Sub-letting and Change of User as Grounds

Sub-letting and change of user are the classic charges a landlord levels when a tenant has, in substance, treated the tenancy as freely transferable property. Under most rent statutes both appear side by side in the eviction schedule. The Chhattisgarh Rent Control Act, 2011 is structurally unusual: change of user is an express eviction ground in Schedule II, while sub-letting is dealt with chiefly as a prohibited tenant obligation in Schedule IV carrying its own penal consequence. This note maps both grounds onto the statutory scheme and grounds each in the verified Supreme Court jurisprudence that the Rent Controlling Authority will apply.

The statutory scheme: Schedule II and Schedule IV

Unlike the Madhya Pradesh or Delhi statutes, the 2011 Act does not bury its eviction grounds in a single operative section. Instead, Section 12(2) read with Schedule II, Serial No. 11 enumerates the grounds on which the Rent Controlling Authority may order a tenant's eviction, while Schedule IV codifies the tenant's positive obligations. The two schedules interlock. Schedule II, Item 11(c) makes it a ground for eviction that "the tenant uses the accommodation for purpose(s) other than that for which it was leased out" - the change-of-user ground. Sub-letting, by contrast, is not separately listed as a Schedule II ground; it surfaces as Schedule IV, Item 3, which obliges the tenant "never to sub-let any portion of the accommodation, with or without monetary consideration, formally or informally, with or without the permission of the landlord." Item 2 of the same schedule requires the tenant to use the accommodation only for the purpose for which it was leased. A reader new to the Act should first work through the definitions and the consolidated eviction grounds before tackling these two defaults in isolation.

What is sub-let, and by whom

The reach of both grounds turns on two defined terms. "Accommodation" under Section 2(1) is any building or part of a building, residential or non-residential, let by landlord to tenant, together with appurtenant open space, staircase, garden and garage; the Chhattisgarh High Court in Sourabh Fuels v. Suresh Kumar Goyal, 2022 SCC OnLine Chh 1634, read the definition to extend even to open land not used for agriculture, so the sub-letting and change-of-user prohibitions bite on commercial yards and plots, not just rooms. "Tenant" under Section 2(14) includes the contractual tenant and, on his death, specified family members ordinarily residing with him - but pointedly the Act contains no definition of "sub-tenant." That silence matters: because sub-letting is framed as a breach of obligation rather than as the creation of a protected status, a person inducted into possession acquires no statutory shield against the landlord. The boundaries of the demised premises are fixed by the lease, so identifying the scope of permitted use feeds directly into the areas covered and exemptions under the Act.

The two ingredients of sub-letting

What converts mere physical presence of a third party into actionable sub-letting is settled by a consistent line of authority. In Dipak Banerjee v. Lilabati Chakraborty, (1987) 4 SCC 161, the Supreme Court held that to establish a sub-tenancy two ingredients must coexist: first, the alleged sub-tenant must have an exclusive right of possession in the premises or a part of them; and second, that right must be in lieu of payment of rent or compensation. On the facts the landlord proved neither exclusive possession nor any payment for the use of two rooms by a tailor, so the finding of sub-letting collapsed. The same dual test was restated in M/s Bharat Sales Ltd. v. Life Insurance Corporation of India, AIR 1998 SC 1240, where the Court explained that a sub-tenancy arises when the tenant gives up possession of the tenanted accommodation, wholly or in part, and puts another person in exclusive possession of it. Casual user, a licence to occupy, or shared possession without parting with the right to exclude the tenant does not satisfy the test. The emphasis on the right to exclude is deliberate: a sub-tenant is distinguished from a licensee or a guest precisely by his exclusive dominion over the demised portion, and it is this transfer of control - not the mere admission of another person onto the premises - that the Act condemns.

Burden of proof and the shifting onus

Sub-letting is almost always clandestine, which is why the evidentiary burden is calibrated rather than absolute. The initial onus lies on the landlord, but it is not onerous. In Bharat Sales the Court held that because monetary consideration usually passes secretly, "the law does not require such payment to be proved by affirmative evidence and the court is permitted to draw its own inference upon the facts of the case proved at the trial," approving the observation in Rajbir Kaur v. S. Chokesiri & Co. that once exclusive possession is shown, an inference of consideration may legitimately be drawn. The modern formulation appears in A. Mahalakshmi v. Bala Venkatram (decided 7 January 2020), where the Supreme Court held that once the landlord establishes that a third party is in exclusive possession and the tenant no longer holds legal possession, the onus shifts to the tenant to prove that he continues to hold lawful possession in tenancy. For the Rent Controlling Authority adjudicating a Schedule IV breach, this means proof of a stranger in exclusive occupation effectively compels the tenant to explain the arrangement.

The consolidated Celina Coelho test

The most cited synthesis is Celina Coelho Pereira v. Ulhas Mahabaleshwar Kholkar, (2010) 1 SCC 217. The Supreme Court there distilled the law into propositions a trial forum can apply mechanically: to prove sub-letting two ingredients must be established - (i) parting with possession of the tenancy or part of it by the tenant in favour of a third party with an exclusive right of possession; and (ii) that such parting was without the landlord's consent and in lieu of compensation or rent. The Court added that the landlord may discharge his initial burden by proving exclusive third-party possession from which both ingredients can be inferred, whereupon the tenant must rebut. Crucially, Celina Coelho confirms that consent of the landlord is part of the wrong: the Schedule IV, Item 3 language - "with or without the permission of the landlord" - is therefore stricter than the common-law position, because in Chhattisgarh even a permitted sub-letting still breaches the codified obligation, though the landlord's prior consent will obviously bear on whether he can complain of it.

