{"id":161571,"date":"1986-04-17T00:00:00","date_gmt":"1986-04-16T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/general-radio-appliances-co-vs-m-a-khader-dead-by-lrs-on-17-april-1986"},"modified":"2017-04-09T18:34:10","modified_gmt":"2017-04-09T13:04:10","slug":"general-radio-appliances-co-vs-m-a-khader-dead-by-lrs-on-17-april-1986","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/general-radio-appliances-co-vs-m-a-khader-dead-by-lrs-on-17-april-1986","title":{"rendered":"General Radio & Appliances Co. … vs M.A. Khader (Dead) By Lrs on 17 April, 1986"},"content":{"rendered":"
Supreme Court of India<\/div>\n
General Radio & Appliances Co. … vs M.A. Khader (Dead) By Lrs on 17 April, 1986<\/div>\n
Equivalent citations: 1986 AIR 1218, \t\t 1986 SCR (2) 607<\/div>\n
Author: B Ray<\/div>\n
Bench: Ray, B.C. (J)<\/div>\n
           PETITIONER:\nGENERAL RADIO & APPLIANCES CO. LTD. & ORS.\n\n\tVs.\n\nRESPONDENT:\nM.A. KHADER (DEAD) BY LRS.\n\nDATE OF JUDGMENT17\/04\/1986\n\nBENCH:\nRAY, B.C. (J)\nBENCH:\nRAY, B.C. (J)\nREDDY, O. CHINNAPPA (J)\nSINGH, K.N. (J)\n\nCITATION:\n 1986 AIR 1218\t\t  1986 SCR  (2) 607\n 1986 SCC  (2) 656\t  1986 SCALE  (1)595\n CITATOR INFO :\n D\t    1991 SC  70\t (6)\n\n\nACT:\n     Andhra Pradesh  Buildings (Lease,\tRent  and  Eviction)\nControl Act,  1960 (AP\tAct No.\t 15 of 1960), section 10(ii)\n(a) read  with section\t2(ix) -\t Transfer of  tenancy  right\nunder  the   lease\/subletting,\tmeaning\t of  -\tWhether\t the\nvoluntary  amalgamation\t by  virtue  of\t the  provisions  of\nsections 391 and 394 of the Companies act, 1956 of a company\nhaving tenancy\trights in  a building  with another  company\namounts to a \"transfer of tenancy rights\" within the meaning\nof AP  Act 15  of 1960\t- Subsequent events, taking judicial\nnotice of.\n\n\n\nHEADNOTE:\n     M\/s. General  Radio &  Appliances Co.  Ltd.,  a  tenant\nunder the  respondent-landlord with  effect from  7th day of\nJanuary, 1959 under a rent agreement dated 12.1.1959 filed a\ncompany\t petition,  before  the\t Bombay\t High  Court,  under\nsections 391  and 394  of the  Companies Act  praying for an\norder sanctioning  the scheme of amalgamation proposed by it\nwith M\/s.  National Ekco  Radio and Engineering Co. Ltd. The\nBombay High  Court sanctioned  the said\t scheme by its order\ndated 27.3.1968.  After the  said amalgamation\tof  the\t two\ncompanies, appellant  No. 1  company stood dissolved from 16\nApril 1968.  The respondent  landlord  issued  a  notice  on\n26.12.1968 to  the first  appellant company  terminating the\ntenancy on  the ground\tof subletting  and\/or  transfer\t and\nassignment of the interest of appellant No. 1 company to the\nappellant No.2 company. Thereafter, the respondent filed the\nRent Control  Case No.\t96 of  1969 for\t eviction under Rule\n10(ii)(a) of  the AP  Act 15  of 1960.\tThe Rent  Controller\naccepted both  the pleas of respondent, namely, unauthorised\nsubletting of  the premises and wilful default in payment of\nrent and  negatived  the  defence  of  the  appellants\tthat\nconsequent upon\t the scheme of amalgamation when made a rule\nof the\tCourt, there  was no  transfer or  subletting but  a\nblending of  two companies  together. In  appeal, the  Chief\nJudge, City Small Causes Court set aside the eviction orders\nholding that a transfer of assets under a scheme\n608\nof amalgamation\t being an involuntary one, it did not amount\nto assignment of lease by the amalgamating company. However,\nthe High  Court while allowing the further Revision Petition\nfiled by the landlord restored the eviction orders passed by\nthe Rent Controller. Hence the appeal by certificate.