TMI Blog1986 (4) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... t. A. Subba Rao for the Respondent. JUDGMENT B.C. Ray, J. This appeal by way of certificate granted by the High Court of Andhra Pradesh at Hyderabad under article 133 of the Constitution of India is against the judgment and decree in Civil Revision Petition No. 684 of 1974 made on April 23, 1976, and it raises an important question of law, i.e. , whether the voluntary amalgamation of the first and second appellants companies amounts to a transfer of the first appellant's right under the lease within the meaning of section 10( ii )( a ) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960. The front corner portion of the premises bearing No. 8092/1/2 (new No. 5-1-1) situated at Rashtrapati Road at Secunderabad was let out on January 12, 1959, to M/s General Radio and Appliances Co. (P.) Ltd., the first appellant, on a monthly rent of Rs. 200 on the basis of a rental agreement dated January 12, 1959 (exhibit P-6), executed by the first appellant. Clause 4 of the said agreement provides that the tenant shall not sub-let the premises or any portion thereof to any one without the written consent of the landlord. The respondent landlord, M. A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the order. Against this judgment and decree, an appeal, being Appeal No. 406 of 1972, was preferred before the Chief Judge, City Small Causes Court, Hyderabad. On October 29, 1975, the Chief Judge, City Small Causes Court, Hyderabad, after hearing the parties, held that though appellant No. 1 company voluntarily sponsored the scheme of amalgamation, the ultimate power to sanction or not to sanction it rested with the High Court. The scheme of amalgamation, though proposed by appellant No. 1 company voluntarily, became binding and enforceable on all the parties only when it was made a rule of the court. It was, therefore, held that the transfer of the assets and liabilities including the leasehold interest of appellant No. 1 company to appellant No. 2 company took place by virtue of the order of the court. It was held that such a transfer of assets, being an involuntary one, did not amount to assignment of the lease by appellant No. 1 company to appellant No. 2 company and, as such, it did not violate the terms of the lease. By amalgamation of appellant No. 1 company with appellant No. 2 company, appellant No. 1 company is not wound up but it is merely blended with the other co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anuary 7, 1959. Clause 4 of the said agreement is in the following terms: "That they shall not sub-let the said premises or any portion thereof to anyone without the written consent of the landlord." On January 9, 1968, appellant No. 1, M/s General Radio Appliances (P.) Ltd., filed Company Petition No. 4 of 1968 in the High Court of Bombay under section 394 of the Companies Act for sanction of a scheme of amalgamation with M/s. National Ekco Radio and Engineering Co. Ltd. M/s. General Radio and Appliances (P.) Ltd. was shown as the transferor company and the National Ekco Radio and Engineering Co. Ltd. was shown as the transferee company in the said petition. The High Court of Bombay by order dated March 28, 1968, sanctioned the scheme of amalgamation. It is pertinent to refer here to the relevant portions of the scheme which are as follows: "With effect from January 1, 1967, the undertaking and all the property, rights, powers of every description including all leases and tenancy rights, industrial, import and all other licences, quota rights of General Radio and Appliances (P.) Ltd. (hereinafter called 'the transferor company') without further act or deed be transferred a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om or on whose account rent is payable for a building and includes the surviving spouse, or any son or daughter, of a deceased tenant who had been living with the tenant in the building as a member of the tenant's family up to the death of the tenant and a person continuing in possession after the termination of the tenancy in his favour, but does not include a person placed in occupation of a building by its tenant, etc." In the instant case, appellant No. 1, i.e. , M/s. General Radio and Appliances Co. (P.) Ltd., is undoubtedly the tenant having taken lease of the premises in question from the respondent landlord by executing a rent agreement dated January 12, 1959, at a rental of Rs. 200 per month, the tenancy commencing from January 7, 1959. On the basis of the sanction accorded by the order of the High Court of Bombay made on March 27, 1968, sanctioning the scheme of amalgamation in Company Petition No. 4 of 1968, filed by the first appellant, all the property, rights and "powers of every description including all leases and tenancy rights, etc., of the first appellant were transferred to and vested or deemed to be transferred and vested in the second appellant, M/s. Nation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or sub-let the tenanted premises or a portion thereof. It is important to note in this connection the definition of tenant as given in section 2( ix ) of the said Act which provides specifically that a tenant does not include a person placed in occupation of a building by its tenant. On a plain reading of this provision, it is crystal clear that any person placed in occupation of a building by the tenant cannot be deemed or considered to be a tenant in respect of the premises in which the said person is to be in possession within the meaning of the said Act. Therefore, the second appellant, i.e. , National Ekco Radio and Engineering Co. Ltd., the transferee company, who has been put in possession of the tenanted premises by the transferor tenant, General Radio and Appliances Co. (P.) Ltd., cannot be deemed to be a tenant under this Act on the mere plea that the tenancy right including the leasehold interest in the tenanted premises have come to be transferred and vested in the transferee company on the basis of the order made under sections 391 and 394 of the Companies Act. The effect of an order under section 153A of the Indian Companies Act, 1913, which corresponds to secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49] 2 MLJ 423 ; AIR 1950 Mad. 25 has been referred to in this connection. In that case, the original tenancy was in favour of three persons who were partners in the firm and after dissolution of the partnership firm, one of the partners was allowed to wind up the affairs of the partnership and thereafter he was allowed to use the demised premises for his sole business. The question arose whether in such case the landlord was entitled to eviction of that partner from the tenanted premises on the ground that there was sub-letting. It was held, in the facts of that case, that the original tenancy being in favour of three persons who were partners in the firm, the act on the part of the two partners after the dissolution of the firm to allow one of the partners to use the premises for his sole business could not amount to a transfer or sub-letting of the premises to the petitioner. It has been observed as follows (at p. 26 of AIR 1950 Mad). "This act on the part of the two partners other than the petitioner cannot amount to a transfer or sub-letting of the premises to the petitioner. It is true that the courts in England have taken up an extreme view that even when one of two partner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nanted premises have been transferred to the transferee company in contravention of the provisions of the said Act as well as in contravention of the terms and conditions of the said rent agreement thereby making the transferee company liable to be evicted from the tenanted premises. It has been observed by Subba Rao J. in the case of Venkatarama Iyer v. Renters Ltd. [1951] 2 MLJ 57, as follows : "The Madras Buildings (Lease and Rent) Control Act applies not only to residential and non-residential buildings, but also to some buildings used for both purposes. If a company doing business in a particular premises (taken on lease) transfers its business as a going concern to another company and also the net assets for consideration and thereafter the transferee company takes over the business and carries on business in the premises let out to the former company it cannot be said that there was no transfer of the right of the former company under the lease to the latter company. On such transfer, the tenant is liable to be evicted." It is pertinent to mention in this connection the decision of this court in Parasram Harnand Rao v. Shanti Parsad Narinder Kumar Jain [1980] 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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