wound up cannot be a ground to direct the official liquidator
to handover possession of the land to the owners inasmuch as
the company in liquidation continues to maintain its corporate
existence until it stands dissolved upon completion of the
liquidation proceedings in the manner contemplated by the
Companies Act. In the present case it has been repeatedly
submitted before this Court by both sides that presently
revival of Prasad Mills is a live issue pending before the
Gujarat High Court, a fact which cannot be ignored by this
Court in deciding the above issue against the appellants.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 3147-3149 OF 2016
Jabal C. Lashkari & Ors
V
Official Liquidator & Ors
Dated:MARCH 29, 2016.
Citation:(2016) 12 SCC 44
1. Leave granted in each of the Special Leave Petitions.
2. The facts arising in the Civil Appeals arising from SLP(C)
Nos. 29282-29284 of 2008, which is being taken as the lead
case, may be noticed at the outset.
3. One Durgaprasad Lashkari (predecessor of the
appellants) had leased out land admeasuring 35,772 sq. mtrs.
in favour of one Bechardas Spinning and Weaving Mills Ltd.
(subsequently known as Prasad Mills Ltd.) for a period of 199
years by a lease deed dated 10.12.1916. A secured creditor of
Prasad Mills Ltd. had in the year 1984 filed a company
petition seeking the winding up of the aforesaid Prasad Mills
Ltd. While the company petition was pending some of the
legal heirs of Durgaprasad Lashkari had filed a suit in the
Small Causes Court seeking permanent injunction against the
sale of assets of company more particularly the sale of the
leased property.
4. An order dated 5.5.1989 was passed by the learned
Company Judge of the Gujarat High Court directing the
winding up of Prasad Mills Ltd. and the appointment of an
official liquidator. The official liquidator was directed to take
charge and possession of all the assets of the company. An
application was filed by another heir of Durgaprasad Lashkari
in the winding up petition seeking direction to further
prosecute the suit pending before the Small Causes Court. The
learned Company Judge by order dated 24.2.1995 ordered
that the suit may be withdrawn and instead directions may be
sought from the Company Court for return of the leased
property. Pursuant thereto a Company Application (C.A.
No.462 of 1999) was filed by some of the heirs of Durgaprasad
Lashkari for return of the leased property and also for orders
restraining the official liquidator from selling/transferring the
leased property. While the return of the leased land was
sought on the twin grounds that in view of the winding up
order the Company no longer required the land and
furthermore default in payment of rent had occurred, for the
second relief sought it was urged that the official liquidator
was not authorised to transfer/alienate the leased property in
view of the provisions of the Bombay Rents, Hotel and Lodging
House Rates Control Act, 1947, as it then existed (hereinafter
referred to as ‘the Bombay Rent Act’). While the above
Company Application was pending the building,
superstructure, plant and machinery of the company was sold
in a public auction. It appears that on 6.2.2004 an
advertisement was issued by the official liquidator for the sale
of the leased property. As against the aforesaid advertisement,
the appellant had filed Company Application No.33 of 2004 for
a declaration that the official liquidator had no right to sell the
leased property. The grounds urged were principally on the
basis of lack of any such empowerment in the lease agreement
and in view of the bar/restriction contained in Section 15 of
the Bombay Rent Act. Another Company Application i.e. C.A.
No.34 of 2004 was filed seeking permission from the Company
Court to file a suit before the appropriate court for eviction of
the official liquidator from the leased property. Eviction of the
official liquidator was claimed, inter alia, on the ground that –
(i) the occupant Company i.e. Prasad Mills had no
document in its favour entitling it to be in possession of
the demised land;
(ii) admitted non payment of rent for a period of over 15
years rendering the company and now the official
liquidator liable to eviction under Section 12 of the
Bombay Rent Act;
(iii) admitted non user of the land for a period of over 6
years attracting Section 13(1)(k) of the Rent Act;
(iv) sub-letting in favour of the company, Prasad Mills, in
violation of Section 13(1)(e) of the Rent Act.
