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

                                                                        607


                      GENERAL RADIO & APPLIANCES 00. LTD. & ORS.
                                           v.                                 A
                              K.A. KHAilKR (DEAD) BY I.RS.

                                    APRIL 17, 1986

                   [O. CHINNAPPA REDDY, B.C. RAY AND K.N. SINGH, JJ.]
                                                                              B
      -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                c
     ·~ "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     D
             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
                                                                              E


    --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        F
             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-    G
     ·~      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


                                                                              H
    608                 SUPREME COURT REPORTS        [1986] 2 S.C.R.

A
    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.

B         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
c   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
D   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

E         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
F   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-
G   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 in company
    petition No. 4 of 1968 by the High Court of Bombay. As such it
H   cannot be said that this is an involuntary transfer effected
    by order of the Court. [615 C-D]
                               GENL. RADIO CO. v. M.A. KHADER            609

                                                                                A
                   1.4 Subsequent event can be taken judicial notice of,
          "' Here, the first appellant company stood dissolved from 16th of
             April 1968 and therefore, is no longer in existence in the eye
             of law and it has effaced itself for all practical purposes.
             The second appellant company that is the transferee company is
             now the person placed in occupation of the suit premises by
             the tenant, the first appellant company. There is undoubtedly      B
             no written permission or consent of the respondent landlord to
             the transfer of tenancy right of the first appellant company
          ~as required under section lO(ii)(a) of the Act. Moreover even



-
             if it is assumed to be a subletting to the second appellant by
             the first appellant, such subletting has been made contrary to
             the provisions of the said Act and in violation of the terms
             of clause 4 of the tenancy agreement dated 12.1.1959 which         c
         ."\ clearly prohibits such subletting of the tenanted premises
         ·~ without the written permission of the landlord. [615 B-F)

                     Sabbayanidbi Virucllumagat" Ltd. v. A.S.R. Subrah•••eya
              lladar & Ors., 1951 A.l.R. Madras p. 209 and Parasaraa Hamand
                                                                                D
              Rao v. Shanti Prasad Rarinder Kimer Jain & Anr., [1980) 3
              S.C.R. p. 444, referred to.

                      Devarajulu Naidu v. Ethirajavalli 'lbyar-, [1949) 2
              M.L.R. p. 423, held inapplicable.
                                                                                E
                      Venkataram Iyer v. Renters Ltd., [1951) II M.L.R. P• 57
              approved •
......
                      CIVIL APPELLATE JURISDICTION   Civil Appeal No. 1923 of
         ~    1976.

          t         From the Judgment and Order dated 23rd April, 1976 of       F
              the Andhra Pradesh High Court in Civil Revision Petition No.
              684 of 1974.

                   U.R. Lalit, D.N. Mishra and Miss Ratna Kapoor for the
              Appellants.
                                                                                G
                      A,Subba Rao for the Respondents.

                      The Judgment of the Court was delivered by

                                                                                H
     610                SUPREME COURT REPORTS       [1986] 2 s.c.R.

A
                                                                           •
          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 23rd
    of April, 1976 and it raises an important question of law,
    i.e. whether the voluntary amalgamation of the first and
B   second appellants companies amounts to a transfer of the first
    appellant's right under the lease withic the meaning of s. 10
    (ii)(a) of Andhra Pradesh Buildings (Lease, Rent & Eviction) t-
    Control Act, 1960.


