Partnership Deed Without Proof Of Accounts Cannot Be Used As Camouflage To Conceal Subletting By Tenants: HP High Court

The Himachal Pradesh High Court held that a partnership deed without proof of books of accounts cannot be used as a camouflage to conceal subletting by the tenants. Justice Satyen Vaidya remarked that: “Evidently, the partnership deed was executed for dual purpose, firstly to camouflage the relationship and secondly to secure the interest of the tenants to get monthly income.” The petitioner, Usha Chaudhary along with others, filed a revision petition under Section 25(5) of the Himachal Pradesh Urban Rent Control Act, 1987 challenging eviction order passed by the Rent Controller. The case arose when the respondent, who is the landlord, filed an eviction petition under Section 14 of the Act alleging that the tenants had sublet the premises to sub-tenant. In response, the tenants contended that they were in possession of the shop and were carrying the business in partnership with the sub-tenant. Even the tenant submitted a separate reply contending that except sharing profit and loss in the business, he had nothing to do with the premises. The Rent Controller observed that most of the tenants lived outside Shimla and the petitioner herself admitted that she no longer sat in the shop. It remarked that this shows that the sub-tenant had exclusive control and possession of the premises and partnership deed was merely to cover up the subletting. Thus, the Rent Controller passed an eviction order which was later affirmed by the appellate authority. The appellate authority stated that: “The partnership was held to be a mere camouflage and, thus, all ingredients to prove subletting were found established.” The High Court upheld the lower court's orders and found no illegality. The Court observed that the partnership lacked authenticity as no books of account were produced to prove profit-sharing between the tenant and sub-tenant.Click Here To Read/Download Order

Partnership Deed Without Proof Of Accounts Cannot Be Used As Camouflage To Conceal Subletting By Tenants: HP High Court

Mehak Aggarwal

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