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SUB-LETTING OF TENANCY

In the case of Associated Hotels of India Ltd., Delhi v. S.B. Sardar Ranjit Singh AIR 1968 SC 933, this Court held that when eviction is sought on the ground of subletting, the onus to prove subletting is on the landlord. It was further held that if the landlord prima facie shows that the third party is in exclusive possession of the premises let out for valuable consideration, it would then be for the tenant to rebut the evidence.

In Helper Girdharbhai v. Saiyed Mohmad Mirasaheb Kadri & Others (1987) 3 SCC 538, this Court held that in a case where a tenant becomes a partner of a partnership firm and allows the firm to carry on business in the demised premises while he himself retains legal possession thereof, the act of the landlord does not amount to subletting. It was held that whether there is genuine partnership or not must be judged in the facts of each case in the light of the principles applicable to partnership.

Shalimar Tar Products Ltd. v. H.C. Sharma[(1988) 1 SCC 70] where it was held that to constitute a sub-letting, there must be a parting of legal possession, i.e., possession with the right to include and also right to exclude others and whether in a particular case there was sub-letting was substantially a question of fact.

A three-Judge Bench of this Court in Parvinder Singh v. Renu Gautam and Others (2004) 4 SCC 794 "The rent control legislations which extend many a protection to the tenant, also provide for grounds of eviction. One such ground, most common in all the legislations, is sub-letting or parting with possession of the tenancy premises by the tenant. Rent control laws usually protect the tenant so long as he may himself use the premises but not his transferee inducted into possession of the premises, in breach of the contract or the law, which act is often done with the object of illegitimate profiteering or rack-renting. To defeat the provisions of law, a device is at times adopted by unscrupulous tenants and sub-tenants of bringing into existence a deed of partnership which gives the relationship of tenant and sub-tenant an outward appearance of partnership while in effect what has come into existence is a sub-tenancy or parting with possession camouflaged under the cloak of partnership. Merely because a tenant has entered into a partnership he cannot necessarily be held to have sub-let the premises or parted with possession thereof in favour of his partners. 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 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 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. A person having secured a lease of premises for the purpose of his business may be in need of capital or finance or someone to assist him in his business and to achieve such like purpose he may enter into partnership with strangers. Quite often partnership is entered into between the members of any family as a part of tax planning. There is no stranger brought on the premises. So long as the premises remain in occupation of the tenant or in his control, a mere entering into partnership may not provide a ground for eviction by running into conflict with prohibition against 1 sub-letting or parting with possession. This is a general statement of law which ought to be read in the light of the lease agreement and the law governing the tenancy. There are cases wherein the tenant sub-lets the premises or parts with possession in defiance of the terms of lease or the rent control legislation and in order to save himself from the peril of eviction brings into existence, a deed of partnership between him and his sub-lessee to act as a cloak on the reality of the transaction. The existence of deed of partnership between the tenant and the alleged sub-tenant would not preclude the landlord from bringing on record material and circumstances, by adducing evidence or by means of cross-examination, making out a case of sub- letting or parting with possession or interest in tenancy premises by the tenant in favour of a third person. The rule as to exclusion of oral by documentary evidence governs the parties to the deed in writing. A stranger to the document is not bound by the terms of the document and is, therefore, not excluded from demonstrating the untrue or collusive nature of the document or the fraudulent or illegal purpose for which it was brought into being. An enquiry into reality of transaction is not excluded merely by availability of writing reciting the transaction........."

In Parvinder Singh v. Renu Gautam 1 [(2004) 4 SCC 794] a three-Judge Bench of this Court devised the test in these terms: (SCC p. 799, para 8) "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 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 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"."

Ms. Celina Coelho Pereira & Ors. Vs Ulhas Mahabaleshwar Kholkar & Ors. JUSTICE Tarun Chatterjee & JUSTICE R. M. Lodha DD 30-10-2009, The legal position was quoted by the court after discussing several decisions and summarised as follows:

(i) In order to prove mischief of subletting as a ground for eviction under rent control laws, two ingredients have to be established, (one) parting with possession of tenancy or part of it by tenant in favour of a third party with exclusive right of possession and (two) that such parting with possession has been done without the consent of the landlord and in lieu of compensation or rent.

