Calcutta High Court
In Re: Sakow Industries P. Ltd. (In ... vs Unknown on 6 March, 1986
Equivalent citations: [1990]67COMPCAS16(CAL)
JUDGMENT Bimal Chandra Basak, J.
1. This appeal arises out of an order passed by the learned judge taking company matters dismissing an application of the appellants herein making the following prayers :
"(a) An order of injunction be issued restraining the Official Liquidator, High Court, his servants and agents from selling, transferring and/ or encumbering the demised premises situate at Kaikhali, Dum Dum, comprising of the holdings under Dag Nos. 80/81, 83, 84/85 and 87 more fully described in the Schedule to the deed of lease dated June 23, 1966, being annexure "A" to the affidavit.
(b) The sale notice in the above matter be recalled and/or cancelled and/or set aside and all proceedings taken thereunder be permanently stayed ;
(c) Leave be granted to the official liquidator to disclaim the said demised premises more fully mentioned in the said deed of lease dated June 23, 1966, in favour of the appellant ;
(d) Direction be given to the official liquidator to hand over possession of the demised pre'mises to the appellants ;
(e) Stay of the order dated August 7, 1984, or any "order for sale of the purported tenancy right of the company in liquidation in the said demised premises."
2. The facts of this case, relevant for the purpose of disposal of the appeal herein, are as follows :
The appellants are the owners of the disputed land. On June 23, 1966, a deed of lease was executed by the appellants in favour of Sakow Industries Pvt. Ltd. (now in liquidation) (hereinafter referred to as "the said company"), whereby the appellants granted in favour of the said company a lease for a term of 21 years commencing from June 1, 1966, and ending on May 31, 1987, at a monthly rent payable on the 10th day of every month. The relevant clauses of the said lease are as follows :
"2(a). To use the demised premises for the construction and running of a factory and business of the lessee.
2(f). The lessee shall be entitled to assign their interest in the demised premises for the stipulated period to such person or persons as it thinks fit but the lessees shall in all cases be itself liable for the rent to the lessors provided that such assignments will be made only if the lessee cannot run its business profitably and that such assignment shall not be for a period exceeding the 28th day of February, 1987.
2(g). The lessee with the consent of the lessors in writing may sublease the demised premises or any portion thereof and such consent shall hot be unnecessarily withheld provided however that notwithstanding such sub-lease, the lessee shall itself remain liable for the rent and for observance and performance of the covenant to be performed on the part of the lessee.
4(k). To yield and deliver quiet and peaceful and vacant possession of the demised premises at the condition or sooner determination of the said term. The lessors may, however, take the buildings, structures executions to be made by the lessee on the demised land at a valuation to be agreed between the lessors and the lessee and failing such agreement the lessee shall be at liberty to remove and take away those buildings, structures and executions errected by it within three months from the date of expiration or sooner determination of the said term but in that event the lessee shall be liable to pay rent for the said period of three months provided, however, if any damage is caused to the demised land or the surface thereof in removing these buildings structures, etc., as aforesaid, the lessee will repair and make good the same at its own costs as to put the demised premises in its original condition.
4(b). If the rent hereby reserved or any part thereof shall be unpaid for 30 days after becoming payable whether formerly demanded or not or if any covenant on the lessee's part herein contained shall not be performed or observed or if a winding-up order is passed against the lessee or the lessee shall make a scheme of composition with creditors for a lesser sum than 16 annas in the rupee and in any such case, it shall be lawful for the lessors at any time hereinafter to re-enter upon the demised premises or any part thereof in the name of the whole and thereupon this demise shall absolutely determine but without prejudice to the right of action of the lessors in respect of any previous breach of the lessees covenants herein contained.
