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Supreme Court of India10 April 20262026 INSC 348

Ramachandrasa (LRs) v. Mahendra Watch Co.

Bench of 2 · Justice Ahsanuddin Amanullah, Justice R. Mahadevan

Why it matters

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Landlords litigating eviction on sub-letting grounds under State rent control statutes can cite this judgment for the proposition that a "reconstitution" of a partnership firm — where the original tenant-partner has wholly exited and strangers are in exclusive occupation — will be treated as unlawful sub-letting once the tenant fails to produce cogent documentary proof of a genuine partnership; equally, tenants and their counsel should note that a High Court exercising revisional jurisdiction cannot rescue such a case by reappreciating evidence, and that rent receipts in the original tenant's name carry no determinative weight.

Summary

A landlord's legal heirs (appellants) challenged a Karnataka High Court order that had set aside a trial Court eviction decree against M/s Mahendra Watch Company (Respondent No. 1), a partnership firm. The firm held a registered lease dated 22.02.1985 in respect of a shop in Chickpet, Bengaluru, through its partner Rajesh Kumar (Respondent No. 4). The landlord initiated eviction proceedings under Sections 27(2)(b)(ii) and 27(2)(p) of the Karnataka Rent Act, 1999, alleging that the original tenant-partner had ceased to occupy the premises and that Respondent Nos. 2 and 3 — Ashish M. Jain and Atul M. Jain — strangers to the lease, were in exclusive possession without the landlord's consent. The trial Court allowed the eviction petition; the High Court reversed it in revision under Section 46 by reappreciating the evidence.

The Supreme Court set aside the High Court's order and restored the trial Court's eviction decree. On the first issue, the Court held that the High Court had transgressed the narrowly circumscribed limits of revisional jurisdiction under Section 46 by undertaking a fresh analysis of depositions, partnership documents, and rent receipts and substituting its own factual conclusions — an exercise indistinguishable from appellate reappreciation, which is impermissible. The Court followed the Constitution Bench ruling in Hindustan Petroleum Corporation Limited v. Dilbahar Singh [(2014) 9 SCC 78] and reiterated that where the legislature has separately provided an appeal under Section 26, revisional jurisdiction cannot be expanded to bypass that mechanism.

On the second and third issues, the Court applied the settled two-stage burden-of-proof framework: the landlord discharges the initial onus by proving (i) exclusive possession of a third party and (ii) absence of the original tenant; thereafter the burden shifts to the tenant to rebut the presumption of unlawful sub-letting. The respondents failed to produce the original partnership deed, any duly proved retirement deed, or evidence of the landlord's written consent. The Court further held that the so-called "reconstitution" of the firm was a cloak to conceal an impermissible transfer of possession, warranting lifting of the veil of partnership. Rent receipts continuing in the name of the original tenant were held irrelevant — it is legal possession and control, not the formality of rent payment, that is determinative. The arrangement was held to constitute unlawful sub-letting/assignment under Section 27(2)(b)(ii) and also attracted Section 27(2)(p).

Key principle

In eviction proceedings on the ground of sub-letting, the landlord discharges the initial burden by establishing exclusive possession of a third party and absence of the original tenant, whereupon a presumption of unlawful sub-letting arises and the onus shifts to the tenant; where a purported reconstitution of partnership is used as a device to conceal an impermissible transfer of possession — evidenced by the original tenant having no role in the business and strangers being in exclusive occupation — courts are entitled to lift the veil of partnership and treat the arrangement as unlawful sub-letting within the meaning of Section 27(2)(b)(ii) of the Karnataka Rent Act, 1999.

Holding

Set aside — the High Court impermissibly converted revisional jurisdiction under Section 46 of the Karnataka Rent Act, 1999 into appellate jurisdiction by reappreciating evidence, and on the merits, the purported reconstitution of the tenant partnership firm constituted unlawful sub-letting under Sections 27(2)(b)(ii) and 27(2)(p), warranting restoration of the trial Court's eviction order.

Statutes invoked

  • Karnataka Rent Act, 1999 · 27(2)(b)(ii)
  • Karnataka Rent Act, 1999 · 27(2)(p)
  • Karnataka Rent Act, 1999 · 46
  • Karnataka Rent Act, 1999 · 26

Practice areas

propertycivil
AI-generated summary, written by Claude Sonnet 4.6 from the court's published judgment. Always verify the original before relying on the summary in court. Generated on 21 May 2026.