c
           The front corner portion of the premises bearing No.
     8092/1/2 (new No. 5-1-1-) situated at Rashtrapati Road at
     Secundrabad was let out on January 12, 1959 to M/s General
    Raio & Appliances Co. (P) Ltd., the first appellant, on a
                                                                      r-   -
    monthly rent of Rs. 200 on the basis of the rental agreement ~
     dated January 12, 1959 (Exhibit P-f>) executed by the first
    appellant. Clause 4 of the said agreement provides that the
D   tenant shall not sub-let the premises or any portion thereof
     to anyone without the written consent of the landlord. The
     respondent-landlord M.A. Khader issued a notice dated ~cember
    26, 1968 to the tenant-appellant No. 1, M/s. General Radio and
    Appliances (P) Ltd. terminating the tenancy on the ground of
    subletting and/or transfer and assignment of the interest of ;.,, '
E   the Appellant No. 1 to the Appellant No. 2. Thereafter on
    April 7, 1969 the Rent Control Case No. 96 of 1969 was filed
    by the respondent-landlord for eviction of the Appellant-
    tenant on two grounds, i.e. (i) unauthorised subletting of the
    premises by the first appellant and (ii) wilful default in
    payment of rent from October 7, 1968 to April 7, 1969. The        l
F   appellants Nos. 1 and 2 filed a joint counter contending that
    there was neither subletting, nor assignment of the tenancy --1
    rights by the first appellant to the second appellant, i.e.
    the first appellant company was amalgamated with the second
    appellant company by operation of law under the scheme of
    amalgamation and order of the High Court of Bombay under ss.
G   391 and 394 of the Companies Act, 1956 and that the judgment
    of the Bombay High Court was judgment 'in Rem' and i t was
    binding on the petitioner even though he was not a party to
    the proceedings. It was further contended therein that by ~
    reason of order of the Bombay High Court all the property
    rights and powers of every description including tenancy right
H   held by the M/ s. General Radio Appliance (P) Ltd., the
             GENL. RADIO CO. v. M.A. KHADER   [B.C. RAY, J.]   611

                                                                      A
       appellant No. 1, have been blended with the second appellant
    .--coq>any, M/s. National Ekco Radio and Engineering Co. Ltd.,
       and that there was no wilful default in payment of rent. The
       application for eviction should, therefore be dismissed.

          Two witnesses were examined on behalf of the landlord
                                                                      B
    and three witnesses were examined on behalf of the tenant. The
    Rent Controller, Secunderabad, on consideration of evidences
    on record held that the appellant No. 1 coq>any has sublet the
  ~premises to the appellant No. 2 coq>any without written
    consent of the landlord, as the amalgamation of the first
    appellant-coq>any with the second appellant-company amounted
    to subletting or assigruoont. It was further held that there
    was wilful default in payment of rent for the period in
                                                                      c
 -~question. The Rent Controller, therefore, allowed the applica-
..& tion and directed the appellants to vacate and deliver vacant
~ possession of the suit premises under their occupation to the
    landlord-petitioner within a period of three months from the
    date of the order.
                                                                      D
            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 29.10.75 the Chief Judge,

•   ~ ~~~~ st~ltl ~:~ ~h:rt~P~~~~::~dN:.ftet ~~:!: ~~~u~~:~~~;        E
    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 yet it 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 assets and
                                                                      F
  ~ liabilities including the leasehold interest of appellant No.
    1 company to appellant No. 2 coq>any took place by virtue of
    the order of the court. It was held that such a transfer of
    assets being art involuntary one did not amount to assigruoont
    of lease by appellant No. 1 company to appellant No. 2 company
    and as such it did not violate the terms of the lease. By
                                                                      G
    amalgamation of appellant 1 company with appellant 2 company,
    the appellant 1 company is not wound up but it is merely
 .. blended with the other coq>any. It was also held that there
    was no wilful default on the part of the tenant to pay the
    rent for the period mentioned in the petition inasl1llch as
    in spite of the tender of the rent the respondent-landlord
                                                                      H
    612                SUPRDIE COURT REPORTS      (1986] 2 s.c.R.


    refused to accept the same and to grant receipt in the name of
A   appellant No. 2 company. The appeal was, therefore, allowed•
    and the order of the Rent Controller was set aside dismissing
    the eviction petition with costs.

          Against this judgment and order, an application in
    revision being Civil Revision Petition No. 684 of 1974 was
    filed in the High Court of Judicature of And hr a Pradesh,
B   Hyderabad. On April 23, 1976 the said Revision Application was ~~
    allowed and the judgment and decree of the Appellate Court was
    set aside on restoring the decision of the Rent Controller. It



c
    was held that the amalgamation of appellant No. l company with
    appellant No. 2 company on the basis of application made by
    the appellant No. l company by suhnitting a scheme which was _.,,
    duly approved and sanctioned by the High Court of Bombay was 'f
                                                                        -
    not an involuntary one and this order of amalgamation ,,.
    indicated transfer of tenancy right without any notice or
    opportunity to the landlord. It is thus hit by the provision
    of s. lO(ii)(a) of the Andhra Pradesh Buildings (Lease, Rent
    and Eviction) Control Act, 1960.
D
          Against this judgment and order the instant appeal by
    way of certificate granted by the High Court of Andhra Pradesh
    has been preferred. The only question which falls for ,..
    consideration in this appeal is whether in view of the order
                                                                     .   '