4(d). If the lessee shall duly perform the covenants and conditions on the part of the lessee to be observed and performed and shall be desirous of continuing in occupation of the said premises hereby demised after the expiration of the said term of twenty-one years hereby granted it shall at least three months before the expiration thereof signify such desire by a notice in writing to the lessors. The lessors shall at or before the expiration of the said term execute at the cost of the lessee a new and effectual lease of the said premises hereby demised for a term of ten years to commence from and after the expiration of the term hereby granted with and subject to the same covenants and provisions as are now herein contained except the present covenant for renewal and except that the rent payable during such period shall be Rs. 315 per month for the first five years and Rs. 330 for the next five years of tenancy such monthly rent to be paid on or before the tenth day of each month then current without any deduction or abatement whatsoever."
3. The admitted position is that this lease is not covered by the provisions of the West Bengal Premises Tenancy Act, 1956 (hereinafter referred to as "the Tenancy Act").
4. By an order dated June 5, 1972, the said company was directed to be wound up under the provisions of the Companies Act, 1956 (C. P. No. 83 of 1970) (hereinafter referred to as "the said Act"). The admitted position is that even thereafter, the rent for certain period was being paid by or on behalf of the company. It is the case of the appellants that without being aware of the winding-up order they have accepted such rent. There are certain letters written by the appellant's advocate on September 7, 1978, February 12, 1979 and March 17, 1979. We, however, need not go into the details of the same because rent up to June, 1981, has been paid by the official liquidator and that has been accepted by the appellants. Thereafter, orders have been passed in this case by the company court directing the official liquidator to sell the said leasehold property of the company in liquidation. Thereafter, there were various proceedings.
5. There was a judgment of the single judge of this court dismissing all disclaimer applications and holding that the tenancy right of a company in liquidation was saleable and that such sale is an involuntary sale and amounts to transfer by operation of law. The learned judge followed the same in the present Subsequently, the said judgment was set aside on appeal. The fact is that in this case the order for sale has not yet been given effect to since no bidders were available. Ultimately, on December 23, 1983, a notice to quit was given to the official liquidator on behalf of the appellants which we set out herein below :
December 22, 1983.
The Official Liquidator, High Court, O. S., 9, Old Post Office Street, Calcutta-1.
Dear Sir, In the matter of Sakow Industries (P.) Ltd. (In liquidation).
Under instructions of our clients, Smt. Indira Dutta Roy, Sunanda Kishore Dutt Roy, Satantra Kumar Dutt Roy and Smt. Radha Gupta all of No. 14, Mandevilla Garden, Calcutta, we have to address you as follows :
You are aware that Sakow Industries (P.) Ltd., before it went into liquidation, was a lessee in respect of a piece of parcel of land measuring 1 bigha, 3 cottahs and chittacks and 29 sft. situate in village Kaikhali Cossipur, Dum bum, in the District of 24-Parganas, under our clients who are the lessors in respect thereof.
The said tenant was a habitual defaulter in payment of rent. Under the provisions of the said lease, in case the tenant defaulted in payment of rent for 30 days after the same became due and also in case the tenant goes into liquidation, the said lease will be forfeited and the lessors will be at liberty to re-enter the premises. Inasmuch as the said tenant has defaulted in payment of rent and also has gone into liquidation, our clients became entitled to re-enter upon the said premises as the lease stood forfeited.
As no possession of the property was delivered to our clients in spite of the lease being forfeited, our clients, in exercise of their rights, made an application before the Hon'ble High Court, inter alia, for stay of sale of the said property and for your disclaimer thereof. Although our clients could not succeed in getting an order as prayed for, the property could not (be) sold, and as the law now stands you have no right to sell any interest in the said property.
The lease having been forfeited in the circumstances stated above, the company in liquidation cannot have any right, title or interest in the said property. The said property is still under your custody. Although the company in liquidation has no right, title or interest thereof and no mesne profit and/or damages for such unlawful possession is being paid for a long time, our clients cannot take any forciable action to re-enter the said property and our clients are suffering serious loss and prejudice.
Our clients, in exercise of their rights of re-entry under the provisions of the lease, as stated herein before, hereby request you to make over possession of the said property to them on or before the 31st December, 1983. In default of compliance, our client will have to move the Hon'ble Court for your disclaimer of the said property which may kindly be noted.
Yours faithfully, Mitra and Ganguly."
