Holding

A special leave petition under Article 136 is not subject to abatement under Section 70 of the Karnataka Rent Act, 1999, and the conversion of a sole proprietorship into a partnership does not constitute sub‑letting.

Summary

The landlord G.V. Srinivasa Murthy leased a non‑residential premises to Mahendra Saree Emporium, originally a sole proprietorship, which later converted into a partnership with the tenant's relatives. The landlord claimed unlawful sub‑letting under Section 21(1)(t) of the Karnataka Rent Control Act, 1961 and obtained an eviction order from the High Court, overturning the Rent Controller’s dismissal. While the appeal under Article 136 of the Constitution was pending, the Karnataka Rent Act, 1999 repealed the 1961 Act, raising the question of whether Section 70(2)(c) of the 1999 Act abated the Supreme Court proceedings. The Court held that Article 136 confers plenary jurisdiction that cannot be curtailed by state legislation, so the special leave petition was not abated. It further held that conversion of a sole proprietorship into a partnership does not constitute sub‑letting because the tenant retained possession, and the landlord failed to prove the ground for eviction. Consequently, the appeal was allowed and the eviction proceedings were dismissed without costs.

Issues considered

The effect of Section 70(2)(c) of the Karnataka Rent Act, 1999 on a pending appeal under Article 136 of the Constitution.
Whether conversion of a sole proprietorship into a partnership amounts to sub‑letting under Section 21(1)(t) of the Karnataka Rent Control Act, 1961.

Legislation cited

Code of Civil Procedure, 1908s. Order 22 Rule 9
Karnataka General Clauses Act, 1899s. 24, s. 6, s. 8
Karnataka Rent Act, 1999s. 69, s. 70(1), s. 70(2)(a), s. 70(2)(b), s. 70(2)(c)
Karnataka Rent Control Act, 1961s. 21(1)(f), s. 21(1)(t)
Transfer of Property Act, 1882s. 105

Subjects

rent controlevictionsub‑lettingstatutory abatementArticle 136Karnataka Rent Actpartnershipleasespecial leave petition

Judgment

MIS. MAHENDRA SAREE EMPORIUM A
v.
G.V. SRINIVASA MURTHY

AUGUST 27, 2004

[R.C. LAHOTI, CJ., G.P. MATHUR AND C.K. THAKKER, JJ.]
B

Rent Control and Eviction :

Karnata.ka Rent Act, 1999 :
c
Section 7-Repeal and Savings of 1961 Act-Effect of, on pending
proceedings under 1961 Act before Supreme Court under Article 136-
Held: Appeal does not abate, and survives for adjudication on mertis-
State Legislature enacting the New Act could have provided for suit itself
which originated under the local law to abate on the date of coming into D
force of the New Act but has not chosen to do so-Constitution of India,
1950-Article 136.

Sections 69 and 70-Repeal of Act of 1961 and coming into force of
Act of 1999-Legislative Scheme-Explained-Karnataka Rent Control E
Act, 1961.

Karnataka Rent Control Act, 1961-Section 21 (l)(j)-Conversion of
sole proprietary concern let out to tenant for individual business into
partnership business by tenant-Partnership business consisting oftenant's F
relatives-Eviction petition, on ground ofsub letting-Maintainability a/-
Held : Case of sub letting not made out since the tenant has not
parted with the possession-Partnership business is with regard to
pre-existing business in the suit premises-Hence, order ofHigh Court that
case of subletting made out not correct and eviction proceedings to be
dismissed. G

Statutory Abatement-Effect of, on pending proceedings-Held :
Abatement takes away right to sue and terminates the pending proceedings
without adjudication on merits-Where legislative intention otherwise is
expressly or by necessary implication deducible, abatement provision H
931
932 SUPREME COURT REPORTS (2004) SUPP. 3 S.C.R.

A would abate only such proceedings as are pending on that day and at that ..
stage, and not the original proceedings which had already stood concluded-
Such provision (s to be construed strictly and applied duly to cases to which
applicability is undoubtedly attracted-Code of Civil Procedure, 1908-
0rder 22 Rule 9-Interpretation of Statutes.
B
Constitution ofIndia, 1950-Article 136--Jurisdiction under-Nature
and scope of-Held: Jurisdiction is plenary-It can be exercised inspite
of other specific provisions for appeal contained in the Constitution or
other laws-Special and residuary power are conferred which are
exercisable outside purview of ordinary laws when justice demands-
C Jurisdiction conferred cannot be limited or taken away by any legislation
subordinate to the Constitution.

Words and Phrqses :

D 'Lease', 'sub lease' and 'sub letting '-Meaning of-Discussed.

