A.R.C. Parcel Service Private Ltd. v. A.V. Rajasekharan and B. BijU

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE T.R.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.KEMAL PASHA TUESDAY, THE 26TH DAY OF NOVEMBER 2013/5TH AGRAHAYANA, 1935 RCRev..No. 321 of 2013 () -------------------------- AGAINST THE ORDER/JUDGMENT IN RCA 14/2011 of II ADDL. RENT CONTROL APPELLATE AUTHORITY, KOLLAM DATED 25-07-2013 AGAINST THE ORDER/JUDGMENT IN RCP 8/2010 of PRINCIPAL RENT CONTROL COURT, KOLLAM DATED 16-02-2011 REVISION PETITIONER(S)/PETITIONER/APPELLANT/ADDL.R2: ----------------------------------------------------------------------------------------------------- A.R.C. PARCEL SERVICE PRIVATE LTD. REPRESENTING BY ITS MANAGING DIRECTOR NO.172 RAJENDRA PRASAD ROAD, TATABAD, COIMBATORE R.RAMASWAMY, POWER OF ATTORNEY HOLDER S/O.MULLIPURAM RAMASWAMY GOUNDER, MANAGER ARC PARCEL SERVICES PVT.LTD., COMPANY ERNAKULAM RESIDING AT 'KARIKUZHUYIL HOUSE' KATTACHIRA, ETTUMANOOR, KOTTAYAM DIST. BY ADVS.SRI.N.DHARMADAN (SR.) SMT.D.P.RENU SRI.M.R.VENUGOPAL RESPONDENT(S)/RESPONDENTS/PETITIONER & 1ST RESPONDENT: ----------------------------------------------------------------------------------------------------------- 1. A.V.RAJASEKHARAN S/O.A.VARADARAJALU MAHESWARY MANSSIONK.C. XLIII/5202, THAMARAKULAM KOLLAM. 2. B.BIJU, S/O.K.M.BALAKRISHNA PILLAI, AGENT (PREVIOUS) A.R.C. PARCEL SERVICES, K.C.XLIII/5202, THAMARAKULAM KOLLAM. R1 BY ADV. SRI.RAJAVIJAYARAGHAVAN CAVEATOR R1 BY ADV. SRI.V.V.RAJA R1 BY ADV. SRI.M.T.SURESHKUMAR THIS RENT CONTROL REVISION HAVING BEEN FINALLY HEARD ON 20-11-2013, THE COURT ON 26/11/2013 PASSED THE FOLLOWING: ## **T.R.RAMACHANDRAN NAIR & B. KEMAL PASHA, JJ.** **- - - - - - - - - - - - - - - - - - - - - - - - - -** **R.C.R.No. 321 of 2013** **- - - - - - - - - - - - - - - - - - - - - - - - - -** ## **DATED THIS THE 26TH DAY OF NOVEMBER, 2013** ## **O R D E R** ## Ramachandran Nair, J. The first respondent landlord approached the Rent Control Court seeking an order of eviction under Sections 11(2)(b), 11(3) and 11(4)(i) of the Kerala Buildings (Lease & Rent Control) Act, 1965 (for short 'the Act'). The Rent Control Court allowed eviction under Sections 11(3) and 11(4)(i) of the Act which was challenged by the revision petitioner herein and the Appellate Authority also confirmed the order of eviction. 2. The revision petitioner is a private limited Company conducting parcel service. It was arrayed as additional second respondent before the Rent Control Court and the second respondent herein was impleaded originally in the eviction petition as respondent and according to the landlord, he is the tenant. The petitioner was impleaded by the Rent Control Court as per order in I.A.No.2855/2010. 3. While narrating the events, learned Senior Counsel for the petitioner, Shri N. Dharmadan submitted that the Rent Control Petition was RCR No.321/2013 -2- filed collusively with the second respondent alone in the party array and the revision petitioner Company, on coming to know about the eviction petition, filed the application for impleading, pursuant to which the landlord impleaded the Company. It is submitted that the real tenant is the Company and the attempt of the landlord was to get an order of eviction by colluding with the second respondent who was only an agent. It is also submitted that both the authorities have taken a perverse view regarding the burden of proof and therefore the orders require interference by this Court in revision. 4. It is necessary to state the minimum facts to consider the arguments on either side. The parties are referred to as arrayed in the eviction petition. In the eviction petition the landlord had pleaded that the first counter petitioner (second respondent herein) took the petition schedule building on 1.11.2007 for a period upto 31.10.2008 agreeing to pay monthly rent of Rs.5,238/- and on certain other conditions. A rent deed was executed originally on 1.11.2007. The building was taken for conducting his agency business with ARC parcel service. The landlord bonafide intend to start an agency business in ready made garments and requested the second respondent herein to vacate the premises by 1.11.2008. But this was RCR No.321/2013 -3- not honoured. Thereafter, a registered notice was sent on 12.1.2009 and since the first counter petitioner was absent, his authorised representative accepted the notice and the first counter petitioner, through his lawyer, sent a reply on 28.1.2009 and tendered a cheque for Rs.11,770/- representing the rent due for three months from November, 2008 to January, 2009. A rejoinder was sent by the landlord. It is averred in para 6 that by the time the first counter petitioner (second respondent herein) obtained an assignment abroad with high prospects and left India. His attempt was to sublet the building to others. When the landlord initiated steps to get the building evicted, the first counter petitioner got the matter mediated and finally informed that he is about to stop the business in an year and undertook to surrender vacant possession within an year and continued to pay rent at the rate of Rs.5,885/- which includes service tax also. The rent was paid upto July, 2009 and thereafter it was defaulted. Again, a lawyer notice was sent by the landlord on 27.1.2010. Even though the notice was accepted, arrears were not paid. It is in those circumstances, the landlord approached the Rent Control Court seeking eviction on various grounds. 