6. Thereafter, this application was made before the learned company judge and by an order dated April 11, 1984, the said application was dismissed by the learned judge taking company matters against which this appeal was preferred The learned judge, in his judgment, referred to the facts set out in the petition and in the different affidavits and ultimately, the learned judge passed the following order :
"It is a matter of record that the official liquidator was given leave to sell the said property but in spite of his efforts, the said property could not be sold. It was stated on behalf of the official liquidator that no offers for purchase of the said property were forthcoming in spite of the advertisements.
It was, however, submitted on behalf of the official liquidator that the subsequent forfeiture will not stand in the way of sale of the property as , relief against such forfeiture could always be claimed.
Learned counsel for the official liquidator cited Kamala Ranjan Roy v. Baijnath Bajoria, , for the proposition that where a lease permitted assignment with the written consent of the lessor not to be unreasonably withheld bereft of such a covenant could be relieved if the lessor withheld his consent unreasonably (sic).
I take note of the fact that the property has not been proved to be saleable since 1981. I also note that presently, the prospective purchaser can have the benefit of the property for a maximum period of 13 years only after which the lease would stand terminated by efflux of time and the purchaser would not have the protection of the West Bengal Premises Tenancy Act, 1956.
The plant, machinery and other assets after long years of non-use presumably will not be in a condition so that the purchaser can utilise the property as a running factory immediately on the purchase. It may not be worthwhile for a purchaser to venture into a project which will necessarily be of a limited duration.
In the event the property is ultimately found to be unsaleable, then rent under the lease would be annexed without any cases proceeding return and certainly will not force to be beneficial to the liquidation proceeding (sic).
For the reasons as above, I dispose of this application by the following order.
The official liquidator is directed to invite offers for sale on the usual fees of the movable assets lying on the said land forthwith. In the same advertisement, the official liquidator will also call for offers for sale or assignment of the unexisted portion of the case as a last effort Advertisements inviting such offers are directed to be published within ten days from date in the Statesman and the Viswamitra. Offers should be made before the 11th June, 1984, and would be considered by the caveat on 13th June, 1984, at 2p.m.
At the instance of the applicants, the operation of this order is stayed for a fortnight. It appears that the official liquidator has available funds to pay the arrears of rent which have accrued since July, 1981. In view of the stay granted, such rent need not be paid to the applicants.
The official liquidator will be entitled to retain the costs of this application assessed at 15 GMs. pass (sic) the funds in his hand."
7. In support of this appeal, Mr. Mukherjee has placed the indenture of lease before us and drawn our attention to the relevant clauses which we have set out hereinbefore. He submitted that pursuant to the same, his client has a right to terminate the said lease which is due to expire in 1987, and which in fact has been done by the letter of December 22, 1983. Such right has been exercised for non-payment of rent and the fact that the company has been wound up. The admitted position is that since June 22, 1981, no rent has been paid. Accordingly, he has submitted that his client is entitled to recover possession of the said land. He has submitted that it is not necessary to file any suit for recovery of such possession because such right to recover possession and all questions relating thereby can be decided by the company court itself in view of the provisions of Section 446(2) of the said Act, and in this context, he has relied on a decision of a Division Bench of this court in the case of Inconducts (India) Ltd. v. New Industrial Chemicals (P.) Ltd. (In liquidation) (Appeal No. 154 of 1976, decided on December 6, 1976), to which I was a party. In the said judgment, we have decided that the question as to whether any person has any right in respect of the land in the possession of the official liquidator or whether he is a trespasser, tenant or licensee can be gone into by the company court in the course of the winding-up proceedings. I ought to point out that in his usual fairness, Mr. A.C. Kar, appearing on behalf of the official liquidator, has not disputed the jurisdiction of this court to go into the question as to the right of the appellants to recover possession of the said property in this winding-up proceedings itself without any recourse to a suit.
