GENERAL RADIO & APPLIANCES CO. LTD. & ORS. versus M.A. KHADER (DEAD) BY LRS.

607

GENERAL RADIO & APPLIANCES 00. LTD. & ORS. v. K.A. KHAilKR (DEAD) BY I.RS.

APRIL 17, 1986

[O. CHINNAPPA REDDY, B.C. RAY AND K.N. SINGH, JJ.]

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Andhra Pradesh Buildings

(Lease, Rent and Eviction) Control Act, 1960 (AP Act No. 15 of 1960), section lO(ii) (a) read with section 2(ix) - Transfer of tenancy right under the lease/subletting, meaning the voluntary of amalgamation by virtue of the provisions of sections 391 and ') 394 of the Companies act, 19 56 of a company having tenancy to a ·~ "transfer of tenancy rights". within the meaning of AP Act 15

in a building with another company amounts

Whether

rights

of 1960 - Subsequent events, taking judicial notice of.

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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 co11pany 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 co11panies, appellant No. l company stood dissolved from 16 April 1968. The respondent landlord issued a notice on 26,12.1968 to the first appellant

--r company terminating the tenancy on the ground of subletting ·. t- No.

and/ or transfer and assignment of the interest of appellant l company to the appellant No.2 company. Thereafter, the respondent filed the Rent Control Case No. 96 of 1969 for eviction under Rule lO(H)(a) of the AP Act 15 of 1960. The Rent Controller accepted respondent, both namely, unauthorised subletting of the premises and wilful default in payment of rent and negatived the defence of the appellants that conseguent upon the scheme of amalgamation when made a rule of' the Court, there was no transfer or sub- · ~ letting but a blending of' two companies together. In appeal, the Chief Judge, City Small Causes Court set aside the evic tion orders holding that a transfer of assets under a scheme

the pleas of

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608

SUPREME COURT REPORTS

[1986] 2 S.C.R.

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. l '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 transfer or in the said Act that in case of any involuntary transfer of the tenancy right by virtue of a scheme of amal- ?' gamation sanctioned by the Court by its order under sections 1 391 and 394 of the Companies Act as in the present case, such ..,.._ transfer will not come within the purview of section lO(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 iillllllle 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-Bl

second appellant

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, y the Engineering Co. Ltd., the transferee company who has been put -j tenanted premises by the transferor in possession of the (P) Ltd. cannot be tenant General Radio and Appliance Co. 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 trans feree company on the basis of the order made under sections 391 and 394 of the Companies Act. [616 B-D]

is National Ekco Radio and

that

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]

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GENL. RADIO CO. v. M.A. KHADER

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 lO(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)

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Sabbayanidbi Virucllumagat" Ltd. v. A.S.R. Subrah•••eya lladar & Ors., 1951 A.l.R. Madras p. 209 and Parasaraa Hamand Rao v. Shanti Prasad Rarinder Kimer Jain & Anr., [1980) 3 S.C.R. p. 444, referred to.

Devarajulu Naidu v. Ethirajavalli 'lbyar-, [1949) 2

M.L.R. p. 423, held inapplicable.

Venkataram Iyer v. Renters Ltd., [1951) II M.L.R. P• 57

approved •

......

CIVIL APPELLATE JURISDICTION Civil Appeal No. 1923 of

~ 1976.

t

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

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610

SUPREME COURT REPORTS

[1986] 2 s.c.R.

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 first and the voluntary amalgamation of second appellants companies amounts to a transfer of the first appellant's right under the lease withic the meaning of s. 10 (ii)(a) of Andhra Pradesh Buildings (Lease, Rent & Eviction) t 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 r

(P) Ltd., the first appellant, on a

Raio & Appliances Co. monthly rent of Rs. 200 on the basis of the rental agreement ~ dated January 12, 1959 (Exhibit P-f>) 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 ~cember 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 Appellant tenant 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 l appellants Nos. 1 and 2 filed a joint counter contending there was neither subletting, nor assignment of the tenancy --1 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 'in Rem' and i t was of the Bombay High Court was judgment 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 the held by

the M/ s. General Radio Appliance

(P) Ltd.,

that

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GENL. RADIO CO. v. M.A. KHADER

[B.C. RAY, J.]

