Sri M.V. Ramachandrasa Since Deceased v. M/s Mahendra Watch Company

S.R. Radhakrishnan v. Neelamegam [2003] Supp. 1 SCR 987 : (2003) 10 SCC 705; Associated Hotels of India Ltd v. S.B. Sardar Ranjit Singh [1968] SCR 548 : AIR 1968 SC 933; Jagan Nath (D) through LRs v. Chander Bhan and Another [1988] Supp. 1 SCR 325 : (1988) 3 SCC 57; Mahendra Saree Emporium (II) v. G.V. Srinivasa Murthy [2004] Supp. 3 SCR 931 : (2005) 1 SCC 481; Rukmini Amma Saradamma v. Kallyani Sulochana and Others [1992] Supp. 3 SCR 579 : (1993) 1 SCC 499; Thankamony Amma and Others v. Omana Amma N. and Others [2019] 10 SCR 125 : (2020) 19 SCC 254; Joginder Singh Sodhi v. Amar Kaur [2004] Supp. 5 SCR 303 : (2005) 1 SCC 31; Ram Murti Devi v. Pushpa Devi and Others [2017] 7 SCR 872 : (2017) 15 SCC 230; Amar Nath Agarwalla v. Dhillon Transport Agency [2007] 3 SCR 442 : (2007) 4 SCC 306; Celina Coelho Pereira (Ms) and Others v. Ulhas Mahabaleshwar Kholkar and Others [2009] 15 SCR 558 : (2010) 1 SCC 217 – referred to. Karnataka Rent Act, 1999. List of Acts List of Keywords Revisional jurisdiction under Section 46 of the Karnataka Rent Act, 1999; Unlawful sub-letting; Unlawful sub-letting stands proved; Eviction proceedings on ground of sub-letting; Onus in eviction proceedings on ground of sub-letting; Original tenant no longer in possession; Exclusive possession of third parties; Initial burden discharged; Presumption of unlawful sub-letting; Onus shifted to tenant; Sub-letting through partnership; Strangers to tenancy; In exclusive occupation of premises without the consent of landlord; Induction into possession not traceable to the original tenancy; Reconstitution of partnership; Cloak to conceal unlawful transfer of possession; Lifting of veil; Lifting of the veil warranted; Original tenant divested of legal possession; Not a bona fide reconstitution of partnership; Section 27(2)(b)(ii) of the Karnataka Rent Act, 1999; Section 27(2)(p) of the Karnataka Rent Act, 1999; Revisional jurisdiction converted into appellate jurisdiction; Burden of proving unlawful sub-letting; Tenant unlawfully parted with possession in favour of a third party. Supreme Court Reports [2026] 4 S.C.R. 513 Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4353 of 2026 From the Judgment and Order dated 23.05.2023 of the High Court of Karnataka at Bengaluru in HRRP No. 56 of 2017. Appearances for Parties Advs. for the Appellant(s): Devashish Bharuka, Sr. Adv., H.S. Somnath, Ms. Sarvshree, Ms. Soumya Sandilaya, Ms. Yashaswi Agrawal. Advs. for the Respondent(s): Paras Jain, T. Harish Kumar, Shubham Kothari, Mrs. Aiyushi Daga, Shubham P. Chopra. Judgment / Order of the Supreme Court Judgment R. Mahadevan, J.

1. Leave granted.

2. This Civil Appeal is directed against the judgment and order dated 23.05.2023 passed by the High Court of Karnataka at Bengaluru1 in House Rent Revision Petition No. 56 of 2017, whereby the High Court allowed the revision petition preferred by Respondent Nos. 1 to 3 and set aside the order dated 14.07.2017 passed by the Chief Judge, Court of Small Causes, Bengaluru2 in H.R.C. No. 63 of 2016. By the said order, the trial Court had allowed the eviction petition and directed the respondents to vacate the schedule premises and hand over vacant possession to the appellant (since deceased), within a period of three months.

3. The appellants are the legal representatives of late Sri M.V. Ramachandrasa, who originally initiated the rent control proceedings before the trial Court. It is their case that the deceased appellant now represented through his legal representatives, was a long-term 1 2 Hereinafter referred to as “the High Court” Hereinafter referred to as “the trial Court” Sri M.V. Ramachandrasa Since Deceased Represented by Legal Heirs v. M/s Mahendra Watch Company Represented by its Partners & Ors. 514 [2026] 4 S.C.R.

