A tenant who forms a company and permits that company to use and to operate from the same premises, may not be held to have transferred or sublet the premises, particularly where the tenant or the tenants, without parting with the possession of the premises is or are exercising substantial control over the Company. However, where the original tenant in its original capacity has also expressly entered into a jural relation of landlord and tenant with the new Company, it can no longer be urged that the original tenant has not sublet to the Company solely because it is also in substantial control of the Company.

( 1 ) THE weight of authorities is clearly in favour of the view that if a tenant, without parting with the possession of the premises, forms a Partnership or a Company along with others retaining controlling interest therein and permits the Firm or the Company to operate from and use the tenanted premises, the tenant does not "transfer, assign or sub-let" the premises to incur the mischief of the relevant provisions of the Rent Control Laws providing for eviction on such ground. The first Appellate Court has referred to a single-Judge Delhi decision Viswa Nath v. Chaman Lal, AIR 1975 Delhi 117 and also to a single-Judge Gujarat decision Jekisondas v. Abdul Rehman - AIR 1975 Guj 205 as authorities for this view. The first Appellate Court, with a little more endeavour, could have found out a number of authorities of this Court also on this point. But now that a later decision of the Supreme Court in Madras Bangalore Transport Co. v. Inder Singh, AIR 1986 SC 1564 has rather clinched this question almost as a sealer on the point, we may not refer to any other decision and take the law therefrom.

( 2 ) IN that Supreme Court decision in Madras Bangalore Transport Co. (supra), the partners of a Firm, which was in possession as a tenant, formed a Limited Company to carry on the same business as the partners could not any longer carry on that business as a Partnership Firm because of the ban imposed under the arrangement whereunder this Firm was constituted after a splitting up of a larger Partnership Firm into two. It was found that the Limited Company so constituted was an "alter ego" and a mere "corporate reflection" of the Partnership Firm with the partners of the Firm as its Directors and that the Firm and the Company "were two only in name but one for all practical purposes". There was nothing to show that there was any creation of landlord-tenant relation between the Firm and the Company and the Supreme Court accordingly ruled that there was no subletting to attract the mischief of S. 14 (1) (b) of the Delhi Rent Control Act. The single-Judge decision of the Delhi High Court in Viswa Nath v. Chaman Lal, AIR 1975 Delhi 117 (supra), relied on by the First Appellate Court, appears to have been referred to by the Supreme Court with approval. We must, therefore, take the law to be that a tenant or the tenants by subsequently forming a Company and permitting that Company to use and to operate from the same premises, may not be held to have transferred or sublet the premises, particularly where the tenant or the tenants, without parting with the possession of the premises is or are exercising substantial control over the Company. But where, as here, the original tenant in its original capacity has also expressly entered into a jural relation of landlord and tenant with the new Company, which is obviously a distinct and separate legal personality, by realising rents from the Company and/or otherwise, can it, in law, still be urged that the original tenant has not sublet to the Company solely because it is also in substantial control of the Company?

( 3 ) THE plaintiff-appellant's clear and categorical case is that the premises were let out to the defendant 1, Property Development Trust Ltd. , and the latter had sub-let the same to the defendant 2, American Refrigerator Co. Ltd. Both the Courts below have found several rent receipts in Exhibit 13 series showing payment of monthly rents by the defendant 2, American Refrigerator Co. Ltd. , to the defendant 1, Property Development Trust Ltd. Our attention has also been drawn to the certified copies of the Memorandum and Article of Association of the American Refrigerator Co. Ltd. , exhibited at the trial which would go to show the same to be a Limited Company registered under the Companies Act, 1956. Section 34 of the Companies Act apart, providing that a Company on incorporation ''shall be a body corporate. . . having perpetual succession and common seal", it has