Eviction: Merger of Bank – Change of tenant without landlord consent

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In British Motor Car Company (1939) Ltd. v. M/s Hindustan Commercial Bank Ltd. (since merged into Punjab National Bank) &Anr. [Neutral Citation: 2026 INSC 671, decided on July 9, 2026], the Supreme Court of India adjudicated a significant question of law regarding whether a bank amalgamation scheme under the Banking Regulation Act, 1949 (BR Act), overrides the anti-subletting protections afforded to a landlord under rent control legislation. The appellant-landlord sought the eviction of Punjab National Bank (PNB) from commercial premises in New Delhi, asserting that the original tenant, Hindustan Commercial Bank (HCB), had “parted with possession” without written consent following an executive amalgamation scheme in 1986. The Delhi High Court had set aside the eviction decree, treating the amalgamation as a statutory, involuntary merger outside the scope of the Delhi Rent Control Act, 1958 (DRC Act).

The Supreme Court allowed the civil appeal, setting aside the High Court’s judgment and restoring the eviction decree. A Division Bench comprising Justice Sanjay Karol and Justice NongmeikapamKotiswar Singh ruled that an amalgamation scheme under Section 45 of the BR Act is purely administrative, not legislative, in nature. The Court held that Section 14(1)(b) of the DRC Act does not differentiate between voluntary and involuntary transfers; the moment a tenant merges into another entity and divests itself of legal control and physical possession without the landlord’s prior written consent, the ground for eviction is automatically satisfied. PNB was ordered to peacefully vacate the premises by January 31, 2027.

1. Factual Matrix and Origin of the Dispute

  • The Original Lease: In 1947, the appellant-landlord leased a commercial area consisting of 2,443.75 sq. ft. on the ground floor and 1,150.25 sq. ft. on the mezzanine floor of the Pratap Building, Connaught Circus, New Delhi, to HCB for non-residential purposes at a monthly rent of ₹585.
  • The Amalgamation: On December 18, 1986, the Government of India issued a Gazette Notification under Section 45(7) of the BR Act, sanctioning an amalgamation scheme prepared by the Reserve Bank of India (RBI). Under the scheme, HCB was merged into PNB with effect from December 19, 1986, vesting all rights, assets, and liabilities of HCB into PNB, which subsequently took over physical possession of the tenanted premises.
  • The Eviction Proceedings: The landlord filed an eviction petition (E-161/1987) under Section 14(1)(b) of the DRC Act, asserting that HCB had sublet, assigned, or otherwise parted with possession to PNB without obtaining prior written consent.
  • Conflicting Lower Court Decisions:
    • The Additional Rent Controller dismissed the petition in 1995, ruling that the statutory amalgamation scheme bound the landlord and operated as a statutory succession rather than unauthorized subletting.
    • The Additional Rent Control Tribunal reversed this in 2001, granting an eviction decree by holding that the DRC Act is a special, subsequent legislation that overrides general banking regulations, making the landlord’s written consent mandatory.
    • Operating under a revision petition under Article 227, the Delhi High Court set aside the eviction decree in 2012. Relying on Asha Rohtagi (2005), the High Court held that the merger was a statutory, involuntary act forced by a third party (the Central Government), placing it beyond the tenant’s control and outside the purview of the DRC Act.

2. Core Legal Issues Formulated

The Supreme Court evaluated two primary legal controversies:

  1. Whether the transfer of tenancy rights and physical possession via a bank amalgamation scheme under Section 45 of the BR Act satisfies the elements of “parting with possession” under Section 14(1)(b) of the DRC Act.
  2. Whether an RBI-formulated amalgamation scheme possesses a legislative character capable of overriding protections granted to landlords under provincial Rent Control statutes.

3. Legal Analysis and Ratio Decidendi

A. The Factual Content of “Parting with Possession”

The Supreme Court analyzed the statutory text of Section 14(1)(b) of the DRC Act, highlighting that eviction is mandated if a tenant sublets, assigns, or otherwise parts with possession without the landlord’s consent in writing. Citing foundational rulings like Jagan Nath v. ChanderBhan (1988) and Celina Coelho Pereira (2010), the Court reiterated that “parting with possession” occurs when a tenant divests itself of both physical occupancy and the absolute legal right to possession, vesting it in a separate entity.