4. lessee in respect of immovable properties bearing Municipal New Nos. 22 to 33, situated at Uttaradhi Mutt Lane, Chickpet, Bengaluru. The said lease was created by virtue of a registered lease deed dated 02.02.1983 for a period of 55 years. Under the terms of the lease, the deceased appellant was duly authorised to sub-lease the whole or any portion of the property. It is the further case of the appellants that Respondent No. 1, M/s. Mahendra Watch Company, a partnership firm, became a tenant under the deceased appellant3 through its partner, Rajesh Kumar, Respondent No. 4, in respect of premises viz., Shop No.1, Ground Floor, Maruthi Plaza, Block C, U.M. Lane, Chickpet, Bangalure, by virtue of a lease deed dated 22.02.1985 registered as Document No. 3669 / 1985. Subsequently, the landlord came to be aware that Respondent Nos. 1 and 4 were no longer in possession of the premises and that the business therein was being carried on by Respondent Nos. 2 and 3, namely Ashish M. Jain and Atul M. Jain, who were not parties to the said lease agreement. Upon issuance of notice in this regard, the landlord instituted H.R.C. No. 63 of 2016 under Sections 27(b)(ii), 27(d)(i)(ii) and 27(p) of the Karnataka Rent Act, 1999, seeking eviction on the ground that Respondent No. 1 had unlawfully sublet the premises and parted with possession in favour of third parties without the consent of the landlord.

5. The trial Court, upon consideration of the pleadings and the oral as well as documentary evidence on record, concluded that the persons in actual occupation of the premises were strangers to the original tenancy and that the tenant had unlawfully parted with possession in their favour. Pointing out that the lease deed expressly prohibited sub- letting or parting with possession without the consent of the landlord, the trial Court held that the respondents had rendered themselves liable for eviction. Accordingly, by order dated 14.07.2017, the eviction petition was allowed and the respondents were directed to vacate the premises and hand over vacant possession to the landlord.

6. Aggrieved thereby, the respondents preferred House Rent Revision Petition No. 56 of 2017 under Section 46 of the Karnataka Rent Act, 1999 against the appellants herein, who are the legal representatives of the deceased appellant / landlord. The High Court, by its impugned 3 Hereinafter referred to “the landlord” Supreme Court Reports [2026] 4 S.C.R. 515 judgment dated 23.05.2023, allowed the revision petition and set aside the eviction order passed by the trial Court. It is in these circumstances that the appellants have approached this Court by way of the present appeal.

7. The learned Senior Counsel appearing for the appellants submitted that the High Court has clearly transgressed the well-settled limits of its revisional jurisdiction under Section 46 of the Karnataka Rent Act, 1999. The revisional power is supervisory in nature and does not confer upon the High Court the status of a court of first appeal. It was submitted that the High Court, instead of confining itself to examining jurisdictional error, illegality, or perversity, has proceeded to reappreciate the entire oral and documentary evidence and substituted its own findings in place of those recorded by the trial Court. Such an exercise is wholly impermissible in law.

7.1. Reliance was placed on the judgment of this Court in Hindustan Petroleum Corporation Limited v. Dilbahar Singh4, wherein, it was categorically held that revisional jurisdiction under rent control statutes is limited and cannot be equated with appellate jurisdiction. Interference is warranted only where findings are perverse, based on no evidence, or suffer from manifest illegality.

7.2. It was submitted that the trial Court, upon a comprehensive appreciation of the evidence on record, returned well-reasoned findings of fact, and categorically held that Respondent Nos. 2 and 3 failed to establish their status as partners of the original tenant firm namely M/s. Mahendra Watch Company. The documentary evidence relied upon by the respondents was found unreliable, and significantly, no partnership deed or credible material was produced to substantiate the claim that Respondent Nos. 2 and 3 were partners of the original tenant firm. These are pure findings of fact and could not have been interfered with by the High Court in the absence of perversity or patent illegality, which is conspicuously absent in the present case.

