TaxTMI 
TaxTMI 
2010 (5) TMI 396
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....Co. Ltd., for a period of five years on a monthly rental of Rs. 400. On the expiry of the period, the lease was further renewed for a period of five years under lease deed dated 1-10-1970. On failure to renew the lease from 1-10-1975, the appellant instituted a suit in O.S. No. 209 of 1976 for specific performance of the renewal clause in the lease agreement dated 1-10-1970. In the said suit, a settlement dated 12-4-1978 was arrived at whereby the appellant agreed to pay fair rent of Rs. 1,200 with effect from 1-10-1975. (b)In the meantime, Government of Tamil Nadu brought into force the Tamil Nadu Urban Land (Ceiling and Regulation) Act, 1978 (hereinafter referred to as "the Ceiling Act") on 17-5-1978. Under the provisions of the said Act, ceiling was fixed regarding extent of vacant land which may be owned by a person and Government had the right to take possession of the excess land over the ceiling limit. On 13-9-1978, the erstwhile landlord-company applied for exemption from acquisition of excess vacant lands. On 4-11-1981, the erstwhile landlord company was granted partial exemption from acquisition of vacant lands under section 21(1)(a) of the Ceiling Act on the ground of....
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....urt by way of special leave petition. 4. Heard Mr. K.K. Venugopal, learned senior counsel for the appellant-tenant and Mr. K. Parasaran, learned senior counsel for the respondent-landlord. 5. Mr. Venugopal, learned senior counsel for the appellant-tenant mainly submitted that upon the amalgamation of the original rent control petitioner with the respondent herein, the new entity was not entitled to continue the eviction proceedings under section 10(3)(a)( i) and (iii) of the Act since the need of the new entity will be different. In addition to the same, though not seriously raised before the Courts below, he submitted that other residential and non-residential buildings owned by the respondent herein disable the new entity to claim the benefit of order of eviction. 6. On the other hand, Mr. K. Parasaran, learned senior counsel for the respondent-landlord, by taking us through the Scheme of Amalgamation approved by the Company Judge and the relevant provisions in the Act, submitted that after merging of the Company which is the landlord with another Company, there is no forfeiture of any right of the landlord under the provisions of the Rent Control Act or the Transfer of ....
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.... filed on 3-4-1987 and the Rent Controller ordered eviction on 9-4-1992. The appeal filed by the tenant came to be dismissed on 10-4-2003 by the Rent Control Appellate Authority. Thereafter, the tenant filed a civil revision petition under section 25 of the Act on 18-8-2003 before the High Court. During the pendency of the above said civil revision petition before the High Court, the Scheme of Amalgamation was finalized and by order dated 26-6-2006, the Company Court sanctioned the Scheme. Thereafter, an application was filed for amendment of the cause title in the civil revision petition was filed by the tenant and the same was also allowed. 10. The Scheme of Amalgamation, filed in the appeal paper- book, contains various definitions and clauses. Clause 1.1 defines "Transferor Company" and Clause 1.2 defines "Transferee Company". Among other clauses, we are concerned with Clauses 1.5 and 6, which read thus :- "1.5 The "Effective date" shall mean the date on which the certified copy of the order of the High Court of Madras sanctioning the scheme vesting the assets, properties, liabilities, rights, duties, obligations and the line of the Transferor Company in the Transferee Co....
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....Mr. Venugopal, learned senior counsel submitted that the eviction was ordered on the ground of personal requirement and such requirement must continue to exist till final determination of the case. In view of the same, according to him, the Appellate/Revisional Court must take cognizance of subsequent events taking into account that the requirement of the landlord is still continuing. In support of the above proposition, he relied on the following three judgments :- (i)In Hasmat Rai v. Raghunath Prasad [1981] 3 SCC 103, this Court held:- "14. . . . If a landlord bona fide requires possession of a premises let for residential purpose for his own use, he can sue and obtain possession. He is equally entitled to obtain possession of the premises let for non-residential purposes if he wants to continue or start his business. If he commences the proceedings for eviction on the ground of personal requirement he must be able to allege and show the requirement on the date of initiation of action in the court which would be his cause of action. But that is not sufficient. This requirement must continue throughout the progress of the litigation and must exist on the date of the decree a....
