Singer India Limited Vs.
Chander Mohan Chadha & Ors [2004] Insc 458 (13 August 2004)
Cji,G. P. Mathur & C. K.
Thakker (With Civil Appeal No. 388 of 2004) G.P. Mathur, J.
1. This appeal, by Special Leave, has been preferred against the judgment
and order dated 25.5.2001 of Delhi High Court whereby the Second Appeal
preferred by the appellant was dismissed and the judgment and order dated
8.4.1996 of the Rent Control Tribunal directing eviction of the appellant from
the premises in dispute was affirmed.
2. Shri Atma Ram Chadha, predecessor-in-interest of respondent Nos. 1 to 13
(hereinafter referred to as the 'landlord') let out Shop No. 13/14 (Private No.
15) Block'C', Cannaught Place, New Delhi to M/s. Singer Sewing Machine Company,
incorporated under the laws of the State of New Jersey, USA, (hereinafter
referred to as 'American Company'), at a rental of Rs. 1200/- per month vide a
registered lease deed dated 11.7.1966. In the year 1982, the landlord filed an
eviction petition on the ground, inter alia, that the American Company, without
obtaining any written consent from the landlord, had parted with the possession
of the premises in dispute in favour of Indian Sewing Machine Company Limited,
incorporated under the Indian Companies Act (hereinafter referred to as 'Indian
Company'), and it was the said company which was in exclusive possession of the
premises and thereby it was liable for eviction in view of Section 14(1)(b) of
the Delhi Rent Control Act (hereinafter referred to as the 'Act'). The eviction
petition was contested by the appellant on the ground, inter alia, that a
direction was issued to the American Company to reduce its share capital to 40
per cent in order to carry on business in India in view of Section 29 of
Foreign Exchange Regulation Act, 1973 (hereinafter referred to as 'FERA').
Accordingly, Company Petition bearing No. 66 of 1981 was filed by the Indian
Company before the Bombay High Court under Sections 391 and 394 of the
Companies Act which was allowed on 31.12.1981, and a scheme of amalgamation was
sanctioned whereby the undertaking in India of the American Company was
amalgamated with the Indian Company. Under the scheme of amalgamation the whole
of the business, property, undertaking, assets, including leases, rights of
tenancy, occupancy etc stood transferred to and vested in the Indian Sewing
Machine Company, namely, the Indian Company. It was submitted that the Indian
Company is no other entity except the legal substitute of the American Company
and in substance there is no case of sub-tenancy. The Additional Rent
Controller, Delhi dismissed the eviction petition by the judgment and order
dated 6.2.1995, but this was reversed by the Rent Control Tribunal in the
appeal preferred by the landlord and eviction petition was allowed. The Second
Appeal preferred by the appellant was dismissed by the High Court on 25.5.2001.
During the pendency of the appeal before the Rent Control Tribunal, the name of
M/s.
Indian Sewing Machine Company was changed as Singer India Limited which is
the appellant herein.