5. The eviction petition was amended as per order in I.A. RCR No.321/2013 -4- No.5210/2010. It was further pleaded that after the filing of the eviction petition, the additional second counter petitioner, viz. the revision petitioner herein issued a notice to the landlord claiming that they are the tenant of the building. It is alleged by the landlord that the first counter petitioner/tenant has sublet/assigned/transferred the premises to the second counter petitioner (petitioner herein) which is without the consent of the landlord and hence objectionable. There subsists no landlord/tenant relationship between the landlord and the petitioner herein. Originally, the tenancy was between the first respondent's father Balakrishna Pillai and the landlord's father Varadarajalu. Later, the rent deed was executed between the landlord and the first counter petitioner before the Rent Control Court (second respondent herein). Earlier the father of the second counter petitioner had also taken the shop room for the very same purpose. 6. Learned Senior Counsel Shri N. Dharmadan submitted that this is a case where the landlord approached the Rent Control Court by stating that the tenancy started on 1.11.2007 whereas there is an admission, after the petitioner herein got impleaded, that the tenancy started with Balakrishna Pillai in 1976. It is therefore submitted that the said admission will cut at RCR No.321/2013 -5- the root of the matter and as the said tenancy continued even after the death of Balakrishna Pillai by holding over and the present plea of the landlord could not have been accepted by both the courts. Secondly, it was submitted that really the burden of proof was on the landlord with regard to the contentious aspects and both the authorities have wrongly cast the burden on the petitioner herein which is not a correct approach. Learned Senior Counsel, by referring to the evidence of the landlord/ first respondent herein who was examined as P.W.1, submitted that there is clear admission that the father of the second counter petitioner had taken the building on rent from the father of the present landlord and this aspect has not been correctly appreciated by the authorities below. It is contended that notwithstanding the death of the original landlord, the tenancy continued in the same manner, between the petitioner Company and the present landlord who is only the successor in interest of the previous landlord. With regard to the alleged collusion between the landlord and the second respondent herein, learned Senior Counsel submitted that the clinching aspects in the case will establish such a collusion which fact should have weighed with the courts below while considering the matter. RCR No.321/2013 -6- 7. Learned counsel for the first respondent, Shri Raja Vijayaraghavan submitted that the landlord had never admitted that the Company was a tenant from 1976. The first respondent's father had taken on rent the building in 1976 and it was not on behalf of the Company also. The father of the present landlord had entered into the arrangement with Shri Balakrishna Pillai. Both of them died in the years 2000 and 2001 respectively. There was a partition in the family and the building herein was allotted to the landlord herein. Ext.A1 will show that a fresh tenancy arrangement started with the present landlord and Shri Biju who is the son of Shri Balakrishna Pillai. It is submitted that nowhere there is an admission on the part of the landlord that the Company had taken the building in 1976. A reading of Exts.B11 and B12 will disprove the pleas now raised. The Company had no case in Ext.B12 lawyer notice that there was any collusion between Shri Biju, the second respondent herein and the present landlord. There is a tacit admission that certain documents have been executed by Shri Biju with the present landlord. Therefore, it is submitted that the plea now raised regarding collusion cannot at all be accepted. RCR No.321/2013 -7- 8. The decisions relied upon by the learned Senior Counsel for the petitioner are: **ManikLal & others v. Ravindra Kumar Gupta** (AIR 2013 Patna 137), **Shkuntala Vasant Pahadi and others v. Purushottam Vasant Pethe and others** {(2007) 3 SCC 123}, **Surayya Begum (Mst) v. Mohd. Usman and others** {(1991) 3 SCC 114}, **V. Dhanapal Chettiar v. Yesodai Ammal** (AIR 1979 SC 1745) and **Shinu P.K. v. Dhanya Madhavan** (ILR 2013 (4) Ker. 387). 9. Before the Rent Control court, Exts.A1 to A16 have been produced by the landlord and on the side of the tenant Exts.B1 to B14 have been marked. The landlord examined himself as P.W.1 and another witness was examined as P.W.2 and R.W.1 has been examined on the side of the revision petitioner. 