\n     Dismissing the appeal, the Court\n^\n     HELD :  1.1 The  Andhra Pradesh  Buildings (Lease, Rent\nand Eviction)  Control Act,  1960 is  a\t special  Act  which\nprovides for eviction of tenants on certain specific grounds\nmentioned in section 10 of the said Act. There is no express\nprovision in  the said\tAct that  in case of any involuntary\ntransfer or  transfer of  the tenancy  right by\t virtue of a\nscheme of  amalgamation sanctioned by the Court by its order\nunder sections\t391 and\t 394 of\t the Companies Act as in the\npresent case, such transfer will not come within the purview\nof section  10(ii)(a) of the said Act. In other words such a\ntransfer of  tenancy right  on the basis of the order of the\ncourt will  be immune from the operation of the said Act and\nthe transferee tenant will not be evicted on the ground that\nthe original tenant transferred its right under the lease or\nsublet the  tenanted premises or a portion thereof. [615 FH;\n616 A-B]\n     1.2 On a plain reading of section 2(ix), of the Act, it\nis clear that \"any person placed in occupation of a building\nby the tenant\" cannot be deemed or considered to be a tenant\nin respect of the premises in which the said person is to be\nin possession within the meaning of the said Act. Therefore,\nthe  second  appellant\tthat  is  National  Ekco  Radio\t and\nEngineering Co.\t Ltd., the  transferee company\twho has been\nput in possession of the tenanted premises by the transferor\ntenant General\tRadio and  Appliance Co.  (P) Ltd. cannot be\ndeemed to be tenant under this Act on the mere plea that the\ntenancy\t right\tincluding  the\tleasehold  interest  in\t the\ntenanted premises  have come to be transferred and vested in\nthe transferee\tcompany on the basis of the order made under\nsections 391 and 394 of the Companies Act. [616 B-D]\n     1.3 The  order of\tamalgamation has  been made  on\t the\nbasis of  the petition\tmade by\t the transferor\t company  in\ncompany petition  No. 4 of 1968 by the High Court of Bombay.\nAs such\t it cannot  be said  that  this\t is  an\t involuntary\ntransfer effected by order of the Court. [615 C-D]\n609\n     1.4 Subsequent  event can\tbe taken judicial notice of.\nHere, the  first appellant company stood dissolved from 16th\nof April  1968 and  therefore, is  no longer in existence in\nthe eye\t of law\t and it has effaced itself for all practical\npurposes.  The\t second\t appellant   company  that   is\t the\ntransferee company is now the person placed in occupation of\nthe  suit  premises  by\t the  tenant,  the  first  appellant\ncompany. There\tis  undoubtedly\t no  written  permission  or\nconsent of  the\t respondent  landlord  to  the\ttransfer  of\ntenancy right  of the  first appellant\tcompany as  required\nunder section  10(ii)(a) of  the Act. Moreover even if it is\nassumed to  be a  subletting to\t the second appellant by the\nfirst appellant,  such subletting  has been made contrary to\nthe provisions of the said Act and in violation of the terms\nof clause  4 of\t the tenancy agreement dated 12.1.1959 which\nclearly prohibits  such subletting  of the tenanted premises\nwithout the written permission of the landlord. [615 B-F]\n     Sabhayanidhi Virudhunagar\tLtd. v.\t A.S.R. Subrahamanya\nNadar &\t Ors., 1951  A.I.R.  Madras  p.\t 209  and  Parasaram\nHarnand Rao  v. Shanti\tPrasad Narinder\t Kumer Jain  & Anr.,<\/a>\n[1980] 3 S.C.R. p. 444, referred to.\n     Devarajulu Naidu  v. Ethirajavalli\t Thyaramma, [1949] 2\nM.L.R. p. 423, held inapplicable.\n     Venkatarama Iyer  v. Renters  Ltd., [1951] II M.L.R. p.\n57 approved.\n\n\n\nJUDGMENT:\n<\/pre>\n
     CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1923 of
\n1976.\n<\/p>\n
     From the  Judgment and  Order dated 23rd April, 1976 of
\nthe Andhra Pradesh High Court in Civil Revision Petition No.
\n684 of 1974.\n<\/p>\n
     U.R. Lalit,  D.N. Mishra  and Miss Ratna Kapoor for the
\nAppellants.\n<\/p>\n
     A.Subba Rao for the Respondents.\n<\/p>\n
     The Judgment of the Court was delivered by
\n610<\/span>
\n     B.C. RAY,\tJ. This appeal by way of certificate granted
\nby the\tHigh Court  of Andhra  Pradesh\tat  Hyderabad  under
\nArticle 133  of the  Constitution of  India is\tagainst\t the
\njudgment and  decree in\t Civil Revision\t Petition No. 684 of
\n1974 made  on 23rd of April, 1976 and it raises an important
\nquestion of  law, i.e. whether the voluntary amalgamation of
\nthe first  and second  appellants  companies  amounts  to  a
\ntransfer of  the first\tappellant’s right  under  the  lease
\nwithin the  meaning of\ts.  10\t(ii)(a)\t of  Andhra  Pradesh
\nBuildings (Lease, Rent & Eviction) Control Act, 1960.\n<\/p>\n
     The front\tcorner portion\tof the\tpremises bearing No.
