Case Laws Companies Act General Radio & Appliances Vs M A Khader (Dead)

Case Laws Companies Act

General Radio & Appliances Vs M A Khader (Dead)

 

PETITIONER:
GENERAL RADIO & APPLIANCES CO. LTD. & ORS.

Vs.

RESPONDENT:
M.A. KHADER (DEAD) BY LRS.

DATE OF JUDGMENT17/04/1986

BENCH:
RAY, B.C. (J)
BENCH:
RAY, B.C. (J)
REDDY, O. CHINNAPPA (J)
SINGH, K.N. (J)

CITATION:
1986 AIR 1218 1986 SCR (2) 607
1986 SCC (2) 656 1986 SCALE (1)595
CITATOR INFO :
D 1991 SC 70 (6)
ACT:
Andhra Pradesh Buildings (Lease, Rent and Eviction)
Control Act, 1960 (AP Act No. 15 of 1960), section 10(ii)
(a) read with section 2(ix) – Transfer of tenancy right
under the lease/subletting, meaning of – Whether the
voluntary amalgamation by virtue of the provisions of
sections 391 and 394 of the Companies act, 1956 of a company
having tenancy rights in a building with another company
amounts to a “transfer of tenancy rights” within the meaning
of AP Act 15 of 1960 – Subsequent events, taking judicial
notice of.

 

HEADNOTE:
M/s. General Radio & Appliances Co. Ltd., a tenant
under the respondent-landlord with effect from 7th day of
January, 1959 under a rent agreement dated 12.1.1959 filed a
company petition, before the Bombay High Court, under
sections 391 and 394 of the Companies Act praying for an
order sanctioning the scheme of amalgamation proposed by it
with M/s. National Ekco Radio and Engineering Co. Ltd. The
Bombay High Court sanctioned the said scheme by its order
dated 27.3.1968. After the said amalgamation of the two
companies, appellant No. 1 company stood dissolved from 16
April 1968. The respondent landlord issued a notice on
26.12.1968 to the first appellant company terminating the
tenancy on the ground of subletting and/or transfer and
assignment of the interest of appellant No. 1 company to the
appellant No.2 company. Thereafter, the respondent filed the
Rent Control Case No. 96 of 1969 for eviction under Rule
10(ii)(a) of the AP Act 15 of 1960. The Rent Controller
accepted both the pleas of respondent, namely, unauthorised
subletting of the premises and wilful default in payment of
rent and negatived the defence of the appellants that
consequent upon the scheme of amalgamation when made a rule
of the Court, there was no transfer or subletting but a
blending of two companies together. In appeal, the Chief
Judge, City Small Causes Court set aside the eviction orders
holding that a transfer of assets under a scheme
608
of amalgamation being an involuntary one, it did not amount
to assignment of lease by the amalgamating company. However,
the High Court while allowing the further Revision Petition
filed by the landlord restored the eviction orders passed by
the Rent Controller. Hence the appeal by certificate.
Dismissing the appeal, the Court
^
HELD : 1.1 The Andhra Pradesh Buildings (Lease, Rent
and Eviction) Control Act, 1960 is a special Act which
provides for eviction of tenants on certain specific grounds
mentioned in section 10 of the said Act. There is no express
provision in the said Act that in case of any involuntary
