The Bombay High Court has reaffirmed that landlords seeking eviction on grounds of unlawful subletting need not produce direct documentary evidence of a sublease agreement. The judgment underscores that the clandestine nature of such arrangements places the burden on tenants to explain possession by third parties, not on landlords to uncover secret transactions.
Background & Facts
The Dispute
The dispute arose over a 10' x 12' shop in Thane, leased to Respondent No. 1, who allegedly sublet it to Respondent No. 2 for running a garage. The Applicants, as landlords, filed an eviction suit under Section 16(1)(e) of the Maharashtra Rent Control Act, 1999, alleging unlawful subletting and rent arrears. While the Trial Court found subletting proved and ordered eviction, the Appellate Court reversed this finding, holding that the landlords failed to produce documentary proof of the sublease.
Procedural History
- 2004: Eviction suit filed by landlords in Civil Suit No. 724 of 2004
- 2009: Trial Court decreed eviction based on unlawful subletting
- 2011: Appellate Court allowed tenant’s appeal, setting aside eviction decree
- 2011: Civil Revision Application filed under Section 115 CPC by landlords
- 2026: Bombay High Court heard revision and set aside appellate judgment
Relief Sought
The Applicants sought restoration of the Trial Court’s eviction decree or, alternatively, a direction to the Appellate Court to re-appreciate evidence in accordance with settled legal principles on unlawful subletting.
The Legal Issue
The central question was whether a landlord must produce direct documentary evidence to prove unlawful subletting under Section 16(1)(e) of the Maharashtra Rent Control Act, or whether exclusive possession by a third party, coupled with the tenant’s admissions and failure to explain control, suffices to shift the burden of proof.
Arguments Presented
For the Petitioner
Counsel for the landlords argued that the Appellate Court erred in requiring documentary proof of a clandestine transaction. They relied on Ram Maruti Devi v. Pushpa Devi to assert that landlords cannot be expected to possess evidence of secret subletting. They highlighted that Respondent No. 1 admitted: (1) the garage license was in her son-in-law’s name, (2) she had no salary records for Respondent No. 2, and (3) she could not account for material purchases. These admissions, they argued, established exclusive possession by Respondent No. 2, triggering the burden shift.
For the Respondent
Counsel for the tenant contended that the absence of a license in Respondent No. 2’s name negated subletting. They argued that the Appellate Court correctly held that the landlords failed to prove exclusive possession or monetary consideration. They further asserted that no adverse inference could be drawn against Respondent No. 2 for not appearing, and that the Appellate Court’s findings were within permissible bounds of fact appreciation.
The Court's Analysis
The Court held that the Appellate Court’s reasoning was legally flawed. It emphasized that unlawful subletting is inherently a clandestine act, and landlords cannot be expected to possess written agreements or tax records proving it. The Court quoted Ram Maruti Devi v. Pushpa Devi:
"The landlord is required to establish exclusive possession of the sub-tenant in respect of suit premises or part thereof for monetary consideration. Once such fact is established, the onus shifts upon the tenant to explain how the sub-tenant is in possession of the suit premises."
The Court found that Respondent No. 1’s admissions - lack of salary records, absence of control over business operations, and license in a third party’s name - collectively demonstrated that she did not run the garage. The Appellate Court’s reliance on tax records as proof was deemed legally untenable, as such records are not indicative of clandestine arrangements. The Court further noted that the Appellate Court ignored the principle from Pandurang Dhondi Chougule v. Maruti Hari Jadhav that a perverse appreciation of evidence warrants interference under Section 115 CPC.
The Court clarified that while it cannot re-appreciate evidence under Section 115, it can intervene where the findings are perverse or based on misapprehension of legal principles. The Appellate Court’s failure to apply the correct legal test rendered its judgment unsustainable.
The Verdict
The petition succeeded in part. The Bombay High Court quashed the Appellate Court’s judgment, restored the appeal to its file, and directed the Appellate Court to re-examine the evidence in light of the correct legal standard. The Court emphasized that the burden shifts to the tenant once exclusive possession by a third party is established.
What This Means For Similar Cases
Documentary Evidence Is Not Mandatory
- Practitioners must argue that unlawful subletting claims do not require rent receipts, agreements, or tax records
- Admissions by tenants regarding lack of control, absence of salary records, or third-party licenses are sufficient to trigger burden shift
- Courts must reject demands for impossible documentary proof in clandestine subletting cases
Tenant’s Silence and Non-Appearance Can Be Material
- Non-appearance of the alleged sub-tenant does not preclude drawing adverse inference, especially when tenant fails to explain third-party possession
- Where tenant admits no operational control, courts must infer that possession is not as a servant or family member
- The burden to explain possession lies squarely on the tenant once landlord establishes prima facie exclusive control
Appellate Courts Cannot Disregard Legal Standards Under CPC Section 115
- Revision under Section 115 CPC is available where appellate courts misapply legal principles
- Courts must not substitute their own factual preferences for legal tests established by the Supreme Court
- Perverse appreciation of evidence - such as requiring tax records for secret transactions - constitutes error of law