10. A reading of the order passed by the Rent Control Court will show that the sufficiency of the documentary evidence produced by the revision petitioner as Exts.B1 to B10 receipts was considered in para 10 of the order. They have been produced as rent receipts and it is observed that those receipts are not issued in the name of ARC Parcel Service. Exts.B1 to B7 receipts are issued in the name of Annamalai Roadways Company RCR No.321/2013 -8- agent, Shri K.M. Balakrishna Pillai (father of the first respondent in the RCP), Ext.B8 receipt is issued in the name of Annamalai Roadways Company agent and Exts.B9 and B10 receipts are in the name of Shri B. Biju, agent, Annamalai Roadways Company. It was concluded that since those receipts are not issued in the name of the Company, it cannot be said that they are issued to the Company. 11. In para 11, after referring to the definition of 'tenant' under Section 2(6) of the Act, it was noted that the revision petitioner herein has not adduced any reliable evidence to prove that the Company is the tenant of the petition schedule building. Exts.B1 to B7 will only prove the fact that the father of the first counter petitioner in the rent control petition was paying the rent of the petition schedule building. Ext.A1 is the rental arrangement which prove the arrangement between the landlord and the first respondent Shri Biju. Exts.B9 and B10 are receipts showing that the rent of the building is paid by the first respondent Shri Biju and the court therefore concluded that the first counter petitioner was the tenant of the petition schedule building who is the tenant from 1/11/2007. On the aspect of sub-lease, it was found that as the first counter petitioner has stopped his RCR No.321/2013 -9- business and put the additional second counter petitioner in possession of the building, he has sublet the petition schedule building. It was also found that there was no consent of the landlord. On the plea under Section 11(3) of the Act, the finding is in favour of the landlord. 12. Before the Appellate Authority, various contentions have been raised by the petitioner herein. The Appellate Authority also considered the issue whether the revision petitioner is the tenant. The Appellate Authority was also of the view that when the revision petitioner herein raised a contention that from 1976 onwards they have been in possession of the petition schedule building as the tenant of the building, the said particular fact has to be proved by the revision petitioner itself. After discussing the oral evidence of P.W.1 and Ext.A1 rent deed, it was found that the landlord has succeeded in discharging his initial burden to prove that the second respondent herein is the tenant. It was found that the burden is on the Company to prove that the tenant is themselves and they had paid rent. After referring to Exts.B1 to B11 and the evidence of P.W.1 and R.W.1, the Appellate Authority found in para 9 of the judgment that mere production of the rent receipts, that too containing the name of the agent, is not RCR No.321/2013 -10- sufficient to prove that the Company is the tenant. The admission of R.W.1 that when the business is started, an employee would be deputed by the Company for such business, was referred to and it was therefore found that there must be evidence regarding the same. A further admission of R.W.1 that the revision petitioner/second respondent never paid rent directly to the landlord was also adverted to and it was thus found that normally there would be evidence of payment of rent and other charges by Demand Drafts or cheques directly to the person to whom the amount is due, since the petitioner is a Company, which is also absent and therefore it makes a shadow in the case advanced by the second counter petitioner. The admission of R.W.1 that there was no entry in the audited statement of accounts of the Company in the head of payment of rent as regards the schedule building, was also adverted to. Thus, the Appellate Authority also concurred with the view of the Rent Control Court that the second counter petitioner Company is not the tenant and the landlord succeeded in establishing that the first counter petitioner in the rent control petition is the tenant. 13. As regards the plea of subletting, the Appellate Authority also RCR No.321/2013 -11- concurred with the finding of the Rent Control Court that there is a failure on the part of the revision petitioner to prove the contentions raised by them that the Company is the tenant. On the plea under Section 11(3) of the Act also, it was found that the case of the landlord that he wants to start a business in ready made garments as a proprietor concern, in the petition schedule building, is bonafide. It was found that the landlord is now conducting textiles business along with his brother and his son and the wife is also engaged in textile business by name 'Maheswari', in the building owned by his brother. These aspects were considered by the Appellate Authority in favour of the landlord. 