3. Shri Anil Divan, learned senior counsel for the appellant, has submitted
that at the relevant time Section 29 of FERA provided that a company (other
than a banking company) which is not incorporated under any law in force in
India or any branch of such company, shall not, except with a general or
special permission of the Reserve Bank, carry on in India or establish in India
a branch, office or other place of business for carrying on any activity of a
trading, commercial or industrial nature, other than an activity for the
carrying on of which permission of the Reserve Bank had been obtained under
Section 28. Accordingly, a direction was issued by the Reserve Bank to the
American Company to reduce its equity capital to 40 per cent. In view of this
direction, a Company Petition was filed under Sections 391 and 394 of the
Companies Act in the Bombay High Court for sanctioning a scheme of amalgamation
which was allowed and the American Company got amalgamated with the Indian
Company. Learned counsel has submitted that it was not a voluntary transfer of
undertaking, but the amalgamation of the original lessee, namely, the American
Company with the Indian Company had to be resorted to under compulsion of law
with a view to secure compliance of the provisions of FERA and the directions
issued by the Reserve Bank of India and, therefore, Section 14(1) (b) of the
Act would not be attracted. Learned counsel has further submitted that in the
peculiar facts of the present case, Section 14(1)(b) of the Delhi Rent Control
Act should not be literally construed but a purposive construction should be
given. Reference in this connection has been made to a decision of Delhi High
Court in Telesound India Ltd. In re. 1983 (53) Company Cases 926 wherein it has
been held that the effect of an order of amalgamation passed under Section 394
of the Companies Act is that the rights, properties and the liabilities of the
transferor company become the rights, property and liabilities of the
transferee-company and it is neither an assignment of right or property nor an
assignment of the property by the company. On amalgamation, the
transferor-company merges into the transferee-company shedding its corporate
shell, but for all practical purposes remaining alive and thriving as part of
the larger whole. The transferor-company is dissolved not because it has died
or ceased to exist, but because for all practical purposes it has merged into
another corporate shell. Learned counsel has thus submitted that what should be
looked into is the substance of the matter and in view of the aforesaid legal
position, only the corporate shell of the American Company has been shed or
removed, but it is still alive and thriving as part of the Indian Company and
consequently there was no sub-letting or parting with possession so as to
attract the provision of Section 14(1)(b) of the Act. Shri Divan has also
referred to G.K. Bhatnagar vs. Abdul Alim 2002(9) SCC 516 and Parvinder Singh
vs. Renu Gautam and others 2004(4) SCC 794 wherein with reference to creation
of partnership by a tenant it was held that if the user and control of the
tenancy premises has been parted with and a deed of partnership has been drawn
up as an indirect method of collecting the consideration for creation of
sub-tenancy or for providing a cloak or cover to conceal a transaction not
permitted by law, the court is not estopped from tearing the veil of
partnership and finding out the real nature of transaction entered into between
the tenant and the alleged sub-tenant. Reference has also been made to a
decision of a Single Judge of Delhi High Court in Vishwa Nath vs. Chaman Lal
Khanna AIR 1975 Delhi 117 wherein it was held that if an individual takes a
premises on rent and then converts his sole proprietorship concern into a private
limited company in which he has the controlling interest, it would not amount
to parting with possession with any one as he continues to be in possession of
the premises and as such he does not become liable for eviction under Section
14(1)(b) of the Act. Learned counsel has further submitted that as the Company
Petition for sanctioning the scheme of amalgamation was filed in order to
secure compliance with law, namely, to reduce the equity capital of the
American Company to 40 per cent and as the "lease, rights of tenancy or
occupancy" of the said company got vested with the Indian Company in view
of the sanction granted by the Bombay High Court i.e. under the orders of the
Court, the principle laid down by this Court in Hindustan Petroleum Corporation
Ltd and another vs. Shyam Co-operative Housing Society and others 1988 (4) SCC
747 will be applicable and no order of eviction can be passed against the
appellant.
4. Shri Dushyant Dave, learned senior counsel for the respondent, has
submitted that the argument that it was not the voluntary act of the American
Company whereunder its leasehold rights, rights of tenancy or occupancy got
transferred to or vested in the Indian Company is wholly fallacious. The
direction issued by the Reserve Bank of India for ensuring compliance of
Section 29 of FERA was merely to reduce the equity capital of the American
Company to 40 per cent and this could be achieved by various modes permissible
in law. No such direction had been issued by the Reserve Bank to the American
Company for getting itself amalgamated with an Indian Company. The American
Company voluntarily submitted to a scheme of amalgamation with the Indian
Company in the Company Petition before the Bombay High Court whereunder its
'lease, right of tenancy or occupancy' got vested with the Indian Company.
After the sanction of scheme of amalgamation, the American Company completely
lost its identity and it was the Indian Company which came into possession of
the premises in dispute and, therefore, the provisions of Section 14(1)(b) of
the Delhi Rent Control Act were clearly attracted and the order for eviction
had rightly been passed. Learned counsel has also submitted that it is a
well-settled principle of interpretation that the words of a statute must be interpreted
in their ordinary grammatical sense unless there be something in the context or
in the object of the statute in which they occur or in the circumstances in
which they are used to show that they were used in a special sense different
from their ordinary grammatical sense, and the golden rule is that the words of
a stature must, prima facie be given their ordinary meaning. On a plain reading
of the provision, it is urged, sub- letting, assigning or otherwise parting
with possession of the whole or any part of the premises without obtaining the
consent in writing from the landlord would render the tenant liable for
eviction. It has thus been urged that in view of the fact that the American
Company transferred the lease and occupancy rights to the Indian Company, the
order for eviction passed against the appellant was perfectly justified. Shri
Dave has also submitted that the controversy raised in the present appeal has
already been considered in several decisions by this Court and there is
absolutely no reason to depart from the view taken therein.