Partnerships, family arrangements and the cloak doctrine

The recurring grey area is the tenant who admits a partner or relative into the business and is then accused of sub-letting. The governing authority is Helper Girdharbhai v. Saiyed Mohmad Mirasaheb Kadri, (1987) 3 SCC 538, where the Supreme Court held that where a tenant becomes a partner of a firm and permits the firm to trade from the demised premises while retaining legal possession himself, there is no sub-letting; the genuineness of the partnership must be judged on the facts of each case. The corollary, reaffirmed in Celina Coelho, is the cloak doctrine: if the partnership deed is a mere device to conceal an outright transfer of possession and the tenant has in truth divested himself of control, the court is not estopped from lifting the veil and reaching the real transaction. The test is always who exercises the right to exclude. A nominal partner who never controls the premises points to sub-letting; a tenant who continues to run the business with a financier-partner does not.

Change of user: the Schedule II, Item 11(c) ground

Change of user is the more straightforward of the two grounds because the Act states it expressly. Schedule II, Item 11(c) permits eviction where the tenant "uses the accommodation for purpose(s) other than that for which it was leased out," mirrored by the positive obligation in Schedule IV, Item 2 to use the accommodation only for its let purpose. The pivotal question is what counts as a different "purpose." The leading authority is Mohan Lal v. Jai Bhagwan, AIR 1988 SC 1034 : (1988) 2 SCC 474. A shop let for vending English liquor was, after the licence lapsed, used for general merchandise. The Supreme Court declined to treat this as a change of user attracting eviction: the premises had been let for the purpose of carrying on business, and a shift from one commercial line to another - causing no structural damage, no impairment of the building's utility and no nuisance - did not breach the statutory purpose. The decisive enquiry is whether the basic character of the user has changed (for example commercial to residential, or a use that damages or imperils the building), not whether the precise trade has altered. The Court expressly recognised an "expanding concept" of allied business, so that a tenant adding goods or services reasonably connected to the original line of trade does not thereby invite eviction.

Applying the change-of-user test in Chhattisgarh

Read into the 2011 Act, the Mohan Lal principle disciplines Item 11(c). A landlord cannot evict merely because the tenant has modernised or diversified a permitted business; he must show that the accommodation is being put to a purpose materially different from, and outside the contemplation of, the lease. Where the letting itself specifies a residential purpose and the tenant runs a commercial establishment, or vice versa, the ground is squarely made out. The factual matrix matters: the original purpose is gathered from the lease deed, the rent agreement and the conduct of the parties, and the burden of proving the changed user lies on the landlord who asserts it. Because Schedule II, Item 11(c) speaks of "purpose(s) other than that for which it was leased out," a tenant who can show the new activity is reasonably incidental to or an extension of the let purpose - the "allied business" reasoning approved in Mohan Lal - will resist eviction. This analytical care distinguishes change of user from the other fault grounds catalogued under grounds of eviction.

Remedy, penalty and procedure

The consequences of the two defaults diverge. Change of user is an eviction ground simpliciter under Schedule II, so the landlord applies to the Rent Controlling Authority and, if Item 11(c) is established, secures a decree for possession. Sub-letting, being framed as a breach of the Schedule IV obligation, carries an additional sting: Section 12(8) renders a violation of the Schedule IV obligations an offence punishable with fine up to Rs. 5,000 or simple imprisonment up to three months, or both, over and above the landlord's right to recover possession for the tenant's breach. In practice the landlord pleads the sub-letting as a default justifying termination and eviction while the penal exposure operates as a deterrent. Both grounds must be proved before the Rent Controlling Authority on evidence, with the burden allocation described above, and the Authority's order is subject to the appellate and revisional structure under the Act, culminating in the Chhattisgarh Rent Control Tribunal.

Practical drafting and pleading points

For an aspirant translating doctrine into an answer or a notice, three points recur. First, plead sub-letting with particulars: identify the third party, the portion in exclusive possession and the approximate date of induction, because vague allegations fail the Celina Coelho ingredients. Second, anticipate the partnership defence - if the tenant raises a firm, the landlord must lead facts showing the deed is a sham and that the tenant has parted with control, invoking Helper Girdharbhai. Third, in change-of-user pleadings, annexe the lease to fix the original purpose and articulate precisely how the present use departs from it, remembering that Mohan Lal bars eviction for trivial or allied shifts. Because the 2011 Act treats permission to sub-let as irrelevant to the existence of the breach, a landlord who once consented should be candid about it and rest his case on the codified prohibition rather than on the absence of consent. These distinctions also interact with the rent-fixation machinery, since an unlawful change of user can affect the standard rent ultimately payable.

Key takeaways

Sub-letting under the 2011 Act is a Schedule IV breach requiring exclusive possession in a third party plus consideration (Dipak Banerjee; Bharat Sales), with the onus shifting to the tenant once exclusive third-party possession is shown (A. Mahalakshmi; Celina Coelho), and a genuine partnership is no sub-letting unless used as a cloak (Helper Girdharbhai). Change of user is the express Schedule II, Item 11(c) ground, confined by Mohan Lal v. Jai Bhagwan to material departures from the let purpose rather than mere changes of trade. Both are proved before the Rent Controlling Authority, but sub-letting additionally exposes the tenant to penal liability under Section 12(8). Mastering the burden-of-proof mechanics is what separates a competent answer from a complete one.