LAWS(CAL)-1981-6-49

KAILASH FINANCIERS (CALCUTTA) PVT LTD Vs. ABC

Decided On June 03, 1981
KAILASH FINANCIERS (CALCUTTA) PVT LTD Appellant
V/S
ABC Respondents

JUDGEMENT

(1.) The above series of applications are for determination of the question whether tenancy right of various types as in the individual cases, that is, monthly tenancy, unexpired portion of the leasehold right and also lease and /or tenancy in respect of which notice of forfeiture and/or determination have been served. whether form part of the assets of the company and can be sold and/or assigned pursuant to the direction of the Court by the official Liquidator. The Companies in respect of which monthly tenancies are concerned inter alia are Kailash Financiers (Calcutta) Pvt. Ltd. (In Liquidation), Chandi Charan Nayak Co. Pvt. Ltd. (In Liquidation), Johanes Co. Ltd. (In Liquidation), New India Electric Limited (In Liquidation) and Central Inland Water Transport Corporation Limited (In Liquidation) of which the Official Liquidator is in possession.

(2.) It is an admitted case and position in law that for beneficial winding-up, the Official Liquidator can continue to be in possession as a monthly tenant or the lessee. But the question is whether those can be assigned as a valuable asset of the company by the Official Liquidator who is under the control and supervision of the Court pursuant to an order of the Court and whether that amounts to in voluntary transfer or voluntary transfer. In these cases, it has been argued that the Official Liquidator represents the company (in Liquidation) and he is bound by the contract of tenancy and also the statutory provisions particularly Section 14 (1) (b) of the West Bengal Premises Tenancy Act, 1956, and as such, he cannot' assign and/or sublet and/or sale the said monthly tenancy right. While dealing with the respective arguments, I will refer to the decisions cited and principles to be applied as contended by the respective Counsels; but it cannot be disputed or atleast the Court can take judicial notice of the notorious facts that the monthly tenancy is a very valuable asset of a company, had the company not been wound-up, but does the winding-up order make any difference in the said position and deprive the company of one of its most valuable assets at the present time and thereby caused loss to the creditors and contributories of the Companies (In Liquidation). This also appears to be an admitted position that Section 14 (1) (b) of the West Bengal Premises Tenancy Act, 1956, has not made the assignment by a tenant of its tenancy right void or illegal but makes him liable to be ejected by proceedings according to law.

(3.) Regarding the unexpired portion of the lease, the question is whether the lease in respect of which a notice of forfeiture has been served either prior to the winding-up but possession has. not, been taken, that is, right of re-entry not exercised or in cases where notice of forfeiture has been served on the Official. Liquidator, in terms of the re-entry clause by nonpayment of rent or company being wound-up, the lessor has the right to re-enter would disentitle the Official Liquidator vis-a-vis the Court to sale the unexpired portion of the leasehold right which is admittedly a very valuable asset of the company. It was also argued in some cases that after notice of forfeiture has been served, the Official Liquidator has no right even with the order of the Court to assign or sale the said unexpired portion of the leasehold right which is undoubtedly very very valuable assets in the present days and circumstances. In some cases, the tenancies are either under the Ex-Directors or their nominees or next friends or relations or henchmen. Although series of decisions were cited on both sides but the principles appear to me to be confined within a narrow compus as to whether the possession of the Official Liquidator, after winding-up of the company, of the assets of the company (In Liquidation) which also include the monthly tenancy or the unexpired portion of the leasehold right in immovable properties comes under the control of the Court and saleable or assignable under the direction and supervision of the Court by an order directing the Official Liquidator to sale the same or assign and/or transfer the same which will be assigned on the landlords or the lessors and the purchaser will also he bound by the original terms of the tenancy or the lease. There are conflicting decisions as it appears to me from the various decisions cited by both the parties and this appears to me to be a matter of great public importance, where, the question is whether a very valuable asset of the company should be returned or handed over to the landlord and/or lessor even if it is not onerous or burdensome in the facts and circumstances of all these cases. In fact, after the hearing of the Kailash Finance Company Pvt. Limited (In Liquidation), the landlord in respect of one of the premises has settled the matter by adjusting the arrears of rent and payment of lump sum to the Official Liquidator in respect of the said tenancy right which was directed to be disclaimed by the Official Liquidator on certain terms. Thereafter, I will record the arguments of respective parties on the question and also on behalf of the Official Liquidator as follows :