Respondent-landlord let out a non-residential premises exceeding
14 sq. metres to a sole proprietary concern-tenant for carrying an
individual's business. The sole proprietary concern was converted into
E partnership business consisting of tenant's relatives. Respondent filed
eviction petition on ground of sub letting under section 2l(l)(t) of the
Karnataka Rent Control Act, 1961. Rent Controller dismissed the
petition, however, High Court held tnat the case of sub letting was
made out and directed the appellant-tenant to be evicted. Thereafter,
F during pendency of the petition before this Court, the 1961 Act stood
repealed and Karnataka Rent Act, 1999 was enacted. A Bench of two
judges of this Court held that since the provisions of 1999 Act did not
apply to the suit premises, the proceedings stood abated in view of
section 70(2)(c) of the 1999 Act. Respondent filed a review petition and
order of High Court was recalled.
G
The questions which arose for consideration before this Court
were with regard to the effect of Section 70 of the Karnataka Rent Act,
1999 on the proceedings pending before this Court under Article 136
of the Constitution, initiated before the date on which the 1999 Act
H came into force and the Karnataka Rent Control Act, 1961 stood
MAHENDRA SAREE EMPORIUM v. G.V.S. MURTHY 933

repealed; and whether there has been subletting of premises within the A
meaning of section 21(1)(t) of the 1961 Act.

Allowing the appeal, the Court

HELD : 1. The jurisdiction conferred on this Court by Article 136
of the Constitution of India is a plenary jurisdiction in the matter of B
entertaining and hearing appeals by granting special leave against any
kind of judgment or order made by Court or Tribunal in any case and
the jurisdiction can be exercised inspite of other specific provisions for
appeal contained in the Constitution or other laws. This Article confers
on this Court special or residuary powers which are exercisable outside C
the purview of the ordinary laws in cases where the needs of justice
demand interference by this Court. The Constitutional jurisdiction
conferred by Article 136 cannot be limited or taken away by any
legislation subordinate to the Constitution. [942-D-E; 942-G]

Durga Shankar Mehta v. ThakurRaghuraj Singh and Ors., [1955) 1
D
SCR267 and Union Carbide Corporation v. Union ofIndia, [1991] 4 SCC
584, relied on ..

S.P. Sampath Kumarv. Union ofIndia and Ors., AIR (1987) SC 386
and Surya Dev Raj v. Chander Rai and Ors., [2003] 6 SCC 675, referred E
to.

2.1. Abatement kills the right to sue and has the effect of
unceremoniously terminating the pending legal proceedings without
adjudication on merits. It has to be strictly construed and applied only F
to such cases to which its applicability is undoubtedly attracted. Excepting
where an otherwise legislative intention is expressly or by necessary
implication deducible, abatement provision of pending proceedings
shall abate only such proceedings as were pending on that day and at
that stage and not the original proceedings which had already stood
concluded but were reopened by a superior forum for the purpose of G
examining legality or propriety thereof. [944-H; 945-A-B]

2.2. In the instant case, the State Legislature enacting the
Karnataka Rent Act, 1999 could have provided for the suit itself which
originated under the local law to abate on the date of coming into force H
934 SUPREME COURT REPORTS (2004] SUPP. 3 S.C.R.

A of the New Act but the Legislature has not chosen to do. Tht~
Legislature could not have provided, nor has it provided, for the
jurisdiction of this Court under Article 136 being taken away or
curtailed in any manner whatsoever and rightly so. In spite olf
Karnataka Rent Control Act, 1961 having been repealed by 1999 Act,
B the instant appeal under Article 136 of the Constitution does not abate,
and survives for adjudication on merits. [945-C-DJ

Ram Adhar Singh v. Ramroop Singh and Ors., j1968) 2 SCR 95;
Chattar Singh and Ors. v. Thakur Prasad Singh, [1975) 4 SCC 457;
C Satyanarayan Prasad Sah and Ors. v. State of Bihar and Anr., [1980)
Supp. SCC 474 and Mst. Bibi Rahmani Khatoon and Ors. v. Harkoo Gape
and Ors., [1981) 3 SCC 173, distinguished.

Gyan Chand v. Kunjbeharilal and Ors., [19771 3 SCC 317, relied
D on.
3.1. Under section 21(1)(f) of the 1961 Act, the phraseology
employed for evidence on the ground of soil-letting is quite wide. It
embraces within its scope sub-letting of the whole or part of the
premises as also assignment or transfer in any manner of the lessee's
E interest in the tenancy premises. The exact nature of transaction
entered into or arrangement or understanding arrived at between the
tenant and alleged sub-tenant may not be in the knowledge of the
landlord and such a transaction being unlawful would obviously be
entered into in secrecy depriving the owner-landlord of the means of
F ascertaining the facts•about the same. However still, the Rent Control
Legislation being protective for the tenant and eviction being not
permissible except on the availability of ground therefor having been
made out to the satisfaction of the Court or the Controller, the burden
of proving the availability of the ground of sub letting is cast on the
G landlord who seeks eviction. It would stand discharged by adducing
prima facie proof of the fact that the alleged sub-tenant was in exclusive
possession of the premises or was holding right to enjoy such property
under Section 105 of the Transfer of Property Act. A presumption of
sub-letting may then be raised and would amount to proof unless
H rebutted. [945-G-H; 946-A-D)
MAHENDRA SAREE EMPORIUM v. G.V.S. MURTHY 935

Krishnawati v. Hans Raj, [1974) 2 SCR 524 and Associated Hotels A
of India Ltd. Delhi v. S.B. Sardar Ranjit Singh, [1968) 1 SCR 548,
referred to.

