Payment Of Rent From Partnership Firm's Account Doesn't Make It A Tenant When Tenancy Was Entered Into By Partners Individually: Rajasthan HC

The Rajasthan High Court has held that merely on account of rent payment through the bank account of a partnership firm, the latter did not automatically become the tenant when the tenancy agreement was entered into with the partner(s) of that firm and not the partnership firm itself.Justice Anoop Kumar Dhand opined that even though, in general law, the “partnership firm” was not a distinct legal entity, the definition of “tenant” under the Rajasthan Rent Control Act, 2001 (“the Act”) included a person by whom or on whose behalf the rent was paid. Hence, a rent petition against the partnership firm could be filed only if the tenancy was created in the name of such firm. The Court was hearing the tenancy dispute in relation to the Tholia House located at Paanch Batti, MI Road. Jaipur. A challenge was made against the order of the tribunal as well as the appellate tribunal, which allowed the eviction application filed by the respondent against the petitioners. It was the case of the petitioners that, firstly, in 1954, the tenancy was entered into in the name of the partnership firm, from whose bank account the rent was also paid to the landlord for all these years. However, in the eviction petition, neither the firm nor one of the three partners was named. Hence, the application was not maintainable owing to non-impleadment of proper parties. Secondly, it was submitted that the landlord had many more properties that could be used by him, and hence, there existed no bona-fide requirement of the property on part of the landlord. After hearing the contentions, the Court firstly highlighted that it was an undisputed fact that the tenancy was not entered into with the firm but with the father of the petitioners, who subsequently started a firm and started operating it from the premises, and also the rent was paid through the bank account of the firm. In this background, underscoring the definition of “tenant” under the Act, the Court held that, “A rent petition against the partnership firm is liable to be filed only if the tenancy is created in the name of such firm, in case such firm or its partners have taken the premises on rent for conducting their business. There is neither any provision under Section 9 of the Act of 2001 nor under Order 30 Rule 1 CPC to file any suit against such firm for its eviction in the absence of any tenancy in its favour…Inheritance of tenancy of a partnership firm under the Hindu Succession Act, 1956, upon death of a partner will not be in operation. While the legal heirs inherit the rights of the deceased partners, they do not inherit the tenancy created in favour of the partnership firm.”The Court held that merely because the individual tenant established a firm and paid rent from its bank account, it did not confer any right on his firm nor did not mean that the firm automatically became “tenant” because of that fact. Hence, neither the firm nor the remaining partner had any right to be impleaded as a party in the eviction petition On the argument of bona fide requirement, the Court held that despite having other properties, it was the landlord's discretion to seek eviction of the petitioners based on personal bona fide necessity to establish a jewellery showroom. It was not for the tenant to suggest that the landlord did not have bona fide necessity. “He cannot be forced to initiate such proceedings against the other tenants. It is for the landlord to take a decision in this regard and once he has decided to get the subject premises vacated, no error or illegality can be attributed to his decision.”Accordingly, the petition was dismissed. Title: Arun Fatehpuria & Anr. v Tarachand TholiaCitation: 2025 LiveLaw (Raj) 253Click Here To Read/Download Order

Payment Of Rent From Partnership Firm's Account Doesn't Make It A Tenant When Tenancy Was Entered Into By Partners Individually: Rajasthan HC

Nupur Agrawal

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