5. The learned Company Judge by a very elaborate order
dated 13.10.2004 rejected all the three company applications.
Aggrieved, the appellant and other legal heirs of Durgaprasad
Lashkari filed three separate appeals before the Division
Bench of the High Court. The High Court by a common order
dated 17.10.2008 dismissed all the appeals on grounds and
reasons that will be noticed shortly. It is against the aforesaid
common order dated 17.10.2008 that the present appeals
have been filed.
6. We have heard Shri Mihir Thakur learned senior counsel
appearing for the appellants in civil appeal arising out of
SLP(C) No. 29282-84/2008; Shri P.S. Narasimha, learned
Additional Solicitor General appearing for the official
liquidator; Shri Tushar Mehta, learned Additional Solicitor
General and Shri S.N. Shlute learned senior counsel appearing
for the Gujarat State Textile Corporation.
7. We have also heard learned counsels appearing for the
parties in all the other cases.
8. At the very outset the relevant provisions of the Bombay
Rent Act, (hereinafter referred to as the ‘Rent Act’) as
applicable to the State of Gujarat and the provisions of the
lease agreement dated 10.12.1916 may be noticed -
“12. - No ejectment ordinarily to be made if
tenant pays or is ready and willing to pay
standard rent and permitted increases
(1) A landlord shall not be entitled to the recovery of
possession of any premises so long as the tenant pays,
or is ready and willing to pay, the amount of the
standard rent and permitted increases, if any, and
observes and performs the other conditions of the
tenancy, in so far as they are consistent with the
provisions of this Act.
1
[(1A) Where by reason of riot or violence of a mob any
material part of the premises in a disturbed area is
wholly destroyed or rendered substantially and
permanently unfit for the purpose for which it was let,
the landlord shall not be entitled to;--
(a) the standard rent and permitted increases due for
the premises,
(b) recover possession of such premises merely oh the
ground of non payment of standard rent and permitted
increases due, during the period in which such
premises remain so destroyed or unfit.]
(2) No suit for recovery of possession shall be instituted
by a landlord against a tenant on the ground of non
payment of the standard rent or permitted increases
due, until the expiration, of one month next after notice
in writing of the demand of the standard rent or
permitted, increases has been served upon the tenant
in the manner provided in section 106 of the Transfer
of Property Act, 1882 (IV of 1882).
(3) (a) Where the rent is payable by the month, and
there is no dispute regarding the amount of standard
rent or permitted increases, if such rent or increases
are in arrears for a period of six month's or more and
the tenant neglects to make payment thereof until the
expiration of the period of one month, after notice
referred to in sub-section (2), the Court may pass a
decree for eviction in any such suit for recovery of
possession.
(b) In any other case, no decree for eviction shall be
passed in any such suit if, on the first day of hearing
of the suit or oil or before such" other date as the Court
may fix, the tenant pays or tenders in Court the
standard rent and permitted increases then due.3
[and
thereafter,--
(i) continues to pay or tender in Court such rent and
permitted increases till the suit is finally decided; and
(ii) pays costs of the suit as directed by the Court.
(4) Pending the disposal of any such suit, the Court
may out of any amount paid or tendered by the tenant
pay to the landlord such amount towards payment of
rent or permitted increases due to him as the court
thinks fit.]
Explanation.---In any case where there is. a dispute as
to the amount of standard rent or permitted increases
recoverable under this Act the tenant shall be deemed
to be ready and. willing to pay such amount if, before
the expiry of the period of one month after notice
referred to in sub-section (2), he makes an application
to the Court under sub-section (3) of section 11 and
thereafter pays or tenders the amount of rent or
permitted increases specified in the order made by the
Court.”
