2007 (9) TMI 654 - HC - Companies Law

Summary

Issues Involved:
1. Termination of tenancy and eviction of the Company (in liquidation).
2. Application for disclaimer of property u/s 535 read with Section 458 of the Companies Act, 1956.
3. Execution of decree and payment of occupation charges.
4. Allegations of collusion and fraud.

Summary:

Termination of Tenancy and Eviction:
The petitioner/appellant, owner of premises No. 31 B.B.D Bagh (South), Kolkata, had a tenant, Buxa Dooars Tea Company (India) Limited (in liquidation) since 1978. The Company stopped paying rent around 1990, leading to an eviction suit in 1990, which was dismissed for default. A notice dated 12th January 2004 u/s 106 of the Transfer of Property Act was served to terminate the tenancy. The Company failed to comply, leading to a civil suit (C.S. No. 1 of 2005) for eviction, which was decreed on 13th September 2005. The Company appealed, and a conditional stay was granted, requiring payment of Rs. 20 per sq. ft. per month. The Company defaulted, making the decree executable. The winding-up order was passed on 1st March 2006, and the Official Liquidator took possession of the assets.

Application for Disclaimer:
The appellant filed C.A. No. 366 of 2006 u/s 535 read with Section 458 of the Companies Act, 1956, seeking the Official Liquidator to disclaim the property and hand over possession. The learned single Judge dismissed the application, stating that the appellant had already acted upon the decree and could not pursue another course of action. The Judge noted that the disclaimer application intended to nullify the decree, which was not permissible.

Execution of Decree and Payment of Occupation Charges:
The appellant argued that the premises were no longer needed by the Company (in liquidation) or the Official Liquidator and that the Company had become a rank trespasser. The Official Liquidator contended that the tenancy rights were valuable assets and that the appellant had no right to claim rent post-decree. The Court held that the premises were not required for the beneficial winding up of the Company and that the continued possession by the Official Liquidator would be onerous. The Court directed the Official Liquidator to disclaim the property and hand over possession to the appellant.

Allegations of Collusion and Fraud:
Mr. Pratap Chatterjee, representing the intervenor, alleged that the disclaimer application was made dishonestly and that the Official Liquidator was colluding with the appellant. The Court found no material to substantiate these allegations and rejected them.

Conclusion:
The appeal was allowed, setting aside the learned single Judge's judgment. The Court directed the Official Liquidator to disclaim and hand over possession of the premises to the appellant. The appellant was permitted to pursue the execution of the decree for any unsatisfied part.