LAL AND CO Vs. A R CHADHA

JUDGEMENT

(1.) This and RSA 61 of 1969 (Dr. Chiranji Lal v. Dwarka Nath) are so closely connected that they are being disposed of together today by two judgments, which may be read together as supplementing each other. Both centre round the question whether the tenancy rights in the premises at 14-Connaught Place held by Dr. Chiranji Lal from the landlord Shri A. R. Chadha were transferred by Dr. Chiranji Lal to Dwarka Nath or to the partnership entered into by him and Dwarka Nath by a deed executed by the partners on the 20th January, 1966. In a suit for dissolution of partnership filed by Dwarka Nath against Dr. Chiranji Lal, the learned Lower court had decided that the tenancy rights in the premises had been transferred by Dr. Chiranji Lal to the partnership and that on the dissolution of the partnership they were liable to be divided between the partners along with other assets of the partnership. In the judgment in RSA 61 of 1969 which is being delivered by me today, I have modified the decrees of both the learned lower courts and held that the suit for dissolution of partnership and accounts in so far as it related to the goodwill including the tenancy right in 14-C Connaught Circus is to stand dismissed.

(2.) The landlord, Shri Chadha, also made an application for eviction against his tenant Dr. Chiranji Lal and Dwarka Nath. The only ground for eviction with which we are now concerned is that the tenant had sublet, assigned or otherwise parted with possession of the whole or part of the premises in favour of Dwarka Nath without the permission of the landlord within the meaning of proviso (b) to sub-section (1) of section 14 of the Delhi Rent Control Act, 1958 (hereinafter called 'the Act'). The tenant resisted the application. The Rent Controller, however, found that the landlord had failed to prove that the partnership agreement between Dr. Chiranji Lal and Dwarka Nath amounted to assignment, subletting or parting with possession of the premises by the tenant in favour of Dwarka Nath within the meaning of proviso (b) to sub-section (1) of section 14 of the Act. This finding of the Rent Controller was reversed by the Rent Control Tribunal which found that the tenant had transferred the whole of his interest in the premises in favour of the partnership consisting of himself and Dwarka Nath and that the tenant had parted with the possession of the premises in favour of the said partnership. The transaction of partnership was, thus, hit by section 14 (1) (b) of the Act giving the landlord right for eviction of the tenant. This second appeal has been filed by the tenant against the judgment of the Rent Control Tribunal.

(3.) The sole question for decision, therefore, is whether the partnership agreement by itself or by virtue of any of its terms amounts to subletting, assignment or parting with possession of the premises by the tenant in favour of Dwarka Nath. Let us first consider whether the mere formation of the partnership by Dr. Chiranji Lal with Dwarka Nath amounted to assignment, subleting or parting with possession of the premises. Prior to the agreement of partnership, Dr. Chiranji Lal was admittedly the sole tenant of the premises. Did he cease to be so because of the partnership 'agreement ? It is well known' that the privity of contract and estate exist only between the landlord and the tenant. It does not extend to other persons who may enter into an agreement with the tenant. It is clear, therefore, that Dwarka Nath did not establish any privity of contract or estate with the landlord by virtue of partnership agreement between him and Dr. Chiranji Lal. The learned Rent Control Tribunal has emphasised the fact that the exclusive possession of the premises enjoyed by Dr. Chiranji Lal prior to the formation of the partnership changed into joint possession of the premises enjoyed by Dr. Chiranji Lal and Dwarka Nath after the formation of the partnership. Throughout his judgment, the learned Rent Control Tribunal has thought that this change in the quality of the possession of the premises amounted to a transfer of the the premises to the partnership and to the parting of possessiort of the premises to it by Dr. Chiranji Lal. In taking this view, however, the learned Rent Control Tribunal has fallen into a fundamental error. The partnership agreement as such is a mere personal contract which binds only Dr. Chiranji Lal and Dwarka Nath It creates only contractual rights in both of them against each other. Such a contract has to be distinguished from a conveyance. The transfer of tenancy rights would be a conveyance as distinguished from a contract. For, tenancy rights are immovable property. The tenancy rights in the present case are certainly worth more than Rs. 100.00. Therefore, a sale of the tenancy rights could be done under section 54 of the Transfer of Property Act read with section 17(l)(b) of the Registration Act only by a registered instrument. There is in this case no such registered conveyajnce of the tenancy rights, which were not transferable otherwise. Further, the exclusiveness of the possession of Dr. Chiranji Lal was relevant only to show that he was a tenant as distinguished from a licencee or occupant of the premises vis-a-vis the landlord. The fact that Dr. Chiranji Lal shares the possession of the premises with Dwarka Nath is not by itself relevant to show that either the rights of the premises or the possession thereof has been transferred to the partnership. The rights created by the partnership are only personal rights as distinguished from the rights or an estate in immovable property which includes tenancy. Unless, therefore, the partnership deed creates in Dwarka Nath a right or estate in the lease-hold property by way of an assignment, sub-lease or the transfer of legal possession, the requirements of proviso (b) to sub-section (1) of section 14 of the Act cannot be said to have been fulfilled.