Case Name: BRITISH MOTOR CAR COMPANY (1939) LTD. v. M/S HINDUSTAN COMMERCIAL BANK LTD. (SINCE MERGED INTO PUNJAB NATIONAL BANK) & ANR. 
Petition No.: Civil Appeal No. 5714 of 2012 
Neutral Citation: 2026 INSC 671
Date of Judgement: 09.07.2026
Coram: Hon’ble Mr. Justice Sanjay Karol and Hon’ble Mr. Justice Nongmeikapam Kotiswar Singh
Relevant Statutes & Provisions: Section 14(1)(b) and Section 14(1)(j) of the Delhi Rent Control Act, 1958; Section 45 of the Banking Regulation Act, 1949; Sections 391 and 394 of the Companies Act, 1956

INTRODUCTION

The Hon’ble Supreme Court has held that Section 14(1)(b) of the Delhi Rent Control Act, 1958 draws no distinction between a voluntary and an involuntary transfer of tenancy rights, and that an RBI amalgamation scheme under Section 45 of the Banking Regulation Act, 1949, being administrative rather than legislative, cannot override that provision. Allowing the landlord’s appeal, the Court restored an eviction decree against Punjab National Bank, the amalgamation of Hindustan Commercial Bank into PNB having amounted to parting with possession without written consent.

FACTS

The Appellant-landlord, in 1947, let out premises at Pratap Building, Connaught Circus, New Delhi, to Hindustan Commercial Bank (“HCB”) for non-residential use. By Gazette Notification under Section 45(7) of the Banking Regulation Act, 1949 (“BR Act”), the Central Government sanctioned an RBI scheme under Section 45(4) of the BR Act amalgamating HCB with Punjab National Bank (“PNB”), vesting all HCB’s rights and liabilities, including the tenancy, in PNB. The landlord filed an eviction petition under Section 14(1)(b) read with Section 14(1)(j) of the Delhi Rent Control Act, 1958 (“DRC Act”), contending that HCB had sublet, assigned or otherwise parted with possession in favour of PNB without written consent. The Additional Rent Controller dismissed the petition, holding the scheme statutory and binding; the Additional Rent Control Tribunal reversed this and decreed eviction, holding written consent mandatory regardless of the scheme; and the Delhi High Court, in revision under Article 227, set aside the decree, holding the merger an involuntary statutory act not amounting to subletting. The landlord appealed to the Supreme Court.

ISSUE

Whether the amalgamation of HCB with PNB, effected pursuant to the scheme framed under the BR Act, attracts Section 14(1)(b) of the DRC Act or not?

ARGUMENTS OF THE PARTIES

The Appellant submitted that Section 14(1)(b) draws no distinction between a voluntary and an involuntary transfer of possession, and that upon amalgamation HCB ceased to exist and its tenancy rights stood vested in PNB, satisfying the provision, relying on Singer India Ltd. v. Chander Mohan Chadha (2004) 7 SCC 1 and Parasram Harnand Rao v. Shanti Parsad Narinder Kumar Jain (1980) 3 SCC 565. It was further contended that the RBI scheme under Section 45 of the BR Act is merely administrative and cannot exclude Section 14(1)(b), relying on K.I. Shephard v. Union of India (1987) 4 SCC 431, and that the High Court had erred in relying on Asha Rohtagi v. Erstwhile New Bank of India through General Mananger PNB 2005 SCC OnLine Del 464, which arose from a legislative scheme under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, and was thus distinguishable per New Bank of India Employees’ Union v. Union of India (1996) 8 SCC 407.

The Respondents submitted that the amalgamation was not a voluntary act, agreement or assignment by the tenant but occurred by operation of a statutory scheme sanctioned by the Central Government, and that vesting of tenancy rights by such statutory operation could not be equated with a voluntary act of assignment or parting with possession, relying on G. Sridharamurti v. Hindustan Petroleum Corpn. Ltd. (1995) 6 SCC 605, Hindustan Petroleum Corpn. Ltd. v. Shyam Coop. Housing Society (1988) 4 SCC 747, and Asha Rohtagi v. Erstwhile New Bank of India.

JUDGEMENT AND ANALYSIS

Regarding the issue framed, the Court held that Section 14(1)(b) of the DRC Act is wide enough to encompass every mode by which possession or tenancy rights of the demised premises are transferred from the original tenant to another entity, and that the provision 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. Relying on Parasram Harnand Rao and Singer India Ltd., the Court reiterated that the provision applies upon occurrence of a factual situation, namely, sub-letting or assignment or otherwise parting with possession and that whether it is a voluntary act of the tenant or otherwise is wholly irrelevant. Adopting the meaning of parting with possession laid down in Jagan Nath v. Chander Bhan (1988) 3 SCC 57, the Court noted this occurs where the tenant divests itself not only of physical possession but also of the right to possession. Applying these principles, the Court held that upon amalgamation, HCB ceased to exist and its tenancy rights vested in PNB without the landlord’s written consent, so that both the ingredients of Section 14(1)(b) stood fully met.

On the Respondents’ contention that the scheme under Section 45 of the BR Act was legislative and therefore could override Section 14(1)(b), the Court, following K.I. Shephard v. Union of India, held the scheme-making process to be administrative in nature and not legislative. The Court further clarified that merely because a scheme is sanctioned by the Central Government and placed before Parliament, required to be sanctioned by the Central Government and placed before both the Houses of Parliament, it does not become legislative in nature. The Court distinguished G. Sridharamurti and Shyam Coop. Housing Society as having arisen under the Esso (Acquisition of Undertakings in India) Act, 1974, a legislative enactment expressly vesting tenancy rights in the Central Government, holding these decisions to be clearly distinguishable and have no application to the facts of the present case.

While discussing the ingredients of Section 14(1)(b) of the DRC Act, the Court highlighted that what is essential is –  (a) there is a transfer of tenancy rights and possession of the tenanted premises; and (b) such transfer is done without the written consent of the landlord. The Court further analyzed the facts of the case by applying the same, and observed that upon the amalgamation taking effect, on 19.12.1986, the original tenant, viz. HCB ceased to exist and all its rights, liabilities, assets and interests, including the tenancy rights qua the tenanted premises stood vested in PNB. As a result, HCB parted with the possession of the tenanted premises and PNB came to occupy the same. The Court, while observing that such a transfer took place without the written consent of the landlord, held that both the ingredients of Section 14(1)(b) of the DRC Act were satisfied.

The Court further held that the High Court’s reliance on Asha Rohatgi was misplaced, since that decision concerned a scheme under Section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, which, per New Bank of India Employees’ Union, is legislative in nature, unlike the administrative scheme under Section 45 of the BR Act. On this basis, the Court concluded that the amalgamation of the original tenant HCB with PNB rendered PNB liable to be evicted from the tenanted premises under Section 14(1)(b) of the DRC Act.

CONCLUSION

The Supreme Court allowed the appeal, set aside the Delhi High Court’s judgment, and restored the eviction decree. Having regard to the Respondents’ long possession, the Court granted time to deliver vacant possession, subject to an undertaking within four weeks and continued rent payment, failing which the Appellant was granted liberty to take possession in accordance with law. The judgment settles that neither the voluntary or involuntary character of a transfer, nor an RBI scheme under Section 45 of the BR Act, can dilute the written consent requirement under Section 14(1)(b).

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