611

appellant No. 1, have been blended with the second appellant .--coq>any, 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.

~premises to

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 coq>any has sublet the the appellant No. 2 coq>any without written consent of the landlord, as the amalgamation of the first appellant-coq>any with the second appellant-company amounted to subletting or assigruoont. It was further held that there was wilful default in payment of rent for the period in -~question. The Rent Controller, therefore, allowed the applica ..& tion 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.

•

therefore, held

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, • ~ ~~~~ st~ltl ~:~ ~h:rt~P~~~~::~dN:.ftet ~~:!: ~~~u~~:~~~; 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 transfer of assets and was, ~ liabilities including the leasehold interest of appellant No. 1 company to appellant No. 2 coq>any took place by virtue of the order of the court. It was held that such a transfer of assets being art involuntary one did not amount to assigruoont 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 coq>any. 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 inasl1llch as respondent-landlord in spite of the tender of the

that

rent

the

the

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612

SUPRDIE COURT REPORTS

(1986] 2 s.c.R.

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.

this

Against

judgment and order, an application in revision being Civil Revision Petition No. 684 of 1974 was filed in the High Court of Judicature of And hr a 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. l company with appellant No. 2 company on the basis of application made by l company by suhnitting a scheme which was _.,, the appellant No. duly approved and sanctioned by the High Court of Bombay was 'f not an indicated transfer of tenancy right without any notice or opportunity to the landlord. It is thus hit by the provision of s. lO(ii)(a) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960.

involuntary one and

this order of amalgamation ,,.

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,.. . '

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. l 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 to be subletting of the tenancy right of the can be deemed appellant No. l or transfer or assignment of interest in the tenanted premises of the appellant No. l to the appellant No. lO(ii) (a) of the said Act. The 2 within the meaning of s. appellant No. (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 :

l General Radio and Appliances

"That they shall not sublet the said premises or

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GENL. RADIO CO. v. M.A. KllADER

[B.C. RAY, J,]

613

any portion thereof to anyone without the written A consent of the landlord."

On January 9, 1968 the appellant No· 1 M/s General Radio and Appliances (PJ 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 B Ekco Radio & Engineering Co. Ltd., M/s. General Radio & -i 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 1st 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, '"-'t which has been brought into being on the basis of the order of the the High Court of Bombay made under as. 391 and 394 of Y 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

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614

SUPRDIE COURT REPORTS

[1986 J 2 S, C, R,

High Court merely becomes a devision of the 2nd appellant company i.e. M/s. National Ekco Radio and Engineering Company "a Ltd. In other words, it was tried to be coritended 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 lO(ii)(a) of the Andhra Pradesh Buildings provisions of S. (Lease, Rent and Eviction) Control Act, 1960 (A.P. Act No. 15 of 1960), Section lO(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 t 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."

. .J..

,

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 -r' deceased tenant who had been living with the tenant ' in the building as a member of the tenant's family -j up tenant and a person ' the 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."

the death of

to

In the instant case the appellant No. 1 i.e. M/s General

Radio and Appliances Co. having the respondent landlord by executing a rent agreement dated 12th January, 1959 at a rental of Rs. 200.per month, the tenancy

lease of the premises in question from

(P) Ltd. is undoubtedly the tenant ~

taken

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GENL. RADIO CO. v. M.A. KllADER

[B.C. RAY, J,]

615

in favour of

the appellant No. 2

colllllE!Ilcing from 7th day of January 1959. On the basis of the 'A 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 --iEngineering 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 i .e tenanted premises - National Ekco Radio and Engineering Co. Ltd. (the transferee ~company). The order of amalgamation has been made on the basis -1 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 t- (Exhibit P-6) which clearly prohibits such subletting of the tenanted premises wi.thout the written permission of the land lord. 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 the Companies i\ct 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

·~by the court by its order under ss. 391 and 394 of

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616

SUPROO COURT RERJRTS

[19861 z s.c.R.

the order of the ccrurt will be illlllune 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 de finition 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 bnfldfng by its tenant. On a plain reading of this provision it is crystal clear that any persont' placed in occupation of a building by the tenant cannot be deemed or considered to be a tenant in respect of the preniises 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 r' company who has been put premises by the transferor tenant General Radio and Appliance f-. 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.

