REPORTABLE

                              IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.                OF 2010 (Arising out of S.L.P. (Civil) No. 29478 of 2009)

M/s Speedline Agencies              .... Appellant(s)

Versus

M/s T. Stanes & Co. Ltd.                  .... Respondent(s)

J U D G M E N T  

P. Sathasivam, J.

1)  Leave granted.

2) This appeal is directed against the final judgment and 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.

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3) Brief facts in a nutshell are as under:

(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  

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 lease from 01.10.1975, the appellant instituted a suit in  

O.S. No. 209 of 1976 for specific performance of the renewal  

clause 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  

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  

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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  

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. 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.   

(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 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-

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company, M/s United Coffee Supply Co. Ltd. was changed to  

Stanes Tea and Coffee Ltd.   

(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  

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,  

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 IInd Additional Subordinate Judge  

of  Coimbatore  and the same was dismissed on 10.04.2003.  

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,  

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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  

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 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 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  

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  

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submitted that other residential and non-residential buildings  

owned  by  the  respondent  herein  disable  the  new  entity  to  

claim the benefit of order of eviction.   

6) On  the  other  hand,  Mr.  K.  Parasaran,  learned  senior  

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  

merging of the Company which is the landlord with another  

Company, there is no forfeiture of any right of the landlord  

under 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  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 that in the present  

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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.  

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  

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:

“10. Eviction of tenants.- (1) xxx xxxx  (2) xxxxx (3)  (a)  A  landlord  may,  subject  to  the  provisions  of  clause (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 is not occupying a residential building of his  own in the city, town or village concerned;  (ii) xxxx  

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(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:…..”

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  

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  

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  was  filed  by  the  tenant  and  the  same  was  also  

allowed.

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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  

“Transferee  Company”.   Among  other  clauses,  we  are  

concerned with Clauses 1.5 and 6, which read thus:

“1.5 The “Effective date” shall mean the date on which the  certified  copy  of  the  order  of  the  High  Court  of  Madras  sanctioning  the  scheme  vesting  the  assets,  properties,  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.”    

“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  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 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 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.”        

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Clause 15 makes it clear that the Transferor Company shall be  

dissolved without winding up as and from the effective date 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  

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  

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 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  

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Section 10 (3) (a) (i) and (iii) as passed by the Rent Controller,  

approved by the Appellate Authority and the High Court.      

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  

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  

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  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 the court  which  would  be  his  cause  of  action.  But  that  is  not  sufficient.  This requirement must continue throughout the  progress of the litigation and must exist on the date of the  decree and when 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 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  

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requirement,  on  the  view  taken  by  the  High  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 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 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 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 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  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 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. 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 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 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  

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Pasupuleti  Venkateswarlu where  Justice  Krishna  Iyer  speaking for the court observed as under: (SCC p. 772, para  4)

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  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  correct to say that the requirement pleaded by the landlord  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 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  contending  when  the  decree  or  order  for  eviction  has  become final. In view of the decision in  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.  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,  Clause  6  (Legal  proceedings)  of  the  

Scheme of Amalgamation makes it clear that with effect from  

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  

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have been continued, prosecuted and enforced by or against  

the 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 Transferor  

Company in its entirety merged with the Transferee Company,  

the  above  decision is  not  directly  applicable  to the  case on  

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 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:-

“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  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  carry  on  the  blended  undertakings.  There  may  be  amalgamation  either  by  the  transfer  of  two  or  more  

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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  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  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  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 that the tenant shall  not sub-let  the premises or any portion thereof  to anyone  without the consent of the landlord. M/s General Radio and  Appliances  Co.  Ltd.  was  amalgamated  with  M/s  National  Ekco  Radio  and  Engineering  Co.  Ltd.  under  a  scheme  of  amalgamation and order of the High Court under Sections  391  and  394  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  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 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 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 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  

15

treat  the  two  companies  as  partners  or  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  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  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.

(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  

Company)  was  incorporated  under  the  same  Act  on  

17.10.1933.   The scheme of amalgamation of  the transferor  

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  

amalgamation of the transferor Company with the transferee  

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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  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 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 2 (g)(iv) of the Bombay Stamp Act, 1958.  

The Division Bench 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.

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14)  With reference to the submissions made by Mr. 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 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 considered as  

an involuntary transfer.  Such amalgamation would fall within  

the mischief of Section 10(2)(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  

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  

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no forfeiture of any right of the landlord under the provisions  

of the Act or under the Transfer of Property Act.

