JUDGMENT Sudhir Narain, J.
1. This writ petition is directed against the Judgment and decree dated 2.2.1996 passed by the Judge. Small Causes Court, respondent No. 2, decreeing the suit for recovery of arrears of rent, ejectment and damages against the petitioner and defendant-respondents and the order of revisional court dated 22.7.1998 affirming the said judgment in revision.
2. Keshav Kinkar Narain Singh, the husband of respondent No. 4, filed S.C.C. Suit No. 891 of 1977 against the petitioner and the defendants for recovery of arrears of rent, ejectment and damages on the allegation that the father of the petitioner, Mahlpal Singh, was tenant of the house in dispute at monthly rent of Rs. 50. The defendants fell in arrears of rent and house and water tax since 1.1.1975. A notice of demand dated 27.6.1977 and termination of their tenancy was sent but in spite of service of notice it was not complied with. The defendants sublet the accommodation to Devendra Kumar Singh and Rajendra Singh, defendant Nos. 8 and 9, and on this ground they were liable for eviction.
3. The petitioner filed written statement denying that any default was committed. He claimed that the amount was paid towards house tax and that was liable for adjustment and if that amount was taken into account, he was not in arrears of rent for more than three months on the date of service of notice. It was denied that the accommodation was sublet to Devendra Kumar Singh and Rajendra Singh.
4. The plaintiff-respondent filed an application to strike off the defence of the petitioner under Order XV. Rule 5 of the Code of Civil Procedure for not depositing the amount as required under the said provision. The trial court struck off the defence and that order was affirmed in revision. The trial court, on merits, came to the conclusion that defendants had committed default in payment of arrears of rent and had sublet the accommodation to defendant Nos. 8 and 9 and on these findings it decreed the suit on 2.2.1996. The petitioner preferred a revision before the District Judge. Respondent No. 1 has dismissed the revision on 22.7.1998.
5. The petitioner has challenged the findings on these two questions in this writ petition. The core question is as to whether the amount of house tax paid by the tenant, which was payable by the landlord, was liable to be adjusted towards payment of rent. There is no dispute that as regards water tax, the liability is on the tenant as provided under Section 7 of U. P. Urban Buildings (Regulation of Letting. Rent and Eviction) Act, 1972 (in short the Act). The liability to pay house tax is on the landlord as provided under sub-section (2) of Section 179 of U. P. Nagar Mahapalika Adhiniyam, 1959 which reads as under :
6. In any other case, the tax shall be primarily leviable as follows, namely -
(a) if the property is let from the lessor ;
(b) if the property is sub-let from the superior lessor ;
(c) if the property is unlet from the person in whom the right to let the same vests.
Sub-section (4) of Section 179 provides that an occupier who makes any payment for which he is not primarily liable under the foregoing provisions shall, in the absence of any contract to the contrary, be entitled to be reimbursed by the person primarily liable.
7. In Basant Lal Katiyar v. Boom Ram Kapoor and others, AIR 1963 All 568, considering the provisions of Section 149 of the Municipalities Act. which is in conformity with Section 179 of U. P. Mahapalika Adhiniyam, the Court held that if the tenant pays the amount on demand made by the municipal authorities, the tenant is entitled to be reimbursed by the lessor.
8. In Hem Raj Singh and others v. VIIth Additional District Judge. Kanpur and others, 1984 (1) ARC 177. the Court relying upon the provisions of Section 179 (4) of U. P. Nagar Mahapalika Adhiniyam held that the tenant is entitled to adjust the amount of taxes in rent. Apart from it, clause (g) of Section 108 of the Transfer of Property Act permits the tenant to deduct with interest from the rent if the amount if recoverable from him which the lessor is bound to make. It reads as under :
"if the lessor neglects to make any payment which he is bound to make, and which, if not made by him, is recoverable from the lessee or against the property, the lessee may make such payment himself, and deduct it with interest from the rent, or otherwise recover it from the lessor."