transfer or transfer of the tenancy right by virtue of a
scheme of amalgamation sanctioned by the Court by its order
under sections 391 and 394 of the Companies Act as in the
present case, such transfer will not come within the purview
of section 10(ii)(a) of the said Act. In other words such a
transfer of tenancy right on the basis of the order of the
court will be immune from the operation of the said Act and
the transferee tenant will not be evicted on the ground that
the original tenant transferred its right under the lease or
sublet the tenanted premises or a portion thereof. [615 FH;
616 A-B]
1.2 On a plain reading of section 2(ix), of the Act, it
is clear that “any person placed in occupation of a building
by the tenant” cannot be deemed or considered to be a tenant
in respect of the premises in which the said person is to be
in possession within the meaning of the said Act. Therefore,
the second appellant that is National Ekco Radio and
Engineering Co. Ltd., the transferee company who has been
put in possession of the tenanted premises by the transferor
tenant General Radio and Appliance Co. (P) Ltd. cannot be
deemed to be tenant under this Act on the mere plea that the
tenancy right including the leasehold interest in the
tenanted premises have come to be transferred and vested in
the transferee company on the basis of the order made under
sections 391 and 394 of the Companies Act. [616 B-D]
1.3 The order of amalgamation has been made on the
basis of the petition made by the transferor company in
company petition No. 4 of 1968 by the High Court of Bombay.
As such it cannot be said that this is an involuntary
transfer effected by order of the Court. [615 C-D]
609
1.4 Subsequent event can be taken judicial notice of.
Here, the first appellant company stood dissolved from 16th
of April 1968 and therefore, is no longer in existence in
the eye of law and it has effaced itself for all practical
purposes. The second appellant company that is the
transferee company is now the person placed in occupation of
the suit premises by the tenant, the first appellant
company. There is undoubtedly no written permission or
consent of the respondent landlord to the transfer of
tenancy right of the first appellant company as required
under section 10(ii)(a) of the Act. Moreover even if it is
assumed to be a subletting to the second appellant by the
first appellant, such subletting has been made contrary to
the provisions of the said Act and in violation of the terms
of clause 4 of the tenancy agreement dated 12.1.1959 which
clearly prohibits such subletting of the tenanted premises
without the written permission of the landlord. [615 B-F]
Sabhayanidhi Virudhunagar Ltd. v. A.S.R. Subrahamanya
Nadar & Ors., 1951 A.I.R. Madras p. 209 and Parasaram
Harnand Rao v. Shanti Prasad Narinder Kumer Jain & Anr.,
[1980] 3 S.C.R. p. 444, referred to.
Devarajulu Naidu v. Ethirajavalli Thyaramma, [1949] 2
M.L.R. p. 423, held inapplicable.
Venkatarama Iyer v. Renters Ltd., [1951] II M.L.R. p.
57 approved.

