MANGAT RAM Vs. OM PARKASH

JUDGEMENT

(1.) THIS petition arises out of a dispute between a landlord and his tenant.

(2.) IT appears that prior to September, 1957 the Respondent, Om Parkash, had taken certain premises consisting of shops, etc., and an ahata on rent from the Petitioner. Later on a room was built on the ahata by the tenant, but it is clear from Exhibit P.l, which is the rent note dated 11th September, 1957, that the cost of construction of that room was adjusted towards the rent and, therefore, that room must be deemed to have become the property of the landlord. By means of the aforesaid rent deed the Respondent took on rent the premises in dispute which included this room which had been built on the ahata. There was a clear stipulation that he was not to sublet the premises. On 9th September, 1957, however, the Respondent entered into what is called an agreement of partnership with Shadi Lal in respect of the room where some machinery had been installed. It was stipulated in this agreement that whatever more capital would be required for being invested on the machinery, that would be invested by Shadi Lal. Om Parkash was to receive a lump sum of Rs. 47 every month by way of profits, as otherwise, he was not to receive any share in the profits. If any losses occurred, Shadi Lal took over the liability to bear those losses. Shadi Lal again was to bear the responsibility for any debts which may be contracted for running the karkhana. Similarly the liability for the payment of income tax and sales tax was taken over by Shadi Lal, and Om Parkash was not to have any responsibility whatsoever in that behalf. It was agreed in categorical terms that if Shadi Lal refused to make payment at the rate of Rs. 47 per mensem, then the partnership would be deemed to have come to an end and that the partnership was to continue for two years. Om Parkash retained the liability to pay the rent of the premises himself. The electricity bills were to be paid by Shadi Lal. It was stated quite clearly that Om Parkash had a separate business adjacent to the room which was being given to Shadi Lal and a wall would be constructed for the purpose of protection of Om Parkash's business at his expense.

(3.) THE first point that has been raised by Mr. Sarin, the learned Counsel for the Petitioner, is that the view of the learned District Judge that a partnership had come into existence by means of the deed, Exhibit P.W. 2/1, was contrary to law and the evidence on the record. Such a matter involves mixed question of fact and law and if wrong principles have been applied, the conclusion of the learned District Judge on the point cannot be treated as sacrosanct. The terms of the partnership deed, which have been set out before, leave no doubt that no partnership was intended to be created and a subterfuge was adopted for the purpose of evading any liability for eviction under the East Punjab Urban Rent Restriction Act. The Rent Controller gave a number of reasons for coming to the aforesaid conclusion and the learned District Judge without meeting all the points that had weighed with the Rent Controller came to the conclusion that a partnership had come into existence. He was largely influenced by the fact that only one room had been given to Shadi Lal by Om Parkash and the latter had provided him with his own machinery and even the electric connection. The whole tenor of the document, Exhibit P.W. 2/1, has to be seen and to my mind the condition that if Rs. 47 are not paid every month, the partnership would automatically come to an end, appears very much like a condition in a deed of lease that if the rent s not paid regularly, the tenancy shall be determined. Apart from this, the principles for deciding whether a partnership has come into existence or not do not appear to have been properly kept in view by the learned District Judge. Section 4 of the Partnership Act shows that a partnership contains three essential elements; (i) it must be the result of an agreement between several persons, (ii) the agreement must be to share the profits of a business, and (iii) the business must be carried on by all or any of them acting for all and there must be an intention to become partners, - -vide Meenakshi Achi and Anr. v. P.S.M. Subramanian Chettiar and Ors., A.I.R. 1957 Mad. 8. It is true, as has been contended by the learned Counsel for the Respondent Om Parkash, on the basis of Raghunandan Nanu Kothare v. Hormasji Bezonji Bamji : A.I.R. 1927 Bom. 187, that it is open to a partner to say that as between himself and other partners he shall bear all the losses of the business and similarly the partners can agree that the profits may be shared in any way they like, e.g. by one partner agreeing to receive a fixed annual or a monthly sum in lieu of a sum varying according to the profits actually earned. The conditions in Exhibit P.W. 2/1 that 6m Parkash was to receive the profits by a monthly payment of Rs. 47 and that Shadi Lal alone was to bear the losses, may not militate against the existence of a partnership but it is not possible to spell out from the so -called deed of partnership the basic requirement that the business must be carried on by all or any of the partners acting for all. The intention has also to be gathered from the various conditions in a particular document and I have no doubt that the provisions of Exhibit P.W. 2/1 do not justify an in ference that what was intended was to create a partnership. For these reasons, I am of the view that the Rent Controller correctly came to the conclusion that no partnership existed between Shadi Lal and Om Parkash and that actually it was a case of sub -tenancy.