Allahabad High Court
Faizabad Distillers Pvt. Ltd. (In ... vs Salim Tailor on 30 October, 1991
Equivalent citations: AIR1992ALL227, [1993]76COMPCAS127(ALL), AIR 1992 ALLAHABAD 227, 1992 ALL. L. J. 497, 1993 (76) COM CAS 127, 1992 (1) ALL RENTCAS 81, 1992 (1) RENCR 163, 1993 COMNR 500, 1992 (3) COM LJ 325 ALL, 1992 (19) ALL LR 203
ORDER
1. Messrs Faizabad Distillers Private Limited was ordered to be wound up by an order of this Court dated 19-4-1970. Since then, almost for about 21 years the winding up proceedings are going on.
2. The Official Liquidator has pleaded under Section 446 of the Companies Act, 1956, referred to hereinafter as the Act, to report to the court that the company under liquidation has its immoveable property situate at Dharamshala Naka Muzaffara, Faizabad and in this property was a tenant one Salim son of Abdullah in a portion of the premises measuring 10' x 8' on the ground floor known as Abkari Dharmshala situate at Naka Muzaffara consisting of one room on a rent of Rs. 50/- per month. The tenancy was from month to month beginning from the 1st of each English calendar ending on the last day of the month. The premises in question was allotted to the aforesaid Salim, a tailor by profession under the terms and conditions of allotment order dated 22 November, 1983 which this tenant accepted in writing. A copy of the allotment order and the copy of the acceptance letter of the tenant are appended to the report of the Official Liquidator as Annexures 1 and 2 and are dated 22 November, 1983 and 31 January, 1984, respectively.
3. The Official Liquidator contends that Salim, opposite party defaulted in payment of rent from Sept. 1, 1984 to June 30, 1985, a period of 10 months for which a demand notice dated 28 June, 1985 was sent by registered A. D. post. The opposite party had replied to this notice. In his reply dated 5 May, 1987 he has stated that he was ill and remained out of station for one year on account of his treatment and promised to remit the arrears amounting to Rs. 1650/- otherwise payable by him by 30 April, 1987. The Official Liquidator submits that the deposit was not made.
4. The Official Liquidator sent a reminder also by registered post dated 30 July, 1989. The second notice of the Official Liquidator was received back with the remark from the post office as "not known" and a copy of the second notice was also sent to the village address of the opposite party and this was served upon him.
5. Thereafter further notices were sent to the opposite party by registered post, dated 10 January, 1985 and 28 February, 1990. The one sent to his village address i.e. notice dated 10 January, 1990 was received by the opposite party on 13 January, 1991 but the other sent at his shop address was received back undelivered with the postal remark "Dookan Band Rahti Hai". The Official Liquidator further submits that in these circumstances the opposite party has violated the provisions of Section 20 of the Urban Buildings (Regulation of Letting, Rent & Eviction) Act, 1972 by being a defaulter by not paying rent of four months and more and, thus, the tenancy stands terminated and the opposite party is liable for eviction.
6. A copy of the application of the Official Liquidator was sent by registered post by the registry of the High Court and steps to serve opposite party were also taken through the District Judge, Faizabad. Notice sent to the opposite party by the High Court was received back, showing an endorsement that it was refused. Thus, under the rules of the Court the opposite party having declined to accept the notice of the court would be deemed to have sufficient service that notice was tendered upon him and he declined to receive it. The District Judge, Faizabad has reported in effect, that upon notice being tendered to the opposite party, the opposite party declined to receive it. The opposite party is a defaulter, and a trespasser on the property of the company and cease to be a tenant and he is liable to be evicted.
7. The aforesaid Salim Tailor is probably under the impression that there will be separate proceedings by the Liquidator to engage him in litigation on his home ground. What the opposite party forgets is that upon a winding up order being passed under Section 446 of the Companies Act, 1956, no suit or legal proceedings can be filed or be pending on the date of winding up order nor can be proceeded with against the company except by leave of court and subject to such terms as the court may impose. Further, notwithstanding anything under any other law for the time being in force if proceeding is to be initiated by or against the company, it does not preclude the High Court from initiating proceedings straightway as if they were proceedings of court of an appropriate jurisdiction. The legislative intent for this purpose is clear that there can be no impedie-ment in the way of Liquidator to get involved in unnecessary litigation as there is public accountability after a winding up order has been passed to determine the liquidation proceedings as expeditiously as possible.
8. As it is the reality of the situation and circumstances of this case are that the winding up proceedings have been pending for over twenty years. Tenants of companies under winding up proceedings, cannot stretch winding up proceedings to suit their personal interest. They have to wind up also, along with the winding up of the company.
9. Thus, this court declares the opposite party a defaulter for not paying rent to the Official Liquidator and further declares him a trespasser and renders him liable to eviction and to be faced with a decree : (a) for eviction; (b) for rent due as between 1-9-1984 to 30-6-1985; (c) damages thereafter as until the date when possession is delivered to the Official Liquidator or under execution to the executing agency at the rate of double the amount that represented rent i.e. instead of Rs. 50/- Rs. 100/- per month. The decree shall be drawn up by the High Court under Section 634 and Section 635 of the Companies Act and sent to the District Judge, Faizabad for execution.
10. The High Court allows this appli-
cation of the Official Liquidator under Section 446 of the Companies Act,1956 and Section 20 of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 3972, with costs.
11. Application allowed.