Advertisement
What really powers the cloud? Behind every Google search, A...
A lot of what defines a home isn’t visible at handover. I...
Private equity has played a significant role in shaping Indi...
Luxury real estate is one of the most talked-about segments ...
Airports play a much bigger role than just enabling travel -...
The Supreme Court has ruled that the merger of a tenant bank with another bank does not protect the successor bank from eviction under the Delhi Rent Control Act if the landlord's written consent was not obtained. The verdict ends a legal dispute that began in 1987 over a commercial property in Delhi's Connaught Circus. The court directed Punjab National Bank to vacate the premises by January 31, 2027, holding that the RBI-backed merger of Hindustan Commercial Bank with PNB did not override the provisions of the Delhi Rent Control Act.
The Supreme Court has held that the merger of a tenant bank with another bank does not exempt the successor entity from eviction under the Delhi Rent Control Act if the landlord's written consent was not obtained before the transfer of possession.
With the ruling, the apex court brought an end to a legal dispute that continued for nearly four decades and directed Punjab National Bank (PNB) to hand over peaceful and vacant possession of a commercial property at Pratap Building in Connaught Circus, New Delhi, to British Motor Car Company Ltd by January 31, 2027.
A bench comprising Justices Sanjay Karol and K. Kotiswar Singh allowed the eviction petition filed by British Motor Car Company Ltd, which had approached the local rent court in 1987 after the tenancy changed following the bank merger.
The dispute traces its origins to 1947, when British Motor Car Company Ltd leased the commercial premises to Hindustan Commercial Bank (HCB). Later, under a Reserve Bank of India (RBI)-backed amalgamation scheme implemented in 1986, HCB merged with Punjab National Bank, following which PNB took over possession of the property.
The landlord subsequently initiated eviction proceedings, contending that the transfer of possession to PNB amounted to assignment or parting with possession without obtaining the landlord's written consent, making it liable for eviction under Section 14(1)(b) of the Delhi Rent Control Act.
Under Section 14(1)(b) of the Act, a tenant can be evicted if the rented premises are sublet, assigned or possession is transferred to another party without the landlord's prior written approval.
The Supreme Court examined whether the amalgamation of Hindustan Commercial Bank with Punjab National Bank fell within the scope of this provision.
Writing the judgment for the bench, Justice Sanjay Karol observed that even where a merger is involuntary or carried out under a government-backed notification, the successor entity is still required to comply with the provisions of the Delhi Rent Control Act regarding the landlord's consent.
The court explained that before an eviction order can be passed under Section 14(1)(b), two conditions must be satisfied: the tenant must have sublet, assigned or parted with possession of the premises, and this transfer must have taken place without obtaining the landlord's written consent.
The bench further held that the amalgamation scheme framed by the Reserve Bank of India could not be treated as a statutory enactment capable of overriding the provisions of the Delhi Rent Control Act. It concluded that the merger of Hindustan Commercial Bank with Punjab National Bank made PNB liable for eviction under the Act.
The litigation witnessed differing judicial views over the years. In 1995, the Additional Rent Controller dismissed the landlord's eviction petition after treating the merger as having statutory force that was binding on the landlord.
That decision was overturned in 2001 by the Rent Control Tribunal, which ordered eviction after holding that the protections available under rent control laws prevailed over banking regulations in such matters.
The matter took another turn in 2012 when the Delhi High Court set aside the eviction order, observing that the merger was an involuntary event beyond the tenant's control. The landlord then challenged the High Court's decision before the Supreme Court, which has now restored the eviction order and settled the legal position.
The ruling is expected to serve as an important precedent for landlord-tenant disputes involving mergers, acquisitions and corporate restructuring, particularly where leased properties are transferred without obtaining the landlord's written consent as required under rent control laws.
Source PTI
Advertisement
Facebook
Whatsapp