 

JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1923 of
1976.
From the Judgment and Order dated 23rd April, 1976 of
the Andhra Pradesh High Court in Civil Revision Petition No.
684 of 1974.
U.R. Lalit, D.N. Mishra and Miss Ratna Kapoor for the
Appellants.
A.Subba Rao for the Respondents.
The Judgment of the Court was delivered by
610
B.C. RAY, J. This appeal by way of certificate granted
by the High Court of Andhra Pradesh at Hyderabad under
Article 133 of the Constitution of India is against the
judgment and decree in Civil Revision Petition No. 684 of
1974 made on 23rd of April, 1976 and it raises an important
question of law, i.e. whether the voluntary amalgamation of
the first and second appellants companies amounts to a
transfer of the first appellant’s right under the lease
within the meaning of s. 10 (ii)(a) of Andhra Pradesh
Buildings (Lease, Rent & Eviction) Control Act, 1960.
The front corner portion of the premises bearing No.
8092/1/2 (new No. 5-1-1-) situated at Rashtrapati Road at
Secundrabad was let out on January 12, 1959 to M/s General
Raio & Appliances Co. (P) Ltd., the first appellant, on a
monthly rent of Rs. 200 on the basis of the rental agreement
dated January 12, 1959 (Exhibit P-6) executed by the first
appellant. Clause 4 of the said agreement provides that the
tenant shall not sub-let the premises or any portion thereof
to anyone without the written consent of the landlord. The
respondent-landlord M.A. Khader issued a notice dated
December 26, 1968 to the tenant-appellant No. 1, M/s.
General Radio and Appliances (P) Ltd. terminating the
tenancy on the ground of subletting and/or transfer and
assignment of the interest of the Appellant No. 1 to the
Appellant No. 2. Thereafter on April 7, 1969 the Rent
Control Case No. 96 of 1969 was filed by the respondent-
landlord for eviction of the Appellanttenant on two grounds,
i.e. (i) unauthorised subletting of the premises by the
first appellant and (ii) wilful default in payment of rent
from October 7, 1968 to April 7, 1969. The appellants Nos. 1
and 2 filed a joint counter contending that there was
neither subletting, nor assignment of the tenancy rights by
the first appellant to the second appellant, i.e. the first
appellant company was amalgamated with the second appellant
company by operation of law under the scheme of amalgamation
and order of the High Court of Bombay under ss. 391 and 394
of the Companies Act, 1956 and that the judgment of the
Bombay High Court was judgment ‘in Rem’ and it was binding
on the petitioner even though he was not a party to the
proceedings. It was further contended therein that by reason
of order of the Bombay High Court all the property rights
and powers of every description including tenancy right held
by the M/s. General Radio Appliance (P) Ltd., the
611
appellant No. 1, have been blended with the second appellant
company, M/s. National Ekco Radio and Engineering Co. Ltd.,
and that there was no wilful default in payment of rent. The
application for eviction should, therefore be dismissed.
Two witnesses were examined on behalf of the landlord
and three witnesses were examined on behalf of the tenant.
The Rent Controller, Secunderabad, on consideration of
evidences on record held that the appellant No. 1 company
has sublet the premises to the appellant No. 2 company
without written consent of the landlord, as the amalgamation
of the first appellant-company with the second appellant-
company amounted to subletting or assignment. It was further
held that there was wilful default in payment of rent for
the period in question. The Rent Controller, therefore,
allowed the application and directed the appellants to
vacate and deliver vacant possession of the suit premises
under their occupation to the landlord-petitioner within a
period of three months from the date of the order.
Against this judgment and decree an appeal being Appeal
No. 406 of 1972 was preferred before the Chief Judge, city
Small Causes Court, Hyderabad. On 29.10.75 the Chief Judge,
City Small Causes Court, Hyderabad after hearing the parties
held that though the appellant No. 1 company voluntarily
sponsored the scheme of amalgamation, the ultimate power to
sanction or not to sanction it rested with the High Court.
The scheme of amalgamation though proposed by appellant No.
1 company voluntarily yet it became binding and enforceable
on all the parties only when it was made a rule of the
court. It was, therefore, held that the transfer of assets
and liabilities including the leasehold interest of
appellant No. 1 company to appellant No. 2 company took
place by virtue of the order of the court. It was held that
such a transfer of assets being an involuntary one did not
amount to assignment of lease by appellant No. 1 company to
appellant No. 2 company and as such it did not violate the
terms of the lease. By amalgamation of appellant 1 company
with appellant 2 company, the appellant 1 company is not
wound up but it is merely blended with the other company. It
