TMI Blog2001 (7) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... n Writ Petition No. 2369 of 1993 dismissing the Writ Petition summarily. 2. Appellant in Appeal No. 518 of 2000 and respondent No. 3 in Appeal No. 519 of 2000 is the Saraswat Co-operative Bank Limited ( the Bank ). Appellant in Appeal No. 519 of 2000 and respondent No. 3 in Appeal No. 518 of 2000 is the Special Recovery Officer. Receiver for Delmot Engg. (P.) Ltd. Respondent No. 1 in both the Appeals is the Petitioner in Company Petition No. 588 of 1991. Respondent No. 2 in both the Appeals is Delmot Engg. Pvt. Ltd. ( the Company ). Respondent No. 4 in both the Appeals is the landlord who had leased his premises to the company ( the landlord ). The Bank has filed Letters Patent Appeals No. 125 of 1993 against the landlord and the company. The other two respondents in the Letters Patent Appeal are formal parties. 3. The short question which arises for determination in these Appeals is whether tenancy rights of the company in liquidation are capable of being transferred, assigned or attached. 4. The landlord leased land admeasuring approximately 9779 square yards on 27-11-1975 to the company. On 30-4-1996, Special Civil Suit No. 163 of the 1986 was filed before the Civil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co-operative Appellate Court, the Bank filed Writ Petition No. 2369 of 1993. Similarly, Writ Petition No. 2509 of 1993 was filed by the landlord against the same order of the Co-operative Appellate Court. The Writ Petitions were rejected, but the order of attachment before judgment was limited only to the plant and machinery and movables of the company. While rejecting Writ Petition No. 2369 of 1993, the learned Single Judge (S.W. Puranik, J. specifically noted that the learned Counsel for the Petitioner (the bank herein) conceded "that there has been an error in stating that the immovable property was also mortgaged with the Bank and he averred that apart from movable property belonging to respondent No. 2, there are no other securities except promissory notes". The learned Single Judge was of the view that because of a wrong annexure filed by the Bank, the Co-operative Court had erroneously ordered attachment of the tenancy rights over the land and building of the factory of the company which he found to have been rightly modified. The learned Single Judge also found that, on the face of the record, the Bank had no privity of the contract with the property of the company and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... editors, was admitted on 17-6-1993. 11. On 11-10-1994, the company was ordered to be wound up in company Petition No. 588 of 1991. The Official Liquidator submitted his Report to the Company Judge on 18-3-1999 seeking a direction against the Receiver to hand over the land and factory premises, plant and machinery of the company in liquidation to him. This Report was opposed by the Bank by filing their affidavit-in-reply on 23-4-1999. On 23-7-1999, this Court (S. Radhakrishnan, J.) directed the Official Liquidator to invite claims of other creditors, if any. 12. The landlord preferred Company Application No. 517 of 1999 on 24-8-1999 seeking a direction against the Official Liquidator to hand over the land and factory premises of the company in liquidation to the landlord. The Bank opposed this Application, by their reply on 14-10-1999, on the ground that it was a major creditor of the company and had to receive a sum of Rs. 80 lakhs together with interest thereon and returning the factory premises to the landlord would defeat its claim against the company. On an application made by the landlord, the Bank and the Receiver were impleaded as parties to the company application o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading statement in Writ Petition No. 2369 of 1993 that Letters Patent Appeal No. 125 of 1993 was admitted and interim orders obtained therein. In her submission, the Official Liquidator s Report dated 18-3-1999 and the Minutes of the meeting held on 3-1-1995 annexed at Exhibit A thereto, leave no manner of doubt that the company was not a going concern. She also urged that, even assuming that tenancy rights of immovable property were capable of being assigned or attached by an order of the Court, the order made by the Co-operative Court attaching the tenancy rights was absolutely unwarranted and unfounded. She urges that under section 156 of the Maharashtra Co-operative Societies Act, 1960, the Co-operative Court is entitled to attach the property of a debtor, but the principles applicable thereunder would be the same as under Order 38 of the Code of Civil Procedure, 1908. She contends that not a single ground had been made out before the Appellate Court and, therefore, on that ground also the attachment before judgment was bad. She contends that inasmuch as the landlord was not a party to the order made by the Co-operative Court or any further proceedings, these aspects of the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this view but had to consider whether the tenant could claim the benefit of the proviso to section 15 of the Rent Act. On facts, the Supreme Court, however, held that since the case before it admittedly was a case of transfer of stock-in-trade and goodwill, the transfer or assignment in favour of the contesting respondent was in the entire interest of transfer of stock-in-trade and the goodwill of leasehold premises together with the business and the goodwill thereof and that the benefit of the proviso to section 15(1) would be applicable even in the case of a statutory tenant. 