GENERAL RADIO & APPLIANCES CO. LTD. & ORS. versus M.A. KHADER (DEAD) BY LRS.

Citation: [1986] 2 S.C.R. 607 · Decided: 17-04-1986 · Supreme Court of India · Bench: O. CHINNAPPA REDDY · Disposal: Dismissed
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Judgment (excerpt)

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607 
GENERAL RADIO & APPLIANCES 00. LTD. & ORS. 
v. 
K.A. KHAilKR (DEAD) BY I.RS. 
APRIL 17, 1986 
[O. CHINNAPPA REDDY, B.C. RAY AND K.N. SINGH, JJ.] 
-i 
Andhra Pradesh Buildings (Lease, Rent and Eviction) 
Control Act, 1960 (AP Act No. 15 of 1960), section lO(ii) (a) 
read with section 2(ix) - Transfer of tenancy right under the 
lease/subletting, 
meaning 
of 
Whether 
the 
voluntary 
amalgamation by virtue of the provisions of sections 391 and 
') 394 of the Companies act, 19 56 of a company having tenancy 
rights in a building with another company amounts to a 
·~ "transfer of tenancy rights". within the meaning of AP Act 15 
of 1960 - Subsequent events, taking judicial notice of. 
M/s. General Radio & Appliances Co. Ltd., a tenant under 
the respondent-landlord with effect from 7th day of January, 
1959 under a rent agreement dated 12.1.1959 filed a co11pany 
petition, before the Bombay High Court, under sections 391 and 
394 of the Companies Act praying for an order sanctioning the 
"'·'°" scheme of amalgamation proposed by it with M/s. National Ekco 
Radio 
and 
Engineering Co. 
Ltd. 
The 
Bombay 
High Court 
sanctioned the said scheme by its order dated 27.3.1968. After 
the said amalgamation of the two co11panies, appellant No. l 
company stood dissolved from 16 April 1968. The respondent 
landlord issued a notice on 26,12.1968 to the first appellant 
--r company terminating the tenancy on the ground of subletting 
·. 
and/ or transfer and assignment of the interest of appellant 
t- No. l company to the appellant No.2 company. Thereafter, the 
respondent filed the Rent Control Case No. 96 of 1969 for 
eviction under Rule lO(H)(a) of the AP Act 15 of 1960. The 
Rent Controller accepted 
both the pleas of respondent, 
namely, unauthorised subletting of the premises and wilful 
default in payment of rent and negatived the defence of the 
appellants that conseguent upon the scheme of amalgamation 
when made a rule of' the Court, there was no transfer or sub-
· ~ letting but a blending of' two companies together. In appeal, 
the Chief Judge, City Small Causes Court set aside the evic-
tion orders holding that a transfer of assets under a scheme 
A 
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608 
SUPREME COURT REPORTS 
[1986] 2 S.C.R. 
of amalgamation being an involuntary one, it did not amount to-. 
assignment of lease by the amalgamating company. However, the 
High Court while allowing the further Revision Petition filed 
by the landlord restored the eviction orders passed by the 
Rent Controller. Hence the appeal by certificate. 
Dismissing the appeal, the Court 
HELD : 1. l 'The Andhra Pradesh Buildings (Lease, Rent and +-
Eviction) Control Act, 1960 is a special Act which provides 
for eviction of tenants on certain specific grounds mentioned 
in section 10 of the said Act. There is no express provision 
in the said Act that in case of any involuntary transfer or 
transfer of the tenancy right by virtue of a scheme of amal- ?' 
gamation sanctioned by the Court by its order under sections 1 
391 and 394 of the Companies Act as in the present case, such ..,.._ 
transfer will not come within the purview of section lO(ii)(a) 
of the said Act. In other words such a transfer of tenancy 
right on the basis of the order of the court will be iillllllle 
from the operation of the said Act and the transferee tenant 
will not be evicted on the ground that the original tenant 
transferred its right under the lease or sublet the tenanted 
premises or a portion thereof. [615 FH; 616 A-Bl 
1.2 On a plain reading of section 2(ix), of the Act, it 
is 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, y-
the 
second 
appellant that is National Ekco 
Radio 
and 
Engineering Co. Ltd., the transferee company who has been put -j 
in possession of the tenanted premises by the transferor 
tenant General Radio and Appliance Co. (P) Ltd. cannot be 
deemed to be 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 trans-
feree company on the basis of the order made under sections 
391 and 394 of the Companies Act. [616 B-D] 
1. 3 The order of amalgamation has been made on the basis 
~· 
of the petition made by the transferor company
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