was also held that there was no wilful default on the part
of the tenant to pay the rent for the period mentioned in
the petition inasmuch as in spite of the tender of the rent
the respondent-landlord
612
refused to accept the same and to grant receipt in the name
of appellant No. 2 company. The appeal was, therefore,
allowed and the order of the Rent Controller was set aside
dismissing the eviction petition with costs.
Against this judgment and order, an application in
revision being Civil Revision Petition No. 684 of 1974 was
filed in the High Court of Judicature of Andhra Pradesh,
Hyderabad. On April 23, 1976 the said Revision Application
was allowed and the judgment and decree of the Appellate
Court was set aside on restoring the decision of the Rent
Controller. It was held that the amalgamation of appellant
No. 1 company with appellant No. 2 company on the basis of
application made by the appellant No. 1 company by
submitting a scheme which was duly approved and sanctioned
by the High Court of Bombay was not an involuntary one and
this order of amalgamation indicated transfer of tenancy
right without any notice or opportunity to the landlord. It
is thus hit by the provision of s. 10(ii)(a) of the Andhra
Pradesh Buildings (Lease, Rent and Eviction) Control Act,
1960.
Against this judgment and order the instant appeal by
way of certificate granted by the High Court of Andhra
Pradesh has been preferred. The only question which falls
for consideration in this appeal is whether in view of the
order made by the High Court of Bombay on 27.3.1968
sanctioning the scheme of amalgamation proposed by the
appellant No. 1 company under ss. 391 and 394 of the
Companies Act in Company Petition No. 4 of 1968 and the
subsequent transfer of tenancy right in the suit premises
and vesting of the same in the 2nd appellant can be deemed
to be subletting of the tenancy right of the appellant No. 1
or transfer or assignment of interest in the tenanted
premises of the appellant No. 1 to the appellant No. 2
within the meaning of S. 10(ii)(a) of the said Act. The
appellant No. 1 General Radio and Appliances (P)
Ltd.admittedly took the premises in question on the basis of
an agreement dated 12th of January, 1959 duly executed by
him in favour of the landlord-respondent at a monthly rent
of Rs. 200 for a period of eleven months commencing from 7th
January 1959. Clause 4 of the said agreement is in the
following terms :
“That they shall not sublet the said premises or
613
any portion thereof to anyone without the written
consent of the landlord.”
On January 9, 1968 the appellant No. 1 M/s General
Radio and Appliances (P) Ltd., filed the Company Petition
No. 4 of 1968 in the High Court of Bombay under s. 394 of
the Companies Act for sanction of a scheme of amalgamation
with M/s National Ekco Radio & Engineering Co. Ltd., M/s.
General Radio & Appliances (P) Ltd. was shown as transferor
Company and the National Ekco Radio and Engineering Co. Ltd.
was shown as a transferee company in the said petition. The
High Court of Bombay by order dated 28th March, 1968
sanctioned the scheme of amalgamation. It is pertinent to
refer here to the relevant portions of the scheme which are
as follows :
“With effect from Ist day of January 1967 the
undertaking and all the property, rights, powers
of every description including all leases and
tenancy rights, industrial, import and all other
licences, quota rights of General Radio &
Appliances (P) Ltd. (hereinafter called the
transferor company) without further act or deed be
transferred and vested or deemed to be transferred
and vested in the National Ekco Radio &
Engineering Co. Ltd. (hereinafter called the
transferee company) etc.”
It has been urged on behalf of the appellant that the
amalgamation of M/s General Radio & Appliances (P) Ltd., 1st
appellant with the 2nd appellant company is involuntary one,
which has been brought into being on the basis of the order
of the High Court of Bombay made under ss. 391 and 394 of
the Companies Act. The first appellant company has not been
wounded up and or liquidated, but it has been merely blended
with the 2nd appellant on the basis of the order of the
court. As such there has been no subletting by the 1st
appellant company to the 2nd appellant company of the
tenancy right of the 1st appellant in respect of the suit
premises, nor there has been any transfer or assignment of
interest of the 1st appellant in respect of its tenancy
right in the premises in question in favour of the 2nd
appellant within the meaning of S. 10(ii)(a) of the said
Act. It has been further urged in this connection that the
1st appellant company by virtue of the scheme of
amalgamation which was sanctioned by the Bombay
614
High Court merely becomes a devision of the 2nd appellant
company i.e. M/s. National Ekco Radio and Engineering
Company Ltd. In other words, it was tried to be contended
that the 1st appellant company has not become extinct, but
it has been merged and or blended in the 2nd appellant
company. In order to determine this issue it is relevant to