\n8092\/1\/2 (new  No. 5-1-1-)  situated at\t Rashtrapati Road at
\nSecundrabad was\t let out  on January 12, 1959 to M\/s General
\nRaio &\tAppliances Co.\t(P) Ltd.,  the first appellant, on a
\nmonthly rent of Rs. 200 on the basis of the rental agreement
\ndated January  12, 1959\t (Exhibit P-6) executed by the first
\nappellant. Clause  4 of the said agreement provides that the
\ntenant shall not sub-let the premises or any portion thereof
\nto anyone  without the\twritten consent of the landlord. The
\nrespondent-landlord  M.A.   Khader  issued  a  notice  dated
\nDecember 26,  1968  to\tthe  tenant-appellant  No.  1,\tM\/s.
\nGeneral\t Radio\tand  Appliances\t (P)  Ltd.  terminating\t the
\ntenancy on  the ground\tof subletting  and\/or  transfer\t and
\nassignment of  the interest  of the  Appellant No.  1 to the
\nAppellant No.  2. Thereafter  on  April\t 7,  1969  the\tRent
\nControl Case  No. 96  of 1969  was filed  by the respondent-
\nlandlord for eviction of the Appellanttenant on two grounds,
\ni.e. (i)  unauthorised subletting  of the  premises  by\t the
\nfirst appellant\t and (ii)  wilful default in payment of rent
\nfrom October 7, 1968 to April 7, 1969. The appellants Nos. 1
\nand 2  filed a\tjoint  counter\tcontending  that  there\t was
\nneither subletting,  nor assignment of the tenancy rights by
\nthe first  appellant to the second appellant, i.e. the first
\nappellant company  was amalgamated with the second appellant
\ncompany by operation of law under the scheme of amalgamation
\nand order  of the High Court of Bombay under ss. 391 and 394
\nof the\tCompanies Act,\t1956 and  that the  judgment of\t the
\nBombay High  Court was\tjudgment ‘in Rem’ and it was binding
\non the\tpetitioner even\t though he  was not  a party  to the
\nproceedings. It was further contended therein that by reason
\nof order  of the  Bombay High  Court all the property rights
\nand powers of every description including tenancy right held
\nby the M\/s. General Radio Appliance (P) Ltd., the
\n611<\/span>
\nappellant No. 1, have been blended with the second appellant
\ncompany, M\/s.  National Ekco Radio and Engineering Co. Ltd.,
\nand that there was no wilful default in payment of rent. The
\napplication for eviction should, therefore be dismissed.\n<\/p>\n
     Two witnesses  were examined  on behalf of the landlord
\nand three  witnesses were  examined on behalf of the tenant.
\nThe  Rent  Controller,\tSecunderabad,  on  consideration  of
\nevidences on  record held  that the  appellant No. 1 company
\nhas sublet  the premises  to the  appellant  No.  2  company
\nwithout written consent of the landlord, as the amalgamation
\nof the\tfirst appellant-company\t with the  second appellant-
\ncompany amounted to subletting or assignment. It was further
\nheld that  there was  wilful default  in payment of rent for
\nthe period  in question.  The  Rent  Controller,  therefore,
\nallowed the  application  and  directed\t the  appellants  to
\nvacate and  deliver vacant  possession of  the suit premises
\nunder their  occupation to  the landlord-petitioner within a
\nperiod of three months from the date of the order.\n<\/p>\n
     Against this judgment and decree an appeal being Appeal
\nNo. 406\t of 1972  was preferred before the Chief Judge, city
\nSmall Causes  Court, Hyderabad. On 29.10.75 the Chief Judge,
\nCity Small Causes Court, Hyderabad after hearing the parties
\nheld that  though the  appellant No.  1 company\t voluntarily
\nsponsored the  scheme of amalgamation, the ultimate power to
\nsanction or  not to  sanction it rested with the High Court.
\nThe scheme  of amalgamation though proposed by appellant No.
