Supreme Court Sets Aside Delhi HC Ruling That PNB-HCB Bank Merger Did Not Amount To Unlawful Subletting
The Supreme Court on Thursday allowed the appeal filed by British Motor Car Company (1934) Ltd against the Delhi High Court's judgment which had held that the statutory amalgamation of Hindustan Commercial Bank (HCB) with Punjab National Bank (PNB) did not amount to unlawful subletting under the Delhi Rent Control Act.
The High Court had set aside the eviction order passed by the Rent Control Tribunal, holding that the transfer of tenancy rights to PNB pursuant to the statutory amalgamation of HCB under the Banking Regulation Act was an involuntary transfer by operation of law and did not amount to subletting or assignment under the Delhi Rent Control Act.
A Bench of Justices Nongmeikapam Kotiswar Singh and Sanjay Karol passed the judgment.
A detailed copy of the judgment is yet to be uploaded.
Background
The dispute concerns premises leased by British Motor Car Company (1934) Ltd to Hindustan Commercial Bank (HCB). In 1986, the Central Government exercising powers under Section 45(7) of the Banking Regulation Act, 1949, sanctioned a scheme amalgamating HCB with Punjab National Bank (PNB). Following the amalgamation, PNB took over all the assets, liabilities and tenancy rights of HCB and continued operating its banking business from the premises.
The landlord initiated eviction proceedings under Section 14(1)(b) of the Delhi Rent Control Act. It argued that HCB had unlawfully sublet or parted with possession of the premises in favour of PNB without its consent. While the Additional Rent Controller dismissed the eviction petition in 1995, the Rent Control Tribunal allowed the landlord's appeal and ordered eviction, holding that the amalgamation amounted to subletting.
In 2012, the Delhi High Court set aside the eviction order. Relying on its earlier decisions in Asha Rohtagi and Allahabad Bank, the Court held that the transfer of tenancy rights to PNB occurred by operation of a statutory scheme sanctioned by the Central Government and was therefore an involuntary transfer, not a voluntary act of subletting or assignment by the tenant.
The Court observed that PNB merely stepped into HCB's shoes and continued the same banking business from the premises.