“13. - When land-lord may recover possession-
(1) Notwithstanding anything contained in this Act1
[but
subject to the provisions of section 15]; a landlord shall
be entitled to recover possession of any premises if the
Court is satisfied--
(a) to (d) ***
(e) that the tenant has, since the coming into operation
of this. Act3
[unlawfully sub-let] the whole or part of the
premises or assigned or transferred in any other
manner his interest therein; or
(ee) to (j) ***
(k) that the premises have not been used without
reasonable cause for the purpose for which they were
let for a continuous period of six months immediately
preceding the date of the suit; “
“15. - In absence of contract to the contrary tenant not
to sublet or transfer
(1)] Notwithstanding anything contained in any
law,3
[but subject to any contract to the contrary,] it
shall not be lawful after the coming into operation of
this Act for any tenant to sub-let the whole or any part
of the premises let to him or to assign or transfer in
any other manner his interest therein:
[Provided that the5
[State] Government may, by
notification in the Official Gazette, permit in any area
the transfer of interest in premises held under such
leases or class of leases and to such extent as may be
specified in the notification.]
[(2) The bar against sub-letting, assigning or
transferring premises contained in sub-section (1) shall
be deemed not to have had any effect before the
commencement of the Bombay Rents, Hotel and
Lodging House Rates Control (Amendment) Ordinance,
1959 (Bom. Ord. No. III of 1959), in any area in which
this Act was in operation before such commencement;
and accordingly, notwithstanding anything contained
in any contract or in the judgement, decree or order of
a Court any such sub-lease, assignment or transfer in
favour of such persons as have entered into possession
despite the bar as sub-lessees, assignees or
transferees, and have continued in possession at the
commencement of the said Ordinance, shall be deemed
to be valid and effectual].”
“19. - Unlawful charges by tenant
(1) [Save in cases provided for under the proviso to
section 15,] it shall not be lawful for the tenant or any
person acting or purporting to act on behalf of the
tenant to claim or receive any sum, or any
consideration as a condition of the
relinquishment2
[transfer or assignment] of his tenancy
of any premises.
(2) Any tenant or person who in contravention of the
provision of sub-section (1) receives any sum or
consideration shall, on conviction, be punished with
imprisonment for a term which may extend to six
months and shall also be punished with fine which
shall not be less than the sum of the value of the
consideration received by him.”
The terms of the lease deed are as follows :
“............;And whereas the above mentioned three
pieces of land are owned by the First Party, and
the Second Party has rented the same from First
Party;
And whereas the rent is fixed at Rs.3501-00 - Rs.
three thousand five hundred and one. for one year
of 12 months to be paid to First Party, by the
Second Party; as rent on the following conditions :
(1) The said rent will be given to First Party, by
Second Party every year and if the Second Party
does not pay the rent due to them every year, the
First Party will give registered notice for recovery of
rent; and in spite of such notice the Second Party or
their successors, heirs or administrators do not pay
the rent, First Party or their successors, heirs,
attorneys or administrators are entitled to obtain
possession of the land with buildings, either by
mutual understanding or through government.
(2) This rent note is valid for 199, in words one
hundred ninety nine years, agreed by Second Party
and on expiry of the said period, we, the Second
Party will vacate the land, resurface it and will give
it to the First Party or their successor with any
amount of rent due, by the Second Party or their
successors or administrators, whosoever would be,
and while giving back the possession, Second
Party will not raise any dispute or objection, and
even if raised will not be admissible by virtue of
this agreement.
(3) The First Party, or their successors, heir, are not
entitled to sale or pledge, or give possession of
these pieces of land, to any other party, and even if
they do so, it will be void by virtue of this
agreement.
(4) In case the government needs this land and/or
if the government purchase some part of this land;
then the right to receive compensation for such
acquisition is of First Party; however, interest at the
rate of one percent per hundred of whatever
amount the First Party thus receive. will be
adjusted by the Second Party from the rent
payable, or the Second Party will give such reduced
rent to First Party after adjusting the said amount,
in the following years; and the First Party will have
no right to any objection or dispute, and even if
they raise any dispute it will be not sustainable by
virtue of this agreement.
(5) In case the Second Party, or their successors,
attorneys. administrators, assinee or executors do
not stay, or do not make use of, or do not store
material, on the land; or vacate the land and give
possession to the First Party, before the specified
period, then the First Party is entitled to receive
rent till the date of possession so given; and the
First Party has no right to claim rent for the
remaining period.