20. Finally, reliance was also placed by Dr. Naik on the judgment of the Supreme Court in Union Bank of India v. Official Liquidator [2000] 5 SCC 274/ 25 SCL 431, and the judgment of this Court in Union Bank of India v. Mittersain Rupchand 184 1995 Bombay 371. The judgment of this Court in Mittersain Rupchand s case ( supra ) merely holds that under section 15 of the Rent Act the prohibition against sub-letting or transfer or assignment of leasehold interest is not absolute because it is always open to the parties to contract to the contrary; that section 15 nowhere provides that the transfer s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Dr. Naik based on this provision of law, it is necessary to quote this relevant provision. Section 15(1) reads as under: "15(1). Notwithstanding anything contained in any law but subject to any contract to the contrary, it shall not be lawful after the coming into operation of this Act for any tenant to sub-let the whole or any part of the premises let to him or to assign or transfer in any other manner his interest therein and after the date of commencement of the Bombay Rents, Hotel and Lodging House Rents Control (Amendment) Act, 1973, for any tenant to give on licence the whole or part of such premises: Provided that the State Government may by notification in the Official Gazette, permit in any area the transfer of interest in premises held under such leases or class of leases or the giving on licence any premises or class of premises and no such extent as may be specified in the notification." Under the proviso to sub-section (1) of section 15 of the Rent Act, the State Government has issued a Notification dated 21-9-1948, the relevant portion of which reads as under: "The Government of Bombay has permitted in all areas to which Part II of this Act extends all tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it would like to stand outside the winding up proceedings. Since the Receiver had already taken charge of the land and factory premises, and since large amounts were recoverable from the company, the Bank had claimed that it had incurred large amounts in providing security to such assets. To similar effect is a reiteration of its stand in the letter dated 3-2-1999 addressed by the Bank to the Official Liquidator. These Reports make it clear that the business of the company was not going on right from the time the Receiver appointed at the instance of the Bank took possession of the land and premises and other assets and locked up the premises from or about 12-12-1992. The stand of the Bank all along was that it was a secured creditor. Though the Bank initially made a misleading statement that it was a secured creditor in respect of all immovable property of the company in liquidation, it later on turned out that the security of the Bank consisted only of movable assets worth to about Rs. 5 to 6 lakhs and that no security was created by the company in respect of its immovable assets including tenancy rights. In any event, the finding of the learned Single Judge in Writ Petition No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aik to satisfy us even now as to how the land and premises could have been attached before judgment by an order made under Order 38 of the Code or its equivalent under the Maharashtra Co-operative Societies Act, 1960. Dr. Naik invited our attention to the application for interim relief made to the Co-operative Court. This application sought three interim reliefs : ( i ) attachment before judgment; ( ii ) appointment of Receiver in respect of movable and immovable assets; and ( iii ) injunction. Apart from a bald averment in paragraph 4 that the company was likely to transfer and/or encumber and/or part with possession of the movable as also immovable assets consisting of factory and other immovable assets with a view to defeating and/or delaying and/or obstructing the execution of any award or carrying out of any order that will be passed, no circumstance indicating as to how such an apprehension arose was mentioned in the application or the order of the Co-operative Court. In our view, an order of attachment before judgment has serious consequences to a debtor. It is not an order to be made lightly nor based on bald averments reiterating the statutory provisions. There has to be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied. The Supreme Court held in this case that when a company is being wound up and the Liquidator of the company takes over tenanted premises, then if the Liquidator does not require the premises for carrying on the business of the company under section 457 of the Companies Act, 1956 or for the beneficial winding up of the company, then the possession of the premises must be handed over to the landlord. In the instant case, the facts before us show that the business of the company was defunct for several years even before the winding up order was made. The Liquidator admitted before the learned Company Judge and before us that he does not require the tenanted premises for beneficial winding up of the company. In these circumstances, the ratio of the judgment of the Supreme Court in Ravindra Ishwardas Sethna s case ( supra ) is clearly applicable. We, therefore, find that the learned Company Judge was justified in making the Company Application absolute in terms of prayer ( a ). 27. In the result, we are of the view that all three Appeals must fail. Order ( a )Appeal No. 518 of 2000 and Appeal No. 519 of 2000 dismissed. Cost of Rs. 10,000 (Rupees Ten Thousand only) to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