\n1 company  voluntarily yet it became binding and enforceable
\non all\tthe parties  only when\tit was\tmade a\trule of\t the
\ncourt. It  was, therefore,  held that the transfer of assets
\nand  liabilities   including  the   leasehold  interest\t  of
\nappellant No.  1 company  to appellant\tNo. 2  company\ttook
\nplace by  virtue of the order of the court. It was held that
\nsuch a\ttransfer of  assets being an involuntary one did not
\namount to  assignment of lease by appellant No. 1 company to
\nappellant No.  2 company  and as such it did not violate the
\nterms of  the lease.  By amalgamation of appellant 1 company
\nwith appellant\t2 company,  the appellant  1 company  is not
\nwound up but it is merely blended with the other company. It
\nwas also  held that  there was no wilful default on the part
\nof the\ttenant to  pay the  rent for the period mentioned in
\nthe petition  inasmuch as in spite of the tender of the rent
\nthe respondent-landlord
\n612<\/span>
\nrefused to  accept the same and to grant receipt in the name
\nof appellant  No. 2  company.  The  appeal  was,  therefore,
\nallowed and  the order\tof the Rent Controller was set aside
\ndismissing the eviction petition with costs.\n<\/p>\n
     Against this  judgment and\t order,\t an  application  in
\nrevision being\tCivil Revision\tPetition No. 684 of 1974 was
\nfiled in  the High  Court of  Judicature of  Andhra Pradesh,
\nHyderabad. On  April 23,  1976 the said Revision Application
\nwas allowed  and the  judgment and  decree of  the Appellate
\nCourt was  set aside  on restoring  the decision of the Rent
\nController. It\twas held  that the amalgamation of appellant
\nNo. 1  company with  appellant No. 2 company on the basis of
\napplication  made   by\tthe   appellant\t No.  1\t company  by
\nsubmitting a  scheme which  was duly approved and sanctioned
\nby the\tHigh Court  of Bombay was not an involuntary one and
\nthis order  of amalgamation  indicated transfer\t of  tenancy
\nright without  any notice or opportunity to the landlord. It
\nis thus\t hit by\t the provision of s. 10(ii)(a) of the Andhra
\nPradesh Buildings  (Lease, Rent\t and Eviction)\tControl Act,
\n1960.\n<\/p>\n
     Against this  judgment and\t order the instant appeal by
\nway of\tcertificate granted  by the  High  Court  of  Andhra
\nPradesh has  been preferred.  The only\tquestion which falls
\nfor consideration  in this  appeal is whether in view of the
\norder  made  by\t the  High  Court  of  Bombay  on  27.3.1968
\nsanctioning the\t scheme\t of  amalgamation  proposed  by\t the
\nappellant No.  1 company  under\t ss.  391  and\t394  of\t the
\nCompanies Act  in Company  Petition No.\t 4 of  1968 and\t the
\nsubsequent transfer  of tenancy\t right in  the suit premises
\nand vesting  of the  same in the 2nd appellant can be deemed
\nto be subletting of the tenancy right of the appellant No. 1
\nor transfer  or\t assignment  of\t interest  in  the  tenanted
\npremises of  the appellant  No. 1  to the  appellant  No.  2
\nwithin the  meaning of\tS. 10(ii)(a)  of the  said Act.\t The
\nappellant  No.\t 1  General   Radio   and   Appliances\t (P)
\nLtd.admittedly took the premises in question on the basis of
\nan agreement  dated 12th  of January,  1959 duly executed by
\nhim in\tfavour of  the landlord-respondent at a monthly rent
\nof Rs. 200 for a period of eleven months commencing from 7th
\nJanuary 1959.  Clause 4\t of the\t said agreement\t is  in\t the
\nfollowing terms :\n<\/p>\n
\t  “That they shall not sublet the said premises or
\n613<\/span>
\n\t  any portion  thereof to anyone without the written
\n\t  consent of the landlord.”<\/p><\/blockquote>\n
     On January\t 9, 1968  the appellant\t No. 1\tM\/s  General
\nRadio and  Appliances (P)  Ltd., filed\tthe Company Petition
\nNo. 4  of 1968\tin the\tHigh Court of Bombay under s. 394 of
\nthe Companies  Act for\tsanction of a scheme of amalgamation
\nwith M\/s  National Ekco\t Radio &  Engineering Co. Ltd., M\/s.
\nGeneral Radio  & Appliances (P) Ltd. was shown as transferor
\nCompany and the National Ekco Radio and Engineering Co. Ltd.
\nwas shown  as a transferee company in the said petition. The
\nHigh Court  of\tBombay\tby  order  dated  28th\tMarch,\t1968
\nsanctioned the\tscheme of  amalgamation. It  is pertinent to
\nrefer here  to the relevant portions of the scheme which are
\nas follows :\n<\/p>\n
\t  “With effect\tfrom Ist  day of  January  1967\t the
\n\t  undertaking and  all the  property, rights, powers
\n\t  of every  description\t including  all\t leases\t and
\n\t  tenancy rights,  industrial, import  and all other
\n\t  licences,  quota   rights  of\t  General  Radio   &
\n\t  Appliances  (P)   Ltd.  (hereinafter\t called\t the
\n\t  transferor company) without further act or deed be
\n\t  transferred and vested or deemed to be transferred
\n\t  and  vested\tin  the\t  National  Ekco   Radio   &
