TMI Blog2015 (5) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 CAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Judge under Section 535 of the Companies Act, 1956 and cite the constitutional provisions pertaining to distribution of legislative powers between the Union and the States in suggesting that an order of January 22, 2013 passed on a disclaimer application was in excess of the company court's jurisdiction. 2. When this application was received on March 13, 2013 along with two other similar applications, it was noticed that the applicants claimed to have been dispossessed from areas under their occupation on the second floor of premises No. 14 Netaji Subhas Road, Calcutta - 700001. It was the common case of all three lots of applicants that they had no notice of the proceedings that culminated in the order of January 22, 2013. Such order was made on an application under Section 535 of the Act and the relevant part of the operative portion of the order read as follows: So far the balance area of 1030 sq. ft. is concerned no one intervened nor there is any objection by anyone. Therefore, the Official Liquidator is also directed to remove trespassers if any from the said area of 1030 sq. ft. and hand over vacant possession to the applicant. In the event, the Official Liquidato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the extent the same prejudices the applicants, the same should be recalled or set aside. Ideally, this application ought to have been heard by the same Bench that passed the order of January 22, 2013, at least at the final stage, but the application was released by the Bench on July 26, 2013. 7. Before the contentions of the applicants are noticed in greater detail, it may do well to appreciate the circumstances in which CA No. 325 of 2010, which resulted in the order dated January 22, 2013, was brought to this court. The applicant therein, PDGD Investments Trading (P) Ltd (hereinafter referred to as the lessor), claimed in such application to be the owner of the entirety of the second floor of premises No. 14 N. S. Road. The application said that the company in liquidation was a monthly tenant under the lessor in respect of a demarcated portion of 2621 sq. ft on the eastern side of the second floor of the building. The company, prior to its liquidation, was said to have obtained the tenancy from one Venkatesh Company Ltd. The lessor claimed that Venkatesh Company Ltd was a party to a scheme of arrangement sanctioned by this court on February 1, 2006 under which the demerged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Annexure A to the Affidavit in support of Judge's Summons in favour of the applicant on such terms and conditions as to this Hon'ble Court may deem fit and proper; (b) The respondent be directed to pay a sum of ₹ 25,79,450/- claimed in paragraph 16 of the affidavit in support of Judge's Summons; (c) The respondent be directed to make payment of a sum of ₹ 27,000 per month on and from April, 2010 each month till the said premises is disclaimed and possession handed over to the applicant; (d) The respondent be directed to hand over vacant and peaceful possession of the said tenanted premises to the applicant; (e) An order of injunction restraining the respondent from dealing with and/or disposing of the said tenanted premises in any manner except for the purpose of disclaiming the said property; (f) Ad-interim orders in terms of prayers above; (g) Costs of this application be paid by the respondent; (h) Such further or other order or orders be passed and/or direction or directions be given as to this Hon'ble Court may deem fit and proper. 9. The order of January 22, 2013 on CA No. 325 of 2010 recognised the application to be one fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espassers from property of the Company (in liquidation) and the Company Court also by a summary order can direct eviction of a trespasser from the Company property. 12. The sheet-anchor of the applicants' submission is that if the said three named occupants were allowed to retain possession of the part of the premises that they claimed to be in occupation of, subject to the lessor's right to evict them in pursuance of any decree passed in a suit lodged before the company court, the other perceived trespassers at the said premises ought to have been accorded the same treatment. The applicants insist that if the law of the land prevents even a trespasser from being dispossessed of any immovable property under his possession except by procedure established by law, even if the applicants had been impleaded in the disclaimer proceedings their eviction could not have been sought or obtained thereat. The applicants spare no occasion to remind the court that the scope of the application carried by the lessor to the company court was not as wide as the ultimate order passed in its favour. 13. The applicants refer to the provisions of the West Bengal Premises Tenancy Act, 1956 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t throw any light on the matter in issue. What fell for consideration in J.K. Cotton Spg. and Wvg. Mills Co. Ltd. (supra) was the operation of a State law in the context of another State law and the Supreme Court observed that in case of an unavoidable conflict in such a situation, a special statute would prevail over a general statute and, as a corollary, a special provision pertaining to a specific aspect would prevail over a general provision. 16. In Sarwan Singh (supra) different statutes passed by the same legislature fell for consideration and the Supreme Court held that the later non obstante clause would prevail in such circumstances. In Employees Provident Fund Commissioner (supra) two statutes of the same legislature were again considered and the Supreme Court ruled that the provisions of the later Act would prevail. It was the same observation in Ashoka Marketing Ltd. (supra) where the later special Act was seen to hold sway over the earlier general statute. 17. In Indu Bhushan Bose (supra) the matter pertained to the operation of a State rent control Act in a cantonment area and the Supreme Court agreed with the High Court that the notification by which the operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of any matter enumerated in List II in the Seventh Schedule would prevail in that State over any law made by the Parliament in respect of any matter enumerated in List III in the Seventh Schedule; and, by virtue of Article 254 of the Constitution, only such law as made by a State in respect of any matter enumerated in List III in the Seventh Schedule will prevail over an earlier law made by the Parliament in respect of that matter in that State if the State law has received the assent of the President. The lessor says that it is elementary that no Union law made in respect of a matter covered by List I in the Seventh Schedule can be overridden by any State law. The lessor points out that it is not in dispute that the Companies Act, 1956 has been enacted by the Parliament in respect of a matter covered by List I in the Seventh Schedule. 