7.3. It was further submitted that Clause 19 of the registered lease deed dated 22.02.1985 (Ex. P4) expressly prohibits sub-letting or transfer of the tenancy rights, including sale of the business, 4 (2014) 9 SCC 78 Sri M.V. Ramachandrasa Since Deceased Represented by Legal Heirs v. M/s Mahendra Watch Company Represented by its Partners & Ors. 516 [2026] 4 S.C.R. without prior written consent of the landlord. The respondents have failed to produce any document evidencing such consent. The material on record clearly establishes that persons presently in occupation, namely Respondent Nos. 2 and 3 have no lawful nexus with the original tenancy. Their claim of deriving rights through an alleged partnership is unsupported by any legally admissible document.

7.4. It was submitted that the respondents’ case rests on an alleged reconstitution of the partnership firm. However, the so-called reconstitution deed is unregistered and legally untenable; no original partnership deed was produced; there is no documentary evidence to establish that Mohanlal, claimed to be the father of Respondent Nos. 2 and 3, was ever a partner; RW-1 (Mohanlal) himself admitted that at the time of execution of the lease deed in 1985, there were five partners, yet, only Respondent No. 4 signed the lease deed. As such, the trial Court rightly concluded that the respondents failed to prove any valid induction into the partnership with the consent of the landlord.

7.5. It was further submitted that the reliance placed by the respondents on Ex. R2 series (rent receipts) is wholly misplaced. The said receipts stand in the name of the original tenant firm and do not confer any independent right upon Respondent Nos. 2 and 3. In this regard, reference was made to the decision in S.R. Radhakrishnan v. Neelamegam5, wherein, this Court held that mere payment of rent or continuance in possession does not ipso facto confer the status of a tenant.

7.6. It was submitted that the appellants have clearly established grounds for eviction under Sections 27(2)(b)(ii) and 27(2)(p) of the Karnataka Rent Act, 1999 inasmuch as there has been unauthorised sub-letting / transfer of possession; the terms of the lease deed have been violated; and the respondents are in unlawful occupation without any legal right or privity of contract.

7.7. It was submitted that the High Court, without adverting to the above material aspects and settled principles of law, has erroneously reversed the well-reasoned judgment of the trial 5 (2003) 10 SCC 705 Supreme Court Reports [2026] 4 S.C.R. 517 Court and set aside the eviction order. Therefore, the impugned judgment suffers from serious legal infirmity and warrants interference by this court.

8. Per contra, the learned counsel appearing for the respondents at the out, submitted that the present appeal is liable to be dismissed in limine as the appellants have not approached this Court with clean hands and have in fact, suppressed material particulars in the list of dates and events. It was contended that the appellants have failed to place true and correct facts and therefore are not entitled to any relief much less the discretionary relief under Article 136 of the Constitution of India.

8.1. The learned counsel further submitted that the respondent firm, represented by its partners, has been a lawful tenant in respect of the suit shop since the year 1978, having acquired tenancy rights upon payment of goodwill to the original owner, namely Shrimad Jagadguru Madhav Acharya Moola Mahasamsthane, Uttaradhi Math, Bengaluru. It was submitted that subsequently, the landlord obtained a long-term lease of the larger property under a registered lease deed dated 02.02.1983 for a period of 55 years, taking symbolic possession of tenanted portions and physical possession of vacant portions. Upon such acquisition, he proposed redevelopment of the property and assured all existing tenants, including the respondent firm, that they would be accommodated in the newly constructed complex, while also offering temporary alternate accommodation.

8.2. It was submitted that acting upon such assurance, the tenants vacated the old premises, following which the landlord demolished the existing structure and constructed a new shopping complex. Upon completion, the respondent firm was allotted a shop measuring 95 sq.ft. in place of the earlier 164 sq.ft. and a registered lease deed dated 22.02.1985 was executed for a period of 53 years, expiring on 22.02.2038. The agreed rent was fixed at Rs. 275/- per month with a provision for periodic enhancement. Since then, the respondent firm has been in continuous possession and has been carrying on business in the said premises without interruption.

8.3. The learned counsel emphasised that the lease deed confers valuable and enduring rights upon the respondent firm, including Sri M.V. Ramachandrasa Since Deceased Represented by Legal Heirs v. M/s Mahendra Watch Company Represented by its Partners & Ors. 518 [2026] 4 S.C.R. heritability, transferability among partners and their heirs, and liberty to carry on business in partnership. It was further submitted that the lease deed does not contain any forfeiture clause attracting Section 111(g) of the Transfer of Property Act, 1882, and therefore, the tenancy cannot be prematurely terminated. It was contended that the respondent firm is entitled to peaceful possession and enjoyment of the premises for the entire duration of the lease, and the eviction proceedings initiated during the subsistence of such lease are wholly misconceived and not maintainable in law.