set out herein the provisions of S. 10(ii)(a) of the Andhra
Pradesh Buildings (Lease, Rent and Eviction) Control Act,
1960 (A.P. Act No. 15 of 1960). Section 10(ii) runs as
follows :
“A landlord who seeks to evict his tenant shall
apply to the Controller for a direction in that
behalf. If the Controller, after giving the tenant
reasonable opportunity of showing cause against
the applicant is satisfied :
(ii) that the tenant has, in Andhra area after the
commencement of the Hyderabad House Rent Control
Order of 1953 Fasli without the written consent of
the landlord ;
(a) transferred his right under the lease or
sublet the entire building or any portion thereof,
if the lease does not confer on him any right to
do so.”
Section 2(ix) defines tenant :
“‘tenant’ means any person by whom or on whose
account rent is payable for a building and
includes the surviving spouse, or any son or
daughter, of a deceased tenant who had been living
with the tenant in the building as a member of the
tenant’s family up to the death of the tenant and
a person continuing in possession after the
termination of the tenancy in his favour, but does
not include a person placed in occupation of a
building by its tenant, etc.”
In the instant case the appellant No. 1 i.e. M/s
General Radio and Appliances Co. (P) Ltd. is undoubtedly the
tenant having taken lease of the premises in question from
the respondent landlord by executing a rent agreement dated
12th January, 1959 at a rental of Rs. 200 per month, the
tenancy
615
commencing from 7th day of January 1959. On the basis of the
sanction accorded by order of the High Court of Bombay made
on 27th March 1968 sanctioning the scheme of amalgamation in
Company Petition No. 4 of 1968 filed by the 1st appellant,
all the property, rights and powers of every description
including all leases and tenancy rights etc. of the 1st
appellant were transferred to and vested or deemed to be
transferred and vested in the 2nd appellant M/s National
Ekco Radio and Engineering Co. Ltd. It also appears that the
appellant No. 1 company stood dissolved from 16th of April,
1968. This clearly goes to show that the General Radio and
Appliances (P) Ltd., the tenant company has transferred all
its interest in the tenanted premises in favour of the
appellant No. 2 i.e National Ekco Radio and Engineering Co.
Ltd. (the transferee company). The order of amalgamation has
been made on the basis of the petition made by the
transferor company in Company Petition No. 4 of 1968 by the
High Court of Bombay. As such it cannot be said that this is
an involuntary transfer effected by order of the court.
Moreover the 1st appellant company is no longer in existence
in the eye of law and it has effected itself for all
practical purposes. The 2nd appellant company i.e.
transferee company is now the tenant in respect of the suit
premises and the 1st appellant company has transferred
possession of the suit premises in favour of the 2nd
appellant company. There is undoubtedly no written
permission or consent of the respondent landlord to this
transfer of tenancy right of the 1st appellant company as
required under S. 10(ii)(a) of the said Act. Moreover even
it is assumed to be a subletting to the 2nd appellant by the
1st appellant, such subletting has been made contrary to the
provisions of the said Act and in violation of the terms of
clause 4 of the tenancy agreement (Exhibit P-6) which
clearly prohibits such subletting of the tenanted premises
without the written permission of the landlord. The Andhra
Pradesh Building (Lease, Rent and Eviction) Control Act,
1960 is a special Act which provides for eviction of tenants
on certain specific grounds mentioned in S. 10 of the said
Act. There is no express provision in the said Act that in
case of any involuntary transfer or transfer of the tenancy
right by virtue of a scheme of amalgamation sanctioned by
the court by its order under ss. 391 and 394 of the
Companies Act as in the present case, such transfer will not
come within the purview of S. 10(ii)(a) of the said Act. In
other words such a transfer of tenancy right on the basis of
616
the order of the court will be immune from the operation of
the said Act and the transferee tenant will not be evicted
on the ground that the original tenant transferred its right
under the lease or sublet the tenanted premises or a portion
thereof. It is important to note in this connection the
definition of tenant as given in S. 2(ix) of the said Act
which provides specifically that a tenant does not include a
person placed in occupation of a building by its tenant. On
a plain reading of this provision it is crystal clear that
any person placed in occupation of a building by the tenant
cannot be deemed or considered to be a tenant in respect of
the premises in which the said person is to be in possession
within the meaning of the said Act. Therefore, the 2nd
appellant i.e. National Ekco Radio and Engineering Co. Ltd.
the transferee company who has been put in possession of the