3.2. So long as the legal possession remains with the tenant the
mere factum of the tenant having entered into partnership for the B
purpose of carrying on the business in the tenancy premises would not
amount to subletting. In the instant case the family of the tenant
consists of sixteen mem hers which includes cousins and is joint and
depends for its livelihood on the business run in the suit premises. The
tenant has not parted with possession in favour of any stranger. The
brothers, a wife of one of the brothers and a cousin have entered into C
partnership with the tenant for the purpose of carrying on the pre-
existing business in the suit premises. There is no evidence adduced and
no material available on record to draw an inference that the tenant
has dissociated himself from the business activity leaving for the
pa.rtners alone to carry on the business or that the so called partners D
are in exclusive possession of the premises having no relationship with
the tenant and the partnership is nothing but a camouflage for parting
with by the tenant of the possession or right to use the tenancy premises
in favour of the persons in possession. High Court was not right in
holding a case of sub-letting having been made out simply because the E
sole propriety business was converted into a partnership business. The
ground for eviction under Section 2l(l)(f) of 1961Act is not made out
and the proceedings for eviction initiated by the respondent-landlord
are dismissed. [947-D; 947-G-H; 948-A-D)

Murlidhar v. Chuni Lal and Ors., (1970) AIR C.J. 922; Helper F
Girdharbhai v. Saiyed Mohmad Mirasaheb Kadri and Ors., (1987) 3 SCR
289 and Parvinder Singh v. Renu Gautam and Ors., [2004) 4 SCC 794,
relied on.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6296 of G
1998.

From the Judgment and Order dated 25.9.98 of the Kamataka High
Court in H.R.R.P. No. 2491 of 1991.

A. Subba Rao and Chandra Mohan for the Appellant. H
936 SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.

A P.R. Ramasesh and Ms. Vandana Jalan for the Respondent.

The Judgment of the Court was delivered by

R.C. LAHOTI, CJ. Respondent, G.V. Srinivasa Murthy is the
B owner-cum-landlord of the suit premises, non-residential in nature. M/s
Mahendra Saree Emporium was a sole proprietary concern now a
partnership firm, sued as the tenant and is the appellant before us. On
21.7.1987 proceedings for eviction were initiated by the landlord against
the tenant on the ground alleged to be available under clause (t) of sub-
C section (I) of Section 21 of the Karnataka Rent Control Act, 1961,
hereinafter, the '1961 Act' or the 'Old Act', for short. It is not disputed
that the premises were taken on rent under Lease Deed dated 16.12.1968
executed by Jugraj, father of Indrachand. The business in the name and
style of Mis Mahendra Saree Emporium was always conducted by
Indrachand, who was minor on 16.12.1968 when the tenancy commenced.
D Later the business has been converted into a partnership business.
Indrachand's two brothers, one brother's wife and one uncle's son the four
are included in the partnership. According to the landlord, the tenant has
unlawfully sublet the premises. According to him, the premises were for
an individual's business and entering into partnership amounts to sub-
E letting, a ground for eviction under Section 2 l(l)(t) of the 1961 Act whkh
provides for the tenant being evicted if "the tenant has unlawfully subfiet
the whole or part of the premises or assigned or transferred in any other
manner his interest therein". The learned Rent Controller found the ground
for eviction not made out and directed the eviction petition to be dismim:d.
F The landlord preferred a revision under sub-Section (I) of Section 50 of
the 1961 Act. A learned Single Judge of the High Court has, vide his order
dated 25.9.1998, reversed the finding of the Rent Controller and held the
ground for eviction made out and directed the tenant to be evicted. On
13 .I 1.1998, the tenant filed this petition seeking special leave to appeal.
The leave has been granted.
G
During the pendency of the petition, the Kamataka Rent Act, 1999
(hereinafter referred to as the '1999 Act' or the 'New Act') has be:en
enacted and has come into force with effect from 31.12.1999. The 1961
Act has stood repealed. Sections 69 and 70 of the New Act provide as
H under:
MAHENDRA SAREE EMPORIUM v. G.V.S. MURTHY [LAHOTI, CJ.] 937
• '4
"69. Transfer of pending cases.- On the commencement of this A
Act,-

(I) all cases pertaining to matters in respect of which the
Controller shall have jurisdiction under this Act and pending
in the Court under the Kamataka Rent Control Act, 1961
shall stand transferred to the Controller and the Controller
B
may proceed to hear such cases either de-novo or from the
stage it was at the time of such transfer.