9. The contention of the petitioner was that he had paid a sum of Rs. 627.60 to the Nagar Mahapalika towards house tax and that he was entitled to adjust towards rent. The Courts below have taken the view that as the primary liability was on the landlord, the tenant was not entitled to adjustment, is contrary to the provisions of Section 179 (4) of U. P. Nagar Mahapalika Adhiniyam and Section 108(g) of Transfer of Property Act. The liability to pay house tax was on the landlord and if he did not pay the amount and the tenant has paid such house tax, he is entitled to adjust the amount towards rent. It is not the case of the plaintiff-respondent that the amount of house tax was paid by him and the tenant has deposited the amount voluntarily in spite of the objection raised by him. The municipal authorities are interested in realising the house tax and when the demand is made from the tenant and he pays such amount, he is entitled for adjustment of the said amount towards rent.
10. Learned counsel for the respondent urged that in the proceedings under Order XV, Rule 5, C.P.C., it was held that the tenant was not liable to adjust the amount of house tax paid by him and this finding operates as res judicata. The proceeding under Order XV, Rule 5 was in respect of striking off the defence. It does not substantially decide the rights of the parties in the suit. Such finding shall not operate as res judicata between the parties when the suit is being decided on merits.
11. The next question is in regard to subletting of the house by the tenant to the defendant Nos. 8 and 9. The plaintiff asserted in the plaint that defendant Nos. 8 and 9 were permitted to occupy a portion of the house by the tenant Mahipat Singh and such occupation being in contravention of provisions of Section 25 of the Act, amounts to subletting. This was refuted by the defendants alleging that defendant Nos. 8 and 9 were nephews of Mahipal singh, the tenant, who had come to study and after completion of studies they left the house. In this respect, learned counsel for the respondents referred to Explanation to sub-section (2) of Section 25 of the Act which reads as under :
"(i) where the tenant ceases, within the meaning of Clause (b) of sub-section (1) or subsection (2) of Section 12, to occupy the building or any part thereof, he shall be deemed to have sublet that building or part ;
(ii) lodging a person in a hotel or a lodging house shall not amount to sub-letting."
12. Section 12 (1) (b) provides that the building shall be deemed to have been ceased to be occupied if the landlord or the tenant has allowed it to be occupied by any person who is not a member of his family. The word used is "occupation". This occupation must be on transfer of possession by the tenant. If the possession is not transferred to another person, it cannot be treated as occupation of such third person. If a servant, guest or relative lives together with the tenant, they cannot be said to have occupied the accommodation in their own right on transfer of possession by the tenant.
13. In P. C. Jain v. District Judge and others, 1979 (UP) RCC 107, the Court while considering the provisions of Section 12 (1) (b) of the Act observed :
"the word 'occupy' like many English words has many meanings depending upon how it is used. In my judgment since occupation Includes possession as its primary element, it must be held that premises has been occupied by another person if the possession has been transferred to him."
14. Their Lordships of the Supreme Court in Associated Hotels of India Ltd. v. R. N. Kapoor, AIR 1959 SC 1262, while considering the distinction between the lease and licence, held that the lease is a transfer of interest in the land as provided under Section 105 of the Transfer of Property Act. Under Section 108 of the said Act the lessee is entitled to be put into possession of the property. Transfer of possession is a basic ingredient in all the leases. The Court observed as under :
"Under the aforesaid Section, if a document gives only a right to use the property in a particular way or under certain terms while it remains in possession and control of the owner thereof. It will be a licence. The legal possession, therefore, continues to be with the owner of the property, but the licensee is permitted to make use of the premises for a particular purpose. But for the permission. his occupation would be unlawful. It does not create in his favour any estate or interest in the property. There is. therefore, clear distinction between the two concepts. The dividing line is clear though sometimes it becomes very thin or even blurred. At one time it was thought that the test of exclusive possession was infallible and if a person was given exclusive possession of a premises, it would conclusively establish that he was a licensee. But there was a change and the recent trend of judicial opinion is reflected in Errington v. Errington, 1952 (1) All ER 149, wherein Lord Denning reviewing the case law on the subject summarizes the result of his discussion thus at p, 155 :
The result of all these cases is that although a person who is let into exclusive possession is, prima facie, to be considered to be tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy."
