Fortune Investors and Traders Ltd. vs Phipson and Company LTD.

Ajoy Nath Ray, J.—This is an application for summary judgment in a suit by a landlord against a tenant and the assignee of the tenant. Mr. Anindya Mitra appearing for the Plaintiff/Petitioner has pressed for a summary decree only with regard to the portion of the claim regarding possession and has submitted that the rest of the suit regarding mesne profits might stand over to trial.

The only reason why possession is sought and the tenancy is claimed to have been forfeited is the one of wrongful assignment. The first Defendant was the tenant of the Plaintiff and an assignment is said to have taken place of the tenancy right to the second Defendant by virtue of an approved order of Court in a company compromise.

In the affidavit-in-opposition filed on behalf of the second Defendant it has been asserted in para. 5 that by an order dated July 12, 1991, all the assets, property and liabilities of the Defendant No. 1 have vested in the Defendant No. 2, without necessity of any further act or deed. The property of the Defendant No. 1 which was the tenancy right, was not made an exception of in the said order.

The notice forfeiting the tenancy is dated December 27, 1991, and it is not in dispute that the said notice was served on December 30, 1991, terminating the tenancy with the expiry of January 31, 1992. The ground as I have mentioned is the ground of wrongful assingnment.

The important clause for our purpose is Clause 2(h) of the written agreement for tenancy and the same is set out below:

2(h). The tenant shall not be entitled to sublet the tenanted premises nor to assign the same except with the written consent of the landlord provided however occupation of the tenanted premises by any subsidiary or its holding company of the tenant or by any company the management whereof is controlled by persons in the management or control of the tenant or its holding company shall not be construed to be either a subtenancy or an assingment of tenancy and the tenant shall in any event continue to remin liable for payment of rent and due observance of the tenancy and conditions herein contained and on the part of the tenant to be perfomed and observed.

It was submitted by Mr. Mitra appearing for the applicant that the clause contains two principal parts, the first part of which prohibits sub-letting or assignment of tenancy. The second part only permits occupation of the tenancy to be had by some other company under similar management or under the same holding company as the first Defendant. The question of occupancy is not, therefore, material if the first part of the above clause has been broken and there has been an assignment or a sub-letting pursuant to which the occupancy has gone over to another company under similar management. In other words, the material point to inquire is whether there has been a subletting or there has been an assignment without consent, and if the answer to that question is in the affirmative of whether occupation thereafter is had by a company under the same management or similar management or as a subsidiary company of the same holding parent company!

Mr. Mitra relied in this regard upon the case of General Radio and Appliances Co. Ltd. and Others Vs. M.A. Khader (Dead) by Lrs., and submitted on the authority of the said case that a transfer by way of sanction of a company petition is as much a matter of voluntary transfer within the meaning of the tenancy laws in India as is any other voluntary transfer like those without intervention of Court. Indeed the said case is a true authority for the said proposition. The reason, with respect, is not far to seek. The company compromise is originated by the voluntary action of persons seeking the compromise, but the Court ultimately puts a stamp thereupon. Without such voluntary origin the transfer or the compromise would never have taken place in the first place. Thus, the tenant is responsible for initiating that process in the final result of which the tanancy stands transferred to the transferee.

Mr. S.B. Mukherjee submitted that the above case is distinguishable on this point, that there, the transferor company being General Radio & Appliance had already stood dissolved. Mr. Mukherjee urged that in the present case the transferor company, i.e. M/s. Phipson and Company Ltd. is not yet dissolved though it has lost all its legal rights and valuably property. The company as a distinct legal person is still in existence. Accordingly, Mr. Mukherjee submitted that the assignment to the second defandent is not yet so full and complete as the same was in the case before the Supreme Court.

With the greatest of respect, this is not a point which calls for any trial at all. I am aware that even if the defence had some very slender hope of success, the same should be considered at a full length trial, and no summary decree should be passed brushing aside even such a slender defence. In the Supreme Court case, however, the fact of dissolution of General Radio was helpful for, and only for, ascertainment of the fact of transfer or assignment from General Radio to the transferee which, in that case, was National EkCompany The dissolution or otherwise of General Radio, as such, did not figure in Their Lordship''s judgment in the Supreme Court to be a matter of any direct or preliminary importance at all, and the same had value only for ascertainment of the assignment. In our case, the company, i.e. the first Defendant is not yet dissolved and still is theoretically a legal person. But that is not a material distinguishing factor, and cannot, by any stretch of imagination, be a material distinguishing factor at the trial of the suit, in any view whatever of the matter.

Notwithstanding the non-dissolution of the first Defendant the assingment of the tenancy to the second Defendant is now complete. Upon the completion thereof the right of the Plaintiff to obtain eviction has also been perfected. It little matters whether the first Defendant is dissolved, exactly like General Radio before the Supreme Court or not.

Under these circumstances it is impossible to permit the Defendants to take the case of eviction to a protracted trial.

The application, therefore, succeeds in part. There shall be a final judgment and summary decree in favour of the Plaintiff Petitioner as against both the Defendants Respondents in terms of claim (a) of the plaint. The rest of the suit shall stand to trial. The Plaintiff Petitioner would be entitled to the costs of this application.

Stay of operation of this order and decree is prayed for but the same is refused.