Bank Merger Without Landlord’s Consent Amounts to Assignment of Tenancy; Eviction Upheld Under Delhi Rent Control Act
Case Name: British Motor Car Company (1939) Ltd. v. M/s Hindustan Commercial Bank Ltd. (Since Merged into Punjab National Bank) & Anr.
Date of Judgment: 09 July 2026
Citation: 2026 INSC 671 | Civil Appeal No. 5714 of 2012
Bench: Hon’ble Mr. Justice Sanjay Karol and Hon’ble Mr. Justice Nongmeikapam Kotiswar Singh
Held: The Supreme Court held that the amalgamation of a tenant bank with another bank under Section 45 of the Banking Regulation Act, 1949, resulting in transfer of tenancy rights without the landlord’s written consent, amounts to assignment or parting with possession under Section 14(1)(b) of the Delhi Rent Control Act, 1958. The Court clarified that the provision makes no distinction between voluntary and involuntary transfers, and a statutory bank merger does not exempt the tenant from eviction.
Summary: The appellant-landlord had leased commercial premises in Connaught Circus, New Delhi, to Hindustan Commercial Bank in 1947. In 1986, Hindustan Commercial Bank was amalgamated with Punjab National Bank pursuant to a scheme sanctioned by the Central Government under Section 45 of the Banking Regulation Act. Following the merger, Punjab National Bank continued to occupy the premises. The landlord initiated eviction proceedings under Section 14(1)(b) of the Delhi Rent Control Act, alleging that the tenancy had been assigned without obtaining prior written consent.
The Additional Rent Controller dismissed the eviction petition, holding that the statutory scheme of amalgamation bound the landlord. However, the Rent Control Tribunal reversed the decision and ordered eviction. The Delhi High Court subsequently set aside the eviction decree, observing that the merger was an involuntary statutory act and therefore did not amount to subletting or assignment.
Allowing the appeal, the Supreme Court held that Section 14(1)(b) of the Delhi Rent Control Act is attracted whenever possession or tenancy rights pass from the original tenant to another entity without the landlord’s written consent, irrespective of whether the transfer is voluntary or occurs due to a statutory amalgamation. The Court observed that once Hindustan Commercial Bank ceased to exist and its tenancy rights vested in Punjab National Bank, the original tenant had parted with possession within the meaning of the Act. It further held that the scheme framed under Section 45 of the Banking Regulation Act is administrative in nature and cannot override the provisions of the Delhi Rent Control Act.
Decision: The Supreme Court allowed the appeal, set aside the judgment of the Delhi High Court, and restored the eviction decree passed by the Rent Control Tribunal. The Court granted Punjab National Bank time until 31 January 2027 to hand over peaceful possession of the premises to the landlord, subject to filing the required undertaking and continuing to pay contractual rent.