(ii) Inducting a partner or partners in the business or profession by a tenant by itself does not amount to subletting. However, if the purpose of such partnership is ostensible and a deed of partnership is drawn to conceal the real transaction of sub-letting, the court may tear the veil of partnership to find out the real nature of transaction entered into by the tenant.

(iii) The existence of deed of partnership between tenant and alleged sub-tenant or ostensible transaction in any other form would not preclude the landlord from bringing on record material and circumstances, by adducing evidence or by means of cross-examination, making out a case of sub-letting or parting with possession in tenancy premises by the tenant in favour of a third person.

(iv) If tenant is actively associated with the partnership business and retains the control over the tenancy premises with him, may be along with partners, the tenant may not be said to have parted with possession.
(v) Initial burden of proving subletting is on landlord but once he is able to establish that a third party is in exclusive possession of the premises and that tenant has no legal possession of the tenanted premises, the onus shifts to tenant to prove the nature of occupation of such third party and that he (tenant) continues to hold legal possession in tenancy premises.

(vi) In other words, initial burden lying on landlord would stand discharged by adducing prima facie proof of the fact that a party other than tenant was in exclusive possession of the premises. A presumption of sub-letting may then be raised and would amount to proof unless rebutted.




GIFT OF UNDIVIDED CO-PARCENARY PROPERTY VOID

In Thamma Venkata Subbamma (dead) by Lrs. V. Thamma Rattamma and Others (1987 (3) SCC 294) it was observed as follows: "There is a long catena of decisions holding that a gift by a coparcener of his undivided interest in the coparcenary property is void. It is not necessary to refer to all these decisions Instead, we may refer to the following statement of law in Mayne's Hindu Law, eleventh Edn., Article 382: "It is now equally well settled in all the Provinces that a gift or devise by a coparcener in a Mitakshara family of his undivided interest is wholly invalid....A coparcener cannot make a gift of his undivided interest in the family property, movable or immovable, either to a stranger or to a relative except for purposes warranted by special texts. …………We may also refer to a passage from Mulla's Hindu Law, fifteenth edn., Article 258, which is as follows: Gift of undivided interest. - (1) According to the Mitakshara law as applied in all the States, no coparcener can dispose of his undivided interest in coparcenary property by gift. Such transaction being void altogether there is no estoppel or other kind of personal bar which precludes the donor from asserting his right to recover the transferred property. He may, however, make a gift of his interest with the consent of the other coparceners.

2008(11 )SCR904 Baljinder Singh . Vs Rattan Singh It is, however, a settled law that a coparcenary can make a gift of his undivided interest in the coparcenary property to another coparcener or to a stranger with the prior consent of all other coparceners. Such a gift would be quite legal and valid

In Sunil Kumar and Anr. v. Ram Parkash and Ors. (AIR 1988 SC 576) it was noted in paras 23 and 24 as follows: The managing member or karta has not only the power to manage but also power to alienate joint family property. The alienation may be either for family necessity or for the benefit of the estate. Such alienation would bind the interests of all the undivided members of the family whether they are adults or minors. The oft quoted decision in this aspect, is that of the Privy Council in Hanuman Parshad v. Mt. Babooee, [1856] 6 M.I.A. 393. There it was observed at p. 423: (1) "The power of the manager for an infant heir to charge an estate not his own is, under the Hindu law, a limited and qualified power. It can only be exercised rightly in case of need, or for the benefit of the estate." This case was that of a mother, managing as guardian for an infant heir. A father who happens to be the manager of an undivided Hindu family certainly has greater powers to which I will refer a little later. Any other manager however, is not having anything less than those stated in the said case. Therefore, it has been repeatedly held that the principles laid down in that case apply equally to a father or. other coparcener who manages the joint family estate.. Although the power of disposition of joint family property has been conceded to the manager of joint Hindu family for the reasons aforesaid, the law raises no presumption as to the validity of his transactions. His acts could be questioned in the Court of law. The other members of the family have a right to have the transaction declared void, if not justified. When an alienation is challenged as being unjustified or illegal it would be for the alienee to prove that there was legal necessity in fact or that he made proper and bona fide enquiry as to the existence of such necessity. It would be for the alienee to prove that he did all that was reasonable to satisfy himself as to the existence of such necessity. If the alienation is found to be unjustified, then it would be declared void. Such alienations would be void except to the extent of manager's share in Madras, Bombay and Central Provinces. The purchaser could get only the manager's share. But in other provinces, the purchaser would not get even that much. The entire alienation would be void. [Mayne's Hindu Law 11th ed. para 396].

