2013 (1) TMI 618 - HC - Companies Law

Direction upon the Official Liquidator(OL) - make over possession of the concerned premises - as OL has no use of the concerned premises for the beneficial winding up of the Company thus is under a duty to disclaim the premises in favour of PDGD - disclaimer will release the Official Liquidator and the Company in liquidation from performing onerous covenant - also direction upon the OL to remove the trespassers from the premises and to make over possession to them - Held that - The property in question were of no use to the Company nor it can be used or utilized for the purpose of winding up of the Company. The property in the tenancy right of the Company is an onerous one which was also admitted by the OL in Court. Thus although the OL did not take possession of premises in question it is in view of Section 446 of the Companies Act he would be deemed to have been in possession as the property in the tenancy right were admittedly an asset of the Company. Thus in view the present owner the applicant PDGD herein is entitled to get the property released in their favour. Eviction of Tenant - occupation of an area of 1645 sq. ft. - Held that - As it is undisputed fact that Bangur Brothers Limited the Company (in liquidation) was a tenant in respect of property in question governed by the provisions of the West Bengal Premises Tenancy Act 1956. The said Bangur Brothers Limited inducted the interveners as alleged sub-tenants and realised rents from them. According to the provisions contained under the Rent Act both old and new creation of sub-tenancy without written consent of the landlord is a ground of eviction of the tenant. In the instant case two different agreements were disclosed by the interveners wherein it was stipulated that prior permission of landlord was obtained for induction of sub-tenant but no written permission was ever produced by any of the occupants being the interveners who are claiming to be lawful sub-tenants. Considering period of occupancy and making payment of rent to the Company (in liquidation) etc. this Court is of the view that the issue should be resolved by filing a suit before the Company Court - liberty granted to the applicant/landlord to institute a suit against the Company (in liquidation) as well as the interveners which the Company Court is entitled to entertain under Section 446 (2) of the Companies Act 1956. So far the balance area of 1030 sq. ft. is concerned no one intervened nor there is any objection by anyone. Therefore OL is also directed to remove trespassers if any from the said area and hand over vacant possession to the applicant & will seek police assistance from the concerned Police Station if required. Exercise of jurisdiction vested upon the Company Court under Section 446 (2) - a plain reading of the provisions of Section 446 make it clear that exercise of power and/or jurisdiction under the same is discretionary in nature. Even if the section is not mentioned in the application in appropriate case the Company Court can exercise it s power and decide any question whether of law or fact which may relate to or rise in course of the proceedings. As decided in Pushpa Devi Jhunjhunwalla (2000 (3) TMI 1037 - CALCUTTA HIGH COURT) that in liquidation proceedings summary eviction can be ordered in appropriate case and no suit regularly filed is necessarily called for before such order is passed. This application is thus allowed.

Summary

Issues Involved:
1. Disclaimer of property under Section 535 of the Companies Act.
2. Possession and eviction of alleged sub-tenants.
3. Jurisdiction and powers of the Company Court under Section 446 of the Companies Act.
4. Application of the West Bengal Premises Tenancy Act, 1956 and 1997.

Issue-wise Detailed Analysis:

1. Disclaimer of Property under Section 535 of the Companies Act:
The applicant, PDGD Investments & Trading (P) Ltd. (PDGD), filed an application under Section 535 of the Companies Act seeking a direction for the Official Liquidator to disclaim the premises and make over possession to PDGD. PDGD asserted that the Official Liquidator had no beneficial use of the premises for winding up the company and that the property was an onerous covenant. The Official Liquidator acknowledged the premises as onerous and agreed to disclaim it on an "as is where as basis."

2. Possession and Eviction of Alleged Sub-Tenants:
PDGD argued that the entities occupying the premises, namely Adhunik Corporation Ltd., Jugal Kishore Agarwal, and Adhunik Metalic Ltd., were trespassers without any landlord-tenant relationship or written consent for sub-tenancy. PDGD sought the removal of these trespassers and vacant possession of the premises. The interveners, however, claimed to be lawful sub-tenants, having been inducted by the Company (in liquidation) with the alleged consent of the previous landlord. They presented various documents to support their claim of lawful occupation and payment of rent.

3. Jurisdiction and Powers of the Company Court under Section 446 of the Companies Act:
PDGD requested the application be treated under Section 446 of the Companies Act, which empowers the Company Court to adjudicate matters related to the winding-up process, including eviction of trespassers. The Court acknowledged its jurisdiction under Section 446 and Section 535 to order the eviction of trespassers from the premises held by the Company (in liquidation) as part of the due process of law.

4. Application of the West Bengal Premises Tenancy Act, 1956 and 1997:
The interveners contended that their sub-tenancies were protected under the West Bengal Premises Tenancy Act, which requires written consent from the landlord for sub-letting. They argued that the Company Court could not bypass the Rent Control Act and that eviction proceedings should be handled by the Rent Controller. The Court noted the lack of written consent for sub-tenancy and the interveners' failure to provide evidence of such consent. The Court granted liberty to PDGD to file a suit for resolving the issue of possession and sub-tenancy before the Company Court.

Conclusion:
The Court directed the Official Liquidator to release the property to PDGD and remove trespassers from the undisputed area of 1030 sq. ft. The Court also granted PDGD the liberty to file a suit against the Company (in liquidation) and the interveners to resolve the issue of possession for the disputed area of 1645 sq. ft. The Court affirmed its jurisdiction under Section 446 to adjudicate matters arising in the winding-up process, including eviction of trespassers, following the law applicable to such cases. The application was allowed, and the Court emphasized the discretionary nature of its powers under Section 446.