Following the amalgamation, HCB completely lost its corporate identity and ceased to exist. Possession passed entirely to PNB without the landlord’s written consent. Relying heavily on the three-judge bench precedents in ParasramHarnand Rao (1980) and Singer India Ltd. v. Chander Mohan Chadha (2004), the Court ruled that the applicability of Section 14(1)(b) is triggered by the factual occurrence of the transfer. The underlying motives, corporate benefits, or whether the transaction was voluntary or involuntary are completely irrelevant.

B. Administrative vs. Legislative Schemes

The respondents argued that because the transfer was executed via a Gazette Notification under a statutory banking framework, it was a legislative act that insulated them from eviction.

The Supreme Court rejected this argument by citing K.I. Shephard v. Union of India (1987), which established that the scheme-framing process under Section 45 of the BR Act is strictly administrative, not legislative. The mere requirement that an RBI scheme be laid before Parliament does not transform a specific administrative direction into a general law of conduct. Consequently, an administrative banking arrangement cannot be utilized to override or wipe out a landlord’s statutory protections under the DRC Act.

C. Correcting the High Court’s Reliance on Asha Rohtagi

The Court found that the High Court erred by relying on the Delhi High Court decision in Asha Rohtagi (2005). The Supreme Court, referencing New Bank of India Employees’ Union v. Union of India (1996), clarified that a fundamental distinction exists between mergers under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (Acquisition Act), and those under the BR Act.

Under Section 9 of the Acquisition Act, a scheme becomes effective only after it is presented to both Houses of Parliament for 30 days and is subject to active modification or rejection by the legislature, giving it a legislative character. Conversely, a scheme under Section 45 of the BR Act is simply placed before Parliament post-sanction without these mandatory conditions, remaining an administrative measure. Therefore, the protections recognized in Asha Rohtagi are not applicable to mergers under the BR Act.

4. Final Conclusion and Operational Directives

  • Appeal Allowed: The Civil Appeal is allowed, setting aside the Delhi High Court’s order dated March 12, 2012.
  • Eviction Decree Restored: The judgment of the Additional Rent Control Tribunal in RCA No. 22/2000 is restored, finalizing the eviction decree against PNB[cite: 20].
  • Vacant Possession Timeline: To prevent disruptions to banking operations, the Court granted PNB an extension until January 31, 2027, to hand over peaceful and vacant possession of the premises to the appellant[cite: 20].
  • Undertaking Mandate: PNB must file a formal written undertaking to comply with the eviction timeline within four weeks from the date of the judgment[cite: 20].
  • Rent Arrears: PNB is directed to continue paying rent regularly based on contractual terms or rates previously fixed by the lower courts until the premises are vacated[cite: 20]. If it fails to comply, the landlord is at liberty to initiate execution proceedings immediately[cite: 20].

2026 INSC 671

British Motor Car Company (1939) Ltd. V. M/S Hindustan Commercial Bank Ltd. Since Has Been Merged Into Punjab National Bank &Anr. (D.O.J. 09.07.2026)

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Supreme Court Acquits Appellant in the Absence of Corroborating Circumstances Beyond Last Seen Theory

August 5, 2026 No Comments

In this criminal appeal, the Supreme Court addressed whether a conviction for murder can be sustained solely on the basis of a weak “last seen” theory without any other corroborating incriminating circumstances. The appellant, who was the son-in-law of PW1, was convicted alongside other co-accused based on testimonies of witnesses including PWs 1 to 4, some of whom were initially declared hostile before turning to implicate the accused. Although the appellant had already been released on remission, he pursued the appeal seeking a clean acquittal. The Supreme Court allowed the appeal and set aside the conviction, holding that the testimonies regarding the last seen theory did not inspire confidence and that a conviction cannot rest merely on the last seen theory in the complete absence of other incriminating evidence.