\n\t  Engineering  Co.   Ltd.  (hereinafter\t called\t the
\n\t  transferee company) etc.”<\/p><\/blockquote>\n
     It has  been urged\t on behalf of the appellant that the
\namalgamation of M\/s General Radio & Appliances (P) Ltd., 1st
\nappellant with the 2nd appellant company is involuntary one,
\nwhich has  been brought into being on the basis of the order
\nof the\tHigh Court  of Bombay  made under ss. 391 and 394 of
\nthe Companies  Act. The first appellant company has not been
\nwounded up and or liquidated, but it has been merely blended
\nwith the  2nd appellant\t on the\t basis of  the order  of the
\ncourt. As  such there  has been\t no subletting\tby  the\t 1st
\nappellant company  to  the  2nd\t appellant  company  of\t the
\ntenancy right  of the  1st appellant  in respect of the suit
\npremises, nor  there has  been any transfer or assignment of
\ninterest of  the 1st  appellant in  respect of\tits  tenancy
\nright in  the premises\tin question  in favour\tof  the\t 2nd
\nappellant within  the meaning  of S.  10(ii)(a) of  the said
\nAct. It\t has been  further urged in this connection that the
\n1st  appellant\t company  by   virtue  of   the\t scheme\t  of
\namalgamation which was sanctioned by the Bombay
\n614<\/span>
\nHigh Court  merely becomes  a devision\tof the 2nd appellant
\ncompany\t i.e.  M\/s.  National  Ekco  Radio  and\t Engineering
\nCompany Ltd.  In other\twords, it  was tried to be contended
\nthat the  1st appellant\t company has not become extinct, but
\nit has\tbeen merged  and or  blended in\t the  2nd  appellant
\ncompany. In  order to determine this issue it is relevant to
\nset out\t herein the provisions of S. 10(ii)(a) of the Andhra
\nPradesh Buildings  (Lease, Rent\t and Eviction)\tControl Act,
\n1960 (A.P.  Act No.  15 of  1960). Section  10(ii)  runs  as
\nfollows :\n<\/p>\n
\t  “A landlord  who seeks  to evict  his tenant shall
\n\t  apply to  the Controller  for a  direction in that
\n\t  behalf. If the Controller, after giving the tenant
\n\t  reasonable opportunity  of showing  cause  against
\n\t  the applicant is satisfied :\n<\/p><\/blockquote>\n
\t  (ii) that the tenant has, in Andhra area after the
\n\t  commencement of  the Hyderabad  House Rent Control
\n\t  Order of 1953 Fasli without the written consent of
\n\t  the landlord ;\n<\/p><\/blockquote>\n
\t  (a) transferred  his\tright  under  the  lease  or
\n\t  sublet the entire building or any portion thereof,
\n\t  if the  lease does  not confer on him any right to
\n\t  do so.”\n<\/p><\/blockquote>\n
\t  Section 2(ix) defines tenant :\n<\/p><\/blockquote>\n
\t  “‘tenant’ means  any person  by whom\tor on  whose
\n\t  account  rent\t  is  payable  for  a  building\t and
\n\t  includes the\tsurviving  spouse,  or\tany  son  or
\n\t  daughter, of a deceased tenant who had been living
\n\t  with the tenant in the building as a member of the
\n\t  tenant’s family  up to the death of the tenant and
\n\t  a  person   continuing  in  possession  after\t the
\n\t  termination of the tenancy in his favour, but does
\n\t  not include  a person\t placed in  occupation of  a
\n\t  building by its tenant, etc.”<\/p><\/blockquote>\n
     In the  instant case  the\tappellant  No.\t1  i.e.\t M\/s
\nGeneral Radio and Appliances Co. (P) Ltd. is undoubtedly the
\ntenant having  taken lease  of the premises in question from
\nthe respondent\tlandlord by executing a rent agreement dated
\n12th January,  1959 at\ta rental  of Rs.  200 per month, the
\ntenancy
\n615<\/span>
\ncommencing from 7th day of January 1959. On the basis of the
\nsanction accorded  by order of the High Court of Bombay made
\non 27th March 1968 sanctioning the scheme of amalgamation in
\nCompany Petition  No. 4\t of 1968 filed by the 1st appellant,
\nall the\t property, rights  and powers  of every\t description
\nincluding all  leases and  tenancy rights  etc. of  the\t 1st
\nappellant were\ttransferred to\tand vested  or deemed  to be
\ntransferred and\t vested in  the 2nd  appellant M\/s  National
\nEkco Radio and Engineering Co. Ltd. It also appears that the
\nappellant No.  1 company stood dissolved from 16th of April,
\n1968. This  clearly goes  to show that the General Radio and
\nAppliances (P)\tLtd., the tenant company has transferred all
\nits interest  in the  tenanted premises\t in  favour  of\t the
\nappellant No.  2 i.e National Ekco Radio and Engineering Co.
\nLtd. (the transferee company). The order of amalgamation has
\nbeen  made  on\tthe  basis  of\tthe  petition  made  by\t the
\ntransferor company  in Company Petition No. 4 of 1968 by the
\nHigh Court of Bombay. As such it cannot be said that this is
\nan involuntary\ttransfer effected  by order  of\t the  court.
\nMoreover the 1st appellant company is no longer in existence
\nin the\teye of\tlaw and\t it  has  effected  itself  for\t all
\npractical  purposes.   The  2nd\t  appellant   company\ti.e.
