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British Motor Car Company (1939) Ltd. v. M/S Hindustan Commercial Bank Ltd.

Civil Appeal · 2026 INSC 671Decided 9 Jul 2026
C.A. No.-005714-005714 - 2012
Justice Sanjay Karol · Justice Nongmeikapam Kotiswar Singh · Justice K. Vinod Chandran

Background

In 1947, British Motor Car Company let out premises in Connaught Circus, New Delhi to Hindustan Commercial Bank (HCB) for non-residential use. In 1986, HCB was amalgamated into Punjab National Bank (PNB) under a government-sanctioned scheme, and PNB took over possession of the premises. The landlord sought eviction of PNB under Section 14(1)(b) of the Delhi Rent Control Act, 1958, arguing that HCB had effectively sublet/parted with possession to PNB without the landlord's written consent. The Rent Controller dismissed the eviction plea, the Rent Control Tribunal reversed and ordered eviction, and the Delhi High Court then set aside the eviction decree, holding the transfer was an involuntary statutory amalgamation and not "subletting."

Decision Breakdown

The Supreme Court held that Section 14(1)(b) of the Delhi Rent Control Act is worded broadly enough to cover any transfer of possession, including one occurring involuntarily through a statutory amalgamation, so long as it happens without the landlord's written consent. Relying on its earlier rulings in Parasram Harnand Rao and Singer India Ltd., the Court held that whether a transfer was voluntary or involuntary is legally irrelevant; what matters is only whether possession passed to another entity without consent. It also held that a scheme framed under Section 45 of the Banking Regulation Act is administrative, not legislative, in character, so it cannot override the protective mandate of the Rent Control Act. The Court restored the Rent Control Tribunal's original eviction decree against PNB, while granting the bank time until 31 January 2027 to hand over vacant possession.

Lesson Learnt

A tenant cannot avoid the consequences of "parting with possession" under rent control law merely because the transfer happened through a legally mandated process (like a bank merger) rather than a deliberate choice. The law looks at the fact of the transfer, not the tenant's intent or control over it.

Official source (sci.gov.in)View Judgment (PDF)

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