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TMI Blog2001 (4) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... and ending with Oct., 1984. The important Clauses of the said lease are as under: "( a ) ... Lessee s covenant : 4. They will use the demised premises for running factory and/or their office purpose only and not for any other purpose and for this purpose they will be at liberty to erect or build necessary structures on the demised premises according to building rules, factory rules and all other law of land. 7. They will at the expiration or sooner determination of the said lease peaceably and quitely surrender the demised premises in the same condition is now, together with all such erections or building and or all such fixtures there or as may be thereon, provided the Lessors be agreeable to pay proper valuation of the same at then market price but the lessee shall remove all their machineries and plants to be fitted there. 8. If the Lessors be not agreeable to take over all such erections building and all such fixtures or in case the Lessors be not agreeable to pay proper price for the same it shall be lawful for the Lessees to remove the same within the period of the lease but not later after the expiration and determination of the said terms. 10. The Lessee shall no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms of 25 years on the terms and conditions to be mutually settled with the owners of the land at the then prevailing market rate and the salami or premium fixed therefor. That the said new terms and conditions were to be mutually settled six months before the expiry of the above lease. 8. From the sale notice it appears that the sale would be "as is where is and whatever there is" basis. 9. It was contended on behalf of the appellants that they were advised to wait till the expiry of the lease period and they were advised not to challenge the sale at the relevant point of time as the same might not yield any result and the owners did not agree amongst themselves to incur further costs in litigation at that stage. 10. The Official Liquidator, High Court, Calcutta, by his letter dated 28-7-1980 informed Shrimati Sutara Daw, one of the owners, that the leasehold interest of A. Coomer Co. (P.) Ltd. has been sold at the auction sale on 25-7-1980 in the Company Court and that the said auction would be confirmed on 1-8-1980. The sale was confirmed by the Hon ble Justice Salil Kumar Roy Choudha on 1-8-1980. 11. K.K. Daw, one of the owners, by his letter dated 24-11-1980 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted to correct the Municipal records and to record and names of the petitioners as owners thereof. ( c )Such further order or orders as this Hon ble Court may deem fit and proper." 18. That the application was opposed by both the auction-purchasers and the Official Liquidator, High Court, Calcutta. 19. It is alleged by the auction-purchasers that the said application has been filed upon suppression of material facts and on misleading allegations; the sale of the assets of the company in liquidation included the leasehold right of the disputed premises with the right of renewal of the said lease for another terms of 25 years and the said asset of the company was sold along with other assets of the company and the assignees gave highest offer and were declared purchasers subject to confirmation by the Court. 20. A sum of Rs. 67,500 was paid in full and final satisfaction of the offer and on 1-8-1980 learned Company Judge confirmed the same. 21. Although the owners gave an assurance that there would be renewal of the lease and that the draft terms and conditions would be handed over to the assignees, but such assurance was not acted upon. 22. The application fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication has been filed immediately after the expiry of the lease. 31. Therefore, the points for determination in the aforesaid appeal are : 1. Whether the relief prayed for in the application under section 446(2) could be granted or not ? 2. Is the application barred by limitation ? 3. Whether the relief claimed by the owners are barred by the provisions of West Bengal Non-Agricultural Tenancy Act, 1949? 32. In order to appreciate the rival contentions certain provisions of the Transfer of Property Act and the Companies Act are required to be looked into: Section 108( j ) runs as under: "( j ) The lessee may transfer absolutely or by way of mortgage or sub-lease the whole or any part of his interest in the property, and any transferee of such interest or part may again transfer it. The lessee shall not, by reason only of such transfer, cease to be subject to any of the liabilities attaching to the lease;" 33. The provisions of section 446(2)( b ) and ( d ) of the Companies Act run as under : "( b )any claim made by or against the company (including claims by or against any of its branches in India); ( c )****** ( d )any question of priorities or an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s interest in the lease. That the plaintiff was a respectable and responsible person cannot, on the evidence before the Court, be denied or disputed and, indeed, learned counsel for the appellant did not so contend. We find ourselves in agreement with the High Court that in the circumstances and on the evidence on record the lessor had unreasonably withheld his consent so as to enable the defendant to assign the lease without such consent. In the circumstances, we are satisfied that both the trial Court and the appeal Court exercised their discretion properly and no ground has been made out for interfering with the judgment of the High Court. The appeal is accordingly dismissed. The appellant to pay the costs of this appeal." (p. 5) 37. We fail to see how this decision helps Mr. Chatterjee. 