    made by the High Court of Bombay on 27.3.1968 sanctioning the
E   scheme of amalgamation proposed by the appellant No. l company
    under ss. 391 and 394 of the Companies Act in Company Petition
    No. 4 of 1968 and the subsequent transfer of tenancy right in
    the suit premises and vesting of the same in the 2nd appellant
    can be deemed to be subletting of the tenancy right of the
    appellant No. l or transfer or assignment of interest in the
F   tenanted premises of the appellant No. l to the appellant No.
    2 within the meaning of s. lO(ii) (a) of the said Act. The
    appellant No. l General Radio and Appliances (P) Ltd.
    admittedly took the premises in question on the basis of an
    agreement dated 12th of January, 1959 duly executed by him in
    favour of the landlord-respondent at a monthly rent of Rs. 200
G   for a period of eleven months commencing from 7th January
    1959. Clause 4 of the said agreement is in the following
    terms :

              "That they shall not sublet the said premises or
H
           GENL. RADIO CO. v. M.A. KllADER   [B.C. RAY, J,]    613


              any portion thereof to anyone without the written A
              consent of the landlord."

         On January 9, 1968 the appellant No· 1 M/s General Radio
    and Appliances (PJ Ltd., filed the Company Petition No. 4 of
    1968 in the High Court of Bombay under S• 394 of the Companies
    Act for sanction of a scheme of amalgamation with M/s National B
    Ekco Radio & Engineering Co. Ltd., M/s. General Radio &
 -i Appliances (P) Ltd. was shown as transferor Company and the
    National Ekco Radio and Engineering Co. Ltd· was shown as a
    transferee company in the said petition. The High Court of
    Bombay by order dated 28th March, 1968 sanctioned the scheme
    of amalgamation. It is pertinent to refer here to the relevant
-"' portions of the scheme which are as follows :                  C

              "With effect from 1st day of January 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 &Appliances (P) Ltd.       D
              (hereinafter called the transferor company) without
              further act or deed be transferred and vested or
              deemed to be transferred and vested in the National
              Ekco Radio & Engineering Co. Ltd. (hereinafter
              called the transferee company) etc."
                                                                       E
           It has been urged on behalf of the appellant that the
      amalgamation of M/s General Radio & Appliances (P) Ltd., 1st
      appellant with the 2nd appellant company is involuntary one,
'"-'t which has been brought into being on the basis of the order of
      the High Court of Bombay made under as. 391 and 394 of the
   Y Companies Act. The first appellant company has not been           F
      wounded up and or liquidated, but it has been merely blended
      with the 2nd appellant on the basis of the order of the court.
      As such there has been no subletting by the 1st appellant
      company to the 2nd appellant company of the tenancy right of
      the 1st appellant in respect of the suit premises, nor there
      has been any transfer or assignment of interest of the 1st       G
      appellant in respect of its tenancy right in the premises in
  ·~question in favour of the 2nd appellant within the meaning of
      S. 10(ii)(a) of the said Act. It has been further urged in
      this connection that the 1st appellant company by virtue of
      the scheme of amalgamation which was sanctioned by the Bombay
                                                                       H
    614                SUPRDIE COURT REPORTS        [1986 J 2 S, C, R,


    High Court merely becomes a devision of the 2nd appellant
A   company i.e. M/s. National Ekco Radio and Engineering Company "a
    Ltd. In other words, it was tried to be coritended that the 1st
    appellant company has not become extinct, but it has been
    merged and or blended in the 2nd appellant company. In order
    to determine this issue it is relevant to set out herein the
    provisions of S. lO(ii)(a) of the Andhra Pradesh Buildings
    (Lease, Rent and Eviction) Control Act, 1960 (A.P. Act No. 15
B   of 1960), Section lO(ii) runs as follows :

              "A landlord who seeks to evict his tenant shall
              apply to the Controller for a direction in that
              behalf. .If the Controller, after giving the tenant
              reasonable opportunity of showing cause against the .,,-
c             applicant is satisfied :