8. The next submission of Mr. Mukherjee is that, in view of the fact that the liquidator has not said that it was necessary for the purpose of winding-up that the said property be retained and further having regard to the fact that the property had been put for sale and it has become infructuous, the official liquidator should be directed to disclaim the said property. In this context, Mr. Mukherjee has relied on a decision of the Supreme Court in the case of Ravindra Ishwardas Sethna v. Official Liquidator [1983] 54 Comp Cas 702, and, the unreported decision of a Division Bench of this court in Inconducts (India) Ltd. V. New Industrial Chemicals (P.) Ltd. (In Liquidation) (Appeal No. 153 of 1981, decided on October 6, 1982). He has drawn our attention to Clause 4(d) of the deed and submitted that the conditions have not been performed. There has been no payment. As, the company has been wound up, the question of the company being desirous of continuing in occupation cannot and does not arise. He has also drawn our attention to Clause 12 wherein it shows that the said lease was made for the purpose of enabling the lessee to carry on the business but no such business can be carried on. So far as the question of assignment is concerned, referring to Clause 2(f), he has submitted that such assignment cannot be made beyond February 28, 1987, i.e., less than one year from now. Accordingly, the question of assignment cannot and does not arise.
9. Mr. Kar, appearing on behalf of the official liquidator, has submitted that under Clause 2(f), his client has got the right to assignment and under Clause 2(g), he has also got the right to sub-lease and the permission to such sub-lease cannot be withheld unreasonably. In this context, he has also submitted that even if there has been any breach of the terms or any right of re-entry of the same, there is no automatic cessation of the lease, but notice is necessary. In this context, he has drawn our attention to the decision of the Supreme Court of India in the case of Namdeo Lokman Lodhi v. Narmadabai, . He has further submitted that the official liquidator can exercise his right to the option for renewal and such right can be exercised and assignment or sub-lease can be done. However, it is admitted, as has also been recorded in the said judgment, the business of the company has been closed down long time back. Various attempts for sale of the lease were made from time to time but they had all. become infructuous. Plant machineries and other assets cannot be utilised. The learned judge himself has recorded that it may not be worthwhile for a purchaser to venture into a project which will necessarily be of a limited duration.
10. So far as the decisions of the Supreme Court of India and of the Division Bench of this court are concerned, he has submitted that those decisions have been given in respect of the position of a statutory tenant whose tenancy has been terminated and not in the case of a long lease the period in respect of which is still subsisting:
11. Before we go into the merits of this case, we shall refer to the two decisions referred to by Mr. Mukherjee.
12. In the case of Ravindra Ishwardas Sethna v. Official Liquidator [1983] 54 Comp Cas 702 (SC), it was held by the Supreme Court that it was not the case of the liquidator that he was carrying on the business of the company which was being wound up with the permission of the court under Section 457 of the Companies Act. We may point out that that is also not the case before us. The Supreme Court pointed out that the language of the section is unambiguous and clear. It is clear that the liquidator with the sanction of the court could carry on the business of the company only to the extent that such carrying on of the business is necessary for the beneficial winding-up of the company. After recording that there is no order of the court to give such sanction, the Supreme Court held that giving premises on lease, licence or under caretaker's agreement was not the business of the company. It was pointed out that the company was a statutory tenant under the Rent Act. It was further pointed out that the statutory tenancy conferred the right to be in possession but if the tenant did not any more require the use of the premises, the provisions of the Rent Act and specially Sections 13 and 15 completely prohibited giving possession of the premises on licence or on sub-lease. The learned company judge could not have permitted holding on to the possession of the premises not needed for efficiently carrying on the winding-up proceedings. The only course open to him was to direct the liquidator to surrender the possession to the landlord and save the recurring liability to pay rent. A Division Bench of this court by its unreported judgment dated October 6, 1982, in the case of Inconducts (India) Ltd. v. New Industrial Chemicals (P.) Ltd. (in Liquidation) (Appeal No. 153 of 1981, decided on October 6, 1982), had gone into this question and also had gone into various decisions of the Supreme Court in that case. It is necessary for us to refer to some of the facts of that case and the points of decisions given