2010 (5) TMI 396 - SC - Indian Laws

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 section 10(3)(a)( i) and (iii) as passed by the Rent Controller, approved by the Appellate Authority and the High Court? Held that - Appeal dismissed. 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. 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, no 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.

Issues Involved:
1. Validity of eviction proceedings post-amalgamation.
2. Implications of subsequent events on eviction orders.
3. Interpretation of "own use/occupation" under the Tamil Nadu Buildings (Lease and Rent Control) Act.
4. Applicability of Section 10(3) proviso of the Tamil Nadu Buildings (Lease and Rent Control) Act.
5. Tenant's entitlement to raise new pleas in higher courts.

Detailed Analysis:

1. Validity of Eviction Proceedings Post-Amalgamation:
The appellant argued that the new entity formed post-amalgamation could not continue the eviction proceedings under Section 10(3)(a)(i) and (iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act since the needs of the new entity would differ. The respondent countered that the amalgamation did not affect the landlord's rights under the Rent Control Act or the Transfer of Property Act. The Court upheld the respondent's view, citing Clause 6 of the Scheme of Amalgamation, which allowed the proceedings to continue as if the amalgamation had not occurred. The Court concluded that the amalgamated company retained the right to enforce the eviction order.

2. Implications of Subsequent Events on Eviction Orders:
The appellant contended that the requirement for eviction must exist until the final determination of the case, citing precedents where subsequent events were considered. The Court distinguished these cases, emphasizing that the amalgamation did not alter the landlord's requirement for the premises. The Court noted that the amalgamated company continued to need the premises for its business and residential purposes, and subsequent events did not impact the eviction order.

3. Interpretation of "Own Use/Occupation" Under the Tamil Nadu Buildings (Lease and Rent Control) Act:
The Court interpreted "own use/occupation" broadly, allowing for the landlord's business expansion through amalgamation. The Court held that the Rent Control Act should not be interpreted to frustrate the Companies Act's provisions, ensuring that the amalgamated company could use the property for its expanded business.

4. Applicability of Section 10(3) Proviso of the Tamil Nadu Buildings (Lease and Rent Control) Act:
The appellant raised a new plea under Section 10(3) proviso, which restricts landlords who become owners by an instrument inter vivos from applying for eviction before three months from the registration date. The Court dismissed this plea, noting it was not applicable to pending revisions and emphasized that the Act focuses on the landlord's occupation rather than ownership of other properties.

5. Tenant's Entitlement to Raise New Pleas in Higher Courts:
The Court rejected the appellant's attempt to introduce new arguments at the higher court level, particularly the claim that the amalgamated company owned other properties. The Court stressed that new pleas not raised earlier should not be entertained, especially when they do not impact the landlord's right to eviction.

Conclusion:
The Supreme Court dismissed the appeal, affirming the eviction order. The Court granted the appellant time to vacate the premises until December 31, 2010, subject to filing an undertaking within four weeks. The judgment underscored the principles of fairness and the need for judicial processes to consider the broader implications of corporate amalgamations on tenancy laws.

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