Supreme Court of India
M/S. SPEEDLINE AGENCIESversusM/S. T. STANES & CO. LTD.
- Citation
- 2010 INSC 326
- Decided
- 14 May 2010
- Disposal
- Dismissed
- Bench
- P SATHASIVAM
Holding
A decree for eviction is a vested asset that devolves on the amalgamated company, which is entitled to enforce the eviction despite the amalgamation being a subsequent event.
Summary
The appellant, Speedline Agencies, occupied a building and land leased from United Coffee Supply Co. Ltd., later renamed Stanes Tea and Coffee Ltd., for over four decades. The landlord filed a petition under sections 10(3)(a)(i) and (iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 seeking eviction for its own residential and non‑residential use, and the Rent Controller and Appellate Authority ordered eviction, which was upheld by the High Court. While the revision petition was pending, the landlord company amalgamated with T. Stanes & Co. Ltd. under the Companies Act, 1956, and the High Court approved the scheme, raising the question whether the transferee could inherit the eviction right. The Supreme Court held that the decree for eviction is an asset that vests in the amalgamated company, and subsequent events such as amalgamation do not defeat the landlord’s vested right. Consequently, the appeal was dismissed and the tenant was given a deadline to vacate the premises.
Issues considered
- The effect of a corporate amalgamation on a landlord's right to enforce an eviction decree under the Tamil Nadu Buildings (Lease and Rent Control) Act.
- Whether subsequent events, such as amalgamation, can be considered to defeat the landlord's vested right to possession.
- Interpretation of section 10(3)(a)(i) and (iii) of the Tamil Nadu Buildings Act in the context of a change of landlord due to amalgamation.
- The applicability of the proviso to section 10(3) in pending revision proceedings.
Legislation cited
- Code of Civil Procedure, 1908s. Order 21 Rule 16
- Companies Act, 1956s. 391, s. 392, s. 393, s. 394, s. 79
- Tamil Nadu Buildings (Lease and Rent Control) Act, 1960s. 10(3)(a)(i), s. 10(3)(a)(iii), s. 18, s. 23(1)(a)(i)
- Tamil Nadu Urban Land (Ceiling and Regulation) Act, 1978s. 21
Subjects
evictionrent controlamalgamationlandlord rightsdecree as assetsubsequent eventsCompanies ActTamil Nadu Buildings Actlease
Judgment
[2010] 7 S.C.R. 46
A M/S. SPEEDLINE AGENCIES
v.
M/S. T. STANES & CO. LTD.
(Civil Appeal No. 4481 of 2010)
MAY 14, 2010
B
[P. SATHASIVAM AND J.M. PANCHAL, JJ.)
Tamil Nadu Buildings (Lease and Rent Control) Act,
1960 - s. 10(3)(a)(i), (iii) - Eviction of tenants - Eviction on
C the ground of its own use and occupation - Grant of, by Rent
Controller as also Appellate Authority - Amalgamation of
erstwhile landlord with transferee company during pendency
of revision petition - Scheme of amalgamation sanctioned by
High Court - Benefit of order of eviction to transferee
D company - Entitlement of - Held: Transferee company
entitled to the benefit of order of eviction - When a company
stands dissolved due to amalgamation, its rights under the
decree for eviction devolves on amalgamated company -
Decree constitutes an asset - Asset of erstwhile company
E devolved on amalgamated company - Business will be
continued to be carried by amalgamated company - Purpose
of amalgamation would be frustrated, if the amalgamated
company is deprived of the same - Companies Act, 1956 -
ss. 391 to 394 - Subsequent events.
F The landlord-UCS company owned a building with
vacant areas. It leased out the said premises with the
vacant area to the appellant for use as residence-cum-
office for five years on a monthly rent. Meanwhile, the
Tamil Nadu Urban Land (Ceiling and Regulation) Act,
G 1978 came into force. The landlord company was granted
exemption from acquisition of vacant lands under the
Act. The Rent Controller fixed the fair rent and the
Appellate Authority enhanced it. Thereafter, the name of
the landlord company was changed to STC company.
H 46
SPEEDLINE AGENCIES v. T. STAN ES & CO. LTD. 47
The STC company filed petition u/s. 10(3)(a)(i) and (iii) of A
the Tamil Nadu Buildings (Lease and Rent Control) Act,
1960 for eviction on the ground of its own use and
occupation for residential and non-residential purpose.
The Rent Controller allowed the petition. The Appellate
Authority upheld the order. Aggrieved, appellant filed s
revision petition before the High Court. During pendency
of the petition, by a Scheme of amalgamation, STC
company was transferred to TS-respondent company
under the Companies Act. The High Court approved the
same. The application for amendment of the cause title c
was allowed. The High Court dismissed the revision
petition. Hence the appeal.
Dismissing the appeal, the Court
HELD: 1. The instant case being one where the order D
of eviction is eminently just, fair and equitable as ordered
by two authorities and confirmed by the High Court, there
is no valid ground for interference, on the other hand, the·
conclusion arrived at by the authorities as well as the High
Court are concurred with. Taking into consideration the E
appellant-tenant is continuing in the premises for more
than four decades, time is granted for handing over
possession till 31.12.2010. [Para 34] [78-D]
2.1. In the instant case, the petition by the landlord F
for eviction of the tenant was filed on 03.04.1987. The
cause of action has no relation to amalgamation,
irrespective of whether it is prior or subsequent to filing
of the application for eviction. The Rent Controller
ordered eviction on 09.04.1992. The appeal of the tenant -
was disposed of by the Appellate Authority on G
10.04.2003. The rights of the landlord are to be
determined as on the date of the application for eviction.
The order of eviction crystallized the rights of the
landlord. The tenant had filed the revision in the High
H
48 SUPREME COURT REPORTS [2010) 7 S.C.R.
A Court on 18.08.2003. During the pendency of the revision
petition, the order for amalgamation under the Companies
Act passed by the High Court was made on 26.02.2006
which is a subsequent event. The Revision Petition was
disposed of by the High Court on 05.08.2009. Had the
B revision petition been disposed of before 26.02.2006, this
contention would not have arisen at all. The delay in the
disposal of the revision petition should not prejudice the
vested rights of the landlord under the decree of the Rent
Controller confirmed by the Appellate Authority. Further,
c the amalgamation of the erstwhile landlord with the
respondent involved not merely the transfer of the
particular leasehold property but the entire business of
the erstwhile landlord including the requirement of the
leasehold premises for the acquired business. [Paras 15
and 16) [67-F-H; 68-A-D]
D
2.2. In normal circumstances, after passing of the
decree by the trial court, the landlord would have
obtained possession of the premises, but for the tenant
continuing in occupation of the premises only on account
E of stay order from the appellate court. In such
circumstances, the well known principle that "an act of
the court shall prejudice no man" shall come into '
operation. Therefore, the heirs of the landlord will be fully
entitled to defend the appeal preferred by the tenant.
F When a company stands dissolved (with or without
winding up) due to amalgamation, its rights under the
decree for eviction devolves on the amalgamated
company. [Para 18] [69-D-F]
Shakunta/a Bai and Ors. vs. Narayan Oas and Ors.
G
(2004) 5 SCC 772; Usha P. Kuvelkar and Ors. vs. Ravindra
Subrai Oalvi (2008) 1 SCC 330; Gaya Prasad. vs. Pradeep
Srivastava (2001) 2 SCC 604, referred to.