therein. In that case, the appellant was the lessor and the company in liquidation was the lessee. It was a lease for a period of ten years from October 1, 1962, with an option for renewal. Admittedly, the lease in that case came within the purview of the relevant Tenancy Act. We have already pointed out that admittedly in the present case, the lease does not come within the purview of the Tenancy Act. In that case, there was a covenant not to assign, sublet, etc. There was default in payment of rent from February, 1978. On April 13, 1979, there was an application for winding-up of the company. Thereafter, there was a combined notice to quit and a notice under Section 13(6) of the West Bengal Premises Tenancy Act terminating the lease. Thereafter, there was a direction for the sale of the assets. A formal application was made by the appellant for stay of such sale. After recording the submissions made by the learned advocates appearing, the appeal court observed in that case that there was no dispute that the contractual tenancy of the company had come to an end on November 9, 1979. It was further held that the company was, however, protected from eviction by virtue of the provisions of Section 13 read with Section 2(h) of the West Bengal Premises Tenancy Act. It was recorded that it was argued on behalf of the respondents that under the provisions of the said Tenancy Act, the company became a tenant of the appellant and had all the rights and obligations of a tenant in respect of the demised premises. In the circumstances, it was argued, that the company had an interest in the property occupied by it and such interest was transferable in law. The Division Bench then considered various decisions of the Supreme Court on the question of the position of a person remaining in occupation of the premises let to him after the determination of the tenancy. After examining various provisions of the said Tenancy Act, it came to the conclusion that the intention of the Legislature is clearly to protect the rights of the person actually in possession of the tenanted property from any threat of eviction by the landlord and also unreasonable enhancement of rent. The definition of "tenant" excludes those who are not living with the tenant at the time of his death. It was pointed out that the right of occupancy of a tenant has not been made heritable as such and that only those heirs who are living with the tenant have been brought under the protective umbrella of the Act. This clearly shows that the Legislature did not intend to create any estate, or interest in favour of a tenant but only wanted to protect the tenant and such of his heirs as were living with him from eviction. The Division Bench also pointed out that in view of Section 14 of the said Act, no tenant can, without the previous consent in writing of the landlord, sublet the whole or any portion of the premises held by him as a tenant or transfer or assign his rights in the tenancy or in any part thereof. It was also pointed out that the Act is protective in nature and provides the tenant with a shield against any threat of eviction even after the contractual relationship is brought to an end by the landlord. But the Act does not revive the contractual relationship nor does it confer upon the tenant any interest or an estate in the tenanted property by express words or necessary implication. The Division Bench thereafter considered various decisions of the Supreme Court including the decision in the case of Ganpat Ladha v. Sashikant Vishnu Shinde, , and pointed out that the object of the said Tenancy Act also is not to deprive the landlord altogether of his rights in the property. The Act has given the tenant and the heirs living with him some protection. The Act, however, has not armed the statutory tenant with any right to transfer or assign his protected right of possession. Thereafter, the Division Bench considered the Supreme Court's decisions in the case of Anand Nivas P. Ltd. v. Anandji Kalyanji's Pedhi, , Calcutta Credit Corporation Ltd. v. Happy Homes P. Ltd. , and Jai Singh Murarji v. Sovani (P.) Ltd., . There is also another Division Bench decision of this court in the case of Asha Gupta v. Sipra Dutta [1976] 80 Cal WN 187. The Division Bench referred to the decision in the case of V. Dhanapal Chettiar v. Yesodai Ammal, , and pointed out that the question whether a statutory tenant has any estate or interest in the property in his occupation did not arise in that case. The Division Bench also considered the decision in the case of Damadilal v. Parashram, , and Ganapati Sitaram Balvalkar v. Waman Shripad Mage, . After consideration of these cases, the Division Bench held as follows :
"In our opinion, in view of the clear pronouncement of law by the Supreme Court in the case of Ganapati Sitaram Balvalkar, , in which some of the earlier Supreme Court judgments have been noted and discussed and also in view of the provisions of the West Bengal Premises Tenancy Act, it must be held that the company did not have any saleable interest in the demised premises on June 12, 1981, when the property was sought to be sold by the official liquidator."
