• Delhi Rent OLD Act.

The problem relates to the Delhi Rent OLD Act. The company HICD P Ltd., was a old tenant at Rs.1100 pm. Thereafter the tenant company through its agents incorporated a new company at Calcutta under the similar name and style of Hooghly Ink Co New Delhi Pvt. Ltd., having separate constitution under Company’s Act 1956. Thereafter the old company quietly transferred its factory and office to the new company along with staff and all remaining the same and on 18/7/91 the landlady requested for a rate hike by writing a letter requesting an increase of 200 pm every three years which was duly accepted by the new company. Rent used to be paid by new company by cheque duly encashed by her through her bank a/c. After 2 years some staff leaked this information to the landlady who stopped taking rent and filed a eviction petition before the ARC and made a Demand draft for the entire amount received in two years and sent the same through her advocate which was duly returned by the new company by Speed Post A/D to her advocate.

Now need the following answers and solution
Q 1)	 Whether there is a provision under the Act for cancelling the new tenancy. Even if she did the whole thing illegally, is she not bound by her letter of increase of rent which automatically tentamounts to acceptance of the new tenancy willingly and increase of rent letter addressed to the new company and thereafter accepting the rent for 2 years by cheque can be undone even if Court feels a fraud has been committed on her as she is alleging fraud and alleging that old staff used to handover the cheque and misled her. 

The landlady is an MA hence cannot be described to be a fool, hence acts committed will create an estoppel, waiver, acquiescence and limitation act is against her.

Q 2)	Normally one months rent is sufficient to create a new tenancy. In this case 2 years rent by cheque is being alleged to be a fraud. Demanding the increase of Rs.200/- pm in writing is a complete estoppel and then accepting 2 years rent for 2 years. Even on the day of rent increase she accepted Rs.4900/- in cash against company’s printed voucher which she was denying but now the original receipt has been filed in Court recently which was not objected to. 

Advice is sought as to what steps the new company should take.

Name of some senior lawyer may be suggested who can help in this matter.

Please suggest some Supreme Court Judgements or of High Court opinion may kindly be given because ejectment suit having been filed by the landlady is almost in final stage. 

A.K.Agarwala Advocate
Asked 7 years ago in Property Law
Religion: Hindu

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3 Answers

you have stated that on 18/7/91 the landlady requested for a rate hike by writing a letter requesting an increase of 200 pm every three years which was duly accepted by the new company.

2) whether correspondence with land lady was done in name of new company ?

3) whether rent receipt was issued by land lady in name of new company ?kindly clarify

4) it is necessary to peruse correspondence exchanged by landlady with the new company

5) further legal notice sent by land lady and reply of your advocate needs to be perused

6) if landlady has accepted cash against new company printed voucher it would weaken her case for eviction

Ajay Sethi
Advocate, Mumbai
99871 Answers
8149 Consultations

Sir

none of the principles of estoppel, waiver, limitation will come to the new company's rescue

you must be aware that a company is a separate legal juristic entity

the old and the new companies have different and independent identities and personalities

even though the name may be the same, but the ROC filings clearly would indicate 2 separate companies having their respective independent legal identities

so transfer of the assets, including tenancy rights, of the old company to the new company, will clearly fall under the realm of 'subletting' which is prohibited by the rent law, unless there was a contract to the contrary, entitling the tenant to sublet the tenanted premises without consent of landlord

even though the landlady may have written the letter demanding increase of rent and accepted revised rent for 2 years - that in no way amounts to estoppel or waiver or acquiescence - because in the first place she was not aware, rather not informed about the change in constitution, which tantamount to subletting

you must also appreciate the doctrine of 'lifting of the corporate veil' applicable in case of companies

Law is fair and equitable. It is based on common sense and logic

if every tenant company would be permitted to transfer its assets to a new company having the same incidents as that of the old company, then this would clearly be prejudicial to the landlord, who would be deprived of the tenancy premium, every time the tenant company changes its constitution/character and emerges as a new company

This is my honest opinion on your query

however i will do research to find some citation which touches the subject matter

Yusuf Rampurawala
Advocate, Mumbai
7904 Answers
79 Consultations

1. It would be illegal on her part to return the mount received as enhanced rent for the period of two prior to this action.

It is also illegal on the part of the company to suppress the fact of new tenancy to the landlady and continue to pay the enhanced rate of rent, if the original tenancy was terminated upon the new one.

2. There is no much issue on the part of the company once the landlady accepted the tenancy whether renewed or new one.

T Kalaiselvan
Advocate, Vellore
90073 Answers
2501 Consultations

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