2.3. In matters governed by the Rent Acts to take into
H
SPEEDLINE AGENCIES v. T. STAN ES & CO. LTD. 49
account subsequent events would inflict hardship to A ·
landlords, in a case like the instant one. [Para 22] [72-G]
Smt. Phool Rani and Ors. vs. Shri Naubat Rai
Ahu/uwa/ia, (1973) SCC 688; Joginder Pal vs. Naval Kishore
Behal (2002) 5 SCC 397; Lachmeshwar Prasad Shuku/ and B
Ors. vs. Keshwar Lal Chaudhuri and Ors. AIR 1941 F.C. 5,
referred to.
2.4. In the instant case, the subsequent event of
amalgamation of a company took place during the
pendency of the revision in the High Court. In a revision C
under s. 25 of the Tamil Nadu Buildings (Lease and Rent
Control) Act, 1960, the Court is exercising a restricted
jurisdiction and not wide powers of the appellate court.
{Paras 24 .and 25] [73-E, G]
D
Mis Sri Raja Lakshmi Dyeing Works and Ors. vs.
Rangaswamy Chettiar (1980) 4 SCC. 259, referred to.
2.5. Coming to the expression "for its own use/
occupation", it has to be construed widely and given
wide and liberal meaning. When a company wants to E
expand its business and amalgamates with another
company, this would also be a case of "for its own use".
If a landlord which is a company cannot advance its
interest in the business by amalgamating with another
company by putting to use its own property, it would be F
unjust, unfair and unreasonable. Further, the provisions
of Rent Control Act should not be so construed as to
frustrate and defeat the legislation. If in a case of landlord
requiring the premises for its own use, to amalgamate
with another company and expands its business, the rent G
control legislation may clash with the provisions of the
Companies Act. The Companies Act and the Rent Control
Act have to be harmoniously interpreted and not to be so
interpreted as to result in the one Act destroying a right
under the other Act. [Para 27] [74-E-G] H
50 SUPREME COURT REPORTS [2010] 7 S.C.R.
A 2.6. The death of a landlord after passing the order
of eviction does not ipso facto destroy the accrued right
under the decree. The cases which have taken into
account the subsequent event in favour of the tenant are
cases where during the pendency of the appeal or
B revision, the requirement of the landlord had been fully
satisfied and met or ceased to exist. In the case on hand,
the landlord required it for its own business and for
residential purposes of its employees. That requirement
continues to exist also for the transferee company since
C the entire business of the transferor company stood
transferred to the transferee company. The requirement
of the company has neither been satisfied nor
extinguished. The right to evict has already crystallized
into a decree to which the company after amalgamation
has succeeded by involuntary assignment. As the decree
0
for eviction was under stay, the decree could not be
executed. Once the stay is vacated or dissolved, the
respondent would be entitled to execute the decree. In
the instant case, the amalgamation order has also
preserved the said right. [Para 28] [74-H; 75-A-D]
E
2.7. As per Clause 1.7 of the Scheme of
amalgamation, all assets vest in the transferee company.
As per Clause 6, any suit, petition, appeal or other
proceedings in respect of any matter shall not abate or
F be discontinued and shall not be prejudicially affected by
reason of the transfer of the said assets/liabilities of the
Transferor Company or of anything contained in the
scheme but the proceedings may be continued,
prosecuted and enforced by or against the transferee
G company in the same manner and to the same extent as
it would be or might have been continued prosecuted
and enforced by or against the Transferor company as if
the scheme has not been made. In view of the same, by
virtue of the provisions in the Scheme of Amalgamation
H and operation of Order 21 rule 16 C.P.C., the decree
SPEEDLINE AGENCIES v. T. STANES & CO. LTD. 51
holder is deemed to execute the decree. Section 18 of the A
Act provides that the order of eviction shall be executed
by the Controller as if such order is an order of a civil
court and for this purpose, the Controller shall have all
the powers of the civil court. For the purpose of execution
of the order, all the powers of civil court have been s
invested in the Rent Controller. Therefore, the principle
of Order 21 Rule 16 C.P.C. will apply. In any event, the
C.P.C. provisions to the extent advance public interest or
ensure a just, fair and reasonable procedure and does not
conflict with the Act will apply to execution of the order c
of eviction. [Para 28) [75-D-H; 76-A]
Hasmat Rai and Anr. vs. Raghunath Prasad (1981) 3
SCC 103; Saraswati Industrial Syndicate Ltd. vs. C./. T. 1990
(Supp) SCC 675; Hindustan Lever and Anr. vs. State Qf
Maharashtra and Anr. (2004) 9 SCC 438, held inapplicable. D
General Radio and Appliances Co. Ltd. and Ors. vs. M.A.
Khader (dead) by LRs. (1986) 2 SCC 656; Singer India Ltd.
vs. Chander Mohan Chadha and Ors. (2004) 7 SCC 1,
referred to. E
2.8. The landlord's entitlement to evict the tenant had
merged with the decree. Further, the amalgamation took
place long after the decree for eviction and rights had
crystallized under the decree for eviction and merged into F
it. The tenant was in possession of vast extent of
property which comprises of a big building with built up
area of 5,274 sq. ft. together with appurtenant space i.e.
vacant land total measuring 61,872 sq. ft from the year
1965 for a period of over 45 years. The appellant was
initially paying rent of Rs. 4001- for the building and Rs. G
3001- for the furniture and fixtures which was raised to Rs.
4001- and Rs. 475/- respectively in 1970's. The Rent
Controller fixed the fair rent as Rs. 6,465/- which was
enhanced by the appellate authority to Rs. 7 ,852/- [Para
29] [76-8-D] H
52 SUPREME COURT REPORTS [2010] 7 S.C R
A 2.9. The assets of the erstwhile company had vested
in the amalgamated company. A decree constitutes an
asset. The said asset of erstwhile company has devolved
on the amalgamated company. The eviction was on the
ground of its own requirement of the erstwhile company.
B The said business will be continued to be carried by the
amalgamated company. If the amalgamated company is
deprived of the said benefit, it will frustrate the very
purpose of amalgamation and defeat the order of
amalgamation passed by the High Court exercising
C jurisdiction under the Companies Act. [Para 30) [78-E-G]
2.10. The vacant land which was leased along with
the building is the subject matter of the proceedings
under the Ceiling Act. The landlord has obtained an order
of exemption under s. 21 of the Act. The exemption was
D expressly for the extension of the industry which is a
public purpose. Under s. 21, only when the requirement
of public interest is satisfied, the Government has power
to grant exemption. When the landlord obtained an order
of exemption under s. 21 of the Ceiling Act, the tenant
E moved the Government for cancellation of exemption and
to assign the land in its favour. It also challenged the
order of exemption in Writ Petition and Writ Appeal which
was dismissed by the High Court. [Para 31] [76-G-H; 77-
A-B]
F
2.11. Section 10, sub-clause 3, first proviso has no
application to pending revisions. It applies only to an
application made before the Rent Controller. The proviso
enjoins that the landlord "is not occupying" the building.
G Even if the landlord owns other properties but is not in
occupation thereof, the proviso will not be attracted. The
Rent Act does not deal with the ownership or title, but
only with regard to the entitlement to occupation. Even
otherwise, this Court will not permit the said new plea to
be raised for the first time. In any event, the plea taken in
H · the application for permission to place on record
SPEEDLINE AGENCIES v. T. STAN ES & CO. LTD. 53
additional facts and documents that the amalgamated A
company owns other land, it is not pleaded that it is in
occupation of such land, therefore, the proviso to s.
10(3)(iii) is not attracted. [Para 32] [77-D-H]
2.12. The object of the Act is to prevent unreasonable 8
eviction of the tenant in occupation and to control rents.