              (ii) that the tenant has, in Andhra area after the t-
              commencement of the Hyderabad House Rent Control
              Order of 1953 Fasli without the written consent of
              the landlord ;
D
              (a) transferred his right under the lease or sublet
              the entire building or any portion thereof, if the
              lease does not confer on him any right to do so." ..J.. ,

              Section 2(ix) defines tenant
E
              "'tenant' means any person by whom or on whose
              account rent is payable for a building and includes
              the surviving spouse, or any son or daughter, of a -r'
              deceased tenant who had been living with the tenant
              in the building as a member of the tenant's family -j'
F             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."
G        In the instant case the 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 12th
    January, 1959 at a rental of Rs. 200.per month, the tenancy
H
             GENL. RADIO CO. v. M.A. KllADER   [B.C. RAY, J,]       615

                                                                           A
       colllllE!Ilcing from 7th day of January 1959. On the basis of the
    'A sanction accorded by order of the High Court of Bombay made on
       27th March 1968 sanctioning the scheme of amalgamation in
       Company Petition No. 4 of 1968 filed by the 1st appellant, all
       the property, rights and powers of every description including
       all leases and tenancy rights etc. of the 1st appellant were
                                                                           B
       transferred to and vested or deemed to be transferred and
       vested in the 2nd appellant M/s National Ekco Radio and
   --iEngineering Co. Ltd. It also appears that the appellant No. 1
       company stood dissolved from 16th of April, 1968. This clearly
       goes to show that the General Radio and Appliances (P) Ltd.,
       the tenant company has transferred all its interest in the
        tenanted premises in favour of the appellant No. 2 i .e
                                                                           c
  - National Ekco Radio and Engineering Co. Ltd. (the transferee
    ~company). The order of amalgamation has been made on the basis
   -1 of the petition made by the transferor company in Company
        Petition No. 4 of 1968 by the High Court of Bombay. As such it
       cannot be said that this is an involuntary transfer effected
       by order of the court. Moreover the 1st appellant company is
                                                                           D
        no longer in existence in the eye of law and it has effected
        itself for all practical purposes. The 2nd appellant company
        i.e. transferee company is now the tenant in respect of the
        suit premises and the 1st appellant company has transferred
  " ~possession of the suit premises in favour of the 2nd appellant
        company. There is undoubtedly no written permission or consent
                                                                           E
        of the respondent landlord to this transfer of tenancy right

-       of the 1st appellant company as required under S. 10(ii)(a) of
        the said Act. Moreover even it is assumed to be a subletting
        to the 2nd appellant by the 1st appellant, such subletting has
- ~been made contrary to the provisions of the said Act and in
    , violation of the terms of clause 4 of the tenancy agreement
     t- (Exhibit P-6) which clearly prohibits such subletting of the           F
        tenanted premises wi.thout the written permission of the land-
        lord. The Andhra Pradesh Building (Lease, Rent and Eviction)
        Control Act, 1960 is a special Act which provides for eviction
        of tenants on certain specific grounds mentioned in s. 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            G
        tenancy right by virtue of a scheme of amalgamation sanctioned
   ·~by the court by its order under ss. 391 and 394 of the
        Companies i\ct as in the present case, such transfer will not
        come within the purview of S. 10(ii) (a) of the said Act. In
        other words such a transfer of tenancy right on the basis of
                                                                           H
    616                SUPROO COURT RERJRTS         [19861 z s.c.R.


A   the order of the ccrurt will be illlllune 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. It is important to note in this connection the de-
    finition of tenant as given in S. 2(ix) of the said Act which
    provides specifically that a tenant does not include a person
B   placed in occupation of a bnfldfng by its tenant. On a plain
    reading of this provision it is crystal clear that any persont'
    placed in occupation of a building by the tenant cannot be
    deemed or considered to be a tenant in respect of the preniises
    in which the said person is to be in possession within the
    meaning of the said Act. Therefore, the 2nd appellant i.e.
c   National Ekco Radio and Engineering Co. Ltd. the· transferee r'
    company who has been put in possession of the tenanted
    premises by the transferor tenant General Radio and Appliance f-.
    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
D   and vested in the transferee company on the basis of the order
    made under ss. 391 and 394 of the Companies Act.

