IN THE HIGH COURT OF DELHI AT NEW DELHI
PRATEEK JALAN, J.
Subhash Chand Goel And Others — Appellant
Versus
Hans Raj Gupta & Co Pvt. Ltd. — Respondent
Civil Miscellaneous (M) No. 340 of 2012; Civil Miscellaneous Application No. 5107 of 2012, 5519 of 2018
Decided on : 02-09-2019
Amalgamation - Eviction under Section 14(1)(b) of the Delhi Rent Control Act, 1958 - Section 14(1)(b) - General Radio & Appliances Co. Ltd. vs. M.A. Khader, (1986) 2 SCC 656, Cox & Kings Ltd. vs. Chander Malhotra, (1997) 2 SCC 687, Singer India Ltd. vs. Chander Mohan Chadha, (2004) 7 SCC 1 - The court discussed the effect of amalgamation on tenancy and held that amalgamation amounts to sub-letting, assigning, or parting with possession within the meaning of Section 14(1)(b) of the Act. The court also rejected the argument of piercing the corporate veil in such circumstances.
Fact of the Case:
The Eviction Petition was filed by the petitioners seeking the eviction of the respondent from the suit property under Section 14(1)(b) of the Delhi Rent Control Act, 1958, contending that the respondent was an unauthorized sub-tenant liable to eviction due to the amalgamation of the original tenant with the respondent.
Finding of the Court:
The court found that the amalgamation of the original tenant with the respondent rendered the respondent liable to eviction under Section 14(1)(b) of the Act. The court also rejected the defense of limitation raised by the respondent.
Issues: The issues were whether the amalgamation amounted to a sub-tenancy under the Act and whether the eviction petition was barred by limitation.
Ratio Decidendi: The court held that amalgamation amounts to sub-letting, assigning, or parting with possession within the meaning of Section 14(1)(b) of the Act. The court also rejected the argument of piercing the corporate veil in such circumstances. Additionally, the court rejected the defense of limitation raised by the respondent.
Final Decision: The present petition was allowed, the impugned judgment of the Tribunal was set aside, and the judgment of the Additional Rent Controller was restored.
JUDGMENT :
Prateek Jalan, J.
By this petition under Article 227 of the Constitution of India, the petitioners challenge an order dated 31.01.2012, passed by the Rent Control Tribunal in RCT No.49/2010, by which the Tribunal has allowed the appeal of the respondent herein, and set aside the order of the Additional Rent Controller dated 05.03.2010 evicting the respondent from the suit premises.
Facts
2. The Eviction Petition was filed by the petitioners herein against the respondents on 11.08.2003, seeking the eviction of the respondent from the suit property [viz. 4634, Ward No. 07, Bazaar Ajmeri Gate, Delhi] under Section 14(1)(b) of the Delhi Rent Control Act, 1958 [hereinafter referred to as "the Act"]. The contention of the petitioners was that although the suit property was let out to a company by the name of M/s Delhi Iron Syndicate Pvt. Ltd., [hereinafter referred to as "DISPL"] at the monthly rent of Rs. 685/-, it was in the possession of the respondent herein, viz. a company by the name of M/s Hans Raj Gupta and Co. Pvt. Ltd. [hereinafter referred to as "HRGPL"]. It was contended that DISPL no longer exists, having been amalgamated with HRGPL, which was thus an unauthorized sub-tenant liable to eviction under Section 14(1)(b) of the Act.
3. The written statement was filed by the respondent in December, 2003. It was inter alia contended therein that the suit property formed part of a larger property which was originally let out to Lala Hans Raj Gupta [HRG] and payment of rent was made by different entities controlled by HRG as per their convenience. Factually, although it was disputed that DISPL was the original tenant of the suit property, it was also stated that it had merged with HRGPL and that both the companies were owned and controlled by the family of HRG. It is undisputed that a scheme of amalgamation of DISPL with HRGPL was sanctioned by an order of this Court dated 13.09.1971 under Sections 391 and 394 of the Companies Act, 1956. All property rights and powers of DISPL were transferred to HRGPL and vested in HRGPL as a result thereof. It was further averred that HRGPL being part of HRG's group of entities, was already a tenant in respect of the suit property. The respondent further contended that an amalgamation does not amount to sub-letting or parting with the possession under Section 14(1)(b) of the Act.
4. The Additional Rent Controller by order dated 05.03.2010 allowed the Eviction Petition. As far as the suit premises is concerned, the contention of the respondent that the suit property was not specifically delineated under Municipal No.4634 was rejected, and it was held that DISPL was the original tenant. Relying upon various authorities including inter alia General Radio & Appliances Co. Ltd. vs. M.A. Khader, (1986) 2 SCC 656, Cox & Kings Ltd. vs. Chander Malhotra, (1997) 2 SCC 687 and Singer India Ltd. vs. Chander Mohan Chadha, (2004) 7 SCC 1, the Trial Court held that amalgamation amounts to sub-letting, assigning or parting with the possession within the meaning of Section 14(1)(b) of the Act.
5. The respondent carried the matter in appeal, which was allowed by the Tribunal vide the impugned order dated 31.01.2012. The Tribunal inter alia held that the Eviction Petition was bad for non-joinder of necessary parties as DISPL had not been impleaded as a party. It was also held that the petition was not maintainable for want of permission under Section 19 of the Slum Areas (Improvement and Clearance) Act, 1956. Although the question of whether amalgamation amounted to sub-letting or not was argued before the Tribunal, the Tribunal did not consider it necessary to decide the same in view of its decision on maintainability as aforesaid.
Submissions
6. I have heard Mr.Siddharth Aggarwal, learned counsel for the petitioners and Mr.Alok Kumar, learned counsel for the respondent. Mr.Kumar submitted at the outset that he was not pressing the defence based on the Slum Areas (Improvement and Clearance) Act, 1956. The onl
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