(2) All cases pertaining to matters in respect of which the Court
shall have jurisdiction under this Act and pending before the c
Controller under the Kamataka Rent Control Act, 1961 shall
stand transferred to the Court and the Court may proceed to
hear such cases either de-novo or from the stage it was at
the time of such transfer.
D
70. Repeal and Savings.- (1) The Karnataka Rent Control Act,
1961 (Kamataka Act 22 of 1961) is hereby repealed.

(2) Notwithstanding such repeal and subject to the provisions of
section 69, -
E
(a) all proceedings in execution of any decree or order
passed under the repealed Act, and pending at the
commencement of this Act, in any Court shall be
continued and disposed off by such Court as if the said
enactment· had not been repealed;
F
(b) all cases and proceedings other than those referred to
in clause (a) pending at the commencement of this Act
before the Controller, Deputy Commissioner, Divisional
Commissioner, Court, District Judge or the High Court
or other authority, as the case may be in respect of the G
premises to which this Act applies shall be continued
and disposed off by such Controller, Deputy
Commissioner, Divisional Commissioner, Court, District
Judge or the High Court or other authority in accordance
"' with the provisions of this Act. H
938 SUPREME COURT REPORTS [2004) SUPP. 3 S.C.R.

A ( c) all other cases and proceedings pending in respect of ...
premises to which this Act does not apply shall as from
the date of c'ommencement of the Act stand abated.

(3) Except as otherwise provided in section 69 and in sub··
B section (2) of this section, provisions of section 6 of the
Karnataka General Clauses Act, 1899 (Karnataka Act III of
1899), shall so far as may be applicable in respect of repeal
of the said enactment, and sections 8 and 24 of the said Act
shall be applicable as ifthe said enactment had been repealed
and re-enacted by this Act."
.,.
c
It is not disputed that the area of the suit premises, which are non··
residential in nature, exceeds 14 sq. metres and, therefore, in view oftht:
provisions contained in clause (g) of sub-section (3) of Section 2 of the
1999 Act, the provisions of the 1999 Act do not apply to the suit premises.
D On May I, 2002 a Bench (Coram of two) of this Court formed an opinion
that if the premises would have been one to which the 1999 Act is
applicable, then under Section 70(2)(b) the hearing would have continued
and the case disposed of in accordance with the.provisions of the New Act
but that was not the case here and, therefore, the case attracted the
E applicability of Section 70(2)(c) and hence directed the proceedings to
stand abated. The decision is reported as Mahendra Saree Emporium v.
G. V. Srinivasa Murthy, [2002) 5 SCC 416. On a review petition preferred
by the landlord, vide order dated February 21, 2003 the order dated May
I, 2002 was recalled and the appeal was directed to be listed for hearing
F in view of the question oflaw centering around the interpretation of Section
70 of 1999 Act arising for decision.

Two questions arise for decision : firstly, as to the effect of Section
70 of the 1999 Act on the proceedings pending before this Court; and
secondly, ifthe proceedings continue to survive unabated for adjudication
G on merits whether a ground for eviction under Section 2l(l)(t) of the 1961
Act is made out?

We have heard Shri A. Subba Rao, the learned counsel for the
appellant and Mr. P.R. Ramasesh, the learned counsel for the respondent.
H The first question to be examined is the effect of Section 70 of the 1999
MAHENDRA SAREE EMPORIUM v. G.V.S. MURTHY [LAHOTI, CJ.] 939

Act on the proceedings under Article 136 of the Constitution initiated A
before 31.12.1999, i.e. the date on which the 1999 Act came into force and
the 1961 Act stood repealed.

The effect of coming into force of the 1999 Act and the effect of
repeal of the 1961 Act have been dealt with by Sections 69 and 70 of the B
1999 Act exhaustiveiy. A careful reading of Sections 69 and 70 discloses
the legislative scheme underlying the repeal of the Old Act and coming
into force of the New Act as under : -

(i) The cases pending at the stage of trial, whether before the C
Controller or the Court, are taken care of by Section 69 of
the 1999 Act. The forum competence in a pending case,
depending on the averments made in the plaint, shall be
determined by reference to the provisions of the 1999 Act.
Such forum competence having been determined, the case
may continue to be tried by the forum in which it is pending D
or be transferred from the Controller to the Court or vice
versa, as the case may be.

