M.V. Ramachandrasa v.  Mahendra Watch Company, 2026 INSC 348: Decision on Subletting Without Consent of Landlord

Jojy George Koduvath

In M.V. Ramachandrasa v.  Mahendra Watch Company, 2026 INSC 348, the Supreme Court of India (Ahsanuddin Amanullah, R. Mahadevan, JJ.), considered two questions of substantial importance.

  • First, whether, in the exercise of revisional jurisdiction under Section 46 of the Karnataka Rent Act, 1999, the Court is entitled to reassess the evidence and substitute its own conclusions; and
  • Second, what constitutes “subletting” under the Rent Act, and in what manner the burden of proving the same is to be discharged by the landlord.

‘No’ was the answer given by the Apex Court in the first question.

The findings, on eviction on the ground ‘sub-letting’, in a nutshell, is that the Initial burden of proving sub-letting is on the landlord, and once it is done, the onus shifts to the tenant.   

The findings on sub-letting can be summarised as under:

(i) Eviction on the ground sub-letting – Two Ingredients: For eviction under rent control laws on the ground sub-letting, two ingredients have to be established-

  • (one) parting with possession in favour of a third party, and
  • (two) such parting has been done without the consent of the landlord.

(ii) Inducting a partner not amount to sub-letting: Inducting a partner by a tenant by itself does not amount to sub-letting. However, the court may tear the veil of partnership to find out the real nature of transaction.

(iii) The existence of deed of partnership would not preclude the landlord from bringing on record, by adducing evidence or by means of cross-examination, making out a case of sub-letting or parting with possession.

(iv) If the tenant is actively associated with the partnership business and retains the control over the tenancy premises with him, may be along with partners, the tenant may not be said to have parted with possession.

(v) Initial burden of proving sub-letting is on the landlord: Initial burden of proving sub-letting is on the landlord but once he is able to establish that a third party is in exclusive possession of the premises and that tenant has no legal possession of the tenanted premises, the onus shifts to the tenant to prove the nature of occupation of such third party and that he (tenant) continues to hold legal possession in tenancy premises.

  • In other words, initial burden lying on the landlord would stand discharged by adducing prima facie proof of the fact that a party other than the tenant was in exclusive possession of the premises. A presumption of sub-letting may then be raised and would amount to proof unless rebutted.
  • The court held – the determinative test, is whether the tenant retains legal possession. That is – whether he retired from the business or he has ceased to have any role in the business or the premises.
  • Once such exclusive possession by third parties is established, the burden shifts to the respondents to prove the genuine partnership.

The rent receipts in the name of the original tenant does not support the respondents’ case, as it is legal possession and control, and not the formality of rent payment, which is determinative.

The Apex Court relied on the folloing earlier decisions:

1.  Associated Hotels of India Ltd v. S.B. Sardar Ranjit Singh (AIR 1968 SC 933) – It was held in this decision – the landlord must prove parting with possession. Once exclusive possession of a third party is established, the burden shifts to the tenant.

2. In Joginder Singh Sodhi v. Amar Kaur, (2005) 1 SCC 31, and Mahendra Saree Emporium v. G.V. Srinivasa Murthy, (2005) 1 SCC 481, it was held that once a prima facie case of exclusive possession by a stranger is made out, a presumption of sub-letting arises, thereby shifting the onus onto the tenant.

3. In Ram Murti Devi v. Pushpa Devi, (2017) 15 SCC 230, it was pointed out that direct evidence of sub-letting is seldom available, because of the clandestine arrangements, and it has to be inferred from surrounding circumstances, particularly where exclusive possession of a third party is established.

The following decisions were referred to in M.V. Ramachandrasa v.  Mahendra Watch Company (supra) while considering ‘unlawful sub-letting / assignment’:

  • .(a) Kala v. Madho Parshad Vaidya, (1998) 6 SCC 573
  • (b) Joginder Singh Sodhi v. Amar Kaur, (2005) 1 SCC 31
  • (c) Shama Prashant Raje v. Ganpatrao, (2000) 7 SCC 522
  • (d) Bharat Sales Ltd. v. LIC, (1998) 3 SCC 1
  • (e) Amar Nath Agarwalla v. Dhillon Transport Agency, (2007) 4 SCC 306
  • (f) Murlidhar v. Chuni Lal, 1969 Ren CR 563 : 1970 Ren CJ 922 (SC)
  • (g) Mohammedkasam Haji Gulambhai v. Bakerali Fatehali, (1998) 7 SCC 608
  • (h) Celina Coelho Pereira v. Ulhas Mahabaleshwar Kholkar, (2010) 1 SCC 217
  • (i) Helper Girdharbhai v. Saiyed Mohmad Mirasaheb Kadri, (1987) 3 SCC 538
  • (j) Jagan Nath v. Chander Bhan, (1988) 3 SCC 57
  • (k) Gopal Saran v. Satyanarayana, (1989) 3 SCC 56
  • (l) Shalimar Tar Products Ltd. v. H.C. Sharma, (1988) 1 SCC 70
  • (m) Gundalapalli Rangamannar Chetty v. Desu Rangiah, AIR 1954 Mad 182
  • (n) Jackson v. Simons, (1923) 1 Ch 373 : 1922 All ER Rep 583
  • (o) Chaplin v. Smith, (1926) 1 KB 198 (CA)
  • (p) Vishwa Nath v. Chaman Lal Khanna, AIR 1975 Del 117
  • (q) G.K. Bhatnagar v. Abdul Alim, (2002) 9 SCC 516
  • (r) Parvinder Singh v. Renu Gautam, (2004) 4 SCC 794
  • (s) Krishnawati v. Hans Raj, (1974) 1 SCC 289
  • (t) Vaishakhi Ram v. Sanjeev Kumar Bhatiani, (2008) 14 SCC 356
  • (u) Nirmal Kanta v. Ashok Kumar, (2008) 7 SCC 722

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