Eviction Upheld: Tenant's "Partnership" Deemed a Sham for Subletting.
21-August-2025
Civil Revision >> Civil & Consumer Law
Two revision applications of Anil Bhausaheb Patil & Others v/s Sangli Urban Cooperative Bank Ltd, through Branch Manager, Sangli Urban Coop Bank Ltd, Sangli, filed by the tenants against a common judgment that upheld their eviction from a commercial premises in Sangli. The suits for eviction were initiated by an Urban Cooperative Bank, the landlord, on distinct grounds:
RCS No. 444 of 1989: The bank sought eviction based on the tenant's default in rent payments and the bank's bona fide and reasonable requirement of the premises for its own business expansion.
RCS No. 214 of 2006: This suit, filed later, alleged unlawful subletting of the premises by the tenant's legal heirs after the original tenant's death.
The lower courts decreed eviction in both suits, and these decisions were affirmed on appeal. The High Court, in this judgment, examined the findings of the lower courts on each ground:
Subletting: The court found that the "partnership agreement" between the tenants and a third party, Mr. Rajesh Gidwani (PW-5), was a subterfuge to mask a subletting arrangement. A key factor was the minuscule profit share (initially 1% each) held by the tenants, which the court found defied logical comprehension and indicated a lack of control over the premises. The court relied on the precedent set by the Supreme Court in Parvinder Singh vs. Renu Gautam & Ors. which allows courts to "tear the veil" of a partnership to discover the true nature of the transaction.
Default in Rent Payment: The court upheld the finding that the tenants had consistently defaulted on rent payments. While they deposited the arrears on a few occasions, the deposits were irregular and made after considerable delays. The court noted the tenants' failure to deposit rent for 120 months (from March 2014 to April 2024) during the pendency of the appeal, which the court deemed a serious breach of its explicit order. This led to the forfeiture of the tenancy.
Bona Fide Requirement: The court affirmed that the bank's need for the premises was genuine and had not been "eclipsed" by subsequent events, such as shifting some departments or acquiring other properties. The court highlighted the logistical difficulties for customers who had to climb stairs to the first floor for banking services and then descend to the basement for locker access, emphasizing the strategic importance of the ground-floor premises. The court ruled that the tenants would not suffer greater hardship, particularly since they had already ceded possession to a third party.
In conclusion, the High Court dismissed both revision applications, upholding the eviction decrees. However, it granted the tenants a six-week period to vacate the premises, provided they file an undertaking not to create a third-party interest.