(ii) The validity of all decrees or orders passed under the 1961
Act has been saved if such decree or order has already been E
put into execution and the execution is pending on 31.12.1999.
The proceedings in execution shall continue and be disposed
of as if the 1961 Act has not been repealed. Inasmuch as
the validity of decrees or orders passed before 31.12.1999
has been saved and as they have not been rendered ineffective F
or nullified by the 1999 Act, such decrees or orders shall
continue to remain available for execution in the same
manner as if saved although any 11pplication for execution
was not actually pending at the commencement of 1999 Act.
This is the reasonable interpretation which can be placed on
clause (a) of sub-Section (2) of Section 70 of the 1999 Act; G
else the provision runs the risk of being declared void under
Article 14 of the Constitution as arbitrary and discriminatory.
It will be reasonable to read clause (a) to include therein the
decrees or orders passed before 31.12.1999 as pending in
execution inasmuch as they were awaiting execution when H
940 SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.

A the New Act came into force.

(iii) All cases or proceedings (other than those in which decrees
or orders have already been passed and have achieved
finality), which are pending at the stage of trial, appeal or
revision and which were initiated under the 1961 Act are
B
covered by clauses (b) and (c). Such cases are divisible into
two categories:

a) Premises to which 1999 Act applies:- The cases and
proceedings initiated under the 1961 Act in respect of such
c premises to which the 1999 Act is also applicable, shall
continue to be heard and disposed of whether at the stage
of trial (subject to the provisions contained in Section 69 of
the 1999 Act) or in appeal or revision, but the substantive
law which would govern the decision in such cases and
D proceedings shall be the one contained in the 1999 Act.
Thus, Section 70(2)(b) has to be read with Section 69 so far
as cases or proceedings at the stage of trial are concerned.

b) Premises to which 1999 Act does not apply:- All cases and
E proceedings initiated under the 1961 Act in respect of the
premises to which the 1999 Act does not apply, shall stand
abated. The abatement shall take place of such proceedings
as were pending on 31.12.1999. The original case itself does
not stand abated; the case or the proceedings at the stage at
which it is on 31.12.1999 shall terminate as abated. The New
F Act liberalises the law in favour of the landlords. The
Statement of Objects and Reasons accompanying the Bill
states inter alia : "Economic Administration Reforms
Commission and the National Commission on Urbanisation
have recommended reform of the Rent Legislation in a way
G that balances the interest of both landlord and the tenant and
also stimulates future construction." As to the premises
which have been taken out of the operation of the Rent
Control Law because of the non-applicability of the New
Act, the landlord can secure eviction of the tenant without ...
H much difficulty simply by making out a case for eviction
MAHENDRA SAREE EMPORIUM v. G.V.S. MURTHY [LAHOTI, CJ.] 941

under the general law which is the Transfer of Property Act. A
If the proceeding pending on 31.12.1999 is by the landlord
seeking eviction of tenant, the proceeding need not continue
as the landlord has available to his advantage, the easier
course of initiating fresh proceedings and securing an order
of eviction without much ado and therefore it becomes B
unnecessary for him to pursue the pending proceedings in
which he will have to satisfy a more stringent test for
securing a decree or order of eviction. Similarly if the
pending proceedings are those in which the tenant has put
in issue a decree or order of eviction, he need not be allowed C
to pursue the same inasmuch as even if he succeeds, it will
always be open for the landlord to initiate fresh proceedings
of eviction wherein he would be able to secure the same
order of eviction with more ease. The scheme of the New
legislation and its comparative reading with the provisions
of the preceding legislation make such interpretation more D
reasonable and sensible.

(iv) To all such cases as are not specifically covered by Section
69 and sub-Section (2) of Section 70 of the 1999 Act, sub-
Section (3) of Section 70 expressly provides for being E
governed by Sections 6, 8 and 24 of the Karnataka General
Clauses Act, 1899. By making such provision, the legislature
has saved such residuary category of cases and proceedings
from the operation of the 1999 Act and allowed them to be
governed by the I 961 Act. That would have been the F
position of law even if sub-Section (3) of Section 70 of the
I 999 Act would not have been expressly enacted.

The next question is as to the applicability of the provisions contained
in clauses (b) and (c) of sub-section (2) of Section 70 of the New Act to
the proceedings pending before this Court in exercise of the jurisdiction G
conferred by Article 136 of the Constitution of India.

It was submitted by Shri A. Subba Rao, the learned counsel for the
appellant that the expression 'cases and proceedings' should be so interpreted
as to hold that on commencement of the New Act, the case itself, i.e. the H
942 SUPREME COURT REPORTS [2004] SUPP. 3 S.C:.R.