In Sadasivam v. K. Doraisamy (AIR 1996 SC 1724) it was found that when the father has executed sale deed in favour of a near relative and the intention to repay debt or legal necessity has not been proved as a sham transaction.

In Words and Phrases by Justice R.P. Sethi the expression `void' and `'voidable' read as under: "Void- Black's Law Dictionary gives the meaning of the word "void" as having different nuances in different connotations. One of them is of course "null or having no legal force or binding effect". And the other is "unable in law, to support the purpose for which it was intended". After referring to the nuances between void and voidable the lexicographer 26 pointed out the following: "The word `void' in its strictest sense, means that which has no force and effect, is without legal efficacy, is incapable of being enforced by law, or has no legal or binding force, but frequently the word is used and construed as having the more liberal meaning of `voidable'. The word `void' is used in statute in the sense of utterly void so as to be incapable of ratification, and also in the sense of voidable and resort must be had to the rules of construction in many cases to determine in which sense the legislature intended to use it. An act or contract neither wrong in itself nor against public policy, which has been declared void by statute for the protection or benefit of a certain party, or class of parties, is voidable only". (Pankan Mehra and Anr. v. State of Maharashtra and Ors. (2000 (2) SCC 756).

Per Fazal Ali, J- The meaning of the word "void" is stated in Black's Law Dictionary (3rd Edn.) to be as follows: "Null and void; ineffectual; nugatory; having no legal force or binding effect; unable in law to support the purpose for which it was intended; nugatory and ineffectual so that nothing can cure it; not valid". Keshavan Madhava Menon v. State of Bombay (1951 SCR 228).

The expression "void" has several facets. One type of void acts, transactions, decrees are those which are wholly without jurisdiction, ab initio void and for avoiding the same no declaration is necessary, law does not take any notice of the same and it can be disregarded in collateral proceeding or otherwise. Judicial Review of Administration Action, 5th Edn., para 5-044 (See also Judicial Remedies in Public Law at page 131; Dhurandhar Prasad Singh v. Jai Prakash University and Ors. (2001 (6) SCC 534)

The other type of void act, e.g. may be transaction against a minor without being represented by a next friend. Such a transaction is a good transaction against the whole world. So far as the minor is concerned, if he decides to avoid the same and succeeds in avoiding it by taking recourse to appropriate preceding the transaction becomes void from the very beginning. Another type of void act may be one, which is not a nullity, but for avoiding the same, a declaration has to be made. (Government of Orissa v Ashok Transport Agency and Ors (2002 (9) SCC 28)

The meaning to be given to the word "void" in Article 13 of the Constitution is no longer res integra, for the matter stands concluded by the majority decision of the Court in Keshavan Madhava Menon v. The State of Bombay (1951) SCR 228. We have to apply the ratio decidendi in that case to the facts of the present case. The impugned Act was a existing law at the time when the Constitution came into force. That existing law imposed on the exercise of the right guaranteed in the citizens of the India by Article 19(1)(g) restrictions which could not be justified as reasonable under clause (6) as it then stood and consequently under Article 13, that existing Law became void "to the extent of such inconsistency". As explained in Keshavan Madhava Menon's case (supra) the Law became void in toto or for all purposes or for all times or for all persons but only "to the extent of such inconsistency", that is to say, to the extent it became inconsistent with the provisions of Part III which conferred the fundamental rights on the citizens.

It did not become void independently of the existence of the rights guaranteed by Part III. (Bhikaji Narain Dhakras and Ors. v. The State of Madhya Pradesh and Anr. (1955 (2) SCR 589).

The word "void" has a relative rather than an absolute meaning. It only conveys the idea that the order is invalid or illegal. In Halsbury's Laws of England, 4th Edn. (Re- issue) Vol. 1(1) in para 26, p.31 it is stated thus: "If an act of decision, or an order or other instrument is invalid, it should, in principle, be null and void for all purposes; and it has been said that there are no degrees of nullity. Even though such an act is wrong and lacking in jurisdiction, however, it subsists and remains fully effective unless and until it is set aside by a court of competent jurisdiction. Until its validity is challenged, its legality is preserved". (State of Kerala v. M.K. Kunhikannan Nambiar Manjeri Manikoth, Naduvil (dead) and ors. (1996 (1) SCC 435).

