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TMI Blog2010 (5) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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. - CIVIL APPEAL NO. 4481 OF 2010 - - - Dated:- 14-5-2010 - P. SATHASIVAM AND J.M. PANCHAL, JJ. K.K. Venugopal and Vineet Subramani for the Appellant. K. Parasaran K.V. Vishwanathan, Anil Kaushik, Abhishek Kaushik, Gopal Singh Chauhan and Shiv Prakash Pande for the Respondent. JUDGMENT P. Sathasivam, J. - Leave granted. 2. This appeal is directed against the final judgment and order dated 5-8-2009 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 : ( 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 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 9-4-1992 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 10-4-2003. 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, M/s. Stanes Tea and Coffee Limited was transferred to M/s. T. Stanes Company Ltd., with effect from 1-4-2005 under sections 391 to 394 of the Companies Act, 156 and this was duly approved by the High Court. Thereafter, an application for amendment of the cause title was filed which was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) and (2)****** (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 )****** ( 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted 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." 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 26-6-2006, the High Court sanctioned the Scheme with effect from the transfer dated 1-4-2005 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 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tending 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., 1-4-2005 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 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 dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 effac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rit 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. 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 wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 v. Narayan Das [2004] 5 SCC 772, it was held that with regard to the category of cases where a decr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion raised by the learned counsel for the respondent must be rejected." 20. As to subsequent events, this Court in Gaya Prasad v. 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 u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in to 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 v. 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 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gality 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 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 con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... algamated 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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