         The effect of an order under S. 153(A) of the Companies
    Act 1913 which corresponds to ss. 391 and 394 of the Companies .J. •
    Act, 1956 has been very succinctly stated in the case of
E   Sahayanidhi Virudhungar Ltd. v. A.S.R. Subrahmanya Nadar &
    Ors., 1951 A.I.R. Madras p. 209. Section 153(A) of the
    Companies Act has been enacted with a view to facilitate
    arrangements and compromise between a Company and its
    creditors or shareholders which involve a transfer of its ..Y- ·
                                                                        -
    assets and liabilities to other companies as part of such
F   agreement. If any such scheme or arrangement is sanctioned by--j
    court, the court is empowered by the section to make
    provisions by its order sanctioning the arrangement or any
    subsequent order, for the transfer of the assets and
    liabilities of a company in liquidation to another company
    styled in the section as transferee company. Where an order of
G   court made under the section provides for the transfer of the
    assets and liabilities of a company in liquidation to another
    company, the assets are, by virtue of that order, without ~
    more, transferred to and vest in the transferee company and ·
    the liabilities of the former company are also cast upon the
    transferee company. Under the ordinary law of contract while
H
           GENL. RADIO CO. v. M.A. KllADER   [B.C. RAY, J.]   617

                                                                      A
 ~assets are assignable, liabilities under contracts or duties
  arising thereunder are not assignable, but the effect of S.
  153(A) is to some extent to override the ordinary law. Thus by
  an order sanctioning amalgamation of the rights, interest and
  liabilities of the transferor company are transferred and
  vested in the transferee company. It appears that by the order      B
  of amalgamation, the interest, rights. of the transferor
  company in all its properties including leasehold interest and
-4tenancy rights are transferred and vested in the transferee
   co~any.



          It has been urged that the effect -of amalgamation is
    analogous to that of a man who enters with partership with        c
"\ another. The two companies do not become jointly liable to
   .their respective separate creditors and neither becomes liable
 -1.for the debts of the other. The general effect of amalgamation
    as provided in Halsbury's Laws of England (3rd Edition) Vol.
     22, P. 432 has been referred to in this connection and it has
    been submitted that by the amalgamation there has been no         D
    subletting as the 1st appellant company has co-interest in
     transferee company, the 2nd appellant co~any herein. lne case
     of Devarajulu Naidu v. Ktbirajavalli Thyar811111a, [ 1949] 2
   ,M.L.R. p. 423 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            E
     partnership firm one of the partner was allowed to wind up
     the affairs of the partnership and there.after he was allowed
     to use the demised premises for his sole business. The
, question arose whether in such case the landlord was entitled
  ·t to eviction of that partner from the tenanted premises on the
  ~ground that there was subletting. It was held in the facts of
                                                                      F
     that case that the original tenancy being in favour of three
     persons who were partners in the firm and act on the part of
     the two partners after dissolution of the firm to allow one of
     the parterns to use the premises for his sole business could
     not amount to a transfer or subletting of the premises to the
     petitioner. It has been observed as follows :                    G

               "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 partners        H
         618                SUPRE11E COURT REPORTS      [1986) 2 s.c.R.
    A
                   after the dissolution of the partnership assigns to>-,
                   the other partner the interest of the partnership
                   in premises which had been taken on lease by the
                   partnership, it would amount to a breach of the
                   covenant prohibiting an assignment of the lease
                   without the consent of the lessor. But this Court
    B              was not inclined to apply this doctrine to Indian
                   conditions. In Ioragalva v • .lakri Beary, (1926, 52
                   M.L,J, 8) Devadoss, J, held that the transfer by ~
                   co-lessee in favour of another lessee of his right
                   in the lease would not be a breach of a covenant
                   against the assignment without the consent of the
c                  landlord."
                                                                          y
             lhis decision has got no application to the instant case 1
        inasmuch as in that case the only question involved was~­
        whether the transfer by co-lessee in favour of another lessee
        of his rights would be a breach of covenant against assignment
D       without the consent of the landlord.

