The Supreme Court has restored an eviction decree against Punjab National Bank over commercial premises in Connaught Circus, New Delhi, originally let to Hindustan Commercial Bank in 1947, holding that the vesting of tenancy rights in a transferee bank through a statutory amalgamation scheme framed by RBI amounts to 'parting with possession' — a form of sub-letting or assignment — under Section 14(1)(b) of the Delhi Rent Control Act, 1958, where the landlord's written consent was never obtained.
Hindustan Commercial Bank had been the original tenant of the premises. It was subsequently amalgamated into Punjab National Bank pursuant to a scheme framed under Section 45 of the Banking Regulation Act, 1949 — the statutory mechanism RBI uses to merge a weak or distressed bank into a stronger one. Punjab National Bank argued that because the transfer of tenancy rights occurred automatically by operation of a statutory scheme, rather than through any voluntary act of assignment or sub-letting by the tenant, it should not attract the rent-control consequences that ordinarily follow an unconsented transfer of possession.
The Supreme Court rejected that argument, holding that the statutory character of the amalgamation scheme does not exempt the resulting change in possession from the landlord-consent requirement built into rent-control legislation. Whatever the mechanism by which possession passed from the original tenant to the transferee bank, the Court held that the landlord's rights under Section 14(1)(b) — to object to, and seek eviction for, an unconsented parting with possession — survive a statutory amalgamation just as they would survive a private, voluntary transfer. Since Punjab National Bank had never obtained the landlord's written consent to the change in possession, the Court restored the eviction decree that had originally been passed but was later overturned in the lower courts.
The ruling clarifies an issue that had not previously received definitive Supreme Court treatment: whether a banking-law amalgamation, mandated by RBI rather than chosen by the parties, can be treated differently from an ordinary assignment for rent-control purposes. The Court's answer is that it cannot — a statutory amalgamation scheme framed under banking law does not override the landlord's rights under separate rent-control legislation.