The Supreme Court has ordered Punjab National Bank to vacate a commercial property in Delhi after ruling that it could not continue as the tenant following its merger with Hindustan Commercial Bank (HCB), which had originally rented the premises. According to reports from The Times of India, a Bench of Justice Sanjay Karol and Justice Nongmeikapam Kotiswar Singh restored an eviction decree against Punjab National Bank after finding that the original tenant had ceased to exist and the tenancy had passed to another entity without the landlord's written consent. The court has set January 31, 2027 as the deadline for PNB to vacate the premises, subject to filing an undertaking within four weeks and continuing to pay all lawful charges during the extended period.
The Court held that Section 14(1)(b) of the Delhi Rent Control Act contains only two requirements - the tenancy or possession must have passed to another person, and the transfer must have taken place without the landlord's written consent. As reported by The Times of India, the Court observed that these are the only statutory ingredients, noting that nothing in the provision suggests Parliament intended to distinguish between voluntary transfers and those taking place under a statutory scheme. The provision enables eviction where the tenant has 'sub-let, assigned or otherwise parted with possession' of the premises without obtaining the landlord's written consent. Referring to its earlier ruling from a 2017 case (Bhairon Sahai v. Bishamber Dayal), the Court emphasized that the reason behind the transfer, including whether it resulted from a statutory amalgamation, does not change the legal position.
The dispute dates back to 1947, when British Motor Car Company (1939) Ltd. leased portions of Pratap Building at Connaught Circus, New Delhi, to Hindustan Commercial Bank for commercial purposes at a monthly rent of ₹585. According to The Times of India, nearly four decades later, the Reserve Bank of India framed a scheme under Section 45 of the Banking Regulation Act for the amalgamation of HCB with Punjab National Bank. The Central Government approved the scheme, which came into effect on 19.12.1986, resulting in all assets, liabilities and legal rights of HCB, including its tenancy rights, vesting in Punjab National Bank. Following the merger, PNB continued operating from the premises until the landlord filed an eviction petition alleging that HCB had handed over the tenancy rights and possession to PNB without his written approval as stipulated in the Delhi Rent Control Act.
The Supreme Court's ruling has significant implications for bank mergers and tenancy rights under the Delhi Rent Control Act. As reported by The Times of India, the Court emphasized that the Banking Regulation Act facilitates amalgamation of banking companies but does not confer immunity from the operation of the Delhi Rent Control Act. The judgment overruled the Delhi High Court's decision, which had incorrectly assumed that every statutory transfer is immune from eviction under the Delhi Rent Control Act. The court clarified that once both conditions are met - tenancy rights and possession passing to another entity without the landlord's written consent - the law permits eviction, regardless of whether the transfer happened voluntarily or through a statutory merger.
The Supreme Court's decision establishes a clear legal precedent for landlord-tenant disputes involving bank mergers. According to The Times of India, the Court granted Punjab National Bank six months' time to vacate the premises, subject to filing an undertaking within four weeks and continuing to pay all lawful charges during the extended period. Failure to comply with these conditions would entitle the landlord to execute the eviction decree in accordance with law. The ruling clarifies that eviction rules under the Delhi Rent Control Act apply equally to statutory mergers and voluntary transfers, emphasizing that the legal position remains unchanged regardless of the transfer's origin or the banking regulatory framework.
