Amalgamation and proceedings by transferee-company upheld, with tenants bound by the sanctioned scheme.

A sanctioned scheme of amalgamation transfers the relevant business or property to the transferee-company, and the transferor-company ceases as a separate legal entity once the amalgamation takes effect. Proceedings arising from the transferred business may therefore be prosecuted by the amalgamated company, even if they were originally instituted against the transferor-company. The amalgamation operates as a judgment in rem and binds third parties, including tenants, who cannot ignore it or challenge maintainability without having sought substitution at the proper stage. The tenant's revision against the maintainability objection was accordingly rejected.

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Issues: Whether the appeal before the appellate court was maintainable at the instance of the amalgamated company, and whether the tenant could successfully challenge that maintainability in revision.

Analysis: The scheme of amalgamation sanctioned by the Company Court transferred the relevant real estate division to the transferee-company, and the transferor-company ceased to exist as a separate corporate entity upon the amalgamation taking effect. The fair-rent proceeding had been instituted against the transferor-company, but the transferee-company had in fact contested the matter and was the entity entitled to pursue the appeal arising from that proceeding. The tenant had been informed of the amalgamation and took no step to seek substitution before the Rent Controller. The order of amalgamation was binding as a judgment in rem, and the tenant, being only a tenant under the rent law, could not deny its effect. The objection to maintainability was therefore held to be without merit and not bona fide.

Conclusion: The appeal by the amalgamated company was maintainable, and the tenant's challenge to its maintainability failed.

Final Conclusion: The revisional application was rejected and no interference was called for with the orders under challenge.

Ratio Decidendi: Where a company has amalgamated pursuant to a sanctioned scheme, the transferee-company may prosecute proceedings arising from the transferred business or property, and the amalgamation operates as a judgment in rem binding on third parties such as tenants.

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