In Commercial Tenancies, Only Tenant Must Use The Premises; Sub-Letting Of Any Portion Must Not Be Allowed: Bombay HC

The Bench of Justice Sandeep V Marne observed, “In my view therefore, in every case, where the tenant is seen attempting to take disadvantage of tenancy protection by indulging in profiteering by letting a third party actually use the premises, subletting must be inferred…Thus, especially in cases of commercial tenancies, it is necessary that the tenant alone uses the entire portion of the shop and does not let any other person to use any portion thereof.”

Advocate Drupad Patil appeared for the Applicants while Advocate Pankaj Kowli appeared for the Respondent.

A revision application was filed by the Defendants challenging a decree passed by the District Court dismissing a regular civil appeal and confirming the decree passed by the Civil Court in the regular civil suit. The Civil Court had decreed the suit filed by the Respondent-Plaintiff and had directed the Applicants-Defendants to hand over the possession of the suit premises and to pay arrears of rent.

The Plaintiff-Respondent is the owner of a plot and building constructed thereon and he let out the premises to the Respondent-Defendant. The Defendant was using the suit premises for selling grocery items. However, since June 2002, Defendant shut his grocery shop from the suit premises and started a shop for retail and wholesale sale of grocery items on his own shop. Plaintiff accordingly contended that the Defendant-Tenant was not using the suit premises for the purpose for which the same was let, he sublet the suit premises to his brother, who was Second Defendant, and that therefore Plaintiff was entitled to seek recovery of possession of the suit premises.

The Court said, “True it is that in relation to a residential premises, exclusive possession by an outsider to tenant’s complete exclusion may be required to assume the act of subletting and mere addition of an outsider in the house to reside along with the tenant may not always lead to presumption of subletting. This however may not apply to every case of commercial tenancy. In case of tenancy in respect of a shop, if tenant permits an outsider (not his employee) to use part of the shop to do business while tenant also continues his own business, even though it is not proved that the outsider is in ‘exclusive’ possession of the tenanted shop, subtenancy can be presumed in a given case.”

The Court also gave an illustration i.e. if a tenant running stationary business in a tenanted shop permits an outsider to install a photostat machine in a corner of the shop to service the outsider’s own customers, subletting needs to be presumed notwithstanding the fact that the outsider may not exclusively possess the tenanted shop.

The Court added that in metropolitan and commercial cities like Mumbai or Pune, where a tiny display space often attracts huge rent/license fees, letting use of a small portion of the shop of even 10 or 20 sq ft in busy locations can fetch good returns to the tenant, who can profiteer by such activity at the cost of the landlord, who is paid pittance towards standard rent by the tenant.

“In every case, where it is noticed that a third person is actually using the premises, the act must be construed as breach of conditions of tenancy. The principle being, beneficial legislation like Rent Control Act is not to be misused by the tenant to the complete disadvantage of the owner. Again, while construing the rent control legislation as beneficial to tenant, the paradigm shift in the approach with passage of time must also not be completely ignored.”, the Court said.

The Court concluded that the Second Defendant’s relation in the present case as the Tenant’s brother would hardly make any difference as the Second Defendant is an independent tenant in respect of Shop No. 2 and has absolutely no business to conduct any activity inside Shop No. 1.

It was proved that the second defendant was doing the following acts qua suit premises i.e. (i) he has unhindered access to the suit premises internally through his shop, (ii) he enters the suit premises through such access (iii) he sells goods stored in the suit premises (iv) locking of the shutter of his shop results in the locking of the suit premises and (v) keys of the said lock are possessed by him.

Accordingly, the Civil Revision Application was dismissed.

Cause Title: Narayan Damodar Thakur and Anr. v. Madanlal Mohanlal Malpani( Neutral Citation: 2024:BHC-AS:31404)

Appearances:

Applicants/Revisionists: Advocates Drupad Patil and Namitkumar Pansare

Respondent: Advocates Pankaj Kowli, Ashok Verma and Dhruva Jain

Click here to read/download the Judgment