38. With regard to question of limitation the entire approach of Mr. Chatterjee is erroneous as rightly pointed out by Mr. Mitra that his client has not come forward with a prayer for setting aside the sale confirmed by the Company Court, but his client has accepted the sale and has only come forward after the lease has expired for restoration of possession inasmuch as only the residue o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant for the purpose. 42. In paragraph 12 of the application under section 446(2) the owners have narrated their proceedings before the appeal Court and the directions of the appeal Court. They have given explanation as to why they have not proceeded any further at that stage. We, therefore, hold that there is no material suppression of the relevant facts in the application. 43. Mr. Anindya Kumar Mitra cited the decision reported in R.I. Sethna v. Official Liquidator High Court (AIR 1983 SC 1061) and particularly referred to paragraph 11 of the said decision : "The learned Company Judge could not have permitted holding on to possession of the premises, not needed for efficiently carrying on winding up proceedings. The only course open to him was to direct the Official Liquidator to surrender possession to landlords and save recurring liability to pay rent." 44. Mr. Mitra, further, cited the decision of the Apex Court in the case of Sudarsan Chit (I) Ltd. v. G. Sukumaran Pillai AIR 1984 SC 1579, and particularly referred to the following three paragraphs : "7. Before we advert to the question of construction of Section 446(2)( b ), it would be advantageous to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n amongst others for recovering the claims of the company. In the absence of a provision like Section 446(2) under the repealed Indian Companies Act, 1913, the Official Liquidator in order to realise and recover the claims and subsisting debts owed to the company had the unenviable fate of filing suits. These suits as is not unknown, dragged on through the trial Court and Courts of appeal resulting not only in multiplicity of proceedings but would hold up the progress of the winding up proceedings. To save the company which is ordered to be wound up from this prolix and expensive litigation and to accelerate the disposal of winding up proceedings, the Parliament devised a cheap and summary remedy by conferring jurisdiction on the Court winding up the company to entertain petitions in respect of claims for and against the company. This was the object behind enacting Section 446(2) and, therefore, it must receive such construction at the hands of the Court as would advance the object and at any rate not thward it. 8. The fasciculus of sections included in Part VII of the Companies Act bears the heading Winding Up . Section 443 sets out the circumstances in which a company may be w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es within its ordinary jurisdiction. In exercise of this Appellate Jurisdiction, the Appellate Bench entertained the appeals and directed that the winding up order shall be held in abeyance till the scheme is implemented and if any default is committed the winding up order made by the learned Company Judge would be revived. 9.****** 10. Sub-section (2) of Section 446 confers jurisdiction on the Court which is winding up the company to entertain and dispose of proceedings set out in clauses ( a ) to ( d ). The expression Court which is winding up the company will comprehend the Court before which a winding up petition is pending or which has made an order for winding up of the company and further winding up proceedings are continued under its directions. Undoubtedly, looking to the language of Section 446(1) and (2) and its setting in Part VII which deals with winding up proceedings would clearly show that the jurisdiction of the Court to entertain and dispose of proceedings set out in sub-clauses ( a ) to ( d ) of sub-section (2) can be invoked in the Court which is winding up the company." (p. 1581) 45. The Apex Court in the said decision explained the provisions of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he event the lessor be not agreeable to takeover all such erections/buildings and all such fixtures or the lessors be not agreeable to pay proper price for the same, it would be lawful for the lessees to remove the same within the period of the lease, but not later after the expiration and determination of the said premises. 50. In view of the aforesaid provisions contained in the deed of lease, the West Bengal Non-Agricultural Tenancy Act, 1949 has no manner of application in the facts and circumstances of the case. 51. The learned single Judge, with respect, went wrong in holding that no order could be passed on Official Liquidator as admittedly he was not in possession of the said premises. The order impugned is, therefore, set aside. 52. In the facts and circumstances, it will be in the interest of justice to direct the Official Liquidator, High Court, Calcutta to hand over possession of the demised premises to the owners and the auction-purchasers, who are in possession of the land for more than 15 years without making any payment whatsoever and who have not initiated any proceeding to assert their alleged right of renew of the lease during all these days, cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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