Mere Payment Of Rent By Partnership Firm Does Not Confer Tenancy Rights: HP High Court

The Himachal Pradesh High Court has held that when the tenancy is in the name of an individual, mere payment of rent by a partnership firm does not confer tenancy rights in its favour unless there is a valid tenancy in the name of the firm.Justice Ajay Mohan Goel remarked that: “Maybe even if some payments were made by some partnership firm, this does not mean that the said partnership firm automatically stood inducted as a tenant.”The dispute arose when in 1995, proceedings were initiated against Keshav Ram Khurana, Proprietor of M/s Himachal Iron Store, Parwanoo by the cooperative society under the H.P. Public Premises (Land Eviction and Rent Recovery) Act, 1971. The cooperative society contended that the tenant defaulted in paying rent of the shop premises allotted to him.However, the petition was dismissed on the ground that the notice was not served in accordance with section 106 of Transfer of Property Act as notice was not served for termination of tenancy.Aggrieved, the society initiated fresh proceedings in 2000, contending that the tenant had again defaulted in payment of rent and the society required the premises for its own use.The proprietor contended that that the tenancy belonged to a partnership firm and all partners should have been made parties to the proceedings.The Court observed that the shop had been allotted to the proprietor in 1982 that was before the partnership firm was formed. It further remarked that the partnership deed, executed in 1983, was unregistered and lacked evidentiary value.Thereafter, the authority ordered eviction of the premises. Aggrieved, the proprietor filed an appeal before the Divisional Commissioner, Shimla, which was dismissed as time-barred in 2010. After his death, his legal heirs approached the High Court, and the matter was remanded for fresh consideration. In 2018, the appellate authority again dismissed the appeal, holding that the alleged partnership firm's existence was not proved through proper documentation.After which the legal heirs filed writ petition before the high court challenging the original eviction order and the appellate order. The High Court observed that the rent receipts and other documents showed that the proprietor alone was the tenant.Thus, the Court dismissed the petition and also noted that it was the legal heirs who took the defence of partnership after the death of the proprietor, he never took this defense. Case Name: Sudershan & others v/s Divisional Commissioner, Shimla & othersCase No.: CWP No.206 of 2019Date of Decision: 22.09.2025For the petitioners: Mr. Surinder Saklani, AdvocateFor the respondents: Mr. Rajat Chauhan, Assistant Advocate General for respondents No.1 and 2. Mr. Bhupender Gupta, Senior Advocate with Mr. Janesh Gupta, Advocate for respondent No. 3.Click Here To Read/Download Order

Mere Payment Of Rent By Partnership Firm Does Not Confer Tenancy Rights: HP High Court

Mehak Aggarwal

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