Wednesday, December 11, 2013

Order of amalgamation doesn't transfer tenancy rights from transferor-company to transferee-company

The High Court held as under:

1) Where order of amalgamation wasn't served on landlord by the transferee-company and landlord continued to issue rent receipts in the name of (dissolved) transferor-company, though he accepted rent from transferee-company, yet no right of tenancy was created or transferred in favour of transferee-company;

2) Tenancy is a non-transferable object that can extend to others either by an explicit contract or by statute;

3) In the instant case, there was neither any statute to support transfer of tenancy on amalgamation nor any agreement executed between tenant (transferor-company) and landlord to deal with such an eventuality - Ambalal Sarabhai Enterprises Ltd. v. Rajeev Daga [2013] 40 taxmann.com 99 (Calcutta)

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