(6) The municipal tax for the land is Rs.500-00 per
year. which will be paid by the Second Party; and
the Second Party will give rent of Rs.3501/- to First
Party every year. However, the Second Party do not
pay the municipal tax of Rs.500/- and the same
has to be paid by the First Party, then the Second
Party, or their successors will reimburse such
amount with six percent interest per hundred per
year thereon.
(7) The First Party will not object upto 199 years, if
the Second Party, or their successors, heirs or
administrators, construct buildings with necessary
government permission, or use a free land or the
Second Party give on rent or on lease, and the First
Party is entitled to take possession of the land
immediately on expiry of 199 years.
(8) The First Party, or their successors, heirs,
administrators or attorneys are entitled to take
possession of the land before the expiry of rent
period, if the Second Party fail to pay rent to First
Party every year.
(9) The government tax on this land is to be paid by
we, First Party; but if some additional tax is levied
because of construction on the land, it will be borne
by the Second Party. Municipal tax is Rs.500/- per
year at present. However, hereafter if municipality
levies some additional tax on First Party or on
Second Party; or the government decide to levy
some new tax; then all such taxes will be borne by
the Second Party, and will not claim it from First
Party; nor will adjust it against rent payable to the
First Party; and the First Party has no right to take
possession of the land before expiry of 199 years,
but the First Party has right to receive amount of
rent till the above period.
(10) The First Party and the Second Party and their
successors, heirs, administrators, attorneys and
assignees, are accepting the terms and conditions
set out in this agreement.
Thus the Second Party has rented the pieces
of land, from the First Party under the terms set out
in this agreement, at our will, and signed and
sealed this agreement.”
9. Before cataloguing the arguments advanced on behalf of
the rival parties it will be apposite to take note of the
reasoning of the High Court which had prompted it to arrive at
the impugned conclusions recorded in the order under appeal.
10. The Division Bench of the High Court in answering the
appeals before it exhaustively considered a 3-Judge Bench
decision of this Court in Laxmidas Bapudas Darbar & Anr.
vs. Rudravva (Smt.) & Ors.
1
. The Division Bench took note of
the fact that in Laxmidas Bapudas Darbar (supra) the
Bench had occasion to consider the purport and effect of the
decision of this Court in V. Dhanapal Chettiar vs. Yesodai
Ammal2
(7-Judges) before holding that “as a matter of fact the
question of curtailment of fixed-term contractual lease was not
involved in the case of Dhanapal Chettiar” (Para 14). In fact
in paragraph 15 of the judgment in Laxmidas Bapudas
Darbar (supra) it was held :
1
2001 (7) SCC 409
2 1979 (4) SCC 214
“It has nowhere been held that by virtue of the
provisions of the Rent Act the contract of term lease is
completely obliterated in all respects. The effect of the
Rent Act on tenancy under contract has been
considered only to a limited extent, confining it to the
necessity of giving notice under Section 106 of the
Transfer of Property Act.”
In Laxmidas Bapudas Darbar (supra) another decision
of this Court in Shri Lakshmi Venkateshwara Enterprises
(P) Ltd. vs. Syeda Vajhiunnissa Begum (Smt.) & Ors.3
rendered in the context of Section 21 of the Karnataka Rent
Act and, specifically, the provisions of the aforesaid Section of
the Karnataka Act were considered. The non-obstante clause
in Section 21 of the Karnataka Act which gives an overriding
effect over any provision in any other law was specifically
taken note of and eventually it was held that the effect of the
non-obstante clause contained in Section 21 of the Karnataka
Act on a fixed-term contractual lease would be as follows :
“18. The effect of the non obstante clause
contained under Section 21 of the Karnataka
Rent Act on the fixed-term contractual lease may
be explained as follows:
3 1994 (2) SCC 671
(i) On expiry of period of the fixed-term
lease, the tenant would be liable for eviction only
on the grounds as enumerated in clauses (a) to (p)
of sub-section (1) of Section 21 of the Act.