A proceedings for eviction of tenant, initiated by landlord, though under the •
Old Act, stand abated on the commencement of the New Act leaving
nothing for this Court to decide. However, Shri Ramasesh, the teamed
counsel for the respondent would not agree. His submission is two-fold.
He submits, firstly, that the legislature has not intended the case for eviction
B itself to abate; what would abate is the proceedings pending in this Coiurt.
Meaning thereby, submitted Shri Ramasesh, the petition or appeal under
Article 136 would abate with the resu:t of leaving untouched the decree
of eviction as passed by the High Court. In the alternative, he submitted
that if this Court may form an opinion that the proceedings under Article
C 136 of the Constitution do not fall within the purview of Section 70 of the
New Act which is a State legislation, then the same shall continue to be
heard and decided in accordance with the provisions of the Old Act.

The jurisdiction conferred on this Court by Article 136 of the
Constitution is a plenary jurisdiction in the matter of entertaining and
D hearing appeals by granting special leave against any kind (lf judgment or
order made by Court or Tribunal in any case or matter and the
jurisdiction can be exercised in spite of other specific provisions for appeal
contained in the Constitution or other laws. This article confers on the
Supreme Court special or residuary powers which are exercisable outside
E the purview of the ordinary laws in cases where the needs ofjustice demand
interference by the Supreme Court (see: Constitution Bench decisions in
Durga Shankar Mehta v. Thakur Raghuraj Singh and Others, [1955] I
SCR 267 and Union Carbide Corporation v. Union of India, [1991] 4 SCC
584, para 58). In Durga Shanker Mehta 's case (supra) the Constitution
F Bench held that Section 105 of the Representation of People Act, 1951
which gives finality to the decision of the Election Tribunal has the effect
of giving finality so far as that Act is concerned and the fact that it does
not provide for any further appeal cannot cut down, or have an overriding
effect on, the powers which the Supreme Court can exercise by virtue: of
Article 136 of the Constitution. The Constitutional jurisdiction confe1Ted
G by Article 136 cannot be limited or taken away by any legislation
subordinate to the Constitution. This view finds support from the
Constitution Bench decision of this Court in S.P. Sampath Kumar v. Union
of India and Others AIR (1987) SC 386 and the recent decision of this
Court in Surya Dev Rai v. Ram Chander Rai and Others, [2003] 6 SCC
H 675. In Surya Dev Rai 's case (supra), this Court has on a review of several
MAHENDRA SAREE EMPORIUM v. G.V.S. MURTHY [LAHOTI, CJ.] 943

authorities held that any legislation subordinate to the Constitution cannot A
whittle down, much less take away the jurisdiction and powers conferred
on the constitutional courts of the country.

Shri A. Subba Rao, the learned counsel for the appellant, submitted
that Section 70 of the New Act legislatively enacts the doctrine of statutory B
abatement as distinguished from abatement of civil proceedings by death
or otherwise caused by an event or happening which is non-statutory.
Reliance was placed on a series of four decisions, namely, Rall! Adhar
Singh v. Ramroop Singh and Others, [1968] 2 SCR 95, Chattar Singh and
Others v. Thakur Prasad Singh, [1975] 4 SCC 457, Satyanarayan Prasad
Sah and Others v. State of Bihar and Another, [1980] Supp. SCC 474 and C
Mst. Bibi Rahmani Khatoon and Others v. Harkoo Gope and Others,
[1981] 3 SCC 173. All these cases deal with statutory abatement consequent
upon a notification under the State Consolidation of Holding legislation
having been issued. A perusal of these decisions shows that the provisions
of the State legislation which came up for consideration of the Court D
provided for the original case, wherefrom the subsequent proceedings had
originated, itself to stand abated on the commencement of such legislation
and/or on the issuance of the requisite notification thereunder, without
regard to the stage at which the proceedings were pending. It was held
that appeal was a continuation of suit and inasmuch as the local law made E
provision for an effective alternative remedy to be pursued before an
exclusive forum to redeem the grievance raised before the Court, the local
law had the effect of terminating and nullifying the initiation of the
proceedings itself and therefore nothing remained for the court to adjudicate
upon in the appeal which was rendered infructuous.
F
Such is not the case before us. The decisions of this Court relied on
by the learned counsel for the appellant are clearly distinguishable and have
no applicability to the situation emerging from the facts of the case before
us. The nearest case relevant to the case in hand is the one relied on by
Shri Ramasesh, the learned counsel for the respondent and that is Gyan G
Chand v. Kunjbeharilal and Others, [1977] 3 SCC 317.

In Gyan Chand's case (supra), proceedings for eviction of tenant
.
under the. provisions of the Rajasthan Premises (Control of Rent and
Eviction) Act, 1950 were pending. During the pendency of the proceedings H
944 SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.