8.4. The learned counsel further submitted that the allegation of subletting, which forms the foundation of the eviction petition, is entirely baseless. It was contended that the respondent firm has at no point sublet, assigned, or parted with possession of the premises. The business has continuously been carried on by the partners of the firm, and any change in the constitution of the partnership does not amount to subletting. It was submitted that a partnership firm is not a separate legal entity distinct from its partners, and the firm name is merely a compendious description of the partners who carry on the business.

8.5. Reliance was placed on the judgments of this Court in Associated Hotels of India Ltd v. S.B. Sardar Ranjit Singh6, Jagan Nath (D) through LRs v. Chander Bhan and another7, and Mahendra Saree Emporium (II) v. G.V. Srinivasa Murthy8, wherein it was held that subletting necessarily requires parting with legal possession in favour of a third party and the mere use of premises by others, including partners, does not constitute subletting so long as the tenant retains legal possession. It was submitted that in the present case, there is no evidence whatsoever to show that any third party has been put in exclusive possession of the premises.

8.6. The learned counsel further contended that the burden of proving subletting squarely lies upon the landlord, which burden has not been discharged in the present case. In the absence of any 6 7 8 AIR 1968 SC 933 (1988) 3 SCC 57 (2005) 1 SCC 481 Supreme Court Reports [2026] 4 S.C.R. 519 material to establish exclusive possession by a third party for consideration, no presumption of subletting can arise. It was submitted that the High Court rightly appreciated the evidence on record and applied the settled principles of law in setting aside the eviction order.

8.7. It was also submitted that the partnership firm was reconstituted on 01.07.2000, prior to the coming into force of the Karnataka Rent Act, 1999, and that the continuing partners, including Ashish M. Jain, have been carrying on business in the suit premises before 31.12.2001. The appellants were fully aware of the same, as rent was being regularly collected from the respondent firm. It was contended that mere reconstitution of a partnership firm or induction of partners does not amount to assignment or subletting, particularly when the firm continues to retain possession and control over the premises.

8.8. The learned counsel submitted that the eviction petition is based on a wholly illusory cause of action and has been filed by suppressing the existence of the registered lease deed dated 22.02.1985. A meaningful reading of the petition would demonstrate that the appellants have attempted to mischaracterise the partners of the firm as sub-tenants, which is impermissible in law. It was thus contended that the proceedings are an abuse of the process of court and liable to be dismissed.

9. We have carefully considered the rival submissions and perused the material available on record.

10. The admitted position is that the appellants are the legal heirs of the deceased appellant, Sri M.V. Ramachandrasa, who himself acquired leasehold rights in respect of the property bearing Nos. 22 to 33 under a lease deed dated 02.02.1983 executed by Uttaradi Math represented by its Presiding Swamiji through its power of attorney, for a period of 55 years with liberty to sub-let the properties. It is not in dispute that after obtaining the said lease, the landlord leased the premises to Respondent No. 1 represented by Respondent No. 4, under a registered lease deed dated 22.02.1985 (Document No. 3669/1985) for a period of 53 years. Clause 19 of the lease deed expressly restricts subletting without prior written consent of the landlord. Since the actual and original partner of Respondent No. 1 firm was not in occupation and possession of the premises, Sri M.V. Ramachandrasa Since Deceased Represented by Legal Heirs v. M/s Mahendra Watch Company Represented by its Partners & Ors. 520 [2026] 4 S.C.R. the landlord preferred eviction petition before the trial Court. After examining the oral and documentary evidence, the trial Court allowed the petition and directed the respondents to vacate and hand over the possession of the premises within a period of three months. However, the High Court allowed the revision petition and set aside the eviction order. Therefore, the present appeal at the instance of the appellants, who are the legal representatives of the deceased appellant / landlord.

