TMI Blog2000 (3) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... hed to the company. He has spent the last 19 years trying to get possession of his property by following the due process of law. Till today he has not been put in possession. In fact, as the situation stands today, it appears that he will probably not get possession of his property during his life time. 2. It is the case of the applicant that the aforesaid premises were given on lease on 27-11-1975 to the company under liquidation for a period of ten years. The lease was terminated by a notice dated 27-2-1981 as the company failed to pay the rent. Civil Suit No. 223 of 1981 was filed by the applicant for vacant possession and recovery of arrears of rent. This suit was disposed of on the basis of the consent order dated 20-9-1983. The company agreed to pay the arrears of rent and also agreed to pay rent in future regularly. The suit was, therefore, withdrawn. The company, however, defaulted in payment of rent. Thus, another notice was given to the company on 3-10-1985. Thereafter Suit No. 163 of 1986 was filed. The lease in favour of the Company expired in 1985 by efflux of time. The Company was using the premises for business/industrial purposes. The Saraswat Co-operative Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land and factory premises of the company. 3. It was sought to be urged on behalf of the applicant that the order of the Division Bench would now limit the powers of the receiver only to movable assets and will not apply to immovable properties. This position was, in fact, also accepted by Mr. Naik whilst arguing the matter before the learned Single Judge in Writ Petition No. 2369 of 1993. In paragraph 9 of the Judgment, the learned Single Judge has noted that Dr. Naik for the Petitioner conceded that there has been an error in stating that the immovable property is also mortgaged with the Bank and he averred that apart from movable property belonging to respondent No. 2 there are no other security except promissory notes. Thereafter the learned Single Judge has observed that It appears that due to that annexure, the Trial Court while passing the order also ordered Attachment of the tenancy rights over the land and building of the factory of respondent No. 2 Company. These observations would certainly give credence to the submission of the learned counsel for the applicant to the effect that the receiver continues only of the movable properties. However, the Court is bound ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f receiver in terms of the tenancy rights can, therefore, have no effect on the ownership rights of the applicant. It has already been held by the Division Bench in Letters Patent Appeal No. 125 of 1993 that the Bank who claims to be the creditor of the company cannot be considered as a proper or necessary party in the eviction suit pending in the Court of Civil Judge (S.D.), Thane. This order clearly lays down that by virtue of being a creditor, the bank cannot claim any interest in the tenancy rights of the company. Viewed in this manner, it has to be held that the order of the Division Bench in Civil Application No. 4151 of 1993 in Letters Patent Appeal No. 125 of 1993 have no effect whatsoever on the ownership rights of the applicant. On the expiry of the lease by efflux of time the Company did not even hold the tenancy rights as an asset of the Company. On the order of winding-up being passed on 11-10-1994, the property had to be returned to its rightful owner, subject to the provisions of section 457 of the Companies Act, 1956. 4. I, therefore, find force in the submission of the learned counsel for the applicant to the effect that whether or not the premises are in posse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hemes. This business had come to a standstill. The Supreme Court found that the liquidator would obviously not be doing the business of locating the chit funds. Thus, it was held that the premises were not required for the beneficial winding-up of the company. In para 6 of the judgment the Supreme Court laid down the law as follows : "6. Section 457 enables the Liquidator in a winding-up by the Court, with the sanction of the Court, amongst others, to carry on the business of the Company so far as may be necessary for the beneficial winding-up of the Company. If the floating of the schemes for prize chits came to a standstill, the moment the Company was ordered to be wound-up, there was no question of the business of the company to be carried on by the Liquidator and that too for the beneficial winding-up of the Company. Whether to carry on the business of the Company which is ordered to be wound-up is not a matter left to the uncontrolled discretion of the Liquidator. The Liquidator undoubtedly has the power under section 457 to carry on the business of the company, if it is necessary for the beneficial winding-up of the Company. And this power can be exercised not at the discre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annum. Thus, virtually it was an out and out sale of the property, as the value of the reversionary interest would be negligible. In the present case, the lease was only for 10 years which expired in 1985. Secondly, in that case the lease was subsisting at the time when the winding-up order was passed. Thirdly, it is to be noticed that the case was decided under section 535 of the Act and did not have any relation to section 457. In that case, the High Court, in the winding-up proceedings, had directed the sale of the property and assets of the company in liquidation. The leasehold property was owned by a Trust, which opposed the sale. The Trust made an application to the Official Liquidator to disclaim the land and surrender it to the Trust on the ground that it was burdened with onerous covenants. The Official Liquidator did not disclaim the land. Thus, the Trust took out a Judge Summons asking the High Court to direct the Official Liquidator under section 535, to disclaim the land because it was burdened with onerous covenants. In that case also Union Bank of India had filed a suit against the company in liquidation, after obtaining necessary leave of the Court. The Bank, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a relevant consideration. 6. I do not see how the aforesaid observations are of any assistance to Mr. Naik. Clearly both, the High Court and the Supreme Court, have come to the conclusion that the premises were required for the beneficial winding-up of the Company. The Official Liquidator had taken a stand that the premises were so required. In the present case, the Official Liquidator is quite prepared to hand over the possession of the premises to the applicant. Thus, in my view, the case is squarely covered by the earlier judgment of the Supreme Court in Ravindra Ishwardas Sethna s case ( supra ). 7. The Official Liquidator had, in fact, submitted a report on 18-3-1999 to this Court, seeking a direction to the receiver to hand over the possession of the premises to the Official Liquidator. The Official Liquidator also submitted another report on 7-7-1999, making the same request. On this report an order came to be passed on 23-7-1999 which is as follows : "Shri Naik states that one Godrej cupboard will be provided to the Official Liquidator to keep all relevant papers, documents at site at Mira Road. The Official Liquidator or representative of the Official Liquida ..... X X X X Extracts X X X X X X X X Extracts X X X X
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