"Voidable act" is that which is a good act unless avoided, e.g. if a suit is filed for a declaration that a document is fraudulent, it is voidable as the apparent state of affairs is the real state of affairs and a party who alleges otherwise is oblige to prove it. If it is proved that the document is forged and fabricated and a declaration to that effect is given, a transaction becomes void from the very beginning. There may be voidable transaction which is required to be set aside and the same is avoided from the day it is so set aside and not any day prior to it. In cases, where legal effect of a document cannot be taken away without setting aside the same, it cannot be treated to be void but would be obviously voidable. Government of Orissa v. Ashok Transport Agency and Ors. (2002 (9) SCC 28)".





SUB-REGISTRAR VALUE IS NOT THE BASIS



In Jawajee Nagnatham vs. Revenue Divisional Officer, Adilabad, A.P. and Others [(1994) 4 SCC 595], the Court observed : "The market value of the land for proper stamp duty has to be determined as per the law under Section 47-A itself. That view was followed by another learned Single Judge in P. Sasidar v. Sub-Registrar It is, therefore, clear that the Basic Valuation Register prepared and maintained for the purpose of collecting stamp duty has no statutory base or force. It cannot form a foundation to determine the market value mentioned thereunder in instrument brought for registration. Equally it would not be a basis to determine the market value under Section 23 of the Act, of the lands acquired in that area or town or the locality or the taluk etc. Evidence of bona fide sales between willing prudent vendor and prudent vendee of the lands acquired or situated near about that land possessing same or similar advantageous features would furnish basis to determine market value."



DEDUCTION TOWARDS DEVELOPMENT CHARGES



Whereas a smaller plot may be within the reach of many, a large block of land will have to be developed preparing a layout plan, carving out roads, leaving open spaces, plotting out smaller plots, waiting for purchasers and the hazards of an entrepreneur. Such development charges may range between 20% and 50% of the total price." It was further observed : "The purpose for which acquisition is made is also a relevant factor for determining the market value. In Basavva v. Spl. Land Acquisition Officer deduction to the extent of 65% was made towards development charges."

The Court noticed a large number of decisions wherein deductions had been made at different rates varying from 20% to 53%. The Court also noticed an earlier decision of this Court in K.S. Shivadevamma vs. Assistant Commissioner and Land Acquisition Officer [(1996) 2 SCC 62], wherein it was opined : "It is then contended that 53% is not automatic but depends upon the nature of the development and the stage of development. We are inclined to agree with the learned counsel that the extent of deduction depends upon development need in each case. Under the Building Rules 53% of land is required to be left out. This Court has laid as a general rule that for laying the roads and other amenities 33-1/3% is required to be deducted. Where the development has already taken place, appropriate deduction needs to be made. In this case, we do not find any development had taken place as on that date. When we are determining compensation under Section 23(1), as on the date of notification under Section 4(1), we have to consider the situation of the land development, if already made, and other relevant facts as on that date. No doubt, the land possessed potential value, but no development had taken place as on the date. In view of the obligation on the part of the owner to hand over the land to the City Improvement Trust for roads and for other amenities and his requirement to expend money for laying the roads, water supply mains, electricity etc., the deduction of 53% and further deduction towards development charges @ 33-1/3%, as ordered by the High Court, was not illegal."




DETERMINATION OF COMPENSATION IN LAQ MATTERS



In Delhi Development Authority vs. Bali Ram Sharma and Others [(2004) 6 SCC 533], 5% increase in the market value was granted having regard to the fact that the notification in question was issued about five years after the notification involved in the earlier judgment. In Land Acquisition Officer, Kammarapally Village, Nizamabad District, A.P. vs. Nookala Rajamallu and Others [(2003) 12 SCC 334], it was observed : "Where large area is the subject-matter of acquisition, rate at which small plots are sold cannot be said to be a safe criterion" It was further observed: "While determining the market value of the land acquired it has to be correctly determined and paid so that there is neither unjust enrichment on the part of the acquirer nor undue deprivation on the part of the owner. It is an accepted principle as laid down in the case of Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer that the compensation must be determined by reference to the price which a willing vendor might reasonably expect to receive from the willing purchaser..."