in possession of

tenanted

the

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involve a transfer of its ..Y- ·

a Company and

compromise between

The effect of an order under S. 153(A) of the Companies Act 1913 which corresponds to ss. 391 and 394 of the Companies .J. • 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 its and creditors or shareholders which assets and liabilities to other companies as part of such agreement. If any such scheme or arrangement is sanctioned by--j court, to make provisions by its order sanctioning the arrangement or any subsequent order, 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

is empowered by

the section

transfer of

the court

for

the

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GENL. RADIO CO. v. M.A. KllADER

[B.C. RAY, J.]

617

A

~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 transferor company are transferred and vested in the transferee company. It appears that by the order B of amalgamation, transferor interest, rights. of company in all its properties including leasehold interest and -4tenancy rights are transferred and vested in the transferee

the

the

the

co~any.

jointly liable

"\ another. The two companies do not become

It has been urged that the effect -of amalgamation is analogous to that of a man who enters with partership with to .their respective separate creditors and neither becomes liable -1.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 co~any herein. lne case of Devarajulu Naidu v. Ktbirajavalli Thyar811111a, [ 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 the partnership firm one of the partner was allowed to wind up the affairs of the partnership and there.after he was allowed the demised premises for his sole business. The to use , question arose whether in such case the landlord was entitled ·t 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 :

the firm and after dissolution of

in

"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

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618

SUPRE11E COURT REPORTS

[1986) 2 s.c.R.

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 to a breach of the partnership, it would amount 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 Ioragalva v • .lakri Beary, (1926, 52 M.L,J, 8) Devadoss, J, held that the transfer by ~ 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."

y lhis decision has got no application to the instant case1 involved was~­

inasmuch as 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.

the only question

in that case

We

the

that

have already

stated hereinbefore

the said High Court

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 Companf_ _ ' 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 tenant company on the basis of their application made before Company Petition. Furthermore, we have also held that the· Andhra Pradesh Buildings (lease, Rent and Eviction) Control I Act, 1960 which is a special Act provides specific grounds for'Y tenancy and eviction of the tenant in S. termination of a lO(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. lhus 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 !St appellant expresslyl prohibits subletting of the, express consent of the landlord. lhe 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.

tenanted premises without

the

in the said~

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GENL. RADIO CO. V• M.A. KHADER

[B.C. RAY, J.)

619

~ ~!n t~~ ::st::::tof0~i!~e:n~~e;~~=:a~vei~1:~:8.:r::::~

to the transferee company in contravention of the provisions of the said Act as well as in contravention of the terms and conditions of thereby making the transferee company liable to be evicted from the tenanted premises.

the said rent agreement

-f

It has been observed by Subba Rao, J, in the case of [1951) II M. L. R. 57 as

llenten Ltd.,

Yenkatarw Iyer V• 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 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 transfer of the right of the that there was no former company under latter the company. On such transfer the tenant is liable to be evicted."

consideration

the net

assets

lease

for

the

to

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in

to mention

this connection

It is pertinent

the decision of this court in Parasarm Bamand Rao v. Shanti "'lPrasad Narinder Kollar 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 Bomaby 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 H

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SUPREME COURT REPORTS

[1986] 2 s.c.R.

;"

in pursuance of

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. l 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. l, however, filed an application for recalling the warrant of possession issued by the court the appellant. This ultimately came up in second appeal and th~ the Rent Controller's order allowing High Court allowed 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 sub lease !mt even an assignent or any other mcle by which{. possession of the tenanted premises is parted. In view of wide amplitude of s. l4(b), it does not exclude even anl-· invohmtary sale.

in favour of

the decree

the t

On a conspectus of all these decisions ref erred 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 provision~-' of S. lO(ii)(a) of the said Act as well as of the terns and conditions of clause 4 of the rent agreement dated 12.1.1959 executed by i.e. M/s General Radio and Appliances (P) Ltd. in favour of respondent landlord.

lst appellant

We,

therefore, affirm the judgment and order passed by f~

the High Court of Judicature Andhra Pradesh and dismiss thi~-J " appeal. There will, however, be no order as to costs.

S.R.

Appeal dismissed.