Similarly, when landlord wants the property for its own
purpose, it takes into account the fact of the landlord's
occupation of other properties and not its ownership of
other properties which are not in occupation. The Act C
permits eviction on reasonable grounds as provided for
in the Act. There may be cases where it would be
reasonable to evict the tenant, but that requirement may
not strictly fall in any one of the provisions of s. 10 of the
Act to entitle .the landlord to evict the tenant. Section 29
of the Act therefore, enables the Government to grant D
exemption of the building in such cases so that the
landlord may be entitled to evict the tenant under the
ordinary remedy of suit. [Para 33] [77-H; 78-A-C]
Case Law Reference: E
(1981) 3 sec 103 Held inapplicable. Para 13
1990 (Supp) sec 675 Held inapplicable. Para 13
(2004) 9 sec 438 Held inapplicable. Para 13
F
(1986) 2 sec 656 Referred to. Para 14
(2004) 1 sec 1 Referred to. Para 14
(2004) 5 sec 112 Referred to. Para 17
G
(2008) 1 sec 330 Referred to. Para 19
(2001) 2 sec 604 Referred to. Para 20
(1973) 1 sec 688 Referred to. Para 21
(2002) 5 sec 397 Referred to. Para 22 H
54 SUPREME COURT REPORTS [201 O] 7 S..C.R
A AIR 1941 F.C. 5 Referred to. Para 23
(1980) 4 sec 259 Referred to. Para 25
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
4481 of 2010.
B
From the Judgment & Order dated 05.08.2009 of the High
Court of Judicature at Madras in Civil Revision Petition (NPD)
No. 1729 of 2003.
C K.K. Venugopal, Vuneet Subramani, Liz Mathew for the
Appellant.
K. Parasaran, KV Viswanathan, Anil Kaushik, Abhishek
Kaushik, Mary Mitzy, Gopal Singh Chauhan, Shiv Prakash
Pandey for the Respondent.
D
The Judgment of the Court was delivered by
P. SATHASIVAM, J. 1. Leave granted.
2. This appeal is directed against the final judgment and
E order dated 05.08.2009 passed by the High Court of
Judicature at Madras in Civil Revision Petition (NPD) No. 1729
of 2003 whereby the High Court dismissed the civil revision
filed by the appellant herein.
3. Brief facts in a nutshell are as under:
F
(a) The appellant took the suit premises in TS No. 1357
(bearing Old No. 6/499 and New No.8/499) on Trichy Road,
Coimbatore comprising an area of 1.4 acres, i.e., 61,872 sq.
ft. with a building having built up area of 5,274 sq. ft. on lease
G under lease deed dated 17.11.1965 for use as residence-cum-
office from M/s United Coffee Supply Co. Ltd., for a period of
five years on a monthly rental of Rs.400/-. On the expiry of the
period, the lease was further renewed for a period of five years
under lease deed dated 01.10.1970. On failure to renew the
H lease from 01.10.1975, the appellant instituted a suit in O.S.
SPEEDLINE AGENCIES. v. T. STANES & CO. LTD. 55
[P. SATHASIVAM, J.]
No. 209 of 1976 for specific performance of the renewa~clause A
in the lease agreement dated 1.10.1970. In the said suit, a
settlement dated 12.04.1978 was arrived at whereby the
appellant agreed to pay fair rent of Rs.1200/- w.e.f. 1.10.1975.
(b) In the meantime, Government of Tamil Nadu brought into
8
force the Tamil Nadu Urban Land (Ceiling and Regulation) Act,
1978 (hereinafter referred to as "the Ceiling Act") on
17.05.1978. Under the provisions of the said Act, ceiling was
fixed regarding extent of vacant land which may be owned by
a person and Government had the right to take possession of
the excess land over the ceiling limit. On 13.09.1978, the C
erstwhile landlord-company applied for exemption from
acquisition of excess vacant lands. On 04.11.1981, the erstwhile
landlord company was granted partial exemption from
acquisition of vacant lands under Section 21 (1 )(a) of the Ceiling
Act on the ground of public interest by way of G.O. Ms. No. D
2900. On 25.06.1986, by way of G.O. (Rt) No. 852 issued by
the Revenue Department, the partial exemption earlier granted
was reviewed and extended to the entire extent of the suit
premises under Section 21 (1 )(a) of the Ceiling Act, i.e. on the
ground of public interest. E
(c) In 1984, the landlord-company filed RCOP No. 397 of
1984 claiming monthly rental of Rs. 9500/- retrospectively from
01.10.1980. However, the Rent Controller, by order dated
18.10.1994, fixed the fair rent as Rs.6465/- from 1.10.1980. The F
appellant filed R.C.A. No. 171 of 1994 whereunder the rent was
fixed as Rs. 7852/- on 19.12.2001 which is currently being paid.
On 15.09.1985, the name of the landlord-company, M/s United
Coffee Supply Co. Ltd. was changed to Stanes Tea and Coffee
Ltd.
G
(d) Stanes Tea and Coffee Ltd. filed RCOP No. 105 of
1987 on 03.04.1987 under Sections 10(3)(a)(i) and (iii) of the
Tamil Nadu Buildings (Lease and Rent Control) Act, 1960
(hereinafter referred to as the 'Act') on the ground that it
required the building and premises for their own use and H
56 SUPREME COURT REPORTS [2010] 7 S.C.R.
A occupation and for providing residential accommodation to its
employees and that vacant areas were required for agency,
warehouses and research and development building, office
quarters and amenities for staff such as garage, cycle stand,
staff recreation club, community hall etc. The Rent Controller,
B by its order, dated 09.04.1992 allowed the petition and directed
eviction of the appellant. Aggrieved by the said order, the
appellant filed an appeal being RCA No. 42 of 1992 before the
Appellate Authority and llnd Additional Subordinate Judge of
Coimbatore and the same was dismissed on 10.04.2003.
C Against the said order, the appellant filed C.R.P. No. 1729 of
2003 before the High Court. During the pendency of the said
C.R.P. before the High Court, by a Scheme of Amalgamation,
M/s Stanes Tea and Coffee Limited was transferred to M/s T.
Stanes & Company Ltd., with effect from 01.04.2005 under
Sections 391 to 394 of the Companies Act, 1956 and this was
0
duly approved by the High Court. Thereafter, an application for
amendment of the cause title was filed which was also duly
allowed by the High Court by order dated 10.07 .2009. On
05.08.2009, the High Court dismissed the revision filed by the
appellant herein. Aggrieved by the said order, the appellant has
E preferred the above appeal before this Court by way of special
leave petition.
4. Heard Mr. K.K. Venugopal, learned senior counsel for
the appellant-tenant and Mr. K. Parasaran, learned senior
F counsel for the respondent-landlord.
5. Mr. Venugopal, learned senior counsel for the appellant-
tenant mainly submitted that upon the amalgamation of the
original rent control petitioner with the respondent herein, the
G new entity was not entitled to continue the eviction proceedings
under Section 10(3)(a)(i) and (iii) of the Act since the need of
the new entity will be different. In addition to the same, though
not seriously raised before the Courts below, he submitted that
other residential and non-residential buildings owned by the
respondent herein disable the new entity to claim the benefit
H of order of eviction.
SPEEDLINE AGENCIES v. T. STANES & CO. LTD. 57
; [P. SATHASIVAM, J.]
