M/s Produce Exchange Corporation and another vs Som Nath and another

D.S. Tewatia, J.—M/s Produce Exchange Corporation Limited was tenant of shop in dispute under the original landlords Dwarka Dass and Smt Shanta Rani who on February 10, 1970, sold the same to Som Nath respondent herein. He sought ejectment of M/s. Produce Exchange Corporation Limited and of M/s. Karam Chand Thapar and Brothers Ltd. inter alia, on the ground that M/s. Produce Exchange Corporation Limited had inducted M/s. Karam Chand Thapar and Brothers Ltd. and has put them into exclusive possession of the shop without prior consent of the landlord.

On behalf of M/s. Karam Chand Thapar and Brothers Ltd. and of M/s. Produce Exchange Corporation Limited the case set up was that vide order of Calcutta High Court dated September 22, 1970, M/s. Produce Exchange Corporation Limited and M/s. Karam Chand Thapar and Brothers Limited were merged and that M/s. Produce Exchange Corporation Limited became part of the amalgamated company and thus continued to exist and therefore, the possession of the shop by M/s. Karam Chand Thapar and Brothers Limited shall be construed as the possession of M/s. Produce Exchange Corporation Limited as well and thus there is no question of sub-letting or transferring of the lessee rights to M/s. Karam Chand Thapar and Brothers by M/s Produce Exchange Corporation Limited The learned Rent Controller as also the Appellate Authority held against the tenant-petitioners herein.

The learned counsel for the petitioner cited Krishna Das Nandy Vs. Bidhan Chandra Roy, and Shanti Parshad Narinder Kumar v. Paras Ram Nand Lal 1969 R.C.J. 657 in support of the proposition that wherever assignment of lease hold rights take place under the orders of the Courts, then the same cannot be considered to be a transfer of lease hold rights by the lessee to other person as the transfer in question is involuntary by operation of law. Their Lordships of the Supreme Court in Parasram Harnand Rao v. Shanti Parsad Narinder Kumar Jain 1969 R.C.J. 657 distinguished Krishna Das''s case (supra) and reversed the judgment in Shanti Parsad Narinder Kumar''s cane (supra) Their Lordships in that case were considering the provisions of Section 14(b) of the Delhi Rent Control Act and held that the language of Section 14(b) was wide enough not only to include any sub-lease but even an assignment or any other mode by which possession of the tenanted premises was parted. In view of the wide amplitude of Section 14(b), it could be held that it did not exclude even an innoluntary sale...Assuming that the sale by the Official Liquidator was an involuntary sale, then it undoubtedly became an assignment as provided for by Section 14(b) of the Act. Consequently the tenant was liable to be evicted

In the present case as noticed by the Appellate Authority in its very well considered judgment M/s Produce Exchange Corporation Ltd are described by the Calcutta High Court in its judgment in question as the transferor company while M/s Karam Chand Thapar and Brothers Limited are described as transferee company. The transferor company had transferred its rights and liability to the transferee company whether voluntarily or involuntarily. Thereafter it stood divested of its right that it transferred to the transferee company. It was urged that the shareholders of the transferor company became the shareholders of the transferee company. That would make no difference. The juristic identity of a company is different from its shareholders The shareholders may become the shareholders of the transferee company but so far as company itself is concerned that goes out of existence by transferring all its rights and liabilities to another company. What is more, in the present case the transferor company had not transferred any lease hold rights to the transferee company as would be evident from Part II of Schedule B attached to the judgment of Calcutta High Court Annexure R-2 which details such properties or rights which were not transferred to the transfer company under clause I of the order. Part II of Schedule B is as under:--

A short description of the lease hold property of the transferor company-Nil

Section 13(2) (ii) (a) of the East Punjab Urban Rent Restriction Act, 1949 expressly prohibits transfer of any right under the lease as also subletting without the written consent of the landlord It is not in dispute that M/s Karam Chand Thapar and Brothers Limited are in exclusive possession of the shop in dispute. That means that the right of possession under the lease that inhered in M/s. Produce Exchange Corporation Ltd. had been wholly transferred to M/s. Karam Chand Thapar and Brothers Limited and since this was without the written consent of the landlord, the same had been done in violation of the aforementioned provision of the East Punjab Urban Rent Restriction Act and therefore, the original lessee i.e. M/s Produce Exchange Corporation Limited as also their transferee M/s Karam Chand Thapar and Brothers Limited became liable to be evicted.

The Courts below, in my opinion, had taken the correct view. So, there is no merit in this petition and the same is dismissed with costs. Counsel fee Rs. 200/-.