MADRAS BANGALORE TRANSPORT CO WEST Vs. INDER SINGH

JUDGEMENT

(1.) The Madras-Bangalore Transport Company, a partnership firm, became the tenant of the disputed premises in July 1962. In 1967, there appear to have been some disputes between the partners of the Madras-Bangalore Transport Company. The disputes were settled by arbitration. The partnership firm was spilt-up into two firms, the Madras-Bangalore Transport Company (West) and the Madras-Bangalore Transport Company (East). The business of the old firm was also divided between the new firms areawise. Under the arrangement each of the new firms was forbidden from carrying on operations in the territory allotted to the other. However, the Madras-Bangalore Transport Company (East) appears to have ceased to function for practical purposes. Even so, the Madras-Bangalore Transport Company (West) could not operate in the territory allotted to the Madras-Bangalore Transport Company (East). So the partners of the Madras-Bangalore Transport Company (West) founded a Limited company styled as the 'Caravan Goods Carrier Private Limited' in order to secure the business in the territory which had been allotted to Madras-Bangalore Transport Company (East) and which business was going to be lost consequent on the Madras-Bangalore Transport Company (East) ceasing to function. effectively. This was in 1968. The Madras-Bangalore Transport Company (West) was appointed as the agent of 'Caravan Goods Carrier Private Limited' in the territory of Delhi. The Caravan Goods Carrier Private Limited was in turn appointed as an agent of the Madras-Bangalore Transport Company (West) for certain purposes, Both Madras-Bangalore Transport Company (West) and Caravan Goods Carrier Private Limited registered themselves under the Delhi Shops and Establishments Act disclosing their offices as located at the disputed premises. Almost 10 years after, the Caravan Goods Carrier Private Limited was founded and started functioning from the disputed premises, the landlord, in 1979, filed an eviction petition against the Madras-Bangalore Transport Company (West) alleging that the tenant had unlawfully 'sublet, assigned or otherwise parted with the possession' of the disputed premises to the Caravan Goods Carrier, Private Limited without obtaining the consent of the landlord. The Additional Rent Controller, Delhi allowed the petition and ordered eviction. On appeal by the Madras-Bangalore Transport Company (West) the Rent Control Tribunal confirmed the order of eviction. A second appeal to the High Court was dismissed in limine. The present appeal has been filed after obtaining the special leave of this Court under Art. 136 of the Constitution.

(2.) The submission of Dr. Chitaley, learned counsel for the appellant, was that there was no -subletting, assignment or parting with possession of the premises as contemplated by S. 14(1)(b) of Delhi Rent Control Act. He argued that the Madras-Bangalore Transport Company (West) was always in possession of the, premises and that the Caravan Goods Carrier Private Limited, whose Directors were partners of Madras-Bangalore Transport Company (West) was in truth and reality no other than the Madras-Bangalore Transport Company (West) itself. On the other hand, the learned counsel for the Respondent Landlord urged that the Madras-Bangalore Transport Company (West) was a partnership firm and the Caravan Goods Carrier Private Limited was a limited company and, therefore, they could never be the same as they were two distinct legal entities. It was argued that the Madras-Bangalore Transport Company (West) had gone out of the picture and the Caravan Goods Carrier Private Limited alone was in possession and, therefore, there was subletting, assignment or parting with possession of the premises as contemplated by S. 14(1)(b) of the Rent Control Act.

(3.) We have been taken through the Judgments of the Rent Controller and the Rent Control Tribunal. We have also been taken through the relevant evidence. The facts which emerge from the evidence are that the Caravan Goods Carrier Private Limited was formed with the partners of the Madras-Bangalore Transport Company (West) as its Directors, with the apparent object of circumventing the ban against the Madras-Bangalore Transport Company (West) from operating in the area allotted to the Madras-Bangalore Transport Company (East). Both the Caravan Goods Carrier Private Limited Company and the Madras-Bangalore Transport Company (West) had their sign-boards at the premises and they were both registered under the Delhi Shops and Establishments Act as having their offices at the disputed premises. Each was constituted as agent of the other. Detailed arrangements were made regarding the separate maintenance of accounts etc. From the facts established, on the evidence we do not have any doubt that the Caravan Goods Carrier Private Limited was an alter ego or, if we may be permitted to use. such an expression, 'the corporate reflection' of the partnership firm of Madras-Bangalore Transport Company (West). The question for consideration is whether, it could be said that there was subletting, assignment or parting with possession of the premises within the meaning of S. 14(1)(b) of. the Delhi Rent Control Act merely because the Caravan Goods Carrier Private Limited was a legal personality distinct from the firm and its partners and it operated from the disputed premises.