,
6. On the other hand, Mr. K. Parasaran, learned senior A
counsel for the respondent-landlord, by taking us through the
Scheme of Amalgamation approved by the Company Judge
and the relevant provisions in the Act, submitted that after
merg'ng of the Company which is the landlord with another
Company, there is no forfeiture of any right of the landlord under B
the provisions of the Rent Control Act or the Transfer of Property
Act. He also submitted that the amalgamation of the erstwhile
landlord with the respondent herein involved not merely the
transfer of the particular leasehold property but the entire
business of the erstwhile landlord including their requirement c
of the leasehold premises for the acquired business. He also
submitted that the subsequent events, namely, the merger had
taken place during the pendency of the Revision before the High
Court, are not matters of automatic cognizance by this Court
or a mandate on the Courts below. He elaborately submitted
0
that in the present case, the landlord required the premises for
its own business and for residential purposes of its employees
and the requirement continues to exist also for the transferee
company since the entire business of the transferor company
stood transferred to the transferee company.
E
. 7. We have considered all the relevant materials and rival
contentions.
8. It is not in dispute that Stanes Tea and Coffee Ltd. has
approached the Rent Controller by filing a petition under F
Section 10 (3) (a) (i) and (iii) of the Act for possession and
eviction against the tenant with regard to the premises in
question for its own use and occupation for residential and non-
residential purpose. The relevant provisions are extracted
hereunder:
G
"10. Eviction of tenants.- (1) xxx xxxx
(2) xxxxx
(3) (a) A landlord may, subject to the provisions of claus_E:) H
58 SUPREME COURT REPORTS [2010] 7 S.C.R.
A (d), apply to the Controller for an order directing the tenant
to put the landlord in possession of the building-
(i) in case it is residential building, if the landlord requires
it for his own occupation or for the occupation of any
member of his family and if he or any member of his family
B
is not occupying a residential building of his own in the city,
town or village concerned;
(ii) xxxx
c (iii) in case it is any other non-residential building, if the
landlord or any member of his family is not occupying for
purposes of a business which he or any member of his
family is carrying on, a non-residential building in the city,
town or village concerned which is own: ..... "
D 9. After analyzing the materials the Rent Controller and the
Appellate Authority accepting the case of the landlord
concurrently found that there is a bona fide need and passed
an order of eviction against the tenant-appellant herein. It is
relevant to note that the rent control petition was filed on
E 03.04.1987 and the Rent Controller ordered eviction on
09.04.1992. The appeal filed by the tenant came to be
dismissed on 10.04.2003 by the Rent Control Appellate
Authority. Thereafter, the tenant filed a civil revision petition
under Section 25 of the Act on 18.08.2003 before the High
F Court. During the pendency of the above said civil revision
petition before the High Court, the Scheme of Amalgamation
was finalized and by order dated 26.06.2006, the Company
Court sanctioned the Scheme. Thereafter, an application was
filed for amendment of the cause title in the civil revision petition
G was filed by the tenant and the same was also allowed.
10. The Scheme of Amalgamation, filed in the appeal
paper-book, contains various definitions and clauses. Clause
1.1 defines "Transferor Company" and Clause 1.2 defines
H
SPEEDLINE AGENCIES v. T. STAN ES & CO. LTD. 59
[P. SATHASIVAM, J.]
"Transferee Company". Among other clauses, we are A
concerned with Clauses 1.5 and 6, which read thus:
"1.5. The "Effective date" shall mean the date on which the.
ce·tified copy of the order of the High Court of Madras
sanctioning the scheme vesting the assets, properties,
8
liabilities, rights, duties, obligations and the line of the
Transferor Company in the Transferee Company are filed
with Registrar of Companies of Tamil Nadu after obtaining
the consents, approvals, permissions, resolutions
agreements, sanctions and orders necessary thereof."
c
"6. Legal Proceedings - With effect from the effective date,
if any suit, petition, appeal, revision or other proceedings
of whatever nature (hereinafter called "the proceedings) by
or agents the Transferor Company under any statute
whether pending on the Transfer Date or which may be D
instituted in future (whether before or after the effective
date) in respect of any matter arising before the effective
date and relating to the Transferred undertaking as agreed
between the Transferor Company and the Transferee
Company shall not abate be discontinued or be in any way E
prejudicially affected by reason of the transfer of the said
assets/liabilities of the Transferor Company or of anything
contained in the scheme but the proceedings may be
continued, prosecuted and enforced by or against the
Transferee Company in the same manner and to the same F
extent as it would be or might have been continued
prosecuted and enforced by or against the Transferor
Company as if the Scheme had not been made."
Clause 15 makes it clear that the Transferor Company shall
be dissolved without winding up as and from the effective date G
or such other date as the High Court of Madras may direct.
11. As mentioned earlier, after analyzing the Company
Petition filed for sanctioning the Scheme of Amalgamation
under Sections 391 to 394 read with Section 79 of the H
60 SUPREME COURT REPORTS [2010] 7 S.C R.
A Companies Act, 1956 and after satisfying all aspects. by order
dated 26.06.2006, the High Court sanctioned the Scheme with
effect from the transfer dated 01.04.2005 and allowed the
petitions accordingly.
12. After getting the order from the Company Court, the
8
Transferee Company filed a petition in the pending civil revision
petition filed by the tenant for amendment of the cause title and
it is not in dispute that the same was ordered by the learned
single Judge subject to objection by the tenant. In the light of
the above factual position, let us consider whether after
C amalgamation of the original landlord with the Transferee
Company, the Transferee Company is entitled to avail the
benefit of the order of eviction granted under Section 10 (3) (a)
(i) and (iii) as passed by the Rent Controller, approved by the
Appellate Authority and the High Court.
D
13. Mr. Venugopal, learned senior counsel submitted that
the eviction was ordered on the ground of personal requirement
and such requirement must continue to exist till final
determination of the case. In view of the same, according to
E him, the Appellate/Revisional Court must take cognizance of
subsequent events taking into account that the requirement of
the landlord is still continuing. In support of the above
proposition, he relied on the following three judgments:-
(i) In Hasmat Rai & Anr. vs. Raghunath Prasad (1981) 3
F SCC 103, this Court held:-
"14 ........ If a landlord bona fide requires possession of a
premises let for residential purpose for his own use, he can
sue and obtain possession. He is equally entitled to obtain
G possession of the premises let for non-residential
purposes if he wants to continue or start his business. If
he commences the proceedings for eviction on the ground
of personal requirement he must be able to allege and
show the requirement on the date of initiation of action in
H the court which would be his cause of action. But that is
SPEEDLINE AGENCIES v. T. STANES & CO. LTD. 61
[P. SATHASIVAM, J.]
not sufficient. This requirement must continue throughout A
the progress of the litigation and must exist on the date of
the decree and wh.en we say decree we mean the decree
of the final court. Any other view would defeat the beneficial
provisions of a welfare legislation like the Rent Restriction
Act. If the landlord is able to show his requirement when B
the action is commenced and the requirement continued
till the date of the decree of the trial court and thereafter
during the pendency of the appeal by the tenant if the
landlord comes in possession of the premises sufficient
to satisfy his requirement, on the view taken by the High c
Court, the tenant should be able to show that the
subsequent events disentitled the plaintiff, on the only
ground that here is tenant against whom a decree or order
for eviction has been passed and no additional evidence
was admissible to take note of subsequent events. When
0
a statutory right of appeal is conferred against the decree
or the order and once in exercise of the right an appeal is
preferred the decree or order ceases to be final. What the
definition of "tenant" excludes from its operation is the
person against whom the decree or order for eviction is
made and the decree or order has become final in the E
sense that it is not open to further adjudication by a court
or hierarchy of courts. An appeal is a continuation of suit.
