of other partners, thus, even assuming that the tenant is firm, eviction
petition filed against one of the partners is maintainable as in the eye of law
he represents all the partners.
 In SHANKAR HOUSING CORPORATION' s case (2 supra      
), it was held by the Supreme Court that - " A firm is not a legal entity but is
only a collective or compendious name for all the partners."  In view of the
above judgments, relied on by the learned counsel for the petitioners, in my
view, the eviction petition ought not to have been dismissed on the ground that
the Partnership firm was not made party.
In K.A. RAMESH's case (10 supra) relied on by the learned counsel for the
respondent,  has no application to the facts of the present case,  since in that
case bank draft for the entire arrears sent prior to the filing of the
proceedings was got encahsed by the landlords therein. But, in the present case
cheque was sent by the respondent  the Rent Controller observed that the tenant
kept quite from February 2000 till July 2000 without verifying as to whether the
cheque is encashed or not by the petitioner.
In MOHAN LAL's case ( 9 supra) the tenancy was created between an individual who
is the tenant in the case and the land landy therein. There was an  admission of
the tenant himself that the business was being run by his brother. The ground
that since rent for default period has been deposited before receiving notice of
demand, and therefore plea of willful default did not survive, was accepted by
the Rent Controller.  Considering the  fact situation therein it was held by the
learned single Judge as follows :
" ..... the ground that since rent for default period had been deposited before
receiving notice of demand, ground of willful default did not survive, was
accepted by the Rent Controller and there is a clear finding of the Rent
Controller that the rents were received by the landlady in June 2002 by way of
money order which has not at all been discussed by the appellate Court. The Rent
Controller found that the petition was filed on 10.6.2002 and P.W.1 had stated
in her statement that she had received the money order for Rs.3,750/-
representing the rents from February 2002 to June, 2002 in the month of June,
2002.  The petition was also filed in June, 2002 and the tenant received the
summons of the Court on 1.7.2002.  Therefore, before receiving the summons the
tenant had cleared the rent of the alleged default period."
Since the rents were paid before receiving the summons, the learned single Judge
of this Court held that ground of willful default did not survive,  as such that
case has no application to the facts of the present case.
In R. RAMAIAH's case (5 supra ), the tenant therein was paying the rents at
irregular intervals and the landlord used to receive the same without protest
and without issuing notice to pay rent regularly. In those circumstances, it was
held that the tenant therein cannot be termed as willful defaulter. However, in
the present case the Rent Controller gave a specific finding that the tenant has
committed willful default and therefore that case has no application to the
facts of the present case.
In K. VENKATA RAMANAIAH's case ( 7 supra), considering the provisions of Section
7(2)(a) of the Act it was held by this Court that the tenant is entitled to
appropriate advance rent lying with landlord towards rental arrears only to the
extent of excess amount over one month's rent and not the entire advance amount
and that where landlord is having advance amount more than one month's rent, he
shall give automatic adjustment of arrears of rent from the excess amount he is
having as advance whether tenant made any claim to that effect or not.
In KANTA BAI ASAWA's case (6 supra ), it was held by the Supreme Court that
adjustment from deposit made by tenant with landlord should be made even without
a specific request by tenant in that behalf regarding arrears of rent.  However,
in the present case, the Rent Controller on appraisal of the evidence on record
found that even after adjustment of the deposit still the tenant was due certain
amount. This being the finding of fact the principle laid down in those cases
relied on by the learned counsel for the respondent, has no application to the
present facts and circumstances of the case.
 In BHAGI BAI 's case ( 8 supra ) it was held that  when the landlord was
receiving the rents at irregular intervals, without any objection, the conduct
of the landlord certainly given an impression that the tenant can pay rents
irregularly, and as such the landlord cannot contend that the tenant committed
willful default in payment of rents.  However, in the present case, the Rent
Controller on consideration of the evidence found that the respondent-tenant
failed to verify whether cheque sent by him was encashed by the revision
petitioner or not and  not taken any further steps to see that the rents are
paid to the revision petitioner, and as such this case has no application to the
facts of the present case.
For the foregoing discussion, though the Rent Controller came to a correct
finding of fact that the respondent-tenant committed willful default in payment
of rent, ought not to have dismissed the Eviction Petition on the premise that
it was filed against the respondent in the individual capacity instead of
Partnership firm. 
I am of the view that both the courts have erroneously
negatived the plea of the landlord only on the ground that the partnership firm
was not made party.  
As discussed above, the respondent would fall within the
definition of tenant as defined under section 2(ix) of the Act. 
In view of the
same, I hold that there is relationship of landlord and tenant between the
petitioner and the respondent and thus the findings of both the courts below are
liable to be set aside.
In view of the above, the orders under challenge are set side and the Eviction
Petition filed by the landlord is allowed on the ground of willful default.
Subject to above directions, the Civil Revision Petition is allowed. The
respondent shall vacate the premises within a period of three months from today
subject to conditions that he shall pay all arrears of rents and shall give an
undertaking that he will vacate the premises after expiry of three months period
as ordered above and continue to pay the rents for the said three months period.
No costs. The miscellaneous applications if any stands closed in the light of
this order.
____________________________    
A. RAJASHEKER REDDY,   J    
Dated : 11th  October  2013

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