Holding

The tenancy was with the legal entity Kailash Chemical and Textile Mills Ltd., not the appellant, and the eviction order stands; the appeal is dismissed.

Summary

The landlady (respondent No.1) leased a house in Chandigarh to Haryana Milk Food Corporation (respondent No.2) for the residence of its General Manager, R.P. Malhotra, who signed the lease on behalf of the corporation. After Malhotra left the corporation, the landlady stopped accepting rent and filed an eviction suit under Section 13 of the East Punjab Urban Rent Restriction Act, 1949, alleging non‑payment, sub‑letting and a bona‑fide personal requirement. The corporation contended it was merely a trade name and not a legal entity, arguing that a suit against it was not maintainable; the appellant made a similar claim. The trial court, appellate court and High Court all held that the tenancy was with the legal entity Kailash Chemical and Textile Mills Ltd., the owner of the corporation, and ordered eviction. On special leave under Article 136, the Supreme Court examined whether a non‑juristic entity could be sued as a tenant and whether it should interfere with the lower courts’ findings. It concluded that the parties knew the true tenant was the legal company, the appellant was not the tenant, and there was a bona‑fide need of the landlord; consequently, the Court dismissed the appeal, staying execution of the eviction decree subject to specified conditions.

Issues considered

Whether a suit for eviction under the East Punjab Urban Rent Restriction Act can be filed against a non‑juristic entity (a trade name) that is not a legal person.
Whether the lease signed by the appellant on behalf of Haryana Milk Food Corporation is valid when the corporation is not a legal entity.
Whether the appellant R.P. Malhotra can be considered the tenant under the Rent Act.
Whether the Supreme Court should interfere with the lower courts' eviction order under Article 136, given the landlord's bona‑fide need and the facts of the case.

Legislation cited

Code of Civil Procedures. Order 30 Rule 10
East Punjab Urban Rent Restriction Act, 1949s. 13, s. 2(i)
General Clauses Act, 1897s. 3(42)

Subjects

evictiontenancynon‑juristic entityEast Punjab Urban Rent Restriction ActArticle 136landlord's bona‑fide needlease validitycorporate nameequity

Judgment

j

A RASHPAL MALHOTRA
v.
MRS. SATYA RAJPUT AND ANOTHER "'
SEPTEMBER 11, 1987

B (SABYASACHI MUKHARJI AND G.L. OZA JJ.]

Constitution of India, Article 136: Court acts not only as 'Court of
law' but also as 'Court of equity'.
'{

c
East Punjab Urban Rent Restriction Act, 1949: ss. 2(i) & L3-
Eviction-'Tenant' an entity not a juristic person-Eviction Suit-
Whether maintainable. I
--
The landlady, respondent No, 1, leased out the premises in ques-
lion in Chandigarh to respondent No. 2, for residence of its General
I
Manager, the appellant. The lease deed was signed on behalf of the
D lessee 'for Haryana Milk Food Corporation' by R.P. Malhotra, the
appellant. When the landlady came to know in the end of 1974 that the
appellant had left the services of the respondent No. 2, she stopped
accepting rent from him. She filed an application under s. 13 of the East
Punjab Urban Rent Restriction Act, 1949 for eviction against him and
respondent No. 2 In November 1977 on the grounds: (a) non-payment of
E rent from January 1, 1975 onwards, (h) the subletting of entire pre- ~-
mises by respondent No. 2 to the appellant, and (c) bona fide personal

-
requirement. That application was contested by the appellant and
respondent No. 2 who filed written statement contending that respon- ....
dent No. 2 was just a trade name and not a legal entity, nor it was a
partnership firm for, the owner of the said concern was Kallash Chemi-
F cal and Textile Mills Ltd., that there could not have been any lease with
such a non-legal entity, and that a suit against such a body was not ~
maintainable.

