Bank Merger Without Landlord Consent Triggers Eviction Under Rent Control Law

British Motor Car Company (1939) Ltd., the landlord, had leased commercial premises at Pratap Building, Connaught Circus, New Delhi to Hindustan Commercial Bank (HCB) in 1947 at Rs. 585 per month. In December 1986, the Government of India, pursuant to a scheme prepared by the Reserve Bank of India under Section 45 of the Banking Regulation Act, 1949, amalgamated HCB with Punjab National Bank (PNB). As a result, all rights and liabilities of HCB, including the tenancy, vested in PNB. The landlord filed an eviction petition under Section 14(1)(b) of the Delhi Rent Control Act 1958, alleging that the tenant had parted with possession without the landlord's written consent. The Additional Rent Controller dismissed the petition, holding the amalgamation scheme was binding on the landlord. The Additional Rent Control Tribunal reversed this, granting eviction. The High Court of Delhi, relying on a case arising under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, set aside the eviction decree, holding the transfer was involuntary and not covered by Section 14(1)(b). The Supreme Court allowed the landlord's appeal. It held that Section 14(1)(b) of the DRC Act does not distinguish between voluntary and involuntary transfers of tenancy rights. The scheme under Section 45 of the BR Act is administrative, not legislative, and cannot override the DRC Act. Once possession and tenancy rights pass to a new entity without the landlord's written consent, eviction grounds are made out. The Court restored the eviction decree but gave the respondents time until January 31, 2027 to vacate, subject to payment of rent and filing an undertaking within four weeks.

In 1947, the appellant landlord leased commercial space in Pratap Building, Connaught Circus, New Delhi to Hindustan Commercial Bank at Rs. 585 per month. In December 1986, the Government of India amalgamated HCB with Punjab National Bank pursuant to a scheme framed by the Reserve Bank of India under Section 45 of the Banking Regulation Act, 1949, causing all rights and liabilities of HCB, including the tenancy, to vest in PNB. The landlord then filed an eviction petition in 1987 alleging that the original tenant had parted with possession of the premises without the landlord's written consent, making the new occupant PNB liable to eviction under Section 14(1)(b) of the Delhi Rent Control Act 1958.

The Supreme Court allowed the appellant landlord's appeal and set aside the High Court's judgment dated 12.03.2012 which had set aside the eviction decree. The Court restored the eviction decree passed by the Additional Rent Control Tribunal on 21.05.2001 under Section 14(1)(b) of the Delhi Rent Control Act 1958. However, given the respondents' long possession, the Court granted time until 31st January 2027 to deliver peaceful and vacant possession, subject to filing an undertaking within four weeks and continued payment of rent.

This ruling firmly establishes that a landlord's right to written consent before any change of tenant cannot be overridden even by a government-ordered statutory bank merger. It settles that Section 14(1)(b) of the Delhi Rent Control Act applies equally to involuntary transfers of tenancy arising from banking amalgamation schemes under the Banking Regulation Act, 1949. Ordinary property owners can take comfort that their consent rights remain enforceable even against powerful institutional changes beyond their control.