HOTEL KANDATH INTERNATIONAL P LTD Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) THE prayer in this application is for a direction to the 2nd respondent (hereinafter referred to as the 'tenant') to hand over vacant possession of the premises held by them in the premises of M/s. Hotel Kandath international (P.) Ltd. in accordance with the scheme sanctioned on 1. 4. 1996. In order to appreciate the arguments of the parties to decide the dispute involved in this application, it is necessary to refer to the background of the case in detail.

(2.) THIS Court passed the winding up order in C. P. No. 15 of 1991 winding up the Hotel Kandath International P. Ltd. (hereinafter referred to as the 'company' ). The Official Liquidator filed applications for a direction to the tenants to vacate the shops occupied by them and to hand over the possession to the Official Liquidator. In this connection it is worthwhile to mention that the Kerala Financial Corporation (K. F. C.), the Kerala State industrial Development Corporation (K. S. I. D. C.), Indian Bank and the Kerala state Co-operative Bank Ltd. are secured creditors of the Company. According to clause 11 of the agreement between the Company and the K. F. C. which financed the construction of the shopping complex and the hotel prohibited the borrower company from selling, mortgaging, leasing, transferring, exchanging or otherwise disposing of or creating any lien or charge in respect of the secured property which included the shops which are occupied by the tenants. Therefore, this Court while considering the application of the Official Liquidator for a direction to vacate the shops passed an order dated 7th July 1992. THIS Court held that in view of the prohibition mentioned above which binds the Official liquidator and the Company it was not permissible to approve the draft lease agreement or to permit the Official Liquidator to create lease or otherwise transfer the shops. It was further held that in view of the prohibition mentioned above this Court could not order eviction of these occupants, but directed the Official Liquidator to treat the occupants as his licencees. THIS court further observed that this order should not preclude the Official liquidator from taking appropriate steps to have the occupants evicted.

(3.) THIS Court by order dated 11. 4. 1996 accepted the revival scheme submitted by the Company and sanctioned the arrangements accepted by all the parties. In the revival scheme it was made clear mat unless the licencees which include tenancies are evicted it will be difficult for completing the revival scheme. It was further submitted that on condition that the above mentioned licencees are evicted the intending purchaser will clear off the amount due to the secured creditors. THIS Court also observed that it is open to the parties to work out their remedies elsewhere regarding the eviction of the tenants. These are the circumstances under which the present application has been filed by the Company. Therefore, this Court has now to tackle the question whether the tenants are liable to be evicted from the premises of the Company in implementation of the scheme/compromise accepted by the Company in these proceedings itself or to direct the company to initiate proceedings under the general law.