\ntransferee company  is now the tenant in respect of the suit
\npremises and  the  1st\tappellant  company  has\t transferred
\npossession of  the  suit  premises  in\tfavour\tof  the\t 2nd
\nappellant  company.   There  is\t  undoubtedly\tno   written
\npermission or  consent of  the respondent  landlord to\tthis
\ntransfer of  tenancy right  of the  1st appellant company as
\nrequired under\tS. 10(ii)(a)  of the said Act. Moreover even
\nit is assumed to be a subletting to the 2nd appellant by the
\n1st appellant, such subletting has been made contrary to the
\nprovisions of  the said Act and in violation of the terms of
\nclause 4  of  the  tenancy  agreement  (Exhibit\t P-6)  which
\nclearly prohibits  such subletting  of the tenanted premises
\nwithout the  written permission\t of the landlord. The Andhra
\nPradesh Building  (Lease, Rent\tand Eviction)  Control\tAct,
\n1960 is a special Act which provides for eviction of tenants
\non certain  specific grounds  mentioned in S. 10 of the said
\nAct. There  is no  express provision in the said Act that in
\ncase of\t any involuntary transfer or transfer of the tenancy
\nright by  virtue of  a scheme  of amalgamation sanctioned by
\nthe court  by its  order  under\t ss.  391  and\t394  of\t the
\nCompanies Act as in the present case, such transfer will not
\ncome within  the purview of S. 10(ii)(a) of the said Act. In
\nother words such a transfer of tenancy right on the basis of
\n616<\/span>
\nthe order  of the court will be immune from the operation of
\nthe said  Act and  the transferee tenant will not be evicted
\non the ground that the original tenant transferred its right
\nunder the lease or sublet the tenanted premises or a portion
\nthereof. It  is important  to note  in this  connection\t the
\ndefinition of  tenant as  given in  S. 2(ix) of the said Act
\nwhich provides specifically that a tenant does not include a
\nperson placed  in occupation of a building by its tenant. On
\na plain\t reading of  this provision it is crystal clear that
\nany person  placed in occupation of a building by the tenant
\ncannot be  deemed or considered to be a tenant in respect of
\nthe premises in which the said person is to be in possession
\nwithin the  meaning of\tthe said  Act.\tTherefore,  the\t 2nd
\nappellant i.e.\tNational Ekco Radio and Engineering Co. Ltd.
\nthe transferee company who has been put in possession of the
\ntenanted premises by the transferor tenant General Radio and
\nAppliance Co.  (P) Ltd.\t cannot be deemed to be tenant under
\nthis Act  on the  mere plea that the tenancy right including
\nthe leasehold interest in the tenanted premises have come to
\nbe transferred\tand vested  in the transferee company on the
\nbasis of  the order  made under\t ss.  391  and\t394  of\t the
\nCompanies Act.\n<\/p>\n
     The effect of an order under S. 153(A) of the Companies
\nAct 1913  which corresponds  to\t ss.  391  and\t394  of\t the
\nCompanies Act,\t1956 has  been very succinctly stated in the
\ncase of\t Sahayanidhi Virudhungar  Ltd. v. A.S.R. Subrahmanya
\nNadar &\t Ors., 1951  A.I.R. Madras p. 209. Section 153(A) of
\nthe Companies Act has been enacted with a view to facilitate
\narrangements  and  compromise  between\ta  Company  and\t its
\ncreditors or  shareholders which  involve a  transfer of its
\nassets and  liabilities to  other companies  as part of such
\nagreement. If  any such\t scheme or arrangement is sanctioned
\nby court,  the court  is empowered  by the  section to\tmake
\nprovisions by  its order  sanctioning the arrangement or any
\nsubsequent  order,  for\t the  transfer\tof  the\t assets\t and
\nliabilities of\ta company  in liquidation to another company
\nstyled in  the section as transferee company. Where an order
\nof court made under the section provides for the transfer of
\nthe assets  and liabilities  of a  company in liquidation to
\nanother company,  the assets  are, by  virtue of that order,
\nwithout more,  transferred to  and vest\t in  the  transferee
\ncompany and  the liabilities  of the former company are also
\ncast upon  the transferee company. Under the ordinary law of
\ncontract while
\n617<\/span>
\nassets are assignable, liabilities under contracts or duties
\narising thereunder  are not assignable, but the effect of S.