tenanted premises by the transferor tenant General Radio and
Appliance Co. (P) Ltd. cannot be deemed to be tenant under
this Act on the mere plea that the tenancy right including
the leasehold interest in the tenanted premises have come to
be transferred and vested in the transferee company on the
basis of the order made under ss. 391 and 394 of the
Companies Act.
The effect of an order under S. 153(A) of the Companies
Act 1913 which corresponds to ss. 391 and 394 of the
Companies Act, 1956 has been very succinctly stated in the
case of Sahayanidhi Virudhungar Ltd. v. A.S.R. Subrahmanya
Nadar & Ors., 1951 A.I.R. Madras p. 209. Section 153(A) of
the Companies Act has been enacted with a view to facilitate
arrangements and compromise between a Company and its
creditors or shareholders which involve a transfer of its
assets and liabilities to other companies as part of such
agreement. If any such scheme or arrangement is sanctioned
by court, the court is empowered by the section to make
provisions by its order sanctioning the arrangement or any
subsequent order, for the transfer of the assets and
liabilities of a company in liquidation to another company
styled in the section as transferee company. Where an order
of court made under the section provides for the transfer of
the assets and liabilities of a company in liquidation to
another company, the assets are, by virtue of that order,
without more, transferred to and vest in the transferee
company and the liabilities of the former company are also
cast upon the transferee company. Under the ordinary law of
contract while
617
assets are assignable, liabilities under contracts or duties
arising thereunder are not assignable, but the effect of S.
153(A) is to some extent to override the ordinary law. Thus
by an order sanctioning amalgamation of the rights, interest
and liabilities of the transferor company are transferred
and vested in the transferee company. It appears that by the
order of amalgamation, the interest, rights of the
transferor company in all its properties including leasehold
interest and tenancy rights are transferred and vested in
the transferee company.
It has been urged that the effect of amalgamation is
analogous to that of a man who enters with partership with
another. The two companies do not become jointly liable to
their respective separate creditors and neither becomes
liable for the debts of the other. The general effect of
amalgamation as provided in Halsbury’s Laws of England (3rd
Edition) Vol. 22, P. 432 has been referred to in this
connection and it has been submitted that by the
amalgamation there has been no subletting as the 1st
appellant company has co-interest in transferee company, the
2nd appellant company herein. The case of Devarajulu Naidu
v. Ethirajavalli Thyaramma, [1949] 2 M.L.R. p. 423 has been
referred to in this connection. In that case the original
tenancy was in favour of three persons who were partners in
the firm and after dissolution of the partnership firm one
of the partner was allowed to wind up the affairs of the
partnership and thereafter he was allowed to use the demised
premises for his sole business. The question arose whether
in such case the landlord was entitled to eviction of that
partner from the tenanted premises on the ground that there
was subletting. It was held in the facts of that case that
the original tenancy being in favour of three persons who
were partners in the firm and act on the part of the two
partners after dissolution of the firm to allow one of the
parterns to use the premises for his sole business could not
amount to a transfer or subletting of the premises to the
petitioner. It has been observed as follows :
“This act on the part of the two partners other
than the petitioner cannot amount to a transfer or
sub-letting of the premises to the petitioner. It
is true that the Courts in England have taken up
an extreme view that even when one of two partners
618
after the dissolution of the partnership assigns
to the other partner the interest of the
partnership in premises which had been taken on
lease by the partnership, it would amount to a
breach of the covenant prohibiting an assignment
of the lease without the consent of the lessor.
But this Court was not inclined to apply this
doctrine to Indian conditions. In Koragalva v.
Jakri Beary, (1926, 52 M.L.J. 8) Devadoss, J. held
that the transfer by a co-lessee in favour of
another lessee of his right in the lease would not
be a breach of a covenant against the assignment
without the consent of the landlord.”
This decision has got no application to the instant
case inasmuch as in that case the only question involved was
whether the transfer by co-lessee in favour of another
lessee of his rights would be a breach of covenant against
assignment without the consent of the landlord.
We have already stated hereinbefore that the 1st
appellant company, the tenant, has transferred their
interest in the tenanted premises to the appellant No. 2
company on the basis of the order made by the High Court of
