1970 (4) TMI 80 - HC - Companies Law

Summary

Issues Involved:
1. Payment of rent by lessees from December 1, 1964, onwards.
2. Handing over possession of the properties after the expiration of the lease.
3. Entitlement to deductions from rent due to partial possession.
4. Liability for damages for use and occupation post-lease expiration.
5. Necessity of filing a regular suit for ejectment.
6. Entitlement to interest on unpaid amounts.

Detailed Analysis:

1. Payment of Rent by Lessees from December 1, 1964, Onwards:
The lessees acknowledged liability to pay the lease money from December 1, 1964, at least up to March 23, 1965. Despite repeated demands, the lessees had not paid the rent due from December 1, 1964, to November 30, 1968. The court decreed that the lessees are liable to pay the official liquidator the full rent of Rs. 50,000 per annum from December 1, 1964, to November 30, 1968, as per the terms of the compromise dated September 18, 1964.

2. Handing Over Possession of the Properties After the Expiration of the Lease:
The official liquidator initially sought possession of the properties after the lease expired on November 30, 1968. However, the official liquidator later informed the court that taking possession would serve no useful purpose due to the likely confirmation of the sale of the premises to the Allahabad Bank. Therefore, the court did not pass an order for possession.

3. Entitlement to Deductions from Rent Due to Partial Possession:
The lessees contended they were entitled to a deduction from the rent because certain godowns remained in possession of the Allahabad Bank. The court found that the lessees had agreed to pay the full rent under the compromise, knowing that some premises were in possession of the Allahabad Bank. The court concluded that the lessees' claim for deductions was unfounded and that they were liable for the full rent.

4. Liability for Damages for Use and Occupation Post-Lease Expiration:
The court held that the lessees are liable to pay damages for use and occupation of the premises at the same rate (Rs. 50,000 per annum) from December 1, 1968, onwards, until the date of the order. This liability arose because the lessees continued to occupy the premises after the lease expired.

5. Necessity of Filing a Regular Suit for Ejectment:
The court determined that the official liquidator could seek directions under section 446(2) of the Companies Act without filing a regular suit. The court cited the Supreme Court's interpretation in Dhirendra Chandra Pal v. Associated Bank of Tripura Ltd., where it was held that elaborate proceedings by way of a suit were not contemplated under similar circumstances.

6. Entitlement to Interest on Unpaid Amounts:
The court decreed that the official liquidator is entitled to claim interest at the rate of 6% per annum on all unpaid amounts, including rent and damages for use and occupation. This interest applies to past, pendente lite, and future amounts.

Conclusion:
The court allowed the applications, except for the prayer for possession, which was no longer pressed by the official liquidator. The lessees were ordered to pay rent from December 1, 1964, to November 30, 1968, and damages for use and occupation from December 1, 1968, onwards, with interest at 6% per annum. The sum of Rs. 1,619.42 already paid was to be adjusted against these dues, and the official liquidator was awarded Rs. 200 in costs.