\n153(A) is  to some extent to override the ordinary law. Thus
\nby an order sanctioning amalgamation of the rights, interest
\nand liabilities\t of the\t transferor company  are transferred
\nand vested in the transferee company. It appears that by the
\norder  of   amalgamation,  the\t interest,  rights   of\t the
\ntransferor company in all its properties including leasehold
\ninterest and  tenancy rights  are transferred  and vested in
\nthe transferee company.\n<\/p>\n
     It has  been urged\t that the  effect of amalgamation is
\nanalogous to  that of  a man who enters with partership with
\nanother. The  two companies  do not become jointly liable to
\ntheir respective  separate  creditors  and  neither  becomes
\nliable for  the debts  of the  other. The  general effect of
\namalgamation as\t provided in Halsbury’s Laws of England (3rd
\nEdition) Vol.  22, P.  432 has\tbeen  referred\tto  in\tthis
\nconnection  and\t  it  has   been  submitted   that  by\t the
\namalgamation  there  has  been\tno  subletting\tas  the\t 1st
\nappellant company has co-interest in transferee company, the
\n2nd appellant  company herein.\tThe case of Devarajulu Naidu
\nv. Ethirajavalli  Thyaramma, [1949] 2 M.L.R. p. 423 has been
\nreferred to  in this  connection. In  that case the original
\ntenancy was  in favour of three persons who were partners in
\nthe firm  and after  dissolution of the partnership firm one
\nof the\tpartner was  allowed to\t wind up  the affairs of the
\npartnership and thereafter he was allowed to use the demised
\npremises for  his sole\tbusiness. The question arose whether
\nin such\t case the  landlord was entitled to eviction of that
\npartner from  the tenanted premises on the ground that there
\nwas subletting.\t It was\t held in the facts of that case that
\nthe original  tenancy being  in favour\tof three persons who
\nwere partners  in the  firm and\t act on\t the part of the two
\npartners after\tdissolution of\tthe firm to allow one of the
\nparterns to use the premises for his sole business could not
\namount to  a transfer  or subletting  of the premises to the
\npetitioner. It has been observed as follows :\n<\/p>\n
\t  “This act  on the  part of  the two partners other
\n\t  than the petitioner cannot amount to a transfer or
\n\t  sub-letting of  the premises to the petitioner. It
\n\t  is true  that the  Courts in England have taken up
\n\t  an extreme view that even when one of two partners
\n618<\/span>
\n\t  after the  dissolution of  the partnership assigns
\n\t  to  the   other  partner   the  interest   of\t the
\n\t  partnership in  premises which  had been  taken on
\n\t  lease by  the partnership,  it would\tamount to  a
\n\t  breach of  the covenant  prohibiting an assignment
\n\t  of the  lease without\t the consent  of the lessor.
\n\t  But this  Court was  not inclined  to\t apply\tthis
\n\t  doctrine to  Indian conditions.  In  Koragalva  v.
\n\t  Jakri Beary, (1926, 52 M.L.J. 8) Devadoss, J. held
\n\t  that the  transfer by\t a co-lessee  in  favour  of
\n\t  another lessee of his right in the lease would not
\n\t  be a\tbreach of  a covenant against the assignment
\n\t  without the consent of the landlord.”<\/p><\/blockquote>\n
     This decision  has got  no application  to the  instant
\ncase inasmuch as in that case the only question involved was
\nwhether the  transfer by  co-lessee  in\t favour\t of  another
\nlessee of  his rights  would be a breach of covenant against
\nassignment without the consent of the landlord.\n<\/p>\n
     We\t have  already\tstated\thereinbefore  that  the\t 1st
\nappellant  company,   the  tenant,   has  transferred  their
\ninterest in  the tenanted  premises to\tthe appellant  No. 2
\ncompany on  the basis of the order made by the High Court of
\nBombay in  Company Petition  No. 4  of 1968  sanctioning the
\nscheme submitted  to it\t by the\t transferor company. We have
\nalso held  that this  is  not  an  involuntary\ttransfer  by
\noperation of  law, but\ta transfer  of the  interest of\t the
\ntenant company on the basis of their application made before
\nthe  said   High  Court\t  in  the   said  Company  Petition.
\nFurthermore, we\t have also  held  that\tthe  Andhra  Pradesh
\nBuildings (Lease, Rent and Eviction) Control Act, 1960 which
\nis a  special Act  provides specific grounds for termination
\nof a tenancy and eviction of the tenant in S. 10(ii)(a) i.e.
\non the ground of subletting and\/or transferring the interest
\nof the\ttenant either  in whole\t or any part of the tenanted
\npremises to  another  person.  Thus  the  Act  prohibits  in
\nspecific terms\tboth subletting\t as well  as the transfer or
\nassignment of  the interest of the tenant. Moreover clause 4
\nof  the\t  rent\tagreement  executed  by\t the  1st  appellant
\nexpressly prohibits  subletting\t of  the  tenanted  premises
\nwithout the  express consent of the landlord. The transferor
\ncompany in  this case has undoubtedly been dissolved and the
\ncompany has ceased to exist for all practical purpose in the
\neye of law.\n<\/p>\n
619<\/span><\/p>\n
All  the   interest  of\t the  transferor  company  including
\npossession in  respect of  the tenanted\t premises have\tbeen
\ntransferred to\tthe transferee\tcompany in  contravention of
\nthe provisions\tof the\tsaid Act as well as in contravention
\nof the\tterms and  conditions of  the  said  rent  agreement
\nthereby making\tthe transferee\tcompany liable to be evicted
\nfrom the tenanted premises.\n<\/p>\n
     It has  been observed  by Subba  Rao, J. in the case of
\nVenkatarama Iyer  v. Renters  Ltd., [1951]  II M.L.R.  57 as
\nfollows :\n<\/p>\n
\t  “The Madras Buildings (Lease and Rent) Control Act
\n\t  applies  not\t only  to   residential\t  and\tnon-
\n\t  residential buildings,  but also to same buildings
\n\t  used\tfor   both  purposes.  If  a  Company  doing
\n\t  business in a particular premises (taken on lease)
\n\t  transfers its\t business  as  a  going\t concern  to
\n\t  another  company  and\t also  the  net\t assets\t for
\n\t  consideration\t and   thereafter   the\t  transferee
\n\t  company takes\t over the  business and\t carries  on
\n\t  business in  the premises  let out  to the  former
\n\t  company it  cannot  be  said\tthat  there  was  no
\n\t  transfer of  the right of the former company under
\n\t  the lease  to the latter company. On such transfer
\n\t  the tenant is liable to be evicted.”<\/p><\/blockquote>\n
     It is  pertinent to  mention  in  this  connection\t the
\ndecision of  this court\t in Parasaram  Harnand Rao v. Shanti
\nPrasad Narinder\t Kumar Jain  & Anr.,<\/a> [1980] 3 S.C.R. p. 444.