A in this Court under Article 136 of the Constitution, the said Act came to
be amended by an Ordinance conferring certain additional benefits on the
tenant and the tenant sought for the decree being modified in the light of
the provisions of the Ordinance. The Ordinance applied to pending
proceedings. The term 'proceeding' was defined to mean suit, appeal or
B application for revision. P.K. Goswami, J., speaking on behalf of Y.V.
Chandrachud, J., (as His Lordship then was) and for himself held that an
application for special leave under Article 136 of the Constitution against
a judgment or an order cannot be equated with the ordinary remedy of
appeal, as of right, under any provisions of law. It is an extraordinary
right conferred under the Constitution, within the discretion of this Court.,
C and such an application for special leave does not come within tht:
contemplation of appeal pending before the Court under Section 13A(a)
of the Act. It was further held that in view of the connotation of the word
"proceeding" as given under the Explanation to Section 13A it is
impermissible to extend the meaning of the word "proceeding" to include
D an application for special leave under Article 136 of the Constitution. The
collocation of the words, "suit, appeal or application for revision" in the
Explanation to denote "proceeding" would go to show that suits, regular
appeals therefrom, as provided under the ordinary law, and applications for
revision alone are intended. It is inconceivable that if the legislature had
E intended to include within the ambit of "proceeding" an application for
special leave under Article 136 of the Constitution it would have omitted
to mention it in express terms. Their Lordships opined that under the
scheme of the Act it was reasonable to hold that the legislature clearly
intended to include only the hierarchy of appeals under the Civil Procedure
F Code and not an appeal or a petition under Article 136 of the Constitution.
Fazal Ali, J., in his concurring opinion, held that if the intention was to
extend the benefit to appeals for special leave it should have been so stated
clearly. The benefit conferred by Section 13A of the Act does not extend
even to the execution proceedings and in these circumstances it cannot be
assumed that it would have applied to a Court which is beyond the frontiers
G of the State and to a remedy which has been provided not by the State
Legislature but by the Constitution itself.

Abatement kills the right to sue and has the effect ofunceremoniously
terminating the pending legal proceedings without adjudication on merits.
H It has to be strictly construed and applied only to such cases to which its
MAHENDRA SAREE EMPORIUM v. G.V.S. MURTHY [LAHOTI, CJ.] 945

applicability is undoubtedly attracted. Excepting where an otherwise A
legislative intention is expressly or by necessary implication deducible, a
provision for abatement of pending proceedings shall abate only such
proceedings as were pending on that day and at that stage and not the
original proceedings which had already stood concluded but were reopened
by a superior forum for the purpose of examining legality or propriety B
thereof.

We are, therefore, of the opinion that the State Legislature enacting
the New Act could have provided for the suit itself which originated under
the local law to abate on the date of coming into force of the New Act but
that the Legislature has not chosen to do. The Legislature could not have C
provided, nor has it provided, for the jurisdiction of this Court under Article
136 being taken away or curtailed in any manner whatsoever and rightly
so. The appeal would, therefore, survive unabated for adjudication on
merits.
D
The next question which arises for consideration is whether there has
been sub-letting of the premises within the meaning of Section 2l(I)(f) of
the Old Act.

The term 'sub-let' is not defined in the Act - new or old. However, E
the definition of 'lease' can be adopted mutatis mutandis for defining 'sub-
lease'. What is 'lease' between the owner of the property and his tenant
becomes a sub-lease when entered into between the tenant and tenant of
the tenant, the latter being sub-tenant qua the owner-landlord. A lease of
immovable property as defined in Section I 05 of the Transfer of Property F
Act, 1882 is a transfer of a right to enjoy such property made for a certain
time for consideration of a price paid or promised. A transfer of a right
to enjoy such property to the exclusion of all others during the term of the
lease is sine qua non of a lease. A sub-lease would imply parting with
by the tenant of a right to enjoy such property in favour of his sub-tenant.
Different types of phraseology are employed by different State Legislatures G
making provision for eviction on the ground of sub-letting. Under Section
21(l)(f) of the Old Act, the phraseology employed is qi,iite wide. It
embraces, within its scope sub-letting of the whole or part of the premises
as also assignment or transfer in any other manner of the lessee's interest
• in the tenancy premises. The exact nature of transaction entered into or H
946 SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.

