Summary
The Supreme Court held that when a tenant bank was amalgamated into Punjab National Bank under a scheme framed under Section 45 of the Banking Regulation Act, 1949, and the tenancy and possession passed to PNB without the landlord's written consent, the ground of eviction under Section 14(1)(b) of the Delhi Rent Control Act, 1958 was made out. The provision does not distinguish between voluntary and involuntary transfers, and a Section 45 scheme is administrative, not legislative, so it cannot override Section 14(1)(b).
Issues
- Whether the amalgamation of the tenant bank with PNB under a scheme framed under Section 45 of the Banking Regulation Act, 1949 amounts to subletting, assignment or parting with possession under Section 14(1)(b) of the Delhi Rent Control Act, 1958.
- Whether a transfer of tenancy that is involuntary, or that results from a scheme sanctioned by the Central Government, falls outside Section 14(1)(b).
- Whether a Section 45 amalgamation scheme is legislative in character so as to override the Delhi Rent Control Act, and whether Asha Rohatgi applied.
Provisions considered
- Section 14(1)(b), Delhi Rent Control Act, 1958Quoted in the judgment, the clause allows eviction where the tenant has sublet, assigned or otherwise parted with possession of the premises without the landlord's written consent. The Court held it wide enough to cover every mode of transfer, voluntary or involuntary, including amalgamation, and found both of its ingredients met when HCB ceased to exist and PNB took possession without consent. (¶¶ 6, 7, 8, 11, 12, 13, 14, 15)
- Section 45 (sub-sections (4), (7), (8) and (11)), Banking Regulation Act, 1949The amalgamation scheme was framed by the RBI under Section 45(4) and sanctioned under Section 45(7). Following K.I. Shephard, the Court held that the scheme-making process is administrative, and laying the scheme before Parliament does not make it legislative, so the scheme cannot have the status of a statute overriding Section 14(1)(b). (¶¶ 2.2, 9, 16, 17, 18, 20)
- Section 9, Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980Distinguished. Under New Bank of India Employees' Union, a scheme under Section 9 is legislative because it takes effect only after Parliament's approval, unlike a Section 45 scheme, so Asha Rohatgi, decided on a Section 9 amalgamation, did not apply. (¶ 20)
Held
- Section 14(1)(b) of the DRC Act requires (1) that the tenant has sublet, assigned or parted with possession of the whole or part of the premises, and (2) that this was done without the landlord's written consent. Parting with possession means the tenant divesting itself of both physical possession and the right to possession in favour of another. (¶¶ 7, 8)
- Following Parasram Harnand Rao and Singer India, Section 14(1)(b) turns on the factual occurrence of a transfer. Whether the transfer was voluntary or involuntary, and the reasons for it, are irrelevant, and the provision makes no exception for transfers under an amalgamation scheme or made to comply with law. Once tenancy rights and possession pass to another entity without written consent and the original tenant loses its identity, the ground is made out. (¶¶ 11, 11.1, 11.2, 12, 14, 15)
- On amalgamation the transferor company ceases to exist. When HCB merged into PNB on 19.12.1986, its tenancy rights vested in PNB, which came to occupy the premises without the landlord's written consent, so both ingredients of Section 14(1)(b) were satisfied. (¶¶ 9, 10, 13)
- A scheme of amalgamation framed by the RBI under Section 45(4) of the Banking Regulation Act is administrative, not legislative (K.I. Shephard), and cannot be treated as a statutory enactment overriding Section 14(1)(b). Decisions on statutory vesting under the Esso (Acquisition of Undertakings in India) Act, 1974 are therefore distinguishable, and the public-interest character of the scheme does not matter once possession has been parted with. (¶¶ 16, 17, 18, 19)
- The High Court wrongly relied on Asha Rohatgi, which concerned a scheme under Section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980. Such a scheme is legislative because it needs Parliament's approval, unlike a Section 45 Banking Regulation Act scheme (New Bank of India Employees' Union). (¶ 20)
Result
Appeal allowed; the High Court's judgment set aside and the eviction decree of the Additional Rent Control Tribunal restored. The respondents were given until 31 January 2027 to deliver vacant possession, on filing an undertaking within four weeks and continuing to pay rent, failing which the landlord may take possession in accordance with law.