The Supreme Court of India on July 9, 2026, ruled that the statutory amalgamation of Hindustan Commercial Bank (HCB) into Punjab National Bank (PNB) constituted a transfer of tenancy without the landlord’s written consent, attracting eviction under the Delhi Rent Control Act, 1958.
A bench of Justice Sanjay Karol and Justice Nongmeikapam Kotiswar Singh set aside the Delhi High Court’s 2012 order and restored the eviction decree against PNB, according to LiveLaw.
Background: How We Got Here
The dispute traces its roots to 1947, when British Motor Car Company (1939) Ltd. leased commercial premises in Pratap Building, N-Block, Connaught Circus, New Delhi, to Hindustan Commercial Bank at a monthly rent of ₹585, per Law Trend.
The premises comprised 2,443.75 sq. ft. on the ground floor and 1,150.25 sq. ft. on the mezzanine floor. The tenancy continued undisturbed for nearly four decades — until a government notification changed everything.
- On December 18, 1986, the Government of India issued a Gazette Notification under Section 45(7) of the Banking Regulation Act, 1949, amalgamating HCB with PNB. The scheme took effect the following day, December 19, 1986, vesting all of HCB’s assets, liabilities, and tenancy rights in PNB.
- In 1987, the landlord filed an eviction petition under Section 14(1)(b) of the Delhi Rent Control Act, 1958, contending that the tenancy had been transferred to PNB without the written consent required by law.
- The Additional Rent Controller dismissed the petition in 1995, viewing the amalgamation as a statutory act binding on the landlord. The Additional Rent Control Tribunal reversed this in 2001, passing an eviction decree. The Delhi High Court then set aside that decree in 2012, prompting the landlord to file Civil Appeal No. 5714 of 2012 before the Supreme Court.
The Ruling — Key Findings
The Supreme Court allowed the landlord’s appeal in its entirety. The bench held that both ingredients of Section 14(1)(b) of the Delhi Rent Control Act were satisfied: there was a transfer of tenancy, and it occurred without the written consent of the landlord, as reported by Bar & Bench.
Justice Sanjay Karol, authoring the judgment, stated: “Once the possession of the tenanted premises, together with the accompanying rights, passes to an entity other than the original tenant without the written consent of the landlord, and the tenant losing its identity and control of possession of the tenanted premises, Section 14(1)(b) of the DRC Act stands automatically attracted.”
The Court categorically rejected PNB’s argument that the involuntary nature of the merger insulated it from eviction. The bench held: “The reasons necessitating such transfer or whether it was voluntary or involuntary, are wholly immaterial.”
On the key conflict between the two statutes, the Court held: “The amalgamation scheme framed by the Reserve Bank of India… cannot be accorded the status of a statutory enactment so as to override the operation of Section 14(1)(b) of the DRC Act.”
The Court found that the RBI’s amalgamation scheme under Section 45 of the Banking Regulation Act is administrative — not legislative — in nature. It therefore cannot override the tenant-consent protections embedded in rent control law, per Bar & Bench.
The Supreme Court further held that the Delhi High Court had incorrectly relied on precedent involving the Banking Companies (Acquisition and Transfer of Undertakings) Act, which is legally distinct from schemes under Section 45 of the Banking Regulation Act.
The bench concluded: “We hold that the amalgamation of the original tenant HCB with PNB rendered PNB liable to be evicted from the tenanted premises under Section 14(1)(b) of the DRC Act.”
The Court restored the eviction decree of the Additional Rent Control Tribunal dated May 21, 2001, and ordered PNB to deliver peaceful and vacant possession by January 31, 2027, according to Law Trend and Verdictum.
This direction is subject to PNB filing a written undertaking before the Supreme Court within four weeks of the judgment and continuing to pay rent in the interim.
Reactions & What’s Next
Senior Advocates Shyam Divan and Shyam Mehta appeared for the appellant-landlord, British Motor Car Company (1939) Ltd. Advocate Rajesh Kumar Gautam represented the respondent-bank, PNB.
PNB is now required to file a written undertaking within four weeks of the July 9, 2026 judgment and must deliver vacant possession of the Connaught Circus premises by January 31, 2027, per the Supreme Court’s directions as reported by Verdictum.
The ruling carries significant implications for tenancy disputes arising out of bank amalgamations across India, particularly where merged entities continue to occupy premises originally leased to predecessor banks without obtaining fresh landlord consent.
More legal news at The Courtroom.
What did the Supreme Court rule in the British Motor Car Company vs PNB case?
On July 9, 2026, the Supreme Court held that the amalgamation of Hindustan Commercial Bank into Punjab National Bank constituted a transfer of tenancy without the landlord’s written consent, satisfying the grounds for eviction under Section 14(1)(b) of the Delhi Rent Control Act, 1958. The bench of Justices Sanjay Karol and Nongmeikapam Kotiswar Singh restored the 2001 eviction decree and directed PNB to vacate the Connaught Circus premises by January 31, 2027.
Does an involuntary bank merger protect a tenant from eviction under the Delhi Rent Control Act?
No. The Supreme Court explicitly held that whether a tenancy transfer is voluntary or involuntary is wholly immaterial for the purposes of Section 14(1)(b) of the Delhi Rent Control Act. Once possession of the tenanted premises passes to an entity other than the original tenant without the landlord’s written consent, eviction is automatically attracted, regardless of the reason behind the transfer.
What is the case name and number for this Supreme Court judgment?
The case is British Motor Car Company (1939) Ltd. v. M/S Hindustan Commercial Bank Ltd. Since Has Been Merged Into Punjab National Bank & Anr., Civil Appeal No. 5714 of 2012.
Disclaimer
Disclaimer: This article is for general information only and does not constitute legal advice. Laws may change or vary by case — consult a qualified lawyer before acting. The Courtroom is not liable for any reliance on this content.