5. Before adverting to the contentions raised at the Bar, it will be
convenient to reproduce Section 14(1)(b) of the Act, which reads as under:
" 14. Protection of tenant against eviction.-- (1) Notwithstanding
anything to the contrary contained in any other law or contract, no order or
decree for the recovery of possession of any premises shall be made by any
court or Controller in favour of the landlord against a tenant:
Provided that the Controller may, on an application made to him in the
prescribed manner, make an order for the recovery of possession of the premises
on one or more of the following grounds only, namely -- (a) (b) that the
tenant has, on or after the 9th day of June, 1952 sub-let, assigned or
otherwise parted with the possession of the whole or any part of the premises
without obtaining the consent in writing of the landlord.." 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.
6. It is also necessary to take note of some clauses of the scheme of
amalgamation which was sanctioned by the Bombay High Court on 31.12.1981. In
the scheme "Transferor Company" means the undertaking in India of
Singer Sewing Machine Company, a company incorporated under the laws of the
State of New Jersey, USA, the "Transferee Company" means Indian
Sewing Machine Company Limited, a company incorporated under the Companies Act, 1956
and having its registered office at 207, Dadabhoy Naoroji Road, Bombay, and the
"Appointed Day" means 1.1.1982. The relevant part of clause (2) of
the scheme, which has a bearing on the controversy, is being reproduced below:
2. " With effect from the Appointed Day, except as hereinafter stated,
the whole of the business, property, undertaking, assets, including leases,
rights of tenancy or occupancy, instalment receivables under hire purchase
contracts, benefits of licences and quota rights of whatsoever description and
wheresoever of the Transferor Company shall without further act or deed, be
transferred to and vested in the Transferee Company so as to become from the
appointed day, the business, property, undertaking assets, including leases,
rights of tenancy or occupancy, instalment receivable under hire purchase
contracts, benefits of licences and quota rights of the Transferee
Company" for all the estate and interest of the transferor company
therein, provided that 13,445 equity shares of." The effect of this clause
is that with effect from 1.1.1982 "leases, rights of tenancy or
occupancy" of the Singer Sewing Machine Company (American Company) got
vested with M/s. Indian Sewing Machine Company (Indian Company).
7. The provision for facilitating reconstruction and amalgamation of
companies is made under Section 394 of the Companies Act.
In an amalgamation, two or more companies are fused into one by merger or by
one taking over the other. Reconstruction or amalgamation has no precise legal
meaning. In Halsbury's Laws of England (4th Edn.) para 1539, the attributes of
amalgamation of companies have been stated as under:
" Amalgamation is a blending of two or more existing undertakings into
one undertaking, the shareholders of each blending company becoming
substantially the shareholders in the company which is to carry on the blended
undertakings. There may be amalgamation either by the transfer of two or more
undertakings to a new company, or by the transfer of one or more undertakings
to an existing company. Strictly "amalgamation" does not, it seems,
cover the mere acquisition by a company of the share capital of other companies
which remain in existence and continue their undertakings, but the context to
which the term is used may show that it is intended to include such an
acquisition.
The question whether a winding up is for the purposes of reconstruction or
amalgamation depends upon the whole of the circumstances of the winding
up."
8. In Saraswati Industrial Undertaking vs. CIT Haryana AIR 1991 SC 70 (para
6), it has been held that there can be no doubt that when two companies
amalgamate and merge into one, the Transferor Company loses its identity as it
ceases to have its business. However, their respective rights or liabilities
are determined under the scheme of amalgamation, but the corporate identity of
the Transferor Company ceases to exist with effect from the date the
amalgamation is made effective. Therefore, in view of the settled legal
position, the original lessee, namely, the American Company ceased to exist
with effect from the Appointed Day i.e. 1.1.1982 and thereafter the Indian Company
came in possession and is in occupation of the premises in dispute.