Both the trial court and the appellant court ordered ejectment of
the appellant and respondent No. 2 holding that respondent No. 2 was
0 the tenant under respondent No. 1, that the appellant had taken the
premises on behalf of respondent No. 2, that they were in arrears of
rent, and that the premises were bona fide required by respondent
No.I. ;.-- ~

The High Court dismissed the appellant's revision petition.
H
110
RASHPAL MALHOTRA v. MRS. S. RAJPUT 111

Dismissing the appeal by special leave,
A
HELD: I. It is apparent from the facts that the tenancy agree·
ment was not with the appellant, and the lease was signed by him on
behalf of the other entity though not strictly legal but it was entered into
by a legal entity, namely, the Kailash Chemical and Textile Mills Ltd.
The parties knew that the appellant was not a tenant. The parties were B
aware that the company was the real owner of respondent No. 2. The
company had accepted that position. Neither respondent No. 2 nor its
owner company was, therefore, prejudiced by holding that the lessee
was not the appellant and they have not been prejudiced by not being made
formal parties. The order of eviction, therefore, does not call for any
interference. [116B-C]
c
r Modi Vanaspati Manufacturing Company and Anr. v. Katihar
Jute Mills (Pvt.) Ltd., A.LR. 1969 Calcutta 496 at page 511; Rajendra
Prasad Oil Mills, Kanpur and Anr. v. Smt. Chunni Devi and Ors.,

~ A.I.R. 1969 Allahabad page l; Mis. M.K.M. Moosa Bhai Amin, Kota
v. Rajasthan Textile Mills, Bhawanimandi A.I.R. 1974 Rajasthan 194 D
and Educational Supplies Depot, Trivandrum v. Vithoba High School
and Others, 1970 Kerala Law Journal Reports 43, referred to.

2. The Supreme Court Is more than a court of appeal. It exercises
power under Article 136 only when there is supreme need. Therefore,
~- even if legal Daws might be electronically detected, the Court cannot E
interfere save manifest injustice or substantial question of public
importance. [116F)

In the instant case, it has been held by the High Court and the
courts below that no deposit had been made in accordance with law.
Merely because in the form of the lease the owner was not mentioned F
and as such was not made a party to the suit and the lease was
~
•l purported to be entered into with an entity which was not a juristic
person and a suit was filed against such non-juristic person, this Court
should not interfere with the conclusions arrived at by the appellate
authority and the High Court. [116G·H; 117A]
G
Heavy Engineering Corporation Ltd. Ranchi v. K. Singh and
Company, Ranchi, A.I.R. 1977 Supreme Court 2031 and Baigana and
;- Others v. Deputy Collector of Consolidation and Ors., [1978) 3 S.C.R.
509, referred to.

3. The Supreme Court in exercising its power under Article 136 H
112 SUPREME COURT REPORTS [1988] 1 S.C.R.

acts not only as Court of law but also as a court of equity and must
A ~

subserve ultimately the cause of justice. In the instant case, there was
evidence that there was some bona fide need of the landlady for her
family. After a long lapse of time, in the facts and the circumstances of
the case, therefore, interference with the findings 11rrived al by the High
Court and the courts below would not be justified. [117A-B]
B
[The Court directed that in case the landlady lets out the premises
within the period of five years the first option should be given lo the
appellant, that she would not sell the premises within a period of five
years and in case she does the first option should be given to the appel-
lant to purchase the property, that the decree for eviction will not be
executed upto 31st August, 1988 provided the appellant files an under-
c taking in the usual form.] [117C-D]
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 188
i
of 1981.

D From the Judgment and Order dated 5. 12.1980 of the Punjab
and Haryana High Court in Civil Revision Petition No. 136 of 1980. ~
R.K. Garg for the Appellant.
Rajinder Sachhar and Mukul Mudgal for the Respondents.
The Judgment of the Court was delivered by
E
SABYASACHI MUKHARJI, J. This is an appeal by the appel-
lant claiming to be a tenant of the premises in question. There was an
brder of eviction under section 13 of the East Punjab Urban Rent
Restriction Act, 1949 (hereinafter called 'the Rent Act'). The res-
pondent-landlady is the owner of House No. 722, Sector IIB,
F Chandigarh (hereinafter called 'the suit premises'). The suit premises
was let out by a lease deed by respondent No. 1 to respondent No. 2
herein, Haryana Milk Food Corporation for the residence of its i
General Manager at Chandigarh. It is stated in the said lease deed that
the lease was for the use of Shri R.P. Malhotra who was at that time
the General Manager of Haryana Milk Food Corporation. On behalf
G of the lessor the landlady, respondent herein has signed and on behalf
of the lessee, it is signed as follows: "for Haryana Milk Food Corpora-
tion R.P. Malhotra" who is the appellant herein. The appellant left the
services of Haryana Milk Food Corporation in the end of 1974 and
J
thereafter attempted to pay the rent of the suit premises by sending it
by a bank-draft with a covering letter on the letter-head of Haryana
H Milk Food Corporation. It is the case of the landlady, respondent
RASHPAL MALHOTRA v. MRS. S. RAJPUT (MUKHARJI, J.J 113

