British Motor Car Company (1939) Ltd v. M/s Hindustan Commercial Bank Ltd

Judgment

[2026] 7 S.C.R. 581 : 2026 INSC 671 British Motor Car Company (1939) Ltd. v. M/s Hindustan Commercial Bank Ltd. Since Has Been Merged Into Punjab National Bank & Anr. (Civil Appeal No. 5714 of 2012) 09 July 2026 [Sanjay Karol* and Nongmeikapam Kotiswar Singh, JJ.] Issue for Consideration Whether the amalgamation of Hindustan Commercial Bank- Respondent No.1 with Punjab National Bank-Respondent No.2, effected pursuant to the scheme framed under the Banking Regulation Act, 1949, attracts s.14(1)(b) of the Delhi Rent Control Act 1958 or not. Headnotes† Delhi Rent Control Act 1958 – s.14(1)(b) – Banking Regulation Act, 1949 – Effect of amalgamation on tenancy rights – s.14(1)(b), 1958 Act, if attracted – Original tenant-Hindustan Commercial Bank (HCB-Respondent No.1) was amalgamated with Punjab National Bank (PNB-Respondent No.2), consequently, all assets, rights, liabilities and obligations of HCB stood vested in PNB which came into possession of the tenanted premises – Appellant-landlord sought eviction of the respondents from the tenanted premises u/s.14(1)(b) r/w s.14(1)(j), DRC Act contending that HCB had sublet/assigned/parted with possession of the tenanted premises in favour of PNB without obtaining their written consent, hence PNB being an unauthorized subtenant is liable to be evicted u/s.14(1)(b), DRC Act – Eviction petition dismissed by Additional Rent Controller – Appeal filed by appellant, decree of eviction passed by Rent Control Tribunal – Revision Petition filed by respondents, eviction decree set aside by High Court – Interference with: Held: ‘Amalgamation’ denotes the fusion of two or more companies into one by merger or by one taking over the other – When two companies amalgamate and merge into one, the transferor company ceases to exist as a separate entity – s.14(1)(b) of the DRC Act is wide enough to encompass every mode by which possession * Author 582 [2026] 7 S.C.R. or tenancy rights of the demised premises are transferred from the original tenant to another entity – Once the possession of the tenanted premises, together with the accompanying rights, passes to an entity other than the original tenant without the written consent of the landlord, and the tenant losing its identity and control of possession of the tenanted premises, s.14(1)(b) of the DRC Act stands automatically attracted – Therefore, what is material is that- there is a transfer of tenancy rights and possession of the tenanted premises; and such transfer is done without the written consent of the landlord – Undisputedly, upon the amalgamation taking effect, the original tenant-HCB ceased to exist and all its rights, liabilities, assets and interests, including the tenancy rights qua the tenanted premises stood vested in PNB – Thus, HCB parted with the possession of the tenanted premises and PNB came to occupy the same – Such a transfer took place without the written consent of the landlord – Therefore, both the ingredients of s.14(1)(b) of the DRC Act stood fully met – Amalgamation of the original tenant-HCB with PNB rendered PNB liable to be evicted from the tenanted premises u/s.14(1)(b) of the DRC Act – Impugned judgment set aside – Judgment passed by the Rent Control Tribunal whereby the suit for eviction was decreed, restored – Companies Act 1956. [Paras 10, 12, 13, 21] Delhi Rent Control Act 1958 – s.14(1)(b) – Banking Regulation Act, 1949 – s.45 – Plea of the respondent(s) that since the amalgamation was effected pursuant to a Gazette Notification and a scheme prepared by RBI u/s.45 of the BR Act, the transfer of tenancy rights and possession must be regarded as involuntary and falling outside the ambit of s.14(1)(b): Held: Contention not agreed with, unsustainable in law – Applicability of s.14(1)(b) depends upon the occurrence of a factual situation, namely, sub-letting or assignment or otherwise parting with possession of the whole or any part of the premises by the tenant – It does not distinguish between voluntary and involuntary transfers, nor does it carve out any exception in favour of transfers effected pursuant to a scheme of amalgamation or to secure compliance with law – Therefore, where, upon amalgamation effected u/s.45 of the BR Act, the tenancy rights vest in another entity and possession qua tenanted premises passes to it without the written consent of the landlord, the ingredients of s.14(1)(b) shall stand fully satisfied – The reasons necessitating such transfer or whether it was voluntary or involuntary, are wholly immaterial for the purposes of attracting the Supreme Court Reports [2026] 7 S.C.R.

583 said provision – The ground of eviction u/s.14(1)(b) of the DRC Act is clearly made out in the facts of the present case. [Paras 14, 15] Words and Phrases – ‘amalgamation’ – Meaning: Held: ‘amalgamation’ denotes the fusion of two or more companies into one by merger or by one taking over the other – When two companies amalgamate and merge into one, the transferor company ceases to exist as a separate entity – The true effect and character of an amalgamation largely depends on the terms of the merger scheme. [Para 10] Banking Regulation Act, 1949 – s.45 – Delhi Rent Control Act 1958 – s.14(1)(b) – Respondent(s) contended that the amalgamation in the present case was triggered pursuant to a scheme framed by RBI in exercise of its ‘statutory power’ u/s.45 of the BR Act and such a scheme-framing process is legislative in nature – It was thus, submitted that since the tenancy rights stood vested in PNB pursuant to the operation of a statutory scheme, the said transfer could not be equated with assignment or parting with the possession within the meaning of s.14(1)(b) of the DRC Act: Held: Contention is misconceived – The scheme-making process u/s.45 of the BR Act is administrative in nature and not legislative – Merely because a scheme framed u/s.45 of the BR Act is required to be sanctioned by the Central Government and placed before both the Houses of Parliament, it does not become legislative in nature – Thus, the amalgamation scheme framed by the Reserve Bank of India, in exercise of power u/s.45(4) of the BR Act, cannot be accorded the status of a statutory enactment so as to override the operation of s.14(1)(b) of the DRC Act. [Paras 16, 17] Case Law Cited