21. The lessor emphasises that the pith and substance test, that is recognised in several Supreme Court decisions in resolving any apparent conflict of laws, does not apply to any law made by the Parliament in respect of a matter covered by the Union List qua any State law whether made under the State List or the Concurrent List. The met ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... third, it would, because falling within both spheres, be invalid by reason of the non obstante clause. It is necessary therefore to scrutinize more closely the two entries, first separately and then in relation to each other and to the context and scheme of the Act. 24. The road map to be charted by a court in assessing such a matter may not have altered much notwithstanding that the Constitution came to be adopted more than a decade after the opinion was rendered by the Federal Court. 25. As to the exclusive authority of the Parliament in enacting laws, the lessor refers to the expression Notwithstanding anything clauses (2) and (3) appearing at the beginning of Article 246 (1) of the Constitution and the exclusive authority of a State legislature to make laws for such State with respect to any of the matters enumerated in the State List being subject to the legislative supremacy of the Parliament as recognised in the Article. As to the tests to be applied in determining legislative competence upon a State law being in apparent conflict with a statute enacted by the Parliament, the lessor has referred to the decision Hoechst Pharmaceuticals Ltd. v. State of Bihar [1983] 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asser in respect of the concerned premises and a consequential order of his eviction therefrom. The company court set the application down for trial on evidence, framed issues, give directions for discovery and inspection of documents and proceeded just as a suit would be conducted. However, the appellant took no steps to participate in the process and failed to appear in course of the trial on several occasions, whereupon the company Judge answered the issues in favour of the applicants. The appellant then sought to contest the maintainability of the application on a point of law, but failed to avail of the opportunities afforded to argue the matter. It was thereafter that the relevant application was allowed and the appellant was directed to deliver vacant possession of the relevant premises upon being declared a trespasser thereat. The primary ground urged in the appeal was that the relevant room was not the property of the company in liquidation and the official liquidator had not taken possession thereof. The Division Bench referred to an unreported judgment of another Division Bench of this court Indramoni v. Shriram Jute Mills (P.) Ltd. [Appeal No. 154 of 1976 dated December ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company (prior to its liquidation) of April 2, 1993 which claims that the company as the tenant had the absolute right to sub-let the tenanted portion at the same rent. In Birla Corpn. Ltd. (supra) the court referred to Section 13 of the West Bengal Premises Tenancy Act, 1956 and held that when a sub-tenancy had been created after the commencement of such Act without prior consent of the superior landlord, such a landlord is not required to make such a sub-tenant a defendant in the suit for recovery of possession filed against his tenant and after the ejectment decree is passed against the tenant of the first degree, it would be binding upon such sub-tenant meaning thereby that a sub-tenant has no independent legal status and is not entitled to the benefits of protection against eviction. 31. In Wellman Wacoma (supra) the Division Bench considered the scope of Section 535 of the Companies Act read with Section 446 thereof. It was held that the power was wide and it is necessary to see the authority thereunder to be wide since the purpose of Section 446 of the Act was to streamline the process of winding-up. The judgment also referred to what would amount to due process of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem and the proximity of the matters in issue in the lis to either of the statutes. 35. Since the Companies Act pertains, undeniably, to a matter in the Union List which falls within the exclusive domain of the Parliament to legislate on, that such enactment contains incidental provisions which apparently stray into fields that may be covered by the State List or the Concurrent List, may be of no relevance. If the authority of the company court is seen to cover all matters pertaining to companies in liquidation as covered in the Companies Act, that the exercise of the jurisdiction thereunder may be in conflict with a provision in a State law made under the State List, or a State law subsequently made under the Concurrent List with Presidential assent, may only be a consideration relevant for the company court as to whether the jurisdiction ought to be wielded or an element of self-restraint should be exercised in dealing with the lis. That a court has the authority to adjudicate a matter may not necessarily prompt the court to take up the adjudication, if the court finds that there is an equally convenient and efficacious forum specifically designated therefor. But the existence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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. 39. Ordinarily, when an applicant seeks the eviction of the company in liquidation from an immoveable property, whether by way of disclaimer or otherwise, the company court should deal with the matter itself. But when an applicant claims that the possession of the applicant's property had been wrongfully parted with by the company in liquidation, several other considerations come into play to assess whether the jurisdiction which is available to the company court ought to be exercised to decide the whole or a part of the claim. For instance, there could be a claim before the company court that those in control of a compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the extreme prejudice visiting them though others similarly placed as the applicants who were before the court were treated differently. As a corollary, the applicants contend that they had not been made aware of CA No. 325 of 2010 and, as such, could not intervene therein even though their failure to intervene in the proceedings despite being aware thereof could never have been counted against them. The applicants say that the procedure was so unfair that to the extent the order passed on CA No. 325 of 2010 affects them, it should be recalled for the mere asking. The applicants say that they do not insist on their right to remain in occupation being adjudicated by way of a more protracted process only on account of the inevitable delay of the laws and the judiciary attendant thereto, but they have a right to insist on a fair procedure being followed before it is concluded that they have no right to occupy the relevant premises. The applicants point out that even the basic adjudication of the title of the lessor was not undertaken in course of CA No. 325 of 2010 and such issue was decided on the concession of the official liquidator. The applicants lament that they were deprived of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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