9. The effect of parting of possession of the tenanted premises as a result
of sanction of scheme of amalgamation of companies under Section 394 of the Companies Act
by the High Court has also been considered in two decisions of this Court. In
M/s. General Radio and Appliances Co. Ltd and others vs. M.A. Khader 1986 (2)
SCC 656, which is a decision by a bench of three learned Judges, the premises
had been let out to M/s. General Radio and Appliances Co. Ltd. On account of a
scheme of amalgamation sanctioned by the High Court under Sections 391 and 394
of the Companies Act, all
property, rights and powers of every description including tenancy right, held
by M/s. General Radio and Appliances Co. Ltd. had been blended with M/s. National
Ekco Radio & Engineering Co. Ltd. Thereafter the landlord instituted
proceedings for eviction on the ground of unauthorized sub-letting. It was
urged on behalf of the original tenant that the amalgamation of M/s. General
Radio and Appliances Co. Ltd (appellant No. 1) with M/s. National Ekco Radio
& Engineering Co. Ltd. (appellant No. 2) was an involuntary one which had
been brought into being on the basis of the order passed by the High Court
under Sections 391 and 394 of the Companies Act
and that the appellant No. 1 Company had not been wound up and /or liquidated,
but had been merely blended with appellant No. 2 on the basis of the order of
the Court and consequently there was no sub-letting by appellant No. 1 Company
to appellant No. 2 Company. It was also urged that appellant No. 1 Company had
not become extinct but had been merged and/or blended with appellant No. 2
Company. It was held that the order of amalgamation was made by the High Court
on the basis of the petition filed by the Transferor Company in the Company
Petition and, therefore, it cannot be said that this is an involuntary transfer
effected by the order of the Court. It was further held that appellant No. 1
Company was no longer in existence in the eyes of law and it had effaced itself
for all practical purposes. The appellant No. 2 Company i.e., the Transferee
Company, was not a tenant in respect of the suit premises and it was appellant
No. 1 Company which had transferred possession of the suit premises in favour
of the appellant No. 2 Company. The Court further took the view that under the
relevant Act, there was no express provision that in case of any involuntary
transfer or transfer of the tenancy right by virtue of a scheme of amalgamation
sanctioned by the High Court by its order under Sections 391 and 394 of the Companies Act,
such a transfer will not come within the purview of Section 10(ii)(a) of Andhra
Pradesh Building (Lease, Rent and Eviction) Control Act. On this finding, it
was held that the appellant was liable for eviction.
10. Cox & Kings Ltd. and another vs. Chander Malhotra 1997 (2) SCC 687
is also a decision by a bench of three learned Judges and arose out of
proceedings for eviction under Section 14(1)(b) of Delhi Rent Control Act.
Here, the premises were given on lease to Cox & Kings (AGENTS) Limited,
a company incorporated under the United Kingdom Companies Act (for short,
"Foreign Company"). A petition for eviction was filed on several
grounds and one of the grounds was of sub-letting to Cox & Kings Limited, a
company registered under the Indian Companies Act (for short an "Indian
Company"). It was contended on behalf of the appellant that in view of
Section 29 of FERA, the Foreign Company was required to obtain written
permission from the Reserve Bank of India to carry on business.
The said permission was sought for but was refused. As a consequence, the
Indian Company, namely, Cox & Kings Limited was floated in which the
Foreign Company sought to have 100 per cent shares, but on refusal of
permission had only 40 per cent of shares in the business to which approval was
given by the Reserve Bank of India. Thereafter, the Indian Company carried on
business in the same premises. It was urged that as the transfer of leasehold
interest from the Foreign Company to the Indian Company was by compulsion, it
was an involuntary one and, therefore, it was not a case of sub-letting within
the meaning of Section 14(1)(b) of the Act. It was held that under FERA, there
was no compulsion that the premises demised to the Foreign Company should be
continued or given to the Indian Company. On the other hand, under the
agreement executed between the Foreign Company and the Indian Company,
incidental to the assignment of the business as a growing concern, the Foreign
Company also assigned the monthly and other tenancies and all rented premises
of the assignor in India to the Indian Company. The Court, accordingly,
concluded that though by operation of FERA the Foreign Company had wound up its
business, but under the agreement it had assigned the leasehold interest in the
demised premises to the Indian Company which was carrying on the same business
in the tenanted premises without obtaining the written consent of the landlord
and, therefore, it was a clear case of sub-letting. After referring to the
earlier decisions in M/s. Parasram Harnand Rao vs. M/s. Shanti Prasad Narinder
Kumar Jain (supra) and M/s. General Radio and Appliances Co.