14. The vehement contention raised by learned Senior Counsel for the revision petitioner is that there is an admission about the tenancy arrangement made from 1976 and therefore the said tenancy continued and the plea of starting a fresh tenancy in 2007 with Shri Biju cannot be accepted. The landlord had to adduce the evidence about the tenancy in 1976. In the eviction petition after the amendment what is stated by the landlord in para 13 is that originally the tenancy was with the first counter petitioner's father Shri Balakrishna Pillai and the petitioner's father Shri RCR No.321/2013 -12- Varadarajalu. The first counter petitioner took the petition schedule building for conducting his agency business with ARC Parcel Service. Earlier, his father also took the shop room for the same purpose. Shri N. Dharmadan, learned Senior Counsel submitted that when the description of the second respondent herein is given as agent of ARC Parcel Service, there was no burden on the part of the petitioner herein to prove anything further. It is submitted that in the petition filed for impleading the Company as I.A. No.2855/2010 also, there is an admission that the original tenancy is from 1976. 15. After considering the averments in the Rent Control Petition and the evidence of P.W.1, we are of the view that there is no admission by the landlord of any tenancy arrangement with the Company in 1976. What is stated is only that the father of the first counter petitioner in the Rent Control Petition had taken the building in 1976 from the father of the landlord. Therefore, the said plea cannot advance the case of the revision petitioner. The landlord has produced Ext.A1 rent deed executed between the landlord and the second respondent herein in the year 2007. The documentary evidence adduced by the revision petitioner herein has been RCR No.321/2013 -13- properly analysed by the authorities below. Exts.B1 to B9 have been referred to and discussed by both the authorities and it was found that nothing is discernible from those documents to support the contention of the revision petitioner of any tenancy arrangement and payment of rent by the Company to the father of the first counter petitioner or to the first counter petitioner. When the revision petitioner asserted that the tenancy arrangement started in 1976 was with the Company and Shri Balakrishna Pillai and Shri Biju are only agents appointed by them, really the burden is on them to establish the same, especially as the landlord has discharged the prima facie burden to prove the tenancy arrangement between the landlord and Shri Biju in 2007. There is no iota of evidence on the part of the Company to prove the tenancy arrangement with the Company and the father of the landlord or later with the landlord. The description of the second respondent as agent of ARC Parcel Service will not advance the case of the Company. As rightly pointed out by the learned counsel for the first respondent, in the evidence of R.W.1 who is the Manager of Ernakulam Zone of the Company, even though it is stated that the Company has passed a resolution to start branches having direct control, nothing is produced. It RCR No.321/2013 -14- is stated that the Company has passed a resolution in 1976 regarding the starting of agency by the father of the second respondent herein, but the same is also not produced. It is also admitted that if the Company is starting branches having direct control, there will be employees under them. The employees under the Company will have Provident Fund, Gratuity, etc. and they will have to maintain wages registers and registration with the Labour Department. To a specific question whether any registration has been taken for any employee, it was answered that no such registration has been taken. It is also deposed by him that for taking buildings on rent, the Company has to pass a resolution and as far as the petition schedule building is concerned, no such resolution has been passed. The Company has not passed any resolution for starting a branch in the petition schedule building. It is also admitted that the second respondent herein started the agency on payment of commission. To a specific question whether the Company had paid any rent directly, it was stated that the payment was through agent and the payments made by the Company is clear from the audited accounts. Even though a specific question was put whether there is any audited statement of accounts showing payment under the heading 'rent', nothing is produced. We have RCR No.321/2013 -15- examined these items of evidence in the light of the vehement argument raised by the learned Senior Counsel for the petitioner that the approach made by the authorities below is totally perverse. But we cannot accept the same in the light of the fact that the Company has not been successful in adducing evidence oral or documentary, in support of their plea that actually the tenancy arrangement is with the Company and the second respondent herein is only an agent appointed by them. Therefore, the finding by the Rent Control Court and the Appellate Authority that there is clear absence of evidence on this aspect is justified. 