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2017 (5) TMI 318 - HC - Companies LawVoid lease deed - prayer for an order and direction to hand over possession of the property of the company in liquidation to the official liquidator - Held that:- The onus was on Modi Rubber Limited as well as Bharat Marketing to plead and prove that the said alleged sub-lease in favour of Bharat Marketing by Modi Rubber Limited was not only a bonafide transaction but was in the interest of the company in liquidation and also that the said transaction was carried out in ordinary course of business by the company in liquidation. It is not in dispute that it was not the business of the company in liquidation to grant property of the company on lease or sub-lease. Modi Rubber Limited as well as Bharat Marketing have failed to plead and prove that the transaction was a bonafide transaction and was in the interest of the company, for the benefit of the company in liquidation and was carried out in ordinary course of business. The Calcutta High Court in case of Prudential Capital Markets Limited (in liquidation) [2007 (10) TMI 393 - HIGH COURT OF CALCUTTA] as considered the similar facts and has held that section 536(2) of the Companies Act, 1956 provides for preservation of all the assets of a company upon commencement of the winding up proceedings, for ultimate distribution thereof amongst the creditors following winding up. It is held that the disposition of its properties and the effects made by a company after commencement of the winding up is covered by section 536(2) of the Companies Act, 1956. The Calcutta High Court declared the lease as void and held that the respondent was not entitled to any protection to remain in possession of the shops in question and was also not entitled to any protection under Andhra Pradesh Rent Control Act. The Company Court accordingly, directed the respondent to deliver vacant possession of the shops to the Official Liquidator. For the aforesaid reasons, the sub-lease executed by Modi Rubber Limited on 20th May, 2002 in favour of Bharat Marketing is thus declared as void. The oral application made by Modi Rubber Limited and Bharat Marketing for validating the said sub-lease is rejected. The Official Liquidator has made out a case for an order and direction against Bharat Marketing to hand over vacant and peaceful possession of the property of the company in liquidation as prayed in prayer clause (b) of the Official Liquidator's Report.
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