Delhi High Court

North Delhi Power Ltd vs Swarna Gupta on 20 December, 2011

Author: Indermeet Kaur

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

%                             Date of Judgment: 20.12.2011

+ CM (M) No. 1588/2010 and CM No. 22286/2010 (stay)

NORTH DELHI POWER LTD                        ..... Petitioner
                 Through            Mr. Sudhir Nandrajog, Sr.
                                    Advocate with Mr. Divyam
                                    agarwal, Mr. Manish Kr. Jha
                                    and Mr. Mohit Bakshi,
                                    Advocates.
                    versus

SWARNA GUPTA                             ..... Respondent
                         Through    Mr. Rakesh Khanna, Sr.
                                    Advocate with Mr. Anshu
                                    Mahajan, Mr. Karan Arora and
                                    Ms. Seema, Advocates.
CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR

INDERMEET KAUR, J. (Oral)

1. The order impugned before this court is the order dated

08.09.2010 which is an order passed by the Additional Rent

Control Tribunal (ARCT) reversing the finding of the Additional

Rent Controller (ARC) dated 22.09.2009 whereby the eviction

petition filed by the landlord i.e. Swarna Gupta against the tenant

namely Delhi Vidyut Board (DVB) on the ground of sub-letting as

contained in Section 14(1)(b) of the Delhi Rent Control Act

(DRCA) had been dismissed. The impugned judgment reversing

this finding had decreed the suit of the landlord.

2. Certain facts are undisputed. Landlord is the owner of the

premises in question i.e. property bearing No. 13-A(Southern

Hall) bearing municipal No. 6323 and 6324 now known as

Jagnnath Market, Kamla Nagar, G.T. Road, Delhi-110007 which

had been let out to the tenant in the year 1963 i.e. to the DVB.

Present tenancy is of the North Delhi Power Limited (NDPL).

Admittedly, the DVB has come to a close and its existence has

been terminated; the company now dealing with the distribution

of power in the said area is the NDPL.

3. The only question which has to be answered by this court is

whether the merger of DVB with the NDPL was necessarily a

transfer by the operation of law or whether it was a voluntary

transfer; if it is of the first category i.e. if it is an operation by law,

then a case of sub-letting under Section 14(1)(b) of the DRCA

would not be made out; in case it is a voluntary transfer, an

eviction decree on the ground of sub-letting under Section

14(1)(b) of the DRCA would have to be passed in favour of the

landlord. Both the learned senior counsels for the parties agree

that this is the only question which has been posed before this

court; it is a legal question.

4. The Delhi Electricity Reforms Act, 2000 (hereinafter

referred to as the Act of 2000) as also the document of transfer

i.e. the notification dated 20.11.2001 issued by the Government of

NCT whereby the assets, liabilities, proceedings and personnel of

the DVB had been transferred to private DISCOMS (the relevant

DISCOM in the present case being DISCOM-3 i.e. NDPL) have

been adverted to.

5. Learned counsel for the petitioner has pointed out that after

the coming into force of the Delhi Electricity Reforms Act 2000

there was a reorganization of the electricity industry as contained

in Chapter V of the said Act. Attention has been drawn to the

various sub clauses of Sections 14 and 15; contention being that

all the assets, liabilities and proceedings of the DVB had by

operation of law been transferred to the NDPL and Section

15(4)(b) in fact clearly stipulates that where any transaction is

effected in pursuance to a transfer scheme, it shall be binding on

all persons including a third party, even if that said party has not

consented to it; emphasis being on the fact that this clearly shows

that the transfer is by operation of law and is not a voluntary

transfer. The notification date 20.11.2001 i.e. the transfer scheme

has also been highlighted.

6. Definition of „assets‟ is contained in Section 2 (a), Section 3

stipulates that all assets, liabilities and proceedings of the Board

shall stand transferred and will vest in the Government absolutely.