  • Unreliable Testimony: The testimonies of witnesses (PW1 to PW4), some of whom were initially declared hostile before alleging assault by PW1’s husband and the appellant, failed to inspire judicial confidence.
  • Limitation of the Last Seen Theory: A conviction cannot be based solely on the last seen theory without any other supporting incriminating circumstances.
  • Acquittal Granted: The Supreme Court set aside the judgments of the lower courts and granted a clear acquittal to the appellant, directing the cancellation of any bonds executed for earlier remission releases.

2026 INSC 780

Munu Sen v. The State of Chhattisgarh (D.O.J. 29.07.2026)

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Proving Adultery at the Threshold: Supreme Court Rules on Interim Maintenance and Private Investigation Evidence

August 5, 2026 No Comments

In this criminal appeal, the Supreme Court examined whether a husband’s application under Section 125(4) of the Code of Criminal Procedure, 1973 (CrPC) alleging adultery by the wife can be deferred until the final adjudication of the main maintenance proceedings, or if it must be considered at the threshold when determining interim maintenance. The appellant-husband had opposed interim maintenance by presenting electronic evidence (photographs and videos) indicating an adulterous relationship, but the lower courts dismissed his application on the grounds that such allegations could only be proved during final trial. The Supreme Court allowed the appeal, set aside the High Court’s order, and remanded the matter to the Trial Court. The Court held that if a husband presents clear, cogent, and ex-facie evidence at the threshold establishing adultery, interim maintenance can be barred or suspended, and such applications cannot be routinely postponed to the final judgment. Additionally, the Supreme Court highlighted the legal lacuna surrounding unregulated private detective agencies and directed that a copy of the judgment be forwarded to the Ministry of Law and Justice and the Law Commission of India for appropriate legislative consideration.

  • Nature and Object of Section 125 CrPC: Proceedings under Section 125 CrPC are summary and civil in nature, designed to prevent vagrancy, destitution, and neglect by ensuring a dignified life for dependents through social justice.
  • Bar Under Section 125(4) CrPC: Section 125(4) acts as an exception, explicitly barring a wife from receiving maintenance (interim or final) if she is living in adultery, refuses to live with her husband without sufficient reason, or lives separately by mutual consent.
  • Timing of Section 125(4) Adjudication: An application under Section 125(4) does not have to wait until the final conclusion of the main petition. If the husband produces ex-facie, clear evidence establishing adultery or mutual consent at the threshold, interim maintenance is impacted; if evidence requires formal proof, interim maintenance continues in the interregnum until the Section 125(4) application is decided.
  • Evidentiary Standard for Electronic Records: Evidence procured through private investigators (such as digital photographs and videos) must satisfy strict admissibility and verification standards, including compliance with Section 65B of the Indian Evidence Act / Bharatiya Sakshya Adhiniyam (BSA) and the foundational tests of relevancy and accuracy.
  • Need for Regulation of Private Investigators: Acknowledging the absence of statutory regulation for private detective agencies in India, the Supreme Court directed the Ministry of Law and Justice and the Law Commission of India to examine the framework for regulating private investigators, balancing evidence collection with privacy and data protection rights.

2026 INSC 778

Himanshu Chordia v. State of Rajasthan & Anr. (D.O.J. 31.07.2026)

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Supreme Court Bars Late-Stage Counter-Claim Court Fee Deposit After Conclusion of Evidence

August 5, 2026 No Comments

In this civil appeal, the Supreme Court examined the legality of an order permitting a defendant to pay court fees on a counter-claim with a delay of four years, specifically after the entire evidence in the suit had been closed. When the written statement and counter-claim were initially filed, the defendant did not pay the required court fees due to financial constraints, and only the written statement was taken on record, leaving the counter-claim non-existent. Years later, after the plaintiff’s evidence and the cross-examination of PW1 concluded, the trial court permitted the defendant to deposit the court fees and prosecute the counter-claim. The Supreme Court allowed the appeal and set aside the orders of the High Court and Trial Court, holding that since the counter-claim was never formally on record and the trial had already concluded, introducing it at that belated stage violated the strict parameters of Order VI Rule 17 of the Civil Procedure Code, 1908 (CPC), as no due diligence or foundational grounds were established.