              We have already stated hereinbefore that the 1st
        appellant company, the tenant, has transferred their interest
        in the-tenanted premises to the appellant No. 2 company on the
        basis of the order made by the High Court of Bombay in Companf_ _'
E       Petition No. 4 of 1968 sanctioning the scheme submitted to it
        by the transferor company. We have also held that this is not
        an involuntary transfer by operation of law, but a transfer of
        the interest of the tenant company on the basis of their
        application made before the said High Court in the said~
        Company Petition. Furthermore, we have also held that the·
F       Andhra Pradesh Buildings (lease, Rent and Eviction) Control I
        Act, 1960 which is a special Act provides specific grounds for'Y
        termination of a tenancy and eviction of the tenant in S.
        lO(ii)(a) i.e. on the ground of subletting and/or transferring
        the interest of the tenant either in whole or any part of the
        tenanted premises to another person. lhus the Act prohibits in
G
        specific terms both subletting as well as the transfer or
        assignment of the interest of the tenant. Moreover clause 4 of
        the rent agreement executed by the !St appellant expresslyl
        prohibits subletting of the tenanted premises without the,
        express consent of the landlord. lhe transferor company in
        this case has undoubtedly been dissolved and the company has
H
        ceased to exist for all practical purpose in the eye of law.
                GENL. RADIO CO. V• M.A. KHADER   [B.C. RAY, J.)     619

                                                                           A

    ~ ~!n t~~ ::st::::tof ~i!~e:n~~e;~~=:a~vei~1:~:8.:r::::~
                           0

      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            B
      premises.

    -f        It has been observed by Subba Rao, J, in the case of
         Yenkatarw Iyer V• llenten Ltd., [1951) II M. L. R. 57 as


-
         follows :

                     "The Madras Buildings (Lease and Rent) Control Act    c
                     applies not only to residential and non-residential
                     buildings, but also to same 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             D
                     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     E
                     be evicted."

-            It is pertinent to mention in this connection the
       decision of this court in Parasarm Bamand Rao v. Shanti
    "'lPrasad Narinder Kollar Jain & .Anr., [1980] 3 s.c.R. P• 444. In
     , this case the appellant landlord executed a lease in respect        F
      ~Of the disputed premises in favour of respondent No. 2 for
        three years on 1.4.1942. In 1948 the appellant landlord filed
        a suit for eviction of the tenant for non-payment of the rent
        and for conversion of user of the premises. The suit for
        possession was dismissed, but a decree for arrears of rent was
        passed and it was held that Laxmi Bank was the real tenant,        G
        The Bomaby High Court subsequently made an order that the Bank
        be wound up and in the winding up proceedings, the High Court
      ~appointed an official liquidator who sold the tenancy right to
        the respondent No. 1 in 1961. The sale was subsequently
        confirmed by the High Court and the respondent No. 1 took
        possession of the premises on 24. 2.1961. The landlord             H
    620                SUPREME COURT REPORTS      [1986] 2 s.c.R.

A   appellant filed an application under the Delhi Rent Control)-,
    Act for eviction of the Laxmi Bank and a decree for eviction
    was passed in favour of the appellant. Thereafter respondent      ;"
    No. l filed a suit for declaration that he was tenant of the
    landlord. The suit was dismissed and the appeal against that
    order also failed. The respondent No. l, however, filed an
    application for recalling the warrant of possession issued by
B   the court in pursuance of the decree in favour of the
    appellant. This ultimately came up in second appeal and th~
    High Court allowed the Rent Controller's order allowing
    recalling of warrant of possession. On appeal by special leave
    this Court held that the amplitude of S. 14(b) of the Delhi
    Rent Control Act was wide enough not only to include any sub-
c   lease !mt even an assignent or any other mcle by which{.
    possession of the tenanted premises is parted. In view of the t
    wide amplitude of s. l4(b), it does not exclude even anl-·
    invohmtary sale.

         On a conspectus of all these decisions ref erred to
D   hereinbefore the irresistible conclusion follows that there
    has been a transfer of the tenancy interest of appellant No. 1
    in respect of the premises in question to the appellant No. 2,
    subsequently renamed appellant No. 3 M/s. National Radio
    Electronics Co. Ltd. in utter contravention of the provision~-'
    of S. lO(ii)(a) of the said Act as well as of the terns and
E   conditions of clause 4 of the rent agreement dated 12.1.1959
    executed by lst appellant i.e. M/s General Radio and
    Appliances (P) Ltd. in favour of respondent landlord.

        We, therefore, affirm the judgment and order passed by f~
    the High Court of Judicature Andhra Pradesh and dismiss thi~-J
F   appeal. There will, however, be no order as to costs.        "



    S.R.                                       Appeal dismissed.