\nIn this\t case the  appellant landlord  executed a  lease  in
\nrespect of the disputed premises in favour of respondent No.
\n2 for  three  years  on\t 1.4.1942.  In\t1948  the  appellant
\nlandlord filed\ta suit\tfor eviction  of the tenant for non-
\npayment of  the rent  and for  conversion  of  user  of\t the
\npremises. The  suit for\t possession  was  dismissed,  but  a
\ndecree for  arrears of\trent was passed and it was held that
\nLaxmi Bank  was the  real  tenant.  The\t Bombay\t High  Court
\nsubsequently made  an order that the Bank be wound up and in
\nthe winding  up proceedings,  the High\tCourt  appointed  an
\nofficial liquidator  who  sold\tthe  tenancy  right  to\t the
\nrespondent  No.\t  1  in\t 1961.\tThe  sale  was\tsubsequently
\nconfirmed by  the High\tCourt and  the respondent No. 1 took
\npossession of the premises on 24.2.1961. The landlord
\n620<\/span>
\nappellant filed\t an application under the Delhi Rent Control
\nAct for eviction of the Laxmi Bank and a decree for eviction
\nwas passed in favour of the appellant. Thereafter respondent
\nNo. 1 filed a suit for declaration that he was tenant of the
\nlandlord. The suit was dismissed and the appeal against that
\norder also  failed. The\t respondent No. 1, however, filed an
\napplication for\t recalling the\twarrant of possession issued
\nby the\tcourt in  pursuance of\tthe decree  in favour of the
\nappellant. This\t ultimately came up in second appeal and the
\nHigh Court  allowed the\t Rent  Controller’s  order  allowing
\nrecalling of  warrant of  possession. On  appeal by  special
\nleave this  Court held that the amplitude of S. 14(b) of the
\nDelhi Rent  Control Act\t was wide enough not only to include
\nany sublease  but even\tan assignment  or any  other mode by
\nwhich possession of the tenanted premises is parted. In view
\nof the\twide amplitude of s. 14(b), it does not exclude even
\nan involuntary sale.\n<\/p>\n
     On a  conspectus of  all these  decisions\treferred  to
\nhereinbefore the  irresistible conclusion follows that there
\nhas been a transfer of the tenancy interest of appellant No.
\n1 in  respect of  the premises\tin question to the appellant
\nNo. 2,\tsubsequently renamed  appellant No.  3 M\/s. National
\nRadio Electronics  Co. Ltd.  in utter  contravention of\t the
\nprovisions of S. 10(ii)(a) of the said Act as well as of the
\nterms and conditions of clause 4 of the rent agreement dated
\n12.1.1959 executed  by 1st  appellant i.e. M\/s General Radio
\nand Appliances (P) Ltd. in favour of respondent landlord.\n<\/p>\n
     We, therefore,  affirm the judgment and order passed by
\nthe High Court of Judicature Andhra Pradesh and dismiss this
\nappeal. There will, however, be no order as to costs.\n<\/p>\n
S.R.\t\t\t\t\t   Appeal dismissed.\n621<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India General Radio & Appliances Co. … vs M.A. Khader (Dead) By Lrs on 17 April, 1986 Equivalent citations: 1986 AIR 1218, 1986 SCR (2) 607 Author: B Ray Bench: Ray, B.C. (J) PETITIONER: GENERAL RADIO & APPLIANCES CO. LTD. & ORS. Vs. RESPONDENT: M.A. KHADER (DEAD) BY LRS. DATE OF JUDGMENT17\/04\/1986 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-161571","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nGeneral Radio & Appliances Co. ... vs M.A. Khader (Dead) By Lrs on 17 April, 1986 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/general-radio-appliances-co-vs-m-a-khader-dead-by-lrs-on-17-april-1986\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"General Radio & Appliances Co. ... vs M.A. Khader (Dead) By Lrs on 17 April, 1986 - 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