Therefore a tenant against whom a decree for eviction is
passed by trial court does not lose protection if he files the
appeal because if appeal is allowed the umbrella of F
statutory protection shields him. Therefore it is indisputable
that the decree or order for eviction referred to in the
definition of tenant must mean final decree or final order
of eviction. Once an appeal against decree or order of
eviction is preferred, the appeal being a continuation of G
suit, the landlord's need must be shown to continue to exist
at appellate stage. If the tenant is in a position to show that
the need or requirement no more exists because of
subsequent events, it would be open to him to point out
such events and the court including the appellate court has H
62 SUPREME COURT REPORTS [2010] 7 S.C.R.
A to examine, evaluate and adjudicate the same. Otherwise
the landlord would derive an unfair advantage. An
Illustration would clarify what we want to convey. A landlord
was in a position to show that he needed possession of
demised premises on the date of the suit as well as on
B the date of the decree of the trial court. When the matter
was pending in appeal at the instance of the tenant, the
landlord built a house or bungalow which would fully satisfy
his requirement. If this subsequent event is taken into
consideration, the landlord would have to be non-suited.
c Can the court shut its eyes and evict the tenant? Such is
neither the spirit nor intendment of Rent Restriction Act
which was enacted to fetter the unfettered right of re-entry.
Therefore when an action is brought by the landlord under
Rent Restriction Act for eviction on the ground of personal
requirement, his need must not only be shown to exist at
D
the date of the suit, but must exist on the date of the
appellate decree, or the date when a higher court deals
with the matter. During the progress and passage of
proceeding from court to court if subsequent events occur
which if noticed would non-suit the plaintiff, the court has
E to examine and evaluate the same and mould the decree
accordingly. This position is no more in controversy in
view of a decision of this Court in Pasupuleti
\lenkateswar/u where Justice Krishna Iyer speaking for the
court observed as under: (SCC p. 772, para 4)
F
We affirm the proposition that for making the right
or remedy claimed by the party just and meaningful as also
legally and factually in accord with the current realities, the
court can, and in many cases must, take cautious
G cognizance of events and developments subsequent to the
institution of the proceeding provided the Rules of fairness
to both sides are scrupulously obeyed .........
...... .Therefore, it is now incontrovertible that where
possession is sought for personal requirement it would be
H
SPEEDLINE AGENCIES v. T. STANES & CO. LTD. 63
[P. SATHASIVAM, J.]
correct to say that the requirement pleaded by the landlord A
··must not only exist on the date of the action but must
·subsist till the final decree or an order for eviction is made.
If in the meantime events have cropped up which would
show that the landlord's requirement is wholly satisfied then
in that case his action must fail and in such a situation it B
is incorrect to say that as decree or order for eviction is
passed against the tenant he cannot invite the court to take
into consideration subsequent events. He can be
precluded from so cc..1tending when the decree or order
for eviction has become final. In view of the decision in c
Pasupuleti case the decision of the Madhya Pradesh High
Court in Taramal case must be taken to have been
overruled and it could not be distinguished only on the
ground that the definition of "tenant" in the Madhya Pradesh
Act is different from the one in Andhra Pradesh Act.
0
Therefore, the High Court was in error in declining to take
this subsequent event which was admittedly put forth in the
plaint itself into consideration ....... "
In the present case, ClauseI 6 (Legal proceedings) of the
Scheme of Amalgamation makes it clear that with effect from E
the effective date i.e. 01.04.2005 all proceedings in which
Transferor Company was a party be continued, prosecuted and
enforced by or against the Transferee Company in the same
manner and to the same extent as it would be or might have
been continued, prosecuted and enforced by or against the F
Transferor Company as if the Scheme had not been made. In
view of the above specific clause coupled with other clauses
of the Scheme and taking note of the fact that the Transferdt
Company in its entirety merged with the Transferee Company,
the above decision is not directly applicable to the case on G
hand.
(ii) The next decision relied on by him is Saraswati
Industrial Syndicate Ltd. vs. C.I. T. 1990 (Supp) SCC 675. In
that case, the question was whether on the amalgamation of H
64 SUPREME COURT REPORTS [2010) 7 S.C.R.
A the Indian Sugar Company with the appellant-Company i.e.
Saraswati Industrial Syndicate Ltd., the Indian Sugar Company
continued to have its entity and was alive for the purposes of
Section 41 (1) of Income Tax Act, 1961. This Court held as
under:-
B
"5. Generally, where only one company is involved in
change and the rights of the shareholders and creditors
are varied, it amounts to reconstruction or reorganisation
of scheme of arrangement. In amalgamation two or more
companies are fused into one by merger or by taking over
c by another. Reconstruction or 'amalgamation' has no
precise legal meaning. The amalgamation is a blending
of two or more existing undertakings into one undertaking,
the shareholders of each blending company become
substantially the shareholders in the company which is to
D carry on the blended undertakings. There may be
amalgamation either by the transfer of two or more
undertakings to a new company, or by the transfer of one
or more undertakings to an existing company. Strictly ·
'amalgamation' does not cover the mere acquisition by a
E company of the share capital of other company which
remains in existence and continues its undertaking but the
context in which the term is used may show that it is
intended to include such an acquisition. See: Halsbury's
Laws of England (4th edition volume 7 para 1539). Two
F companies may join to form a new company, but there may
be absorption or blending of one by the other, both amount
to amalgamation. When two companies are merged and
are so joined, as to form a third company or one is
absorbed into one or blended with another, the
G amalgamating company loses its entity.
6. In General Radio and Appliances Co. Ltd. v. M.A.
Khader the effect of amalgamation of two companies was
considered. M/s General Radio and Appliances Co. Ltd.
was tenant of a premises under an agreement providing
H
SPEEDLINE AGENCIES v. T. STANES & CO. LTD. 65
[P. SATHASIVAM, J.]
that the tenant shall not sub-let the premises or any portion A
thereof to anyone without the consent of the landlord. Mis
General Radio and Appliances Co. Ltd. was
amalgamated with M/s National Ekco Radio and
EngineerinJ Co. Ltd. under a scheme of amalgamation
and order of the High Court under Sections 391 and 394 B
of Companies Act,1956._Under the amalgamation
scheme, the transferee company, namely, M/s National
Ekco Radio and Engineering Company had acquired all
the interest, rights including leasehold and tenancy rights
of the transferor company and the same vested in the c
transferee company. Pursuant to the amalgamation
scheme the transferee company continued to occupy the
premises which had been let out to the transferor company.
The landlord initiated proceedings for the eviction on the
ground of unauthorised sub-letting of the premises by the
0
transferor company. The transferee company set up a
defence that by amalgamation of the two companies under
the order of the Bombay High Court all interest, rights
including leasehold and tenancy rights held by the transferor
company blended with the transferee company, therefore
E
the transferee company was legal tenant and there was no
question of any sub-letting. The Rent Controller and the
High Court both decreed the landlord's suit. This Court in
appeal held that under the order of amalgamation made
on the basis of the High Court's order, the transferor
company ceased to be in existence in the eye of law and F
it effaced itself for all practical purposes. This decision lays
down that after the amalgamation of the two companies
the transferor company ceased to have any entity and the
amalgamated company acquired a new status and it was
not possible to treat the two companies as partners or G
jointly liable in respect of their liabilities and assets ....... .
