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2015 (5) TMI 440 - HC - Companies LawWinding up - Possession of property by official liquidator - Authority to a company Judge under Section 535 read with Section 446(2) of the Companies Act, 1956 - No notice of the proceedings received - Legislative powers between the Union and the States - Held that:- The several judgments of this court in assessing the width of the authority available under Section 446 of the Companies Act instruct that as long as there is a substantial connection of the lis with a company in liquidation, the company court presiding over such liquidation may receive it and adjudicate thereupon. But the authority under Section 446(2) of the Companies Act is not absolute and a later special Act as the Recovery of Debts due to Banks and Financial Institutions Act, 1993 has been seen to have substantially denuded the authority of the company court to address certain matters pertaining to a company in liquidation. However, such analogy is of no relevance in the present context as it is a subsequent State law which is cited here and not a subsequent enactment by the Parliament. The key to the primary issue that has arisen herein may not be so much in discovering that the company court would not have the jurisdiction to adjudicate on a claim of eviction made by the owner of an immoveable property against a company in liquidation or the illegal sub-tenants inducted by the company, whether prior to or after the commencement of its liquidation. Even if it is accepted that such jurisdiction is available to the company court, as the several judgments cited on such aspect instruct, there is an element of discretion available to the company court as to whether or not the jurisdiction should be exercised and the manner in which it should be exercised. As would be evident from the judgment in Tata Steel Ltd. [2007 (12) TMI 284 - HIGH COURT OF CALCUTTA] the company court would have been diffident in receiving the claim against an alleged illegal occupant; but when such alleged illegal occupant intervened in the proceedings and insisted on his rights qua the property being adjudicated by the company court, the entirety of the matter was assessed by the company court. When the same genre of claim was made before the company Judge in East India Trading Co. [2010 (7) TMI 269 - HIGH COURT OF CALCUTTA ]the company Judge declined to entertain the lis as an application that could be addressed in a summary manner and gave liberty to the applicant to file a regular suit before the company court itself. The jurisdiction is surely available, whether it ought to be exercised or not would depend on the nature of the claim. There is no doubt that if the appropriate procedure had been followed in course of CA No. 325 of 2010 to give due notice to these applicants and try the claim of the lessor against these applicants, such adjudication would have had to be regarded as being in accordance with the procedure established by law. Again, if the present application was tried on evidence to adjudicate on the applicants' title to remain in possession of the said premises, that would also have been a fair procedure as established by law. But it was not necessary to undertake the elaborate exercise of a trial on evidence of this application in the context of the summary procedure adopted in course of CA No. 325 of 2010. Since it is evident that the order of January 22, 2013 had the effect of, and ultimately resulted in, dispossessing these applicants from an immoveable property that was admittedly under their possession, without notice to them, CA No. 116 of 2013 is allowed and the order of January 22, 2013, in so far as it provided for the eviction or removal of the applicants from the said premises, is recalled. The lessor is left free to pursue any claim against the applicants herein, but in view of the property having been disclaimed in the lessor's favour by the order dated January 22, 2013 no suit to claim eviction may be instituted by the lessor against these applicants before the company court.As a consequence, the official liquidator will refund the deposit made by these applicants together with all interest accrued thereon within four weeks from date. - Decided in favour of appellant.
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