Amalgamation of a banking company under Section 45 of BR Act attracts Section 14(1)(b) DRC Act.

In 1947, the appellant (landlord) let out premises in Connaught Circus, New Delhi, to Hindustan Commercial Bank (HCB).

In 1986, the Government of India issued a notification under Section 45(7) of the Banking Regulation (BR) Act, 1949, amalgamating HCB with Punjab National Bank (PNB). Consequently, PNB took possession of the premises.

The appellant filed an eviction petition under Section 14(1)(b) of the Delhi Rent Control (DRC) Act, 1958, alleging unauthorized sub-letting/assignment.

The Additional Rent Controller dismissed the petition, viewing the amalgamation as a statutory act binding on the landlord.

The Rent Control Tribunal reversed this, passing an eviction decree.

However, the High Court of Delhi set aside the decree, ruling the merger was an "involuntary act" by a third party (Central Government) and did not constitute sub-letting.

1. Whether the amalgamation of a tenant bank with another bank under a scheme framed pursuant to Section 45 of the Banking Regulation Act, 1949, constitutes sub-letting, assignment, or parting with possession under Section 14(1)(b) of the Delhi Rent Control Act, 1958.

2. Whether an "involuntary" transfer of tenancy rights through a statutory scheme exempts a tenant from the rigors of Section 14(1)(b).

Section 14(1)(b) of the DRC Act prohibits a tenant from sub-letting, assigning, or parting with possession without the landlord's written consent.

The court relied on Parasram Harnand Rao v. Shanti Parsad Narinder Kumar Jain, which established that Section 14(1)(b) is of wide amplitude and includes even involuntary sales or assignments.

It further applied Singer India Ltd. v. Chander Mohan Chadha, holding that the applicability of the provision depends on the factual occurrence of transfer, irrespective of the reasons or whether the act was voluntary.

Regarding the nature of the scheme, the court followed K.I. Shephard v. Union of India, which clarified that schemes framed under Section 45 of the BR Act are administrative, not legislative, in nature.

The Court reasoned that Section 14(1)(b) of the DRC Act triggers automatically upon the factual transfer of possession and tenancy rights to a third party without written consent.

In this case, upon amalgamation, HCB (the original tenant) ceased to exist, and its rights were vested in PNB.

The Court rejected the respondent's argument that "involuntary" transfers via a Gazette Notification are exempt, noting that the DRC Act does not carve out such exceptions for amalgamations.

Furthermore, the Court distinguished this case from legislative acquisitions (like the ESSO Act); since the BR Act scheme is merely an administrative action per K.I. Shephard, it cannot override the specific protections granted to landlords under the DRC Act.

The Court also clarified that the High Court erred in relying on Asha Rohatgi, as that case involved the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, which is legislative—unlike the BR Act.

The Court granted PNB time until January 31, 2027, to vacate the premises, subject to filing an undertaking and continued payment of rent.