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 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 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  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.  

Revision  Petition  was  disposed  of  by  the  High  Court  on  

05.08.2009.  As rightly pointed out by Mr. Parasaran, learned  

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senior  counsel,  had  the  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.   

16)  Further, 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 the requirement of the leasehold  

premises  for  the  acquired business.   In  view of  the  factual  

details  including  various  clauses  in  the  Scheme  of  

Amalgamation 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 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  

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courts below.  A subsequent event is one which may be taken  

into  account  in  certain  circumstances  and  deserves  to  be  

eschewed 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 of cases where subsequent event was not taken  

into  account.   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  Shakuntala  Bai and  Ors.  vs.  

Narayan Das & Ors. (2004) 5 SCC 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 landlord and the legal  

21

representatives are entitled to defend further proceedings 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,  

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,  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 company.   

19)   Further  in  Usha  P.  Kuvelkar  &  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 in para 14 that:-

22

“……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  Shakuntala  Bai  referred to the decision in Shantilal Thakordas v. Chimanlal   Maganlal  Telwala and  specifically  observed  that  the  view  expressed  in  Shantilal  Thakordas  case did  not,  in  any  manner, affect the view expressed in  Phool Rani v.  Naubat  Rai Ahluwalia to the effect that 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  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  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 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 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 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 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  

23

on that ground he 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 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  certain  developments occurred pendente lite, because the opposite  party succeeded in prolonging the matter for such unduly  long period.”

It was further held in para 15 that:-

“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  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.”

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.   

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:-

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“13. Several decisions were cited before us but those falling  within the following categories are to be distinguished— (i) cases in which the death of the plaintiff occurred after a  decree for possession was passed in his favour; say, 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  (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. 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 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 held in para 9 of Joginder Pal vs. Naval Kishore Behal  

(2002) 5 SCC 397 that:-

“9. The rent control legislations are heavily loaded in favour  of the tenants treating them as weaker sections of the society  requiring  legislative  protection  against  exploitation  and  unscrupulous  devices  of  greedy  landlords.  The  legislative  intent has to be respected by the courts while interpreting  the laws. But it is being uncharitable to legislatures if they  are attributed with an intention that they lean only in favour  of the tenants and while being fair to the tenants, go to the  extent of being unfair to the landlords. The legislature is fair  to the tenants and to the landlords — both……”  

25

23)  It is pointed out by Mr. Parasaran, learned senior 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 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 of  

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  

question  as  to  the  difference  between  the  exercise  of  

jurisdiction in appeal and revision was not argued or decided  

in those cases.   

26

25)  In a revision under Section 25 of the Act, the Court is  

exercising a restricted jurisdiction and not wide powers of the  

appellate  court.   In  M/s 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  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 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 Janagaval1; “it is not wide enough to  make the High Court a second Court of 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, 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  

meaning.  When a company wants to expand its business and  

27

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 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 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.   

28)  As stated earlier, 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 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  

28

business and for residential purposes of its employees.  That  

requirement 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  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 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  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  

29

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 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,  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  

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 merged  

with the decree.  Further, the amalgamation took place long  

after the decree for eviction and rights had crystallized under  

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the decree for eviction and merged into it.   The tenant  has  

been 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.  400/- for  the  

building and Rs. 300/- for the furniture and fixtures which  

was raised to Rs. 400/- and Rs. 475/- respectively in 1970’s.  

The Rent 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.

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  

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  

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order of amalgamation passed by the High Court  exercising  

jurisdiction under the Companies Act.   

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.  

The exemption was expressly for the extension of the industry  

which is a public purpose.  It is relevant to mention that under  

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  

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 by order dated 12.07.1993.   

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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:-

“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.”  

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 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  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.   

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33)  The object of the Act is to prevent unreasonable 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 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 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  

authorities and confirmed by the High Court, we do not find  

any valid ground for interference, on the other hand, we are in  

agreement with the conclusion arrived at by the authorities as  

well  as  the  High  Court.  Taking  into  consideration  the  

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appellant-tenant is continuing in the premises for more than  

four decades, 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.      

...…………………………………J.                   (P. SATHASIVAM)  

...…………………………………J.            (J.M. PANCHAL)  

NEW DELHI; MAY 14, 2010.           

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