A arrangement or understanding arrived at between the tenant and alleged
sub-tenant may not be in the knowledge of the landlord and such a
transaction being unlawful would obviously be entered into in secrecy
depriving the owner-landlord of the means of ascertaining the facts about
the same. However still, the Rent Control Legislation being protective for
B the tenant and eviction being not permissible except on the availability of
ground therefor having been made out to the satisfaction of the Court or
the Controller the burden of proving the availability of the ground is cast
on the landlord, i.e. the one who seeks eviction. In Krishnawati v. Hans
Raj, [1974] 2 SCR 524, reiterating the view taken in Associated Hotels of
C India Ltd. Delhi v. S.B. Sardar Ranjit Singh, [1968] 2 SCR 548, this Court
so noted the settled law- "the onus of proving sub-letting is on the
landlord. If the landlord prima facie shows that the occupant, who was
in exclusive possession of the premis.:s, let out for valuable consideration,
it would then be for the tenant to rebut the evidence". Thus, in the case
of sub-letting, the onus lying on the landlord would stand discharged by
D adducing prima facie proof of the fact that the alleged sub-tenant was in
exclusive possession of the premises or, to borrow the language of Section
I 05 of the Transfer of Property Act, was holding right to enjoy such
property. A presumption of sub-letting may then be raised and would
amount to proofunless rebutted. In the context of the premises having been
E sub-let or parted with possession by the tenant by adopting the device of
entering into partnership, it would suffice for u~ to notice three decisions
of this Court. Murlidhar v. Chuni Lal and Others, (1970) A.LR.CJ. 922
is a case where a shop was let out to a firm of the name of Cliuni Lal
Gherulal. The firm consisted of three partners, namely, Chuni Lal, Gherulal
F and Meghraj. This partnership closed and a new firm by the name of
Meghraj Bansidhar commenced its business with partners Meghraj and
Bansidhar. The tenant firm was sought to be evicted on the ground that
the old firm and the new firm being two different legal entities, the
occupation of the shop by the new firm amounted to subletting. This court
discarded the contention as 'entirely without substance' and held that a
G partnership firm is not a legal entity; the firm name is only a compendious
way of describing the partners of the firm. Therefore, occupation by a firm
is only occupation by its partners. The two firms, old and new, had a
common partner namely Meghraj, who continued to be in possession and
it was fallacious to contepd that earlier he was in possession in the capacity
H of partner of the old firm and later as a partner of the new firm. The
MAHENDRA SAREE EMPORIUM v. G.V.S. MURTHY [LAHOTI, CJ.) 947

landlord, in order to succeed, has to prove it as a fact that there was a A
subletting by his tenant to another firm. As the premises continued to be
in possession of one of the original tenants, Meghraj, then by a mere change
in the constitution of the firm of which Meghraj continued to be a partner,
an inference as to subletting could not be drawn in the absence of further
evidence having· been adduced to establish subletting. In Helper Girdharbhai B
v. Saiyed Mohmad Mirasaheb Kadri&: Ors., [I 987] 3 SCR 289, the tenant
had entered into a partnership and the firm was carrying on business in the
tenancy premises. This Co~ held that if there was a partnership firm of
which the appellant was a partner as a tenant, the same would not amount
to sub-letting leading to forfeiture of the tenancy; for there cannot be a sub- C
letting unless the lessee parted with the legal possession. The mere fact that
another person is allowed to use the premises while the lessee retains the
legal possession is not enough to create a sub-lease. Thus, the thrust is,
as laid down by this Court, on findin~ out who is in legal possession of
the premises. So long as the legal possession remains with the tenant the
mere factum of the tenant having entered into partnership for the purpose D
of carrying on the business in the tenancy premises would not amount to
sub-letting. In Parvinder Singh v. Renu Gautam & Ors., (2004] 4 SCC
794, a three-Judges Bench of this Court devised the test in these terms -
"if the tenant is actively associated with the partnership business and retains
the use and control over the tenancy premises with him, maybe along with E
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 a transaction not permitted by law, the court F
is not estopped from tearing the veil of partnership and finding out the real
nature of transaction entered into between the tenant and the alleged sub-
tenant."

In the present case there is un-rebutted evidence available on record
'to show that the family of the tenant consists of sixteen members which G
includes cousins as well. The family is joint and depends for its livelihood
on the business run in the suit premises. The tenant has not parted with
possession in favour of any stranger. The brothers, a wife of one of the
• brothers and a cousin have entered into partnership with the tenant for the
purpose of carrying on the pre-existing business in the suit premises. There H
948 SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.

A is no evidence adduced and no material available on record to draw an
.
inference that the tenant has dissociated himself from the business activity
leaving for the partners alone to carry on the business or that the so-called
partners are in exclusive possession of the premises having no relationship
with the tenant and the partnership is nothing but a camouflage for parting
B with by the tenant of the possession or right to use the tenancy premises
in favour of the persons in possession. The High Court was not right in
holding a case of sub-letting having been made out simply because the sole
propriety business was converted into a partnership business.

For the foregoing reasons we hold that in spite of the Old Act, i.e.
C the 1961 Act having been repealed by the New Act, i.e. the 1999 Act, the
present appeal under Article 136 of the Constitution does not abate and
survives for adjudication on merits. However, the ground for eviction
under Section 21(1)(!) of the Old Act is not made out and, therefore, the
proceedings for eviction initiated by the respondent-landlord cannot succeed.
D
The appeal is allowed and the proceedings for eviction are directed
to be dismissed. No order as to the costs.

N.J. Appeal allowed.