No. 1 that on coming to know of the cessation of the appellant's A
employment with Haryana Milk Food Corporation the respondent
No. 1 stopped accepting rent from the appellant. On 23rd of
November, 1977 application for eviction was' filed by the respondent
No. 1 against the appellant and respondent No. 2 Haryana Milk Food
Corporation, inter alia, on the following grounds: (a) non-payment of
rent from 1.1. 75 onwards; (b) subletting of entire premises by the B
Haryana Milk Food'Corporation to the appellant and (c) bona fide
personal requirement.

It is relevant to mention that the rent application was filed by the
respondent making Haryana Milk Food Corporation as the first
defendant and the appellant as the second defendant under section 13 C
of the Rent Act. Respondent No. 2 Haryana Milk Food Corporation
filed a written statement contending that Haryana Milk Food Corpora-
tion was just a trade name and not a legal entity, nor it was a partner-
ship firm and the owner of the said concern was Kailash Chemical and
Textile Mills Ltd. The same ground was taken by the appellant in the
written statement filed by the appellant. Respondent No. 2 further D
contended that the appellant had been sending cheques and drafts for
the payment of rent to the landlady which she had never accepted as
none of the drafts sent by the appellant to the landlady had ever been
encashed. Respondent No. 2 further contended that she had never
accepted the appellant as the tenant from whom she had never
accepted any rent.. The landlady also filed an application for implead- E
ing the company as a party but unfortunately for unexplained reason
the same was not proceeded with and withdrawn.

The Trial Court raising issues, inter a/ia, held so far as relevant to
the present purpose that Haryana Milk Food Corporation obtained the
( house for the appellant and the said concern was making payment of F
rent to respondent No. 1. The appellant and respondent No. 2 were
\ liable to be ejected on tbe ground of arrears of rent. It was further held
that the suit premises was required bona fide by respondent No. 1. In
the premises on 5th of May, 1979 the Trial Court ordered the eject-
ment of the appellant and respondent No. 2 from the suit premises.
The judgment of the Appellate Court was passed on 5th of November, G
1979 affirming the findings of the Trial Court holding that the appel-
lant took the premises on behalf of Haryana Milk Food Corporation.
It was further held that Haryana Milk Food Corporation was the ten-
ant under respondent No. 1. It was further held that the appellant and
respondent No. 2 were held liable to be ejected on account of non-
payment of rent and in view of the aforesaid findings e'iction was H
114 SUPREME COURT REPORTS [1988] 1 S.C.R.

A ordered from the suit premises. There was a further revision to the ""
High court and the High Court dismissed the appellant's revision peti-
tion affirming the reasoning of the Courts below.

The main point of challenge in this Court was that Haryana Milk
Food Corporation was not a legal entity and a suit against such a body
B was not maintainable. It was further contended that there could not
have been any lease with a non-legal entity. The main ground of attack
in this appeal was that the real tenancy was with the appellant and not
respondent No. 1. It may be mentioned that an appeal was filed before
the Appellate Authority by Haryana Milk Food Corporation through
its General Manager, and Kailash Chemical and Textile Mills Ltd.,
C through its Director. It was contended in the grounds of said appeal,
that the relationship of the landlord and tenant between respondent
No. 1 and the appellant did not stand proved from the material on
record. It was further contended that the note signed by the appellant
that the order dated 5th May, 1979 had virtually held Kailash Chemi-
call and Textile Mills L.td., as liable. It had treated Haryana Milk Food
D Corporation as synonymous with Kailash Chemical and Textile Mills
Ltd., and it was, therefore.._aggrieved by the said order. That appeal
had been filed by Haryana Milk Food Corporation through its General
Manager and Kailash Chemical and Textile Mills Ltd., through its
Director. Therefore, Kailash Chemical and Textile Mills Ltd., accep-
ted that this was the company which owned Haryana Milk Food
E Corporation and it was a legal entity.