16. Strong reliance is placed by the learned Senior Counsel for the petitioner, on the decision of the Apex Court in **Manik Lal's case** (AIR 2013 Patna 137), especially para 10 therein. That was a case where the subsequent purchaser of the property from the landlord sought eviction. The lease deed executed by the tenant with the erstwhile lessor was for a period of 25 years. It was held that acceptance of tenancy by the tenants could not result in automatic determination of lease and the lease continued to subsist. The above dictum was relied upon to contend that the tenancy in 1976 continued to subsist. But in the absence of any evidence regarding RCR No.321/2013 -16- tenancy in favour of the Company in 1976, it will not advance the case of the petitioner. 17. **Shkuntala Vasant Pahadi's case** {(2007) 3 SCC 123} is relied upon in support of the plea of collusion. But as far as the aspect of collusion is concerned, as rightly pointed out by the learned counsel for the first respondent, in Ext.B12 lawyer notice issued on behalf of the petitioner, there is no case of collusion and what is stated in the notice is only that some documents have been executed by Shri Biju that too on behalf of the Company. Therefore, the belated plea now raised that there is a collusion, cannot be accepted. 18. **Shinu P.K.'s case** (ILR 2013 (4) Ker. 387) is relied upon in the context of discharge of burden of proof and the onus on the party. **Surayya Begum (Mst)'s case** {(1991) 3 SCC 114} is also relied upon in the context of the argument of collusion. **V. Dhanapal Chettiar's case** (AIR 1979 SC 1745) is relied upon to advance the plea that the tenancy set up in 1976, continued to subsist. 19. In the light of the pleadings of the revision petitioner Company that it is the real tenant, the burden of proof is clearly on it. Merely because RCR No.321/2013 -17- the landlord has stated that in 1976 there was an arrangement between the father of the landlord and Shri Balakrishna Pillai, that cannot help to advance the case of the revision petitioner that the Company itself is the real tenant. If the Company had directly taken the premises on rent, there would have been a resolution to that effect and nothing has been produced to establish the same and also to show payment of rent directly by the Company. Therefore, we are of the view that the revision petitioner has not succeeded in proving their case of tenancy arrangement directly entered into by them or with regard to the payment of rent. Therefore, those contentions are only to be rejected and we do so. 20. As far as the sub-lease found is concerned, the finding on that ground is also perfectly justified. There is no tenancy arrangement proved between the Company and the landlord. The plea of the landlord that the second respondent left India after giving possession of the petition schedule building to the revision petitioner herein, has been accepted by the authorities below, rightly according to us. 21. Regarding the bonafide need pleaded also, there is nothing to show that the landlord's plea that he bonafide requires the premises for RCR No.321/2013 -18- doing business, is a ruse for eviction. Various details have been pleaded by the landlord and it has been found by the authorities below that the plea that he wants the premises for starting a business in ready made garments, is genuine. His family is in textile business and he wants to have an independent business also. Therefore, the said plea has been correctly found in favour of the landlord and there is nothing to interfere with the same. For all these reasons, we dismiss the revision petition. The petitioner is granted six months time from to day to vacate the petition schedule premises on the following conditions: i) The entire arrears of rent, if any, as on today will be paid/deposited within one month. If such deposit is made, the same will be disbursed to the first respondent; ii) An affidavit will be filed by the petitioner before the Rent Control Court within one month from today, undertaking to vacate the premises within the time stipulated by this Court. iii) The petitioner will continue to pay at the same monthly rate for the use and occupation of the building till vacant peaceful possession is RCR No.321/2013 -19- handed over to the first respondent; iv) If the above conditions are not satisfied, the petitioner will not get the benefit of this order. As per the interim order passed by the Appellate Authority in I.A. No.355/2011, the petitioner was directed to pay rent at the rate of Rs.10,000/- and the court below was directed not to release the amount deposited in excess of the monthly rate of Rs.5,885/- to the first respondent/landlord and the amount in excess of Rs.5,885/- was directed to be kept in court deposit, till he disposal of the appeal. Since the rent and the service tax element will be Rs.5,885/-, which alone is being received by the landlord, the revision petitioner will be entitled to get back the amount less the rent payable to the landlord along with service tax. No costs. ## **(T.R.RAMACHANDRAN NAIR, JUDGE)** ## **(B. KEMAL PASHA, JUDGE)** ## **kav/**