Going-concern exception in tenancy transfer failed where business had ceased and stock-in-trade was not proved.

A transfer of shop premises and business will be protected only if it falls within the notification allowing assignment of a live business as a going concern, together with stock-in-trade and goodwill. On the recorded facts, the business had stopped, no trading activity had occurred for over a year, and no stock-in-trade was shown to exist at the time of transfer. The assignment was therefore treated as a colourable device to transfer tenancy rights rather than a permitted transfer, and the burden of bringing the case within the exception was not discharged. The request to reopen the factual record was also rejected for want of sufficient basis.

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Issues: Whether the assignment of the shop premises and business fell within the government notification permitting transfer incidental to the sale of a business as a going concern together with stock-in-trade and goodwill, so as to avoid eviction for unlawful assignment under the Bombay Rent Act.

Analysis: The notification permitted assignment only where the entire interest in the leasehold premises was transferred together with a live business carried on as a going concern, along with its stock-in-trade and goodwill. The concurrent findings were that no business transaction had taken place for more than a year before the assignment, the business had come to a standstill, and no stock-in-trade was proved to exist in the premises at the time of transfer. On those facts, the transaction could not be treated as a transfer of a going concern and was a colourable device to transfer tenancy rights. The assignee seeking the benefit of the exception had to establish that the case fell within it, and that burden was not discharged. Additional evidence was also refused because no sufficient basis was shown for letting the petitioner reopen the factual record in supervisory jurisdiction.

Conclusion: The assignment did not fall within the notification and was hit by the statutory prohibition; the eviction decree was ? No. The petition failed and the impugned decree was sustained.

Ratio Decidendi: A transfer of tenancy will be protected under the exception only if the business is actually a going concern at the time of assignment and the transfer includes the stock-in-trade and goodwill; where the business has ceased and no stock-in-trade is shown, the transaction is not a permissible assignment but a prohibited transfer of tenancy rights.

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