Bombay in Company Petition No. 4 of 1968 sanctioning the
scheme submitted to it by the transferor company. We have
also held that this is not an involuntary transfer by
operation of law, but a transfer of the interest of the
tenant company on the basis of their application made before
the said High Court in the said Company Petition.
Furthermore, we have also held that the Andhra Pradesh
Buildings (Lease, Rent and Eviction) Control Act, 1960 which
is a special Act provides specific grounds for termination
of a tenancy and eviction of the tenant in S. 10(ii)(a) i.e.
on the ground of subletting and/or transferring the interest
of the tenant either in whole or any part of the tenanted
premises to another person. Thus the Act prohibits in
specific terms both subletting as well as the transfer or
assignment of the interest of the tenant. Moreover clause 4
of the rent agreement executed by the 1st appellant
expressly prohibits subletting of the tenanted premises
without the express consent of the landlord. The transferor
company in this case has undoubtedly been dissolved and the
company has ceased to exist for all practical purpose in the
eye of law.
619
All the interest of the transferor company including
possession in respect of the tenanted premises have been
transferred to the transferee company in contravention of
the provisions of the said Act as well as in contravention
of the terms and conditions of the said rent agreement
thereby making the transferee company liable to be evicted
from the tenanted premises.
It has been observed by Subba Rao, J. in the case of
Venkatarama Iyer v. Renters Ltd., [1951] II M.L.R. 57 as
follows :
“The Madras Buildings (Lease and Rent) Control Act
applies not only to residential and non-
residential buildings, but also to same buildings
used for both purposes. If a Company doing
business in a particular premises (taken on lease)
transfers its business as a going concern to
another company and also the net assets for
consideration and thereafter the transferee
company takes over the business and carries on
business in the premises let out to the former
company it cannot be said that there was no
transfer of the right of the former company under
the lease to the latter company. On such transfer
the tenant is liable to be evicted.”
It is pertinent to mention in this connection the
decision of this court in Parasaram Harnand Rao v. Shanti
Prasad Narinder Kumar Jain & Anr., [1980] 3 S.C.R. p. 444.
In this case the appellant landlord executed a lease in
respect of the disputed premises in favour of respondent No.
2 for three years on 1.4.1942. In 1948 the appellant
landlord filed a suit for eviction of the tenant for non-
payment of the rent and for conversion of user of the
premises. The suit for possession was dismissed, but a
decree for arrears of rent was passed and it was held that
Laxmi Bank was the real tenant. The Bombay High Court
subsequently made an order that the Bank be wound up and in
the winding up proceedings, the High Court appointed an
official liquidator who sold the tenancy right to the
respondent No. 1 in 1961. The sale was subsequently
confirmed by the High Court and the respondent No. 1 took
possession of the premises on 24.2.1961. The landlord
620
appellant filed an application under the Delhi Rent Control
Act for eviction of the Laxmi Bank and a decree for eviction
was passed in favour of the appellant. Thereafter respondent
No. 1 filed a suit for declaration that he was tenant of the
landlord. The suit was dismissed and the appeal against that
order also failed. The respondent No. 1, however, filed an
application for recalling the warrant of possession issued
by the court in pursuance of the decree in favour of the
appellant. This ultimately came up in second appeal and the
High Court allowed the Rent Controller’s order allowing
recalling of warrant of possession. On appeal by special
leave this Court held that the amplitude of S. 14(b) of the
Delhi Rent Control Act was wide enough not only to include
any sublease but even an assignment or any other mode by
which possession of the tenanted premises is parted. In view
of the wide amplitude of s. 14(b), it does not exclude even
an involuntary sale.
On a conspectus of all these decisions referred to
hereinbefore the irresistible conclusion follows that there
has been a transfer of the tenancy interest of appellant No.
1 in respect of the premises in question to the appellant
No. 2, subsequently renamed appellant No. 3 M/s. National
Radio Electronics Co. Ltd. in utter contravention of the
provisions of S. 10(ii)(a) of the said Act as well as of the
terms and conditions of clause 4 of the rent agreement dated
12.1.1959 executed by 1st appellant i.e. M/s General Radio
and Appliances (P) Ltd. in favour of respondent landlord.
We, therefore, affirm the judgment and order passed by
the High Court of Judicature Andhra Pradesh and dismiss this
appeal. There will, however, be no order as to costs.
S.R. Appeal dismissed.
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