In support of this contention that a non-legal entity like the
Haryana Milk Food Corporation could not enter into a reference with
the landlady, reliance was placed on the statement of Halsbury's Laws
of England, Fourth Edition, volume 7 at page 457, paragraphs 765, 766
f and 767, where it was stated that as regards litigation by an incor-
porated company, as a rule the directors were the persons who have
the authority to act for the company. Relying on the said statement of
law the Calcutta High Court in the case of Modi Vanasptlfi Manu-
facturing Company and another v. Katihar Jute Mills (Pvt.) Limited,
A.LR. 1969 Calcutta 496 at page 511 in paragraph 42, A.N. Ray, as
G the learned Chief Justice of India then was, observed that the provi-
sions contained in Order 30, Rule 10 of the Code were that any person
carrying on business in the name and style other than his own name
may be sued in such name or style as if it were a firm name and so far
as the nature of the case would permit all rules under Order 30 of the
Code of Civil Procedure would be applicable. Agreeing with the said
H observations, the other learned Judge, S.K. Mukherjee, J. at para-
RASHPAL MALHOTRA v. MRS. S. RAJPUT [MUKHARJI, J.) 115

graph 63 referred to the Halsbury's Laws of England, Third Edition, A
r Volume 6 at page 444, where it was said that a company can only sue
or be sued in its corporate name. Mr. Garg, learned counsel for the
appellant strongly relying on these observations submitted that the suit
against Haryana Milk Food Co1'p0ration was not maintainable. A con-
trary view was taken by the Full Bench of the Allahabad High Court in
Rajendra Prasad Oil Mills, Kanpur and another v. Smt. Chunni Devi B
and others, A.LR. 1969 Allahabad page 1, where it was held that a
limited company falls within the meaning of the expression 'person' as
i
used in Rule 10, Order 30 of the Code of Civil Procedure. This would
be so even though the limited company might have been carrying on
business in a name or style other than its own without any attempt to
conceal its own corporate name and this fact was known to the party c
~- suing. There, the Court observed that there could not be any con-
troversy that Rajendra Prasad Oil Mills, Kanpur was an undertaking
owned by N.K. Industries limited. Salish Chandra J. as the learned
Chief Justice then was, observed that in certain circumstances a
limited company carrying on business. in an assumed name by conceal-
ment of its own corporate name is a person within meaning of Order 30 D
Rule 10 of the Code of Civil Procedure. Same is the view of the
Rajasthan High Court in the case of Mis. M.K.M. Moosa Bhai Amin,
Kota v. Rajasthan Textile Mills, Bhawanimandi, A.LR. 1974 Rajas-
than 194 where it was held that where a limited company carried on a
business in an assumed name and a suit came to be filed against the
_..,_
defendant in that name in respect of price due on sale of goods in view E
of section 3(42) of the General Clauses Act, 1897 the expression
'person' as used in the Code of Civil Procedure Order 30 Rule 10 in the
suit filed against the defendant in the name assumed by the limited
company was tenable under Order 30 Rule 10 of the Code of Civil
Procedure. The Kerala High Court, however, in the case of Educa-
tional Supplies Depot, Trivandrum v. Vithoba High School and F
others, [1970] Kerala Law Journal Reports43 held that a decree could
\ not be passed against a school as it was not a juristic entity much less a
person to hold property. It may be mentioned that subsequently the
Kailash Chemical and Textile Mills Ltd. has changed its name to the
Haryana Milk Food Corporation and they have merged formerly, but
that is subsequent to the lease and the institution of the suit. It is G
manifest from the position that parties knew that Kailash Chemical
and Texitle Mills Ltd. was the owner of the Haryana Milk Food
Corporation. Kailash Chemical and Texitle Mills Ltd., accepted that
+ position as it would be apparent from the grounds filed before the
Appellate Authority. Mr. Garg, learned counsel for the appellant,
however, tried to emphasise that in view of the definition of tenant H
116 SUPREME COURT REPORTS (1988] 1 S.C.R.