13. Thereafter, the Division Bench considered the question as to whether it was really a case of court sale and whether even though the company voluntarily could not sell or transfer the assets, the official liquidator acting under the direction and control of the court, in exercise of the statutory power could effect such sale. It was contended on behalf of the appellant that the official liquidator was merely acting as an agent of the company and could not sell what the company was not empowered to transfer. The Division Bench accepted this contention of the appellant and held that the corporate existence of a company does not come to an end as soon as an order for winding-up of the company is passed. The assets in the custody of the liquidator continue to be the assets of the company. It was pointed out that the sale that was made in that case was by the official liquidator under the provisions of Section 456 on behalf of the company and was made in the name of the company. It was pointed out that the property of the company after the winding-up order did not vest in the official liquidator and that under Section 456 of the Companies Act, the liquidator merely had custody and control of the assets of the company. In this context, the Division Bench referred to a decision in the case of Parasram Harnand Rao v. Shanti Parsad Narinder Kumar Jain, , and held that according to the Supreme Court, the sale by the official liquidator of the tenancy right of a company under the orders of the court is a voluntary sale. It was further held that even if the sale was an involuntary one, it was an assignment by the official liquidator and came within the mischief of Section 14(b) of the Delhi Rent Control Act. It was pointed out that the answer to the question whether the sale by the liquidator is a voluntary sale on behalf of the company or a sale by operation of law does not depend on any provisions of the said Tenancy Act but is dependent on the provisions of the Companies Act regarding the power and the position of the liquidator. It also referred to a judgment of the Delhi High Court in the case of Globe Associates (P.) Ltd. (In Liquidation) v. H.P. Sharma ILR [1971] 1 Delhi 149 (FB). In this context, the Division Bench also pointed out that under the English law a liquidator cannot, without the consent of the landlord, sell a lease where there is a covenant against an assignment. It was pointed out that the law in India does not appear to be different in any way. It was held that the liquidator was acting as an agent of the company and was selling the assets belonging to the company. The sale was a voluntary sale made by the liquidator on behalf of the company and was not a court sale at all. It was next held that the tenancy created by the agreement stood terminated and there was no subsisting tenancy. Although the company in liquidation may continue to be in possession of the property as a statutory tenant, by virtue of the provisions of the said Tenancy Act, the liquidators cannot sell or dispose of the right of occupancy even if it is an interest in the property, without the written consent of the landlord.
14. It was argued before us on behalf of the official liquidator that the Supreme Court cases cited by Mr. S.B. Mukherjee and also the unreported judgment of the Division Bench of this court have no application in the facts and circumstances of this case inasmuch as in the present case, there is no question of any statutory tenancy, whereas in those cases the question of statutory tenancy was involved. In our opinion, the position in the present case is worse. In the decisions cited, there was determination of contractual tenancy but some additional right was sought to be claimed on the basis of the statutory tenancy. No such plea is available in this case. Accordingly, the question of a statutory tenant having any right after his contractual relationship has been terminated cannot and does not arise in the facts and circumstances of this case.
15. In the facts of this case, the first question which should be decided is whether that contractual tenancy has come to an end or whether in spite of non-termination of the same, such tenancy should be allowed to be continued or permitted to be transferred. In our opinion, having regard to the facts and circumstances of this case, such tenancy has come to an end and the right of re-entry given to the lessor has come into force and become effective. Admittedly, after June, 1981, no rent has been paid. Admittedly, the company has gone into liquidation which is one of the circumstances upon which the right of re-entry can be exercised. Moreover, in this case even if it may be contended that the earlier defaults in payment of rent have been waived, at least there has been such default from June, 1981. Further, the company has also gone into liquidation. On these two grounds, a notice of termination has been given by the lessee in December, 1983, and in our opinion, the contractual tenancy has come to an end. The official liquidator is not in a better position. The company still exists. The question is whether it is still an asset of the company. We are of the opinion that having regard to such termination, it is no longer an asset of the company and it is no longer available to the company. Had the company been alive and if its contract had been terminated in such a manner, the company could not have assigned or sub-let the same.