15. In Jagdish Prasad v. Smt. Angoori Devi, 1984 (1) ARC 679. Interpreting the provisions of Sections 12 (1) (b), 12 (2) and 20 (2) (e) the Court held that merely from the presence of a person other than the tenant in the shop, subletting cannot be presumed. There may be several situations in which a person other than the tenant may be found sitting in the shop ; for instance, he may be a customer waiting to be attended to ; a distributor who may have come to deliver his goods at the shop for sale ; a creditor coming for collection of the dues ; a friend visiting for some social purpose or the like. As long as control over the premises is kept by the tenant and the business run in the premises is of the tenant, subletting flowing from the presence of a person other than the tenant in the shop cannot be assumed.
16. In Badri Nath Garg v. Shiv Prasad Tandon, 1990 (1) ARC 93, the Court held that sub-tenancy cannot be presumed merely on the basis that the real brother of the tenant was looking after the business when on the record it is not established that he has given exclusive possession to him and lost the control over the shop.
17. Learned counsel for the respondent cited decisions where the Court has taken the view that if a person is occupying the premises who is not a member of the family of the tenant as defined under Section 3 (g) of the Act. such tenant shall be deemed to have sublet the accommodation. In Smt. Kamla Sharma v. IIIrd Additional District Judge, Allahabad and others. 1984 (2) ARC 605, the Court had recorded the finding that the sub-tenants were residing in a portion of the premises let out to the tenant. Similarly in Omendra Bahadur Saxena v. IXth Additional District Judge, Kanpur and others. 1987 (1) ARC 359, the finding was that the tenant had permitted to occupy by other persons. In Mahesh Chandra Varshney v. IInd Additional District Judge. Aligarh, 1989 (1) ARC 223, the Court found that a portion of the tenancy was allowed to be occupied by another person who was not a member of the family and in that circumstance the provisions of Section 12 (1) (b) of the Act was attracted. In Smt. Kiran Goel v. IInd Additional District Judge, Aligarh and others, 1993 (I) ARC 326, the Court itself made it clear that the onus of proving subletting or a transfer of lease holding is upon the landlord, yet once the Court is satisfied that there has been a transfer of possession, the onus shifts on the tenant within whose special knowledge the facts explaining the manner in which such possession has been transferred and he may have to bear the burden thereafter.
18. In Harish Tandon v. Additional District Magistrate, Allahabad and others. 1995 (1) ARC 220, their Lordships of the Supreme Court held that if a tenant admits a person as partner in business who is not a member of his family, in respect of a non-residential building, the building shall be deemed to have been sublet under Section 25 read with Sections 12 (2) and 12 (4) of the Act. It was a case of non-residential building for which the specific provision was contained under Section 12 (2) of the Act which provided that if the person is admitted as partner of the firm the building shall be deemed to be vacant. The house in question is residential one and secondly, it is not the case of any of the parties that defendant Nos. 8 and 9 were admitted as partner in any business. The Courts below assumed that the defendant Nos. 8 and 9 were subtenants without recording a finding as to whether the tenant had transferred possession to them.
19. Sri Mandhyan, raised objection that the writ petition filed by the tenant-petitioner is not maintainable as he has not impleaded the other tenants and subtenants who were impleaded in the suit as partners. It is not necessary for the petitioner to implead the other tenants as proforma respondents or the alleged sub-tenants who were made the parties. He is not claiming any relief as against them. The decree is joint one and that can be assailed even by one of the defendants in the suit.
20. As the Courts below have not recorded findings in correct perspective and in accordance with law as discussed above, the judgments dated 22.7.1998 and 2.2.1996 passed by respondent Nos. 1 and 2 are hereby quashed and the writ petition is allowed. The trial court shall decide the suit afresh in accordance with law keeping in view the observations made above. Considering the facts and circumstances of the case the parties shall bear their own costs.