Ltd. vs. M.A. Khader (supra), the Court ruled that it was a case of
assignment by the Foreign Company to the Indian Company which amounted to
sub-letting within the meaning of Section 14(1)(b) of the Act and the decree
for eviction was affirmed.
11. These cases clearly hold that even if there is an order of a Court
sanctioning the scheme of amalgamation under Sections 391 and 394 of the Companies Act
whereunder the leases, rights of tenancy or occupancy of the Transferor Company
get vested in and become the property of the Transferee Company, it would make
no difference in so far as the applicability of Section 14(1)(b) is concerned,
as the Act does not make any exception in favour of a lessee who may have
adopted such a course of action in order to secure compliance of law.
12. Madras Bangalore Transport Co. (West) vs. Inder Singh and others 1986(3)
SCC 62 cited by Shri Divan, does not advance the case of the appellant either
as, here, the Court on the basis of material on record found as a fact that the
Limited Company was formed with the partners of the existing tenant firm as
Directors and both the firm and the company were operating from the same place,
each acting as agent of the other. It was also found as a fact that the company
was only an 'alter ego' or a 'corporate reflection' of the tenant firm and the
two were for all practical purposes having substantial identity and,
consequently, there was no sub-letting, assignment or parting with possession
of the premises by the firm to the company so as to attract Section 14(1)(b) of
the Act. This case has been decided purely on facts peculiar to it and no
principle of law has been laid down. The position in Hindustan Petroleum
Corporation Ltd and another vs.
Shyam Co-operative Housing Society and others 1988(4) SCC 747 cited by
learned counsel for the appellant has hardly any application here. It is not a
case of amalgamation of two companies but acquisition of undertaking of a
Foreign Company by the Central Government. Section 5 of Esso (Acquisition of
Undertakings in India) Act, 1974 provided that where any property is held in
India by Esso under any lease or under any right of tenancy, the Central Government
shall, on from the appointed day be deemed to have become the lessee or tenant,
as the case may be, in respect of such property as if the lease or tenancy in
relation to such property had been granted to the Central Government, and
thereupon all the rights under such lease or tenancy shall be deemed to have
been transferred to and vested in the Central Government. In view of this
statutory provision, the Central government, by operation of law, became the
tenant of all such properties which were being held by Esso under any lease or
any right of tenancy.
There is no statutory enactment here which may give any kind of protection
to the appellant.
13. Shri Divan has next contended that on amalgamation Singer Sewing Machine
Company (American Company) merged into Indian Sewing Machine Company (Indian
Company) shedding its corporate shell, but for all practical purposes remained
alive and thriving as part of the larger whole. He has submitted that this
Court should lift the corporate veil and see who are the directors and
shareholders of the Transferee Company and who are in real control of the
affairs of the said company and if it is done it will be evident there has been
no sub-letting or parting with possession by the American Company.
14. In Palmer's Company Law (24th Edn), in chapter 18, para 2 onwards some
instances have been given in which the modern company law disregards the
principle that the company is an independent legal entity and also when the
Courts would be inclined to lift the corporate veil and the important ones
being in relation to the law relating to trading with enemy where the test of
control is adopted and also where the device of incorporation is used for some
illegal or improper purpose. In Gower's Principle of Modern Company Law (4th
Edn), in chapter 6, the topic of lifting the veil has been discussed. The
learned author has said that there is no consistent principle beyond a refusal
by the legislature and the judiciary to apply the logic of the principle laid
down in Solomon's case where it is too flagrantly opposed to justice,
convenience or the interest of the Revenue. In the cases where veil is lifted,
the law either goes behind the corporate personality to the individual members,
or ignores the separate personality of each company in favour of the economic
entity or ignores the separate personality in favour of the economic entity
constituted by a group of associated companies. The principal grounds where
such a course of action can be adopted are to protect the interest of the Revenue
and also where the corporate personality is being blatantly used as a cloak for
fraud or improper conduct.