(ii) Any ground contained in the agreement
of lease other than or in addition to the grounds
enumerated in clauses (a) to (p) of sub-section (1)
of Section 21 of the Act shall remain inoperative.
(iii) Proceedings for eviction of a tenant
under a fixed-term contractual lease can be
initiated during subsistence or currency of the
lease only on a ground as may be enumerated in
clauses (a) to (p) of sub-section (1) of Section 21 of
the Act and it is also provided as one of the
grounds for forfeiture of the lease rights in the
lease deed, not otherwise.
(iv) The period of fixed-term lease is ensured
and remains protected except in the cases
indicated in the preceding paragraph.”
11. The Division Bench of the High Court took note of the
fact that the non-obstante clause in Section 13 of the Rent Act
only gave the said Section 13 an overriding effect over the
other provisions of the Act. Section 13 was also made subject
to the provisions of Section 15 of the Bombay Act. This is in
contrast to Section 21 of the Karnataka Act which had an
overriding effect over any other law or contract to the contrary.
Section 15 which deals with the authority of the lessee to
sub-lease or assign the leased rights/property, though, gives
an overriding effect over any other law has been made subject
to any contract to the contrary. Therefore, the terms of the
lease and other cognate provisions of law is not obliterated.
The Division Bench, in view of the above provisions of the
Bombay Rent Act, went on to hold that the “ratio of the
decision of 3-Judge Bench of the Apex Court in Laxmidas
Bapudas Darbar (supra) would apply with much greater force
for the benefit of the lessee under fixed long term lease in the
State of Gujarat.” It is on the aforesaid basis that the Division
Bench came to the conclusion that the Rent Act did not
obliterate the effect of the provisions of Section 108(j) of the
Transfer of Property Act which would vest a right in the lessee
not only to sublet but also to assign the subject matter of the
lease granted to him by the original lessor.
12. So far as the contention of the appellants that as the
company has been wound up it no longer required the leased
land for its use is concerned, the High Court, in the impugned
judgment, disagreed with the aforesaid proposition as a viable
and acceptable proposition of law. Furthermore, it was held
that the liability/obligation to pay rent for the leased land does
not constitute an onerous obligation on the company in
liquidation so as to justify surrender of the leased land by the
Official Liquidator or any direction to the said effect under
Section 525 of the Companies Act.
13. So far as the issue with regard to default in the payment
of rent is concerned, the High Court, in the light of its views
with regard to the applicability of the provisions of the
Transfer of Property Act, had invoked both Section 114 of the
Transfer of Property Act and Section 12 (3) of the Rent Act to
hold that as “the secured creditors and workers have always
shown their readiness and willingness to pay the rent and
arrears thereof the lessors are not entitled to claim or get
possession of the land leased to the company presently in
winding up”. However, in the operative part of its order the
Bombay High Court was pleased to observe as follows :
“In view of the statement of Mr. RM Desai,
learned counsel for the secured creditor that the
arrears of rent, if any, remaining unpaid by the
company in liquidation shall be paid by the
secured creditor, we direct that within one
month from today, the Official Liquidator shall
supply to the secured creditor the particulars of
the rent for the demised land for the period upto
31st October, 2008, remaining unpaid so far,
and the secured creditor – State Bank of India
shall deposit the amount with the Official
Liquidator within one month thereafter. It will
be open to the lessors to withdraw such
amount.”
14. On behalf of the appellants it is urged that the company
in liquidation i.e. Prasad Mills Ltd. and the official liquidator
appointed by the learned Company Judge in the liquidation
proceedings involving the said company have rendered
themselves liable to eviction on the ground of default in
payment of rent under Section 12 of the Rent Act. It is further
contended on behalf of the appellants that eviction of the
official liquidator is required to be ordered on the grounds
enumerated in Sections 13(1)(e) and 13(1)(k) of the Rent Act.