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....e landlord built a house or bungalow which would fully satisfy his requirement. If this subsequent event is taken into consideration, the landlord would have to be non-suited. Can the court shut its eyes and evict the tenant? Such is neither the spirit nor intendment of Rent Restriction Act which was enacted to fetter the unfettered right of re-entry. Therefore when an action is brought by the landlord under Rent Restriction Act for eviction on the ground of personal requirement, his need must not only be shown to exist at the date of the suit, but must exist on the date of the appellate decree, or the date when a higher court deals with the matter. During the progress and passage of proceeding from court to court if subsequent events occur which if noticed would non-suit the plaintiff, the court has to examine and evaluate the same and mould the decree accordingly. This position is no more in controversy in view of a decision of this Court in Pasupuleti Venkateswarlu where Justice Krishna Iyer speaking for the court observed as under : (SCC p. 772, para 4)" We affirm the proposition that for making the right or remedy claimed by the party just and meaningful as also legally and....
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....pany, i.e., Saraswati Industrial Syndicate Ltd., the Indian Sugar Company continued to have its entity and was alive for the purposes of section 41(1) of Income-tax Act, 1961. This Court held as under :- "5. Generally, where only one company is involved in change and the rights of the shareholders and creditors are varied, it amounts to reconstruction or reorganisation of scheme of arrangement. In amalgamation two or more companies are fused into one by merger or by taking over by another. Reconstruction or 'amalgamation' has no precise legal meaning. The amalgamation is a blending of two or more existing undertakings into one undertaking, the shareholders of each blending company become substantially the shareholders in the company which is to carry on the blended undertakings. There may be amalgamation either by the transfer of two or more undertakings to a new company, or by the transfer of one or more undertakings to an existing company. Strictly 'amalgamation' does not cover the mere acquisition by a company of the share capital of other company which remains in existence and continues its undertaking but the context in which the term is used may show that it is intended to....
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.... in respect of their liabilities and assets. . . . ". . . The true effect and character of the amalgamation largely depends on the terms of the scheme of merger. But there cannot be any doubt that when two companies amalgamate and merge into one the transferor company loses its entity as it ceases to have its business. However, their respective rights or liabilities are determined under the scheme of amalgamation but the corporate entity of the transferor company ceases to exist with effect from the date the amalgamation is made effective." This case deals with reference to liability to pay Income-tax by Transferor Company after amalgamation and hence not applicable to the case on hand. (iii)The third decision heavily relied on by Mr. Venugopal is Hindustan Lever v. State of Maharashtra [2003] 117 Comp. Cas. 758^1 (SC). In that case, Tata Oil Mills Co. Ltd. (transferor Company) was incorporated on 10-12-1917 under the Companies Act, 1913. Hindustan Lever Ltd. (transferee Company) was incorporated under the same Act on 17-10-1933. The scheme of amalgamation of the transferor Company with the transferee Company was formulated and approved by the Board of Directors of the res....
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....no forfeiture of any right of the landlord under the provisions of the Act or under the Transfer of Property Act. 15. In a case where a company is a tenant, amalgamation is the cause of action for the landlord to sue the tenant company for eviction on the ground of subletting without the consent of the landlord. In the present case, the petition by the landlord for eviction of the tenant was filed on 3-4-1987. The cause of action has no relation to amalgamation, irrespective of whether it is prior or subsequent to filing of the application for eviction. The Rent Controller ordered eviction on 9-4-1992. The appeal of the tenant was disposed of by the Appellate Authority on 10-4-2003. The rights of the landlord are to be determined as on the date of the application for eviction. The order of eviction crystallized the rights of the landlord. The tenant had filed the revision in the High Court on 18-8-2003. During the pendency of the revision petition, the order for amalgamation under the Companies Act passed by the High Court was made on 26-2-2006 which is a subsequent event. Revision Petition was disposed of by the High Court on 5-8-2009. As rightly pointed out by Mr. Parasaran, l....