.. .. .. The true effect and character of the amalgamation
largely depends on the terms of the scheme of merger. But
there cannot be any doubt that when two companies H
66 SUPREME COURT REPORTS [2010) 7 S.C.R.
A amalgamate and merge into one the transferor company
loses its entity as it ceases to have its business. However,
their respective rights or liabilities are determined under
the scheme of amalgamation but the corporate entity of the
transferor company ceases to exist with effect from the date
B the amalgamation is made effective."
This case deals with reference to liability to pay income tax by
Transferor Company after amalgamation and hence not
applicable to the case on hand.
C (iii) The third decision heavily relied on by Mr. Venugopal
is Hindustan Lever & Anr. vs. State of Maharashtra & Anr.
(2004) 9 SCC 438. In that case, Tata Oil Mills Co. Ltd.
(transferor Company) was incorporated on 10.12.1917 under
the Companies Act, 1913. Hindustan Lever Ltd. (transferee
D Company) was incorporated under the same Act on
17 .10.1933. The scheme of amalgamation of the tra.nsferor
Company with the transferee Company was formulated and
approved by the Board of Directors of the respective
companies on 19.03.1993. On 03.03.1994 the scheme of
E amalgamation of the transferor Company with the transferee
Company was sanctioned with certain modifications by a
learned single Judge of the High Court. Appeal filed against the
judgment and order of the learned single Judge was rejected
by the Division Bench on 18.05.1994. The special leave petition
F against the above judgment of the Division Bench was
dismissed by this Court on 24.10.1994. The drawn-up order of
amalgamation of the transferor Company with the transferee
Company was approved by the High Court on 24.11.1994. On
presentation of the certified copy of the Court's order, the
G Registrar of Companies, Maharashtra issued a certificate
amalgamating the two companies. In view of the stamp duty
sought to be levied on the order of amalgamation passed under
Section 394 of the Companies Act, 1956 the appellant-
Hindustan Lever filed writ petition in the Bombay High Court
challenging the constitutional validity of the provisions of Section
H
SPEEDLINE AGENCIES v. T. STANES & CO. LTD. . 67
[P. SATHASIVAM, J.]
2 (g)(iv) ·at the Bombay Stamp Act, 1958. The Division Bench A
upheld the validity and dismissed the writ petition. This decision
mainly deals with payment of stamp duty levied on the order of
amalgamation and not helpful to the case on hand.:
14. With reference to the submissions made by Mr.
B
Venugopal and the above mentioned decisions relied on,
amalgamation of a company with another company under
Sections 391 to 394 of the Companies Act has different legal
consequences on the rights of the Company in a case where
it is a tenant of a building entitled to the benefits of the Act and C
in a case where company which amalgamates with another
company is a landlord of the building. When a company which
is a tenant amalgamates with another company, the
amalgamating company (Transferor Company) loses its
identity. It would, in law, amount to the amalgamating company
inter alia transferring its right under the lease even if it be .D
considered as an involuntary transfer. Such amalgamation would
fall within the mischief of Section 10(21(ii}(a) of the Act when it
is without the written consent of the landlord and would result
in forfeiture of the tenancy [vide General Radio and Appliances
Co. Ltd. & Ors. vs. M.A. Khader (dead) by LRs. (1986) 2 SCC E
656 and Singer India Ltd. vs. Chander Mohan Chadha and
Ors. (2004) 7 SCC 1.) As in the present case, the company
which is the landlord merges with another company, there is
no forfeiture of any right of the landlord under the provisions of
the Act or under the Transfer of Property Act. F
15. In a case where a company is a tenant, amalgamation
is the cause of action for the landlord to sue the tenant
company for eviction on the ground of subletting without the
consent of the landlord. In the present case, the petition by the
landlord for eviction of the tenant was filed on 03.04.1987. The G
cause of action has no relation to amalgamation, irrespective
of whether it is prior or subsequent to filing of the application
for eviction. The Rent Controller ordered eviction on 09.04.1992.
The appeal of the tenant was disposed of by the Appellate
H
68 SUPREME COURT REPORTS (2010] 7 S.C.R.
A Authority on 10.04.2003. The rights of the landlord are to be
determined as on the date of the application for eviction. The
order of eviction crystallized the rights of the landlord. The tenant
had filed the revision in the High Court on 18.08.2003. During
thH pendency of the revision petition, the order for
B amalgamation under the Companies Act passed by the High
Court was made on 26.02.2006 which is a subsequent event.
Revision Petition was disposed of by the High Court on
05.08.2009. As rightly pointed out by Mr. Parasaran, learned--
senior counsel, had the revision petition been disposed of
c before 26.02.2006, this contention would not have arisen at all.
Th«:! delay in the disposal of the revision petition should not
prejudice the vested rights of the landlord under the decree of
the Rent Controller confirmed by the Appellate Authority.
16. Further, the amalgamation of the erstwhile landlord witt
D the respondent herein involved not merely the transfer of the
particular leasehold property but the entire business of the
erstwhile landlord including the requirement of the leasehold
premises for the acquired business. In view of the factual details
including various clauses in the Scheme of Amalgamation
E which was approved by the High Court, while there is no quarrel
about the proposition in the decision relied on by Mr.
Venugopal, they are not applicable to the case on hand.
17. As far as the appellant's prayer before this Court to
F take note of the subsequent event of amalgamation, it is at the
outset submitted that subsequent events are not matters of
automatic cognizance by this Court or a mandate on the courts
below. A subsequent event is one which may be taken into
account in certain circumstances and deserves to be eschewed
G and kept out of the purview of judicial consideration in certain
other cases. Mr. Parasaran, learned senior counsel pointed out
that in cases under Rent Acts there are two lines of cases. One
has taken into account subsequent events and moulded the
relief and the other refused to take into account subsequent
events. According to him, the present case falls within the line
H
SPEEDLINE AGENCIES v. T. STANES & CO. LTD. 69
[P. SATHASIVAM, J.]
of cases where subsequent event was not taken into account. A
In the present case, he submitted that the subsequent events
do not have a fundamental impact on the order of eviction
based on the requirement of the landlord for its own occupation
and/or for purpose of its business. According to him, the
subsequent event is therefore not to be taken into account. In B
Shakuntala Bai and Ors. vs. Narayan Das & Ors. (2004) 5
sec 772, it was held that with regard to the category of cases
where a decree for eviction is passed and the landlord died
during the pendency of the appeal, the estate is entitled to the
benefit which, under a decree, has accrued in favour of the c
landlord and the legal representatives are entitled to defend
further pro~eedings like an appeal which is challenged to the
benefit under the decree.
18. we agree with Mr. Parasaran that, in normal
circumstances, after passing of the decree by the trial Court, D
the landlord would have obtained possession of the premises,
but for the tenant continuing in occupation of the premises only
on account of stay order from the appellate court. In such
circumstances, the well known principle that "an act of the court
shall prejudice no man" shall come into operation. Therefore, E
the heirs of the landlord will be fully entitled to defend the appeal
preferred by the tenant. When a company stands dissolved
(with or without winding up) due to amalgamation, its rights
under the decree for eviction devolves on the amalgamated
oom~~- F
19. Further in Usha P. Kuve/kar & Ors. vs. Ravindra
Subrai Dalvi, (2008) 1 SCC 330, this Court clearly brought out
the distinction between the cases where death occurred after
the decree and death occurring during the decree. It was held G
in para 14 that:-
" ...... In the same decision a contrary note expressed by
this Court in P. V. Papanna v. K. Padmanabhaiah was
held to be in the nature of an obiter. This Court in
H
70 SUPREME COURT REPORTS [2010) 7 S.C.R.
A Shakuntala Bai referred to the decision in Shanti/al
Thakordas v. Chiman/al Magan/al Telwa/a and specifically
observed that the view expressed in Shanti/a/ Thakordas
case did not, in any manner, affect the view expressed in
Phool Rani v. Naubat Rai Ahluwalia to the effect that
B where the death of landlord occurs after the decree for
possession has been passed in his favour, his legal heirs
are entitled to defend the further proceedings like an
appeal and the benefit accrued to them under the decree.
