1991 (10) TMI 231 - HC - Companies Law

Summary

Issues:
- Default in payment of rent by the tenant
- Termination of tenancy and eviction of the tenant
- Legal proceedings during winding up of a company
- Execution of decree for eviction and rent due

Default in Payment of Rent by the Tenant:
The official liquidator reported that the tenant, Salim, defaulted in paying rent from September 1, 1984, to June 30, 1985, despite multiple notices and reminders sent to him. The tenant had promised to remit the arrears but failed to do so, leading to the claim of non-payment of rent by the official liquidator. The tenant's failure to pay rent for an extended period was considered a violation of the rental agreement and relevant laws.

Termination of Tenancy and Eviction of the Tenant:
The official liquidator contended that the tenant's default in paying rent for more than four months led to the termination of the tenancy under the provisions of the Urban Buildings (Regulation of Letting and Occupation) Act, 1972. The court held that the tenant, by being a defaulter and trespasser, ceased to have the right to continue occupying the premises and was liable for eviction. The court declared the tenant a defaulter, trespasser, and rendered him liable to eviction through a decree that included eviction, rent due, and damages.

Legal Proceedings During Winding Up of a Company:
The judgment highlighted the legal restrictions on initiating or continuing legal proceedings against a company once a winding-up order has been passed under section 446 of the Companies Act, 1956. It emphasized that no suit or legal proceedings can be filed or continued against the company without the court's permission. The court clarified that the liquidator could initiate proceedings promptly without hindrance to expedite the liquidation process, ensuring public accountability.

Execution of Decree for Eviction and Rent Due:
The High Court allowed the official liquidator's application under section 446 of the Companies Act, 1956, and section 20 of the U.P. Urban Buildings (Regulation of Letting, Rent, and Eviction) Act, 1972. The court directed the decree for eviction, rent arrears, and damages to be drawn up under specific sections of the Companies Act and sent for execution to the District Judge, Faizabad. The judgment concluded by granting the application with costs, affirming the eviction and financial liabilities of the defaulting tenant.

This detailed analysis of the judgment covers the issues of default in rent payment, termination of tenancy, legal proceedings during company winding up, and the execution of the decree for eviction and rent due as per the court's decision.