OFFICIAL LIQUIDATOR Vs. BHAGWAT SARAN GARG

JUDGEMENT

(1.) TWO applications require to be disposed of in the liquidation proceedings of the Northern India Oil Industries Limited, which was ordered to be wound up on August 7, 1963, on a petition presented by the Registrar of Companies on May 24, 1962. The first is Company Application No. 8 of 1968 (presented on January 30, 1968), in which the official liquidator had asked the court to direct Bhagwat Saran Garg and Mukat Saran Garg (O.Ps. 1 and 2) to pay up the rent due from them from December 1, 1964, onwards under a lease of the company's properties executed in their favour by the company on November 30, 1961, and extended by the liquidator for a period of two years from December 1, 1966. The second is Company Application No. 4 of 1969 (presented on January 20, 1969), whereby in addition to the prayer in the earlier application for a direction to the lessees to pay up the rent due, the official liquidator has asked for a further direction to be issued to them to hand over possession of the properties forthwith, in view of the fact that the lease has expired on November 30, 1968.

(2.) BY the lease dated November 30, 1961, the Northern India Oil Industries Limited let out to Bhagwat Saran Garg and Mukat Saran Garg the whole of its movable and immovable properties, consisting of an oil mill with its building, the land on which the building stood and the land appurtenant thereto, various ancillary departments (such as paint factory, ice factory, linseed oil plant and soap plant) and all machinery, machine parts and accessories. The lease was to remain in force for a period of five years and the lessees were to pay a sum of Rs. 50,000 annually as rent. The deed further recited that the lessees were entitled to enjoy all the rights that had been enjoyed by the lessor company itself in all these properties, and that with effect from the date of execution of the deed the lessees had been put in possession of all the leased properties.

(3.) ON the issue of notice by the court, however, the lessees appeared through counsel and a statement was made on their behalf (on December 15, 1968) that they acknowledged liability to pay the lease money from December 1, 1964, at any rate up to March 23, 1965, the date on which the properties of the company were sold in execution to the Allahabad Bank (a secured creditor which had elected to stay outside the liquidation proceeding and was realising its dues independently). Time was granted for payment, but out of the amount of Rs. 15,513'70 claimed by the official liquidator for the lease money that accrued between December 1, 1964, and March 22, 1965, the lessees sent a draft for only Rs. 1,619'42 along with accounts purporting to show that nothing more was due.