In Lila Ghosh (Smt.) (Dead) Through LR Tapas Chandra Roy vs. State of W.B. [(2004) 9 SCC 337], a Division Bench of the Court has observed that if a plot is large, then there must be depreciation for largeness, as large plots always fetch less than small plots.

In V. Hanumantha Reddy (Dead) by Lrs. vs. Land Acquisition Officer & Mandal R. Officer [(2003) 12 SCC 642], the law is stated in the following terms : "It is now a well-established principle of law that the land abutting the national highway will fetch far more higher price than the land lying interior"

It is also well-settled that for the purpose of determining the market value of the acquired lands, the comparable sales method i.e. the lands sought to be compared must be similar in potentiality and nature may be adopted. [ Panna Lal Ghosh and Others vs. Land Acquisition Collector and Others (2004) 1 SCC 467].

It is also trite to state that the market value of agricultural land is lower than that of land suitable for commercial purposes [ Om Prakash (Dead) By LRs. and Others vs. Union of India and Another (2004) 10 SCC 627] .

In Shaji Kuriakose and Another Vs. Indian Oil Corpn. Ltd. and Others [(2001) 7 SCC 650], the court observed: "It is no doubt true that courts adopt comparable sales method of valuation of land while fixing the market value of the acquired land. While fixing the market value of the acquired land, comparable sales method of valuation is preferred than other methods of valuation of land such as capitalisation of net income method or expert opinion method. Comparable sales method of valuation is preferred because it furnishes the evidence for determination of the market value of the acquired land at which a willing purchaser would pay for the acquired land if it had been sold in the open market at the time of issue of notification under Section 4 of the Act. However, comparable sales method of valuation of land for fixing the market value of the acquired land is not always conclusive. There are certain factors which are required to be fulfilled and on fulfilment of those factors the compensation can be awarded, according to the value of the land reflected in the sales. The factors laid down inter alia are: (1) the sale must be a genuine transaction, (2) that the sale deed must have been executed at the time proximate to the date of issue of notification under Section 4 of the Act, (3) that the land covered by the sale must be in the vicinity of the acquired land, (4) that the land covered by the sales must be similar to the acquired land, and (5) that the size of plot of the land covered by the sales be comparable to the land acquired. If all these factors are satisfied, then there is no reason why the sale value of the land covered by the sales be not given for the acquired land. However, if there is a dissimilarity in regard to locality, shape, site or nature of land between land covered by sales and land acquired, it is open to the court to proportionately reduce the compensation for acquired land than what is reflected in the sales depending upon the disadvantages attached with the acquired land."

The Courts will also have to take into consideration the enormity of the financial implication of enhancement in view of the size of the land acquired for a particular project. In Viluben Jhalejar Contractor case, Supreme Court held : "One of the principles for determination of the amount of compensation for acquisition of land would be the willingness of an informed buyer to offer the price therefor. It is beyond any cavil that the price of the land which a willing and informed buyer would offer would be different in the cases where the owner is in possession and enjoyment of the property and in the cases where he is not. ………. Market value is ordinarily the price the property may fetch in the open market if sold by a willing seller unaffected by the special needs of a particular purchase. Where definite material is not forthcoming either in the shape of sales of similar lands in the neighbourhood at or about the date of notification under Section 4(1) or otherwise, other sale instances as well as other evidences have to be considered. ……………. The amount of compensation cannot be ascertained with mathematical accuracy. A comparable instance has to be identified having regard to the proximity from time angle as well as proximity from situation angle. For determining the market value of the land under acquisition, suitable adjustment has to be made having regard to various positive and negative factors vis-a-vis the land under acquisition by placing the two in juxtaposition. The positive and negative factors are as under:

Positive factors (i) smallness of size (ii) proximity to a road (iii) frontage on a road (iv) nearness to developed area (v) regular shape (vi) level vis-a-vis land under acquisition (vii) special value for an owner of an adjoining property to whom it may have some very special advantage

Negative factors (i) largeness of area (ii) situation in the interior at a distance from the road (iii) narrow strip of land with very small frontage compared to depth (iv) lower level requiring the depressed portion to be filled up (v) remoteness from developed locality (vi) some special disadvantageous factors which would deter a purchaser





CASE LAW ON LAND LAWS

KARNATAKA LAND LAWS