2004 (4) TMI 299 - HC - Companies Law

Summary

Issues Involved:

1. Establishment of right, interest, and title to reside in the property.
2. Declaration of respondents as trespassers and encroachers.
3. Eviction and recovery of possession of the property.
4. Jurisdiction of the High Court under Section 446 of the Companies Act.
5. Limitation period for filing the application.
6. Compliance with the decree dated 18-12-1978 and subsequent court orders.
7. Payment of compensation and municipal taxes.
8. Validity of sub-letting and unauthorized occupation.

Issue-wise Detailed Analysis:

1. Establishment of Right, Interest, and Title to Reside in the Property:
The Liquidator sought directions for the respondents to establish their right to reside in the property known as Dhupsingh Chali. The court found that the respondents, including the heirs of Dhupsingh Charansingh, failed to prove any legal right or title to the property. The respondents' claim of tenancy was based on an expired lease and subsequent unauthorized occupation.

2. Declaration of Respondents as Trespassers and Encroachers:
The court declared the respondents as trespassers and encroachers. The respondents, including the heirs of Dhupsingh Charansingh, were found to be in illegal occupation of the premises without any legal right, title, or interest. The court held that the respondents had no lawful claim to the property and were occupying it without authorization.

3. Eviction and Recovery of Possession of the Property:
The court directed the respondents to hand over vacant and peaceful possession of the premises to the Official Liquidator. If the respondents failed to comply, the Official Liquidator was authorized to take possession with police protection. The court emphasized that the respondents' failure to pay compensation and comply with court orders entitled the Liquidator to seek eviction.

4. Jurisdiction of the High Court under Section 446 of the Companies Act:
The court affirmed its jurisdiction under Section 446 of the Companies Act to entertain and dispose of the application. It held that the provision was intended to avoid unnecessary litigation and expedite the winding-up process. The court stated that it had the authority to deal with claims and questions arising during the winding-up of the company.

5. Limitation Period for Filing the Application:
The court addressed the issue of limitation, stating that the application was not barred by limitation. It referred to Section 458-A of the Companies Act, which excludes the period from the commencement of winding-up to the date of the winding-up order and an additional year. The court calculated the limitation period and concluded that the application was filed within the permissible time frame.

6. Compliance with the Decree Dated 18-12-1978 and Subsequent Court Orders:
The court found that the respondents failed to comply with the decree dated 18-12-1978, which required them to pay compensation and hand over possession in case of default. The respondents also did not comply with the court's order dated 3-12-2003, directing them to deposit amounts regularly. The court held that the respondents' non-compliance justified their eviction.

7. Payment of Compensation and Municipal Taxes:
The court noted that the respondents had defaulted in paying compensation since 1986 (or 1987). The respondents' claim that the amounts were payable annually was rejected as a dishonest attempt to avoid compliance. The court also stated that paying municipal taxes did not confer any legal title or right to occupy the property.

8. Validity of Sub-letting and Unauthorized Occupation:
The court held that sub-letting by the respondents was illegal and violated the terms of the decree. The respondents had sub-let the property to 61 persons without any legal right, making them unauthorized occupants. The court emphasized that the respondents' actions were collusive and lacked bona fides.

Conclusion:
The court allowed the application and directed the Official Liquidator to take possession of the property with police protection if necessary. The respondents were declared trespassers and encroachers, and their occupation was deemed illegal. The court's orders dated 17-1-2002 and 3-12-2003 were revived, and the respondents were ordered to vacate the premises. The rule was made absolute in Misc. Civil Application No. 5 of 2002 and Misc. Civil Application No. 6 of 2002 for the limited purpose of recalling the order dated 17-1-2002 for granting a hearing to the applicants.