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.... 18. We agree with Mr. Parasaran that, in normal circumstances, after passing of the decree by the trial Court, the landlord would have obtained possession of the premises, but for the tenant continuing in occupation of the premises only on account of stay order from the appellate court. In such circumstances, the well known principle that "an act of the court shall prejudice no man" shall come into operation. Therefore, the heirs of the landlord will be fully entitled to defend the appeal preferred by the tenant. When a company stands dissolved (with or without winding up) due to amalgamation, its rights under the decree for eviction devolves on the amalgamated company. 19. Further in Usha P. Kuvelkar v. Ravindra Subrai Dalvi [2008] 1 SCC 330, this Court clearly brought out the distinction between the cases where death occurred after the decree and death occurring during the decree. It was held in para 14 that :- ". . . In the same decision a contrary note expressed by this Court in P.V. Papanna v. K. Padmanabhaiah was held to be in the nature of an abater. This Court in Shakuntala Bai referred to the decision in Shantilal Thakordas v. Chimanlal Maganlal Telwala and speci....
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....its surface, nonetheless the need would remain intact. All that is needed is to erase the patina and see the gloss. It is pernicious, and we may say, unjust to shut the door before an applicant just on the eve of his reaching the finale, after passing through all the previous levels of the litigation, merely on the ground that certain developments occurred pendente lite, because the opposite party succeeded in prolonging the matter for such unduly long period." It was further held in para 15 that :- "15. The judicial tardiness, for which unfortunately our system has acquired notoriety, causes the lis to creep through the line for long long years from the start to the ultimate termini, is a malady afflicting the system. During this long interval many events are bound to take place which might happen in relation to the parties as well as the subject-matter of the lis. If the cause of action is to be submerged in such subsequent events on account of the malady of the system it shatters the confidence of the litigant, despite the impairment already caused." It would inflict great injustice in many cases if subsequent events are taken into account when long years have passed un....
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....ll properties. He further submitted that the principle of taking into consideration subsequent event is to be confined only to appeals on the principle that an appeal is a continuation of the proceedings and the appellate court exercises all the powers of the Trial Court. [Vide Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri AIR 1941 F.C. 5 at page 13.] 24. In the present case, subsequent event of amalgamation of a company took place during the pendency of the revision in the High Court. Though, subsequent events which have occurred during the pendency of a revision petition in the High Court or the matter was pending before this Court, have been taken into consideration by this Court in some cases, the question as to the difference between the exercise of jurisdiction in appeal and revision was not argued or decided in those cases. 25. In a revision under section 25 of the Act, the Court is exercising a restricted jurisdiction and not wide powers of the appellate court. In Sri Raja Lakshmi Dyeing Works v. Rangaswamy Chettiar [1980] 4 SCC 259 at page 262 it was held :- ". . . Therefore, despite the wide language employed in section 25, the High Court quite obviously sho....
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....ansferor company stood transferred to the transferee company. The requirement of the company has neither been satisfied nor extinguished. The right to evict has already crystallized into a decree to which the company after amalgamation has succeeded by involuntary assignment. As the decree for eviction was under stay, the decree could not be executed. Once the stay is vacated or dissolved, the respondent would be entitled to execute the decree. In the present case, the amalgamation order has also preserved the said right. As per Clause 1.7 of the Scheme, all assets vest in the transferee company. As per Clause 6, any suit, petition, appeal or other proceedings in respect of any matter shall not abate or be discontinued and shall not be prejudicially affected by reason of the transfer of the said assets/liabilities of the Transferor Company or of anything contained in the scheme but the proceedings may be continued, prosecuted and enforced by or against the transferee company in the same manner and to the same extent as it would be or might have been continued prosecuted and enforced by or against the Transferor company as if the scheme has not been made. In view of the same, by vir....
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....the Ceiling Act. The landlord has obtained an order of exemption under section 21 of the Act vide G.O. Rt. No. 2900, dated 4-11-1981 and the order G.O. Rt. No. 852, dated 25-6-1986. The exemption was expressly for the extension of the industry which is a public purpose. It is relevant to mention that under section 21, only when the requirement of public interest is satisfied, the Government has power to grant exemption. It is also pointed out the conduct of the tenant when the landlord obtained an order of exemption under section 21 of the Ceiling Act, the tenant moved the Government for cancellation of exemption and to assign the land in its favour. It also challenged the order of exemption before the High Court in Writ Petition No. 6434 of 1987 which was dismissed by the High Court by order dated 18-4-1991 and Writ Appeal No. 1177 of 1992 which was dismissed by the Division Bench of the High Court by order dated 12-7-1993. 32. The reliance placed on behalf of the tenant, section 10, sub-clause (3), first proviso, is a new plea. The said proviso reads as under :- "Provided that a person who becomes a landlord after the commencement of the tenancy by an instrument inter vivos....