Landlord's Need To Settle His Son Independently In Business Constitutes Bonafide Use: Allahabad High Court

Justice Ajit Kumar held that “if the son has been doing business with his father, he has every right to get settled independently in a business and father is absolutely justified in setting up a need for the release of the shop in question to settle his son.”

Case Background

Petitioner challenged order by the Prescribed Authority granting release of shop premises in favor of the landlord under Section 21 (1)(a) of the U.P. Urban Buildings (Regulation of letting, Rent and Eviction) Act, 1972. Release was granted to the landlord on the point of bona fide need. The appeal by the petitioner was rejected, due to which he challenged both orders before the High Court.

Petitioner counsel relied on GST documents furnished before both authorities showing the name of the firm being in the name of both father and son, and also the son paying tax for the same. It was submitted that due to the aforesaid, the son was not doing business absolutely in subordination of his father.

It was argued that there were three shops in possession of the landlord, out of which business was being conducted in two. Even if the son was working under the father, one of the shops could have gone to the son. It was submitted that this aspect had not been considered by the authorities below. Accordingly, it was contended that there was no bona fide need.

Counsel for the respondent pressed documents filed before the authorities below showing that the GSTIN number in question was cancelled in the year 2018, whereas the release application was filed in the year 2020. Thereafter, the business was registered solely in the name of the father.

She further submitted that the survey commission report demonstrated that there were only two shops on the premises, not three.

High Court Verdict

The Court determined only one point for consideration: whether the court of appeal was justified in ignoring the GST receipts while recording the existence of bona fide need.

Justice Kumar observed that relevance of a document as to the fact in issue would be determinable dependent on the date of institution of a case. The Court recorded a finding that in the present case, documents led in evidence by the petitioner would have been relevant had they been of the same year that the case was instituted (2020).

It was further observed that the 2018 GSTIN receipt itself showed that it was cancelled that very year. The Court noted that while an inference can be drawn from a document, the GSTIN receipt stood cancelled. This meant that only an adverse inference of the son not being an independent businessman could be drawn. The authorities below were thus fully justified in ignoring said GST receipts, held the Court.

The Court held that if the son was in business with his father, he had every right to get settled independently in his own business and such need was bona fide.

Holding that there was no error manifest in law or facts by the authorities below, the Court dismissed the writ petition.

Case Title: Hari Shankar vs. Rakesh Kumar 2025 LiveLaw (AB) 50 [MATTERS UNDER ARTICLE 227 No. - 15637 of 2024]

Case Citation: 2025 LiveLaw (AB) 50