  • Non-Existence of Counter-Claim Without Court Fees/Taking on Record: Where a defendant fails to pay court fees upon raising a counter-claim and explicitly requests the court to take only the written statement on record due to lack of financial capacity, the counter-claim does not legally exist on record.
  • Limits of Section 149 CPC: While Section 149 CPC grants courts the discretionary authority to allow the payment of deficient court fees at any stage of the suit, it presupposes that the pleading or claim itself is validly and properly on record.
  • Application of Order VI Rule 17 CPC Post-Trial: Introducing a counter-claim after the conclusion of trial amounts to an amendment of the pleadings. Under the proviso to Order VI Rule 17 CPC, such amendments post-commencement of trial are barred unless the party proves that, despite due diligence, they could not have raised the matter earlier.
  • Prejudice to the Plaintiff: Permitting a counter-claim after the entire evidence is closed causes severe prejudice, as the plaintiff has had no opportunity to adduce evidence to controvert the new claims.
  • Final Direction of the Supreme Court: The Supreme Court allowed the appeal, set aside the High Court’s affirmation of the trial court’s order, and directed that the suit shall proceed and be adjudicated strictly without the counter-claim.

2026 INSC 777

IJM Corporation Berhad v. M/s Lakshmi Sai Constructions Company and Anr. (D.O.J. 28.07.2026)

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Navigating Discretionary Equity: Supreme Court Restores Trial Court Decree Denying Specific Performance

August 5, 2026 No Comments

In this civil appeal arising from a property transaction spanning over two decades, the Supreme Court examined the limits of appellate interference with the discretionary and equitable relief of specific performance under Section 20 of the Specific Relief Act, 1963. The sole appellant (original defendant) had entered into an agreement to sell a property in Udhagamandalam for ₹2,25,00,000, but the transaction collapsed amid allegations of bounced cheques, mutual lack of candor, inconsistent pleadings, and criminal complaints. While the trial court decreed only a refund of the advance amount of ₹85,00,000 with interest, the High Court reversed it and granted specific performance. The Supreme Court allowed the appeals, set aside the High Court’s judgment, and restored the trial court’s decree. It held that the plaintiffs failed to prove continuous readiness and willingness, approached the court with unclean hands due to retaliatory criminal proceedings, took contradictory stances regarding property assignment, and that the long passage of time combined with the advanced age of the appellant rendered specific performance inequitable.

  • Scope of Order XLI Rule 22 CPC: A respondent supporting a decree can impugn an adverse finding without filing cross-objections, provided they seek no relief beyond what the decree already grants.
  • Maintainability Without Declaration: Where an agreement does not confer a contractual right of unilateral termination, such termination amounts to repudiation, and the aggrieved party may sue for specific performance without seeking a separate declaratory relief as to the invalidity of the cancellation.
  • Continuous Readiness and Willingness: The plaintiff in a specific performance suit must prove continuous readiness and availability of funds from the date of the agreement up to the date of the decree. Dishonour of advance cheques and absence of concrete fund-raising material at the time of the suit demonstrate a lack of continuous financial readiness.
  • Conduct and “Clean Hands” Principle: Specific performance is an equitable and discretionary remedy. Plaintiffs who adopt contradictory stands across litigation (such as blowing hot and cold regarding assignment of rights) and file retaliatory criminal complaints seeking recovery of money rather than upholding the contract are not entitled to equitable relief.
  • Hardship and Delay: An inordinate lapse of time (over two decades), coupled with the advanced age of the vendor and the death of a key plaintiff, constitutes severe hardship and makes specific performance inequitable, warranting the restoration of the trial court’s alternative remedy of refund with interest.

2026 INSC 776

V.N.A.S. Chandran v. S. Venila and Others (D.O.J. 31.07.2026)

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