Here in this case also it is obvious that the original
c landlord, Prabhakar Govind Sinai Kuvelkar had expired
only after the eviction order passed by the Additional Rent
Controller. This is apart from the fact that the landlord had
sought the possession not only for himself but also for his
family members. There is a clear reference in Section
23(1 )(a)(i) of the Act regarding occupation of the family
D
members of the landlord. In that view the contention raised
by the learned counsel for the respondent must be
rejected."
20. As to subsequent events, this Court in Gaya Prasad
E vs. Pradeep Srivastava (2001) 2 SCC 604 at 609 para 10
observed as under:
"10. We have no doubt that the crucial date for deciding
as to the bona fides of the requirement of the landlord is
F the date of his application for eviction. The antecedent
days may perhaps have utility for him to reach the said
crucial date of consideration. If every subsequent
development during the post-petition period is to be taken
into account for judging the bona fides of the requirement
pleaded by the landlord there would perhaps be no end
G
so long as the unfortunate situation in our litigative slow-
process system subsists. During 23 years, after the
landlord moved for eviction on the ground that his son
needed the building, neither the landlord nor his son is
expected to remain idle without doing any work, lest, joining
H
SPEEDLINE AGENCIES v. T. STANES.& CO. LTD. 71
[P. SATHASIVAM, J.]
A
any new assignment or starting any new work would be at
the peril of forfeiting his requirement to occupy the building.
It is a stark reality that the longer is the life of the litigation
the more would be the number of developments sprouting
up during the long interregnum. If a young entrepreneur
decides to launch a new enterprise and on that ground he 8
or his father seeks eviction of a tenant from the building,
the proposed enterprise would not get faded out by
subsequent developments during the traditional lengthy
longevity of the litigation. His need may get dusted, patina
might stick on its surface, nonetheless the need would C .
remain intact. All that is needed is to erase the patina and
see the gloss. It is pernicious, and we may say, unjust to
shut the door before an applicant just on the eve of his
reaching the finale, after passing through all the previous
levels of the litigation, merely on the ground that certaia .. D
developments occurred pendente lite, because the
opposite party succeeded in prolonging the matter for such
unduly long period."
It was further held in pijtra 15 that:- E
"15. The judicial tardiness, for which unfortunately our
system has acquired notoriety, causes the lis to creep
through the line for long long years from the start to the
ultimate termini, is a malady afflicting the system. During
this long interval many many events are bound to take place F
which might happen in relation to the parties as well as the
subject-matter of the lis. If the cause of action is to be
submerged in such subsequent events on account of the
malady of the system it shatters the confidence of the
litigant, despite the impairment already caused." G
It would inflict great injustice in many cases if subsequent
events are taken into account when long years have passed
unless there are very compelling circumstances to take into
account the subsequent events. H
72 SUPREME COURT REPORTS [2010] 7 SC R.
A 21. In Smt. Phool Rani & Ors. vs. Shri Naubat Rai
Ahuluwalia, (1973) 1 SCC 688, at page 693, this Court, after
discussing the issue in paras 9, 10, 11 and 12 held in para 13
and 14 as under:-
"13. Several decisions were· cited before us but those
B
falling within the following categories are to be
distinguished-
(1) cases in which the death of the plaintiff occurred after
a decree for possession was passed in his favour; say,
c during the pendency of an appeal filed by the unsuccessful
tenant;
(ii) cases in which the death of the decree-holder landlord
was pleaded as a defence in execution proceedings; and
D (iii) cases in which, not the plaintiff but the defendant -
tenant died during the pendency of the proceedings and
the tenant's heirs took the plea that the ejectment
proceedings cannot be continued against them.
E 14. Cases of the first category are distinguishable because
the decisions therein are explicable on the basis, though
not always so expressed, that the estate is entitled to the
benefit which, under a decree, has accrued in favour of the
plaintiff and therefore the legal representatives are entitled
F to defend further proceedings, like an appeal which
constitute a challenge to that benefit."
22. Particularly in matters governed by the Rent Acts to
take into account subsequent events would inflict hardship to
landlords, in a case like the present one. In this context, it was
G held in para 9 of Joginder Pal vs. Naval Kishore Behal (2002)
5 sec 397 that:-
"9. The rent control legislations are heavily loaded in favour
of the tenants treating them as weaker sections of the
H
SPEEDLINE AGENCIES v. T. STANES & CO. LTD. 73
[P. SATHASIVAM, J.]
society requiring legislative protection against exploitation A
and unscrupulous devices of !;!reedy landlords. The
legislative intent has to be respected by the courts while
interpreting the laws. But it is being uncharitable to
le~islatures if they are attributed with an intention that they
lean only in favour of the tenants and while being fair to B
the tenants, go to the extent of being unfair to the landlords.
The legislature is fair to the tenants and to the landlords
- both ...... "
23. It is pointed out by Mr. Parasaran, learned senior C
counsel that the tenant, in the present case, is an affluent
company and is not a tenant falling under the category of
weaker sections of tenants of small properties. He further
submitted that the principle of taking into consideration
subsequent event is to be confined only to appeals on the
principle that an appeal is a continuation of the proceedings D
and the appellate court exercises all the powers of the trial
Court. [Vide Lachmeshwar Prasad Shukul and Ors. vs.
Keshwar Lal Chaudhuri & Ors. AIR 1941 F.C. 5 at page 13.)
24. In the present case, subsequent event of amalgamation E
cif a company took place during the pendency of the revision
in the High Court. Though, subsequent events which have
occurred during the pendency of a revision petition in the High
Court or the matter was pending before this Court, have been
taken into consideration by this Court in some cases, the F
question as to the difference between the exercise of jurisdiction
in appeal and revision was not argued or decided in those
cases.
25. In a revision under Section 25 of the Act, the Court is
exercising a restricted jurisdiction and not wide powers of the G
appellate court. In Mis Sri Raja Lakshmi Dyeing Works and
Ors. vs. Rangaswamy Chettiar (1980) 4 SCC 259 at page 262
it was held:·
" ...... Therefore, despite the wide language employed in H
74 SUPREME COURT REPORTS [201 O] 7 S.C.R.
A Section 25, the High Court quite obviously should not
interfere with findings of fact merely because it does not
agree with the finding of the subordinate authority. The
power conferred on the High Court under Section 25 of the
Tamil Nadu Buildings (Lease and Rent Control) Act may
B not be as narrow as the revisional power of the High Court
under Section 115 of the Code of Civil Procedure but in
the words of Untwalia, J., in Dattonpant Gopalvarao
Devakate v. Vithalrao Maruthirao Janagava/1; "it is not
wide enough to make the High Court a second Court of
c first appeal".
26. Mr. Parasaran reiterated that the High Court having
only the power of limited jurisdiction and not powers of appellate
court, the subsequent event which occurred during the
pendency of the revision petition is not to be taken into account,
D the High Court will decide only as to the legality of the order
under revision.