11. On the basis of the pleadings, the following issues arise for consideration in the present appeal: (i) Whether the High Court was justified in interfering with the findings of fact recorded by the trial Court while exercising its revisional jurisdiction under Section 46 of the Karnataka Rent Act, 1999? (ii) Whether the burden of proving unlawful sub-letting lies upon the landlord, and if so, whether such burden has been duly discharged in the present case? (iii) Whether the alleged retirement of the original tenant – partner and continuation of business by Respondent Nos. 2 and 3 constitutes a mere reconstitution of partnership or amounts to unlawful sub-letting / assignment under Sections 27(2)(b)(ii) and 27(2)(p) of the Karnataka Rent Act, 1999? Issue No. 1

12. Whether the High Court was justified in interfering with the findings of fact recorded by the trial Court while exercising its revisional jurisdiction under Section 46 of the Karnataka Rent Act, 1999?

12.1. At the outset, it must be noted that the scope of revisional jurisdiction under Section 46 is well-settled and narrowly circumscribed. The provision empowers the High Court to examine the legality, correctness or propriety of an order; however, it does not confer appellate powers permitting reappreciation of evidence or substitution of factual findings. For ease of reference, the said provision reads as under: “46. Revision.- (1) The High Court may, at any time call for and examine any order passed or proceeding Supreme Court Reports [2026] 4 S.C.R. 521 taken by the Court of Small Causes or the Court of Civil Judge Senior Division referred to in items (i) and (ii) of clause (c) of section 3 for the purpose satisfying itself as to the legality or correctness of such order or proceeding and may pass such order in reference thereto as it thinks fit. (2) The District Judge may at any time call for and examine any order passed or proceeding taken by the Court of Civil Judge Junior Division referred to in item (iii) of clause (c) of section 3 for the purpose of such order or proceeding and may pass such order in reference thereto as he thinks fit. (3) The costs incidental to all proceedings before the High Court or the District Judge shall be in the discretion of the High Court or the District Judge as the case may be.

12.2. In Rukmini Amma Saradamma v. Kallyani Sulochana and others9, this Court held that even where the statutory language appears wide, the revisional court cannot act as a court of appeal and undertake a fresh evaluation of evidence. It was categorically observed that the High Court cannot reappreciate oral and documentary evidence under the guise of examining “propriety” as doing so would obliterate the distinction between appellate and revisional jurisdiction. The following paragraphs are pertinent: “9. Notwithstanding the fact that Section 20 of the Act conferring revisional jurisdiction of the High Court is widely worded, such a jurisdiction cannot be converted into an appellate jurisdiction. This Court in Rai Chand Jain v. Chandra Kanta Khosla10 has clearly pointed out the scope of such revisional jurisdiction and has held that it cannot act as a second court of appeal. Therefore, the impugned order is liable to be set aside. Without prejudice to 9 (1993) 1 SCC 499 10 (1991) 1 SCC 422 Sri M.V. Ramachandrasa Since Deceased Represented by Legal Heirs v. M/s Mahendra Watch Company Represented by its Partners & Ors. 522 [2026] 4 S.C.R. the above, it is submitted that this Court in Aundal Ammal v. Sadasivan Pillai11 has held that no second revision is permissible to the High Court either under Section 115 of the Code or under Section 20 of the Act. The District Court has exercised the revisional jurisdiction. Hence, the remit order in C.R.P. No. 1719 of 1985 is void and is illegal. If that remit order goes, what remains is only the revisional order of the District Court, Kollam, confirming the appellate order directing revision on the ground of bona fide need. Hence, the impugned order calls for interference.” “20. We are afraid this approach of the High Court is wrong. Even the wider language of Section 20 of the Act cannot enable the High Court to act as a first or a second court of appeal. Otherwise, the distinction between appellate and revisional jurisdiction will get obliterated. Hence, the High Court was not right in re-appreciating the entire evidence both oral or documentary in the light of the Commissioner’s report (Exts. C-1 and C-2 mahazar). In our considered view, the High Court had travelled far beyond the revisional jurisdiction. Even by the presence of the word “propriety” it cannot mean that there could be a re-appreciation of evidence. Of course, the revisional court can come to a different conclusion but not on a re-appreciation of evidence; on the contrary, by confining itself to legality, regularity and propriety of the order impugned before it. Therefore, we are unable to agree with the reasoning of the High Court with reference to the exercise of revisional jurisdiction.”

12.3. The legal position stands conclusively settled by the Constitution Bench of this Court in Hindustan Petroleum Corporation Ltd (supra), wherein it was held that revisional jurisdiction, though wider than that under Section 115 of the Civil Procedure Code, 1908, remains qualitatively distinct from appellate jurisdiction. 11