This section clarifies that there is an automatic transfer by

operation of law of all the assets, liabilities and proceedings of the

DVB to the Government and the same shall vest with the

Government absolutely. Section 5 which deals with the "Transfer

of Undertakings by the Government". The object clause of

Schedule F interalia states:-

"Unless otherwise specified by the Government the Transmission Undertakings shall comprise of all the assets, liabilities and proceedings concerning Distribution consisting of:"

which when read in conformity with Sections 14 and 15 of the Act

show that the transfer by operation of law is only of the assets,

liabilities and proceedings of the Board to the Government but

thereafter from the Government to the private Discoms -3 (NDPL);

it is not a transfer by operation of law. This can be gathered from

the use of word „may‟ as appearing in the various parts of Sections

14 and 15 depicting the intent of the legislature that the transfer

scheme may or may not be formulated by the Government in

favour of the private DISCOMS. Further Schedule F clearly states

that the assets, liabilities and proceedings transferred from the

Board to the NDPL are detailed in Schedule F where the disputed

premises (i.e. the premises bearing No. 13-A(Southern Hall)

bearing municipal No. 6323 and 6324 now known as Jagnnath

Market, Kamla Nagar, G.T. Road, Delhi-110007) do not find

mention.

7. A wholesome reading of these various provisions thus shows

that the transfer of the tenancy rights by the DVB to the NDPL

was not a transfer under the operation of law; the assets,

liabilities and proceedings of the DVB had by an operation of law

vested with the Government but thereafter from the Government

to the private DISCOMS; it was not a transfer governed by the

operation of law. As such the finding in the impugned judgment

holding that this amounted to a sub-letting entitling the landlord

to a decree of eviction under Section 14(1)(b) of the Delhi Rent

Control Act (DRCA) does not call any interference.

8. In AIR 2004 Supreme Court 4368 titled as Singer India

Limited vs. Chander Mohan Chaddha, the Apex Court while

dealing with the amalgamation of the companies under Sections

391 and 394 of the Companies Act in this context on the

applicability of Section 14(1)(b) of the DRCA had noted as under:-

"There is no ambiguity in the Section and it clearly says that if, without obtaining the consent in writing of the landlord the tenant has, on or after 9.6.1952, (i) sub-let, or (ii) assigned, or (iii) otherwise parted with the possession of the whole or any part of the premises, he would be liable for eviction. The applicability of the Section depends upon occurrence of a factual situation, namely, sub-letting or assignment or otherwise parting with possession of the whole or any part of the premises by the tenant. Whether it is a voluntary act of the tenant or otherwise and also the reasons for doing so are wholly irrelevant and can have no bearing. This view finds support from an earlier decision rendered in M/s. Parasram Harnand Rao vs. M/s. Shanti Prasad Narinder

Kumar Jain and another AIR 1980 SC 1655 wherein Section 14(1)(b) of Delhi Rent Control Act came up for consideration. The tenant in the premises, was Laxmi Bank, which was ordered to be wound up and in that winding up proceeding, the Court appointed an Official Liquidator who sold the tenancy rights in favour of S.N. Jain on 16.2.1961. The sale was confirmed by the High Court and, as a result thereof, S.N. Jain took possession of the premises. Thereafter, the landlord filed a petition for eviction of Laxmi Bank. The High Court held that as the transfer in favour of S.N. Jain by the Official Liquidator was confirmed by the Court, he acquired the status of the tenant by operation of law and, therefore, the transfer of the tenancy rights was an involuntary transfer and the provision of Section 14(1)(b) of the Act would not be attracted. Reversing the judgment, this Court held that the Official Liquidator had merely stepped into the shoes of Laxmi Bank which was the original tenant and even if the Official Liquidator had transferred the tenancy interest to S.N. Jain under the orders of the Court, it was on behalf of the original tenant. It was further held that the sale was a voluntary sale, which clearly was within the mischief of the Section, and assuming that the sale by the Official Liquidator was an involuntary sale, it undoubtedly became an assignment as provided by Section 14(1)(b) of the Act. The Court further held that the language of Section 14(1)(b) is wide enough not only to include any sub-lease but even an assignment or any other mode by which possession of the tenanted premises is parted and the provision does not exclude even an involuntary sale."

9. Reliance placed upon by the learned counsel for the

petitioner on the judgment of Hindustan Petroleum Corporation

Limited vs. Shyam Cooperation Society and Ors. reported in AIR

1989 Supreme Court 295 as also another judgment of this court

reported in 119 (2005) DLT 538 titled as Asha Rohtagi and Ors.

vs. Erstwhile New Bank of India is misplaced. In the first

judgment (supra), there was an acquisition of an undertaking of a

foreign company by the Central Government and under Section 5

of the Esso (Acquisition of Undertakings in India) Act 1974 the

Central Government on the appointed date had become a

lessee/tenant in respect of this property; this was by way of a

statutory enactment. The second judgment of Asha Rohtagi also