A under section 2(i) of the Rent Act the right of eviction under section 13
in the suit as framed was not maintainable.

It has been held by all the Courts that the parties knew who were
the tenants, it is apparent that the appellant was not the tenant. It was
held by the Rent Controller that one of the grounds for eviction was
B bona fide need of the landlord. The Appellate Authority and the High
Court did not go into this question. The parties were aware that the
Kailash Chemical and Textile Mills Ltd., was the real owner of the
Haryana Milk Food Corporation. Neither Haryana Milk Food Corpo-
ration nor Kailash Chemical and Textile Mills was prejudiced by hold-
ing that the lessee was not the appellant and they have not been pre-
C judiced by not being made formal parties. In the aforesaid view of the ··~
matter, we are inclined not to interfere with the order of evict.ion. ~

It has to be borne in mind that this is an appeal under Article 136
of the Consitution. This Court in Heavy Engineering Corporation Ltd.
Ranchi v. K. Singh and Company, Ranchi, A.LR. 1977 Supreme
D Court 2031 expressed the opinion that although the powers of this
Court were wide under Article 136 it could not be urged that because ·
leave had been granted the Court must always in every case deal with
the merits even though it was satisfied that the ends of justice did not
justify its interference in a given case. It is not as if, in an appeal with
leave under Article 136, this Court was bound to decide the question if
E on facts at the later hearing the Court felt that the ends of justice did
not make it necessary to decide the point. Similarly in Baigana and
others v. Deputy Collector of Consolidation and others, [1978] 3 S. C.R.
509 this Court expressed the view that this Court was more than a
Court of appeal. It exercises power only when there is supreme need.
It is not the fifth court of appeal but the final court of the nation.
F Therefore, even if legal flaws might be electronically detected, we
cannot interfere save manifest injustice or substantial question of
public importance. In this case it is apparent from the facts placed
before us and the High Court and the courts below that there is a
genuine need of the landlady for the premises in question. It has been
established clearly that the tenancy agreement was not with the appel-
G !ant and the lease was signed by the appellant on behalf of other entity
though not strictly legal but it was entered by a legal entitly, namely
Kailash Chemical and Textile Mills Ltd. It has been held that no
deposit had been made in accodance with law by three Courts. Merely J.
because in the form of the lease Kailash Chemical and Textile Mills
Ltd., was not mentioned and as such was not made a party to the suit
H and the lease was purported to be entered with an entity which is not a
RASHPAL MALHOTRA v. MRS. S. RAJPUT [MUKHARJI, J.[ 117

juristic person and a suit was filed against such non-juristic person, this A
Court should not interfere with the conclusions anived at by the
learned Appellate Authorjty and the High Court. It has to be borne in
mind that this Court in exercising its power under Article 136 of the
Constitution acts not only as a court of law but also as a court of equity
and must subserve ultimately the cause of justice. In this case, there is
evidence that there is some bona fide need of the landlady for her B
family. After a long lapse of time, in the facts and the circumstances of
this case we decline to interfere with the findings arrived at by the
High Court and the Courts below.

We, therefore, dismiss this appeal, but we direct that in case the
landlady, respondent No. 1 herein lets out the premises within a C
period of five years the first option should be given to the appellant.
We further direct and record the undertaking of the landlady that she
would not sell the premises within a period of five years, and in case
she does the first option should be given to the appellant to purchase
the property. We further direct that the decree for eviction will not be
executed upto 31st of August, 1988 provided the appellant files an D
undertaking to this Court in the usual form within four weeks from this
date. We also direct that the occupation charges or mesne profits from
1st of August, 1987 should be paid to the respm1dent No. 1 at the rate
of Rs .800 per month and the first of such payment should be made on
the 30th September, 1987 and each subsequent payment should be
made on 15th of each subsequent month. In default of filing the under- E
taking or not making the payment as hereinbefore indicated the order

-
of eviction will become executable forthwith.

The appeal, therefore, fails and it is dismissed subject to the
conditions indicated heteinbefore. In the facts and circumstances of
this case, the parties are directed to pay and bear their own costs. F

\ P.S.S. Appeal dismissed.

(