27. Coming to the expression "for its own use/occupation",
it has to be construed widely and given wide and liberal
E meaning. When a company wants to expand its business and
amalgamates with another company, this would also be a case
of "for its own use". If a landlord which is a company cannot
advance its interest in the business by amalgamating with
another company by putting to use its own property, it would
F be unjust, unfair and unreasonable. Further, the provisions of
Rent Control Act should not be so construed as to frustrate and
defeat the legislation. If in a case of landlord requiring the
prE!mises for its own use, to amalgamate with another company
and expands its business, the rent control legislation may clash
G with the provisions of the Companies Act. The Companies Act
and the Rent Control Act have to be harmoniously interpreted
and not to be so interpreted as to result in the one Act
destroying a right under the other Act.
28. As stated earlier, death of a landlord after passing the
H order of eviction does not ipso facto destroy the accrued right
\__SPEEDLINE AGENCIES v. T. STANES & CO. LTD. 75
[P. SATHASIVAM, J.]
under the decree. The cases which have taken into account the A
subsequent event in favour of the tenant are cases where during
the pendency of the appeal or revision, the requirement of the
landlord had been fully satisfied and met or ceased to exist. In
the case on hand, the landlord required it for its own business
and for residential purposes of its employees. That requirement B
continues to exist also for the transferee company since the
entire business of the transferor company stood transferred to
the transferee company. The requirement of the company has
neither been satisfied nor extinguished. The right to evict has
already crystallized into a decree to which the company after c
amalgamation has succeeded by involuntary assignment. As
· the decree for eviction was under stay, the decree could not
be executed. Once the stay is vacated or dissolved, the
respondent would be entitled to execute the decree. In the
present case, the amalgamation order has also preserved the
0
said right. As per Clause 1. 7 of the Scheme, all assets vest in
the transferee company. As per Clause 6, any suit, petition,
appeal or other proceedings in respect of any matter shall not
abate or be discontinued and shall not be prejudicially affected
by reason of the transfer of the said assets/liabilities of the E
Transferor Company or of anything contained in the scheme but
the proceedings may be continued, prosecuted and enforced
by or against the transferee company in the same manner and
to the same extent as It would be or might have been continued
prosecuted and enforced by or against the Transferor company
as if the scheme has not been made. In view of the same, by F
virtue of the provisions in the Scheme of Amalgamation and
operation of Order 21 rule 16 of C.P.C., the decree holder is
deemed to execute the decree. Section 18 of the Act provides
that the order of eviction shall be executed by the Controller as
if such order is an order of a civil court and for this purpose, G
the Controller shall have all the powers of the civil court. For
the purpose of execution of the order, all the powers of civil court
have been invested in the Rent Controller. Therefore, the
principle of Order 21 Rule 16 of the C.P.C. will apply. In any
event, as rightly pointed out by learned senior counsel for the H
76 SUPREME COURT REPORTS [2010] 7 S.C.R.
A respondent that the C.P.C. provisions to the extent advance
public interest or ensure a just, fair and reasonable procedure
and does not conflict with the Act\will apply to execution of the
order of eviction. •
29. The landlord's entitlement to evict the tenant had
8
merged with the decree. Further, the amalgamation took place
long after the decree for eviction and rights had crystallized
under the decree for eviction and merged into it. The tenant has
been in possession of vast extent of property which comprises
C of a big building with built up area of 5,274 sq. ft. together with
appurtenant space i.e. vacant land total measuring 61,872 sq.
ft. from the year 1965 for a period of over 45 years. The
appellant was initially paying rent of Rs. 400/- for the building
and Rs. 300/- for the furniture and fixtures which was raised to
Rs. 400/- and Rs. 4 75/- respectively in 1970's. The Rent
0 Controller fixed the fair rent as Rs. 6,465/- by order dated
18.10.1994 which was enhanced by the appellate authority in
an appeal filed by the appellants to Rs. 7 ,852/- by order dated
19.12.2001.
E 30. The assets of the erstwhile company had vested in the
amalgamated company. A decree constitutes an asset. The
said asset of erstwhile company has devolved on the
amalgamated company. The eviction was on the ground of its
own requirement of the erstwhile company. The said business
F will be continued to be carried by the amalgamated company.
If the amalgamated company is deprived of the said benefit, it
will frustrate the very purpose of amalgamation and defeat the
order of amalgamation passed by the High Court exercising
jurisdiction under the Companies Act.
G 31. Further, the vacant land which was leased along with
the building is the subject matter of the proceedings under the
Ceiling Act. The landlord has obtained an order of exemption
under Section 21 of the Act vide G.O. Rt. No. 2900 dated
04.11.1981 and the order G.O. Rt. No. 852 dated 25.06.1986.
H The exemption was expressly for the extension of the industry
SPEEDLINE AGENCIES v. T. STANES & CO. LTD. 77
[P. SATHASIVAM, J.]
which is a public purpose. It is relevant to mention that under A
Section 21, only when the requirement of public interest is
satisfied, the Government has power to grant exemption. It is
also pointed out the conduct of the tenant when the landlord
obtained an order of exemption under Section 21 of the Ceiling
Act, the tenant moved the Government for cancellation of B
exemption and to assign the land in its favour. It also challenged
the order of exemption before the High Court in Writ Petition
No. 6434 of 1987 which was dismissed by the High Court by
order dated 18.04.1991 and Writ Appeal No. 1177 of 1992
which was dismissed by the Division Bench of the High Court c
by order dated 12.07.1993.
32. The reliance placed on behalf of the tenant, Section
10, sub-clause 3, first proviso, is a new plea. The said proviso
reads as under:-
D
"Provided that a person who becomes a landlord after the
commencement of the tenancy by an instrument inter vivos
shall not be entitled to apply under this clause before the
expiry of three months from the date on which the
instrument was registered." E
It has no application to pending revisions. On the other hand, it
applies only to an application made before the Rent Controller.
The proviso enjoins that the landlord "is not occupying" the
building. Even if the landlord owns other properties but is not F
in occupation thereof, the proviso will not be attracted. The Rent
Act does not deal with the ownership or title, but only with
regard to the entitlement to occupation. Even otherwise, this
Court will not permit this new plea to be raised for the first time.
In any event, it is pointed out that the plea taken in the
application for permission to place on record additional facts G
and documents that the amalgamated company owns other
land, it is not pleaded that it is in occupation of such land,
therefore, the proviso to Section 10(3)(iii) is not attracted.
33. The object of the Act is to prevent unreasonable H
78 SUPREME COURT REPORTS [2010] 7 S.C.R.
A eviction of the tenant in occupation and to control rents.
Similarly, when landlord wants the property for its own purpose,
it takes into account the fact of the landlord's occupation of other
properties and not its ownership of other properties which does
not in occupation. The Act permits eviction on reasonable
B grounds as provided for in the Act. It may be that there may be
cases where it would be reasonable to evict the tenant, but that
requirement may not strictly fall in any one of the provisions of
Section 10 of the Act to entitle the landlord to evict the tenant.
Section 29 of the Act therefore, enables the Government to
c grant exemption of the building in such cases so that the
landlord may be entitled to evict the tenant under the ordinary
remedy of suit.
34. The present case being one where the order of eviction
is eminently just, fair and equitable as ordered by two
D authorities a,i:d confirmed by the High Court, we do not find any
valid ground for interfe1ence, on the other hand. we are in
agreement with the conclusion a1 rivt:d at by the authorities as
well as the High Court. Taking into consideration the appellant-
tenant is continuing in the premises for more than four decades,
E we grant time for handing over possession till 31.12 2010 on
usual condition of filing an undertaking within a period of four
weeks. With the above observation, the appeal fails and the
same is dismissed. No order as to costs.
N..J. Appeal dismissed.
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