The Supreme Court of India has set aside a Karnataka High Court judgment that had overturned an eviction order against a tenant firm. The Bench, comprising Justice Ahsanuddin Amanullah and Justice R. Mahadevan, held that the High Court exceeded its revisional jurisdiction by reappreciating evidence and that the “reconstitution” of a partnership firm to include strangers without the landlord’s consent constituted unlawful sub-letting.
Background
The case originated from a lease agreement dated February 22, 1985, between the late Sri M.V. Ramachandrasa (landlord) and M/s. Mahendra Watch Company (tenant), represented by its partner, Rajesh Kumar (Respondent No. 4). The lease for the shop in Bengaluru was for 53 years, but Clause 19 expressly prohibited sub-letting or parting with possession without the landlord’s prior written consent.
The landlord initiated eviction proceedings under the Karnataka Rent Act, 1999, alleging that the original partner (Respondent No. 4) was no longer in possession and that the business was being conducted by strangers, Ashish M. Jain and Atul M. Jain (Respondent Nos. 2 and 3). The Trial Court allowed the eviction, finding that the tenant had unlawfully parted with possession. However, the High Court of Karnataka, in a revision petition, set aside the Trial Court’s order, leading to the present appeal by the landlord’s legal heirs.
Arguments of the Parties
Appellants (Landlords): The appellants argued that the High Court “transgressed the well-settled limits of its revisional jurisdiction” under Section 46 of the Karnataka Rent Act. They contended that revisional power is supervisory and does not allow for a full reappreciation of evidence. Relying on Hindustan Petroleum Corporation Limited v. Dilbahar Singh, they asserted that the Trial Court’s findings of fact regarding the lack of a valid partnership deed or landlord consent were well-reasoned and should not have been disturbed.
Respondents (Tenants): The respondents claimed they had been lawful tenants since 1978 and that the lease deed allowed for heritability and transferability among partners. They argued that the “reconstitution” of the firm on July 1, 2000, did not amount to sub-letting, as a partnership firm is not a separate legal entity. They cited Associated Hotels of India Ltd v. S.B. Sardar Ranjit Singh, arguing that sub-letting requires parting with “legal possession” in favor of a third party, which they claimed had not occurred.
Court’s Analysis
The Supreme Court addressed three primary issues:
1. Scope of Revisional Jurisdiction
The Court emphasized that Section 46 of the Karnataka Rent Act does not confer appellate powers. Citing Rukmini Amma Saradamma v. Kallyani Sulochana, the Court noted:
“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 Bench found that the High Court had erroneously undertaken a fresh analysis of depositions and documents to reach its own factual conclusions.
2. Burden of Proof in Sub-letting
The Court reiterated that while the initial burden to prove sub-letting lies with the landlord, it shifts once the landlord establishes that a third party is in exclusive possession. Referring to Mahendra Saree Emporium (II) v. G.V. Srinivasa Murthy, the Court observed:
“Once a prima facie case of exclusive possession by a stranger is made out, a presumption of sub-letting arises, thereby shifting the onus onto the tenant.”
The Court found the landlord had discharged this burden as Respondent No. 4 (the original partner) was no longer in possession, and Respondent Nos. 2 and 3 were in exclusive occupation.
3. Reconstitution as a ‘Cloak’ for Sub-letting
The Court scrutinized the alleged partnership reconstitution. It observed that the respondents failed to produce the original partnership deed or a retirement deed for Respondent No. 4. The Bench held:
“The so-called reconstitution is nothing but a cloak to conceal an unlawful transfer of possession, warranting lifting of the veil.”
The Court clarified that while inducting a partner is generally permissible, it becomes sub-letting if the original tenant divests themselves of legal control. In this case, the original tenant had “clearly divested himself of legal possession.”
Decision
The Supreme Court allowed the appeal and restored the Trial Court’s eviction order dated July 14, 2017. The Court held that the arrangement amounted to unlawful sub-letting under Section 27(2)(b)(ii) and Section 27(2)(p) of the Karnataka Rent Act. The respondents have been granted three months to vacate and hand over possession to the appellants.
Case Details
- Case Title: Sri M.V. Ramachandrasa (D) represented by LRs v. M/s. Mahendra Watch Company & Ors.
- Case No.: Civil Appeal No. 4353 of 2026
- Bench: Justice Ahsanuddin Amanullah and Justice R. Mahadevan
- Date: April 10, 2026