15. The question of lifting the corporate veil was examined by a
Constitution Bench in Tata Engineering and Locomotive Co. Ltd etc. vs.
The State of Bihar and others AIR 1965 SC 40. The Court observed that the
doctrine of lifting of the veil postulates the existence of dualism between the
corporation or company on the one hand and its members or shareholders on the
other. After review of a number of authorities and standard books, the
parameters where the said doctrine could be applied were indicated in
consonance with the principles indicated in the preceding paragraph. In Delhi
Development Authority vs. Skipper Construction Company (P) Ltd. and another AIR
1996 SC 2005, Mr. Justice B. P. Jeevan Reddy has examined the question in
considerable detail and it will be useful to reproduce the relevant paragraph
of the judgment which is as under:
Para 24. " Lifting the corporate veil:
In Aron Salomon v. Salomon & Company Limited (1897) Appeal Case 22), the
House of Lords had observed, "the company is at law a different person
altogether from the subscriber..; and though it may be that after incorporation
the business is precisely the same as it was before and the same persons are
managers and the same hands received the profits, the company is not in law
agent of the subscribers or trustee for them. Nor are the subscribers as
members liable, in any shape or form, except to the extent and in the manner
provided by that Act". Since then, however, the Courts have come to
recognize several exceptions to the said rule. While it is not necessary to
refer to all of them, the one relevant to us is "when the corporate
personality is being blatantly used as a cloak for fraud or improper
conduct" (Gower:
Modern Company Law 4th Edn. (1979) at P. 137) Pennington (Company Law 5th
Edn. 1985 at P.53) also states that "where the protection of public
interests is of paramount importance or where the company has been formed to
evade obligations imposed by the law", the Court will disregard the
corporate veil " It was held that, broadly, where a fraud is intended to
be prevented, or trading with enemy is sought to be defeated, the veil of
corporation is lifted by judicial decisions and the shareholders are held to be
'persons who actually work for the corporation'. The main principle on which
such a course of action can be taken was stated in paragraph 28 of the report
and the relevant part thereof is being reproduced below:
"28. The concept of corporate entity was evolved to encourage and
promote trade and commerce but not to commit illegalities or to defraud people.
Where, therefore, the corporate character is employed for the purpose of
committing illegality or for defrauding others, the Court would ignore the
corporate character and will look at the reality behind the corporate veil so
as to enable it to pass appropriate orders to do justice between the parties
concerned.."
16. However, it has nowhere been held that such a course of action is open
to the company itself. It is not open to the Company to ask for unveiling its
own cloak and examine as to who are the directors and shareholders and who are
in reality controlling the affairs of the Company.
This is not the case of the appellant nor could it possibly be that the
corporate character is employed for the purpose of committing illegality or
defrauding others. It is not open to the appellant to contend that for the
purpose of FERA, the American Company has effaced itself and has ceased to
exist but for the purpose of Delhi Rent Control Act, it is still in existence.
Therefore, it is not possible to hold that it is the American Company which
is still in existence and is in possession of the premises in question. On the
contrary, the inescapable conclusion is that it is the Indian Company which is
in occupation and is carrying on business in the premises in question rendering
the appellant liable for eviction.
17. Civil Appeal No. 388 of 2004 has been filed by M/s. Singer Company of USA
(American Company). The American Company did not challenge the order of the
Rent Control Tribunal by filing a Second Appeal in the High Court. Even
otherwise, the grounds for challenge are the same, which we have already discussed
above.
18. For the reasons mentioned above, Civil Appeal No. 387 of 2004 and Civil
Appeal No. 388 of 2004 are dismissed with costs.
19. The appellant in Civil Appeal No. 387 of 2004 is granted three months'
time to vacate the premises subject to its filing usual undertaking before the
Rent Controller.
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