Supreme Court Upholds Possession Rights in Chandigarh Booth Subletting Dispute

The Supreme Court of India has delivered a crucial judgment in Madan Mohan Singh v. Ved Prakash Arya, addressing a long-standing property dispute involving the allotment and alleged subletting of Booth No.186, Sector 35-D, Chandigarh. The case involved issues of lease restrictions, tenancy claims, and rightful possession under the Public Premises (Eviction of Unauthorized Occupants) Act, 1971.

Background of the Case

The dispute originated in 1972 when the appellant, Madan Mohan Singh, was allotted Booth No.186 in Sector 35-D, Chandigarh, under a hire-purchase agreement. The allotment conditions expressly prohibited subletting or transfer of rights in the premises.

Subsequently, in 1976, Singh entered into a partnership with the respondent, Ved Prakash Arya, to conduct a cycle repair business at the booth. Later, Singh alleged that Arya had unlawfully retained possession even after the dissolution of their partnership in 1979.

The Estate Officer of Chandigarh, after an inspection, terminated Singh’s lease agreement in 1980 for violation of the allotment conditions. Singh challenged this decision, and multiple legal proceedings followed.

Petitioner’s Arguments

Madan Mohan Singh, the original allottee, contended:

The partnership deed between him and Ved Prakash was legally valid and did not amount to subletting.
Ved Prakash was merely an employee in his business after the dissolution of the partnership.
The Chief Administrator of Chandigarh, in an earlier order, had ruled that the misuse had stopped and the booth should be restored to him.
Despite multiple administrative and judicial orders in his favor, he was unable to regain possession of the booth.

Respondent’s Arguments

Ved Prakash Arya, claiming possession of the booth, argued:

He had taken the premises on rent in 1976 from Singh at ₹450 per month.
The partnership agreement was a sham document, executed merely to bypass the restrictions imposed under the lease conditions.
He had been in continuous possession of the premises and thus had acquired tenancy rights.
The trial court had recognized his tenancy rights, and therefore, he could not be evicted.

Supreme Court’s Observations

The Supreme Court, led by Ashok Bhushan and R. Subhash Reddy, made key observations:

1. Validity of the Partnership Agreement

“When the parties signed a document and entered into a partnership deed, they cannot wish away the consequences which flow from the signing of the deed.”

The Court ruled that the execution of the partnership agreement was admitted by both parties. However, Arya’s claim that it was a sham document was not supported by evidence.

2. Tenancy Claims and Absence of Proof

“The defendant has to be held to be a tenant in respect of the booth in question notwithstanding the fact that the defendant failed to prove any documents pertaining to the tenancy.”

The Supreme Court noted that the respondent failed to produce any evidence—such as rent receipts or agreements—proving a landlord-tenant relationship.

3. Lease Agreement Conditions and Role of the Chief Administrator

“Clause 12 of the lease prohibits subletting, and the decision of the Chief Administrator shall be binding on the parties.”

The Court emphasized that the Chief Administrator’s earlier ruling, which restored the booth to Singh and identified Arya as an employee, was final and binding.

Supreme Court’s Verdict

The Supreme Court ruled in favor of Madan Mohan Singh, overturning the High Court’s decision and reinstating the First Appellate Court’s ruling, which had granted Singh possession rights. Key directions included:

Immediate restoration of Booth No.186 to Singh.
Authorities were directed to ensure compliance with the ruling.
Singh was granted the right to seek damages and mesne profits from Arya for unlawful occupation.

Conclusion

This ruling sets an important precedent regarding property disputes, especially concerning leased government properties where subletting is explicitly prohibited. It reinforces the authority of administrative decisions and ensures rightful possession to the lawful allottee.

Petitioner Name: Madan Mohan Singh.
Respondent Name: Ved Prakash Arya.
Judgment By: Justice Ashok Bhushan, Justice R. Subhash Reddy.
Place Of Incident: Chandigarh.
Judgment Date: 05-03-2021.

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