16. We have to point out other facts. The original lease was for the period which will expire in February, 1987, that is, barely less than a year is left. The admitted position further is that the official liquidator has made various attempts to sell and dispose of the properties which have failed. The chance of assigning such tenancy for less than a year is very poor. The further admitted position is that the business of the company is not being carried on and the learned judge himself has observed that probably the machines and plant themselves cannot be any longer used for the purpose of carrying on the business. The position is that it is not necessary to retain this for the purpose of efficiently carrying on the business of the company for efficient winding up. The admitted position is that no application has been made even to that effect under Section 457. So far as the question of assigning of the tenancy is concerned, it is to be noticed from Clause 2(b) that such assignment, if at all it can be allowed, can be allowed only for the period up to February, 1987. No such assignment is possible beyond that period even if it is open to the official liquidator to exercise such option. So far as sub-letting is concerned, no such subletting is practically feasible without such renewal. Moreover, such subletting must be with the consent which though may not be unreasonable withheld, but in the facts of this case, the refusal by the lessor may not be held to be unreasonable. Moreover, in the facts of this case, even if the lease has not been validly terminated up to now, the lessor may not be willing to renew the lease. The alleged right of renewal is also in dispute. And the company carrying on business there still, it may be said that other things being equal, the company could ask for such renewal but that right of renewal being conditional, it may be refused on the ground that the conditions have not been fulfilled. The conditions contemplate that the business shall be carried on as specified in Clause 2(a) which is not being complied with. The condition of payment of rent has not been complied, with. Clause 4(b) contemplates that the company is carrying on business, whereas in the present case, the company is in the process of liquidation. Further, even if any assignment may be made, the company, i.e., the liquidator remains liable to pay the rent in terms of Clause 2(f). The official liquidator shall be liable to go on paying the rent as long as the lease is continued. If the lease has not been determined, then it shall continue to be liable to pay such rent without any benefit arising therefrom.
17. For all these reasons, in our opinion, irrespective of the question of termination of the lease, this is a fit and proper case where the official liquidator should no longer continue to be in possession of the said property and should disclaim the same. For the aforesaid reasons, we allow this appeal and set aside the order passed by the learned company judge. The official liquidator is directed to disclaim the said premises as mentioned in the deed of lease dated June 23, 1966, in favour of the appellants-applicants with immediate effect.
18. However, we should give one or two other directions at the instance of the official liquidator. It is recorded that the appellants give up all their claims for rent or mesne profits for any period subsequent to the period for which such amount has already been paid. In terms of the lease, upon construction being made by the lessee after the execution of the lease and upon delivery of quiet, peaceful and vacant possession of the demised premises upon determination of the same, it is open to the lessor to take the structures made by the lessee on the demised land at a valuation to be agreed between the lessors and the lessee and failing such agreement, the lessee shall be at liberty to remove and take away those building structures constructed by it within three months from the date of expiration or sooner determination of the said term. Mr. Mukherjee, upon instruction has submitted that the lessors are not willing to take over such building and structures and they have no objection to leave being given to the official liquidator to remove the same or sell the existing structure for the purpose of removal of the same and it is directed accordingly. Further, though the possession of the premises is to be handed over to the appellant immediately, they shall be bound to offer all facilities to the official liquidator for the purpose of sale of such structures or of any plant and machinery therein. However, such sale and removal must be completed within a period of three months from this date, failing which it shall be open to the appellants to demolish the same and take such action as it thinks fit.
19. The official liquidator is directed to make an inventory of the said premises including any structures, plant and machinery therein with reference to the inventory, if any, already made at or about the time of handing over the possession. There will be no order as to costs. The official liquidator shall be entitled to retain his costs out of the assets in his hands which is assessed at Rs. 1,020.
20. All parties concerned to act on the signed copy of the operative portion of the order.
21. We make it clear that we have not gone into the more general question as to whether upon winding up of a company a lease, in which a substantial period is still outstanding, automatically comes to an end or not irrespective of any condition or any terms and conditions to that effect in the lease as it is not necessary for us to decide such question. This case has been decided by us only on the facts and circumstances of this case.
S.K. Hazari, J.
22. I agree.