Pointing out the provisions of Section 15 of the Rent Act it has
been urged that the official liquidator has assigned the
property contrary to the provisions of Section 15, such act not
being saved either by express term of the contract/lease deed
or by the proviso to Section 15 of the Rent Act. Sections 18
and 19 of the Rent Act have also been relied upon by thePage 19
19
appellants to show that the official liquidator is not entitled to
receive any payment apart from the standard rent. It is urged
that in the absence of any such enabling provision not only
receipt of such consideration upon assignment is illegal but
the property itself has become onerous being incapable of
earning any profit. Besides, the property has ceased to serve
the purpose of lease in view of the liquidation of the company.
Accordingly, the official liquidator is liable to surrender the
same to the original owners, it is urged.
15. Shri P.S. Narasimha, learned Additional Solicitor General
on the other hand has submitted that the provisions of default
in the matter of payment of rent would not be attracted as the
secured creditors including the State Bank of India had all
along been ready and willing to pay all rents due. In fact, the
learned Additional Solicitor General has drawn the attention to
the directions of the High Court contained in para 43 of the
impugned judgment (extracted above) to contend that the
same is an order passed under Section 12(3)(b) of the Rent Act
which, however, could not be honoured in view of the interim
order passed by this Court at the time of entertaining the
special leave petitions. Insofar as the arguments advanced on
behalf of the appellants with regard to Section 13(1)(e) is
concerned, it is urged by the learned Additional Solicitor
General that under Clause 7 of the lease deed dated
10.12.1916 subletting is admittedly permissible. In the
present case, according to the learned Additional Solicitor
General, there is no assignment. In this regard reliance is
placed on two decisions of the Privy Council in Hans Raj vs.
Bejoy Lal Sel4
and Ram Kinkar Banerjee vs. Satya Charan
Srimani5
to contend that the law, as prevailing in India, does
not recognize any substantial difference between subletting
and assignment. So far as Section 13(1)(k) is concerned, it is
urged that the purpose of lease is not spelt out in the lease
deed and in any event Section 13(1)(k) contemplates non-user
of the leased premises without a reasonable cause. In the
present case, such non-user is on account of the fact that the
company was ordered to be wound up as far back as in the
year 1989.
4
[AIR 1930 PC 59]
5
[AIR 1939 PC 14]
16. The main plank on which the appellants have based their
case, as already noticed, is the operation of Sections 12
(default), 13(1)(e) (unauthorized assignment) and 13(1)(k)
(non-user of the leased land). We may now take up the
aforesaid issues in seriatim.
17. Section 12 of the Rent Act confers protection on a tenant
who is regularly paying or is ready and willing to pay the rent.
In the present case while there is no doubt that rent has not
been paid, equally, there is no doubt that the secured
creditors including the State Bank of India had all along been
ready and willing to pay the rent and the reasons for non
payment appears to be (para 43 of the impugned order of the
High Court) lack of communication by the official liquidator to
the SBI of the precise amount of rent due. While there can be
no doubt that mere readiness and willingness to pay without
actual payment cannot enure to the benefit of the tenant in
perpetuity what is required under Sub-section (2) of Section
12 is a notice in writing by the landlord raising a demand of
rent and only on the failure of the tenant to comply with such
notice within a period of one month that the filing of a suit for
recovery of possession is contemplated. The service of notice
giving an opportunity to the tenant to pay the unpaid rent is
the first chance/opportunity that the Rent Act contemplates
as a legal necessity incumbent on the landlord to afford to the
tenant. Admittedly, in the present case, no such notice as
contemplated by Section 13 (2) has been issued by the
landlord; at least none has been brought to our notice. In
such a situation, the readiness and willingness of the tenant
to pay the rent, though may have continued for a fairly long
time without actual payment, will not deprive the tenant of the
protection under the Rent Act. Though the order of the High
Court in para 43 of the impugned judgment has been placed
before the Court as an order under Section 12(3)(b) of the Rent
Act we do not find the said order to be of the kind
contemplated by Section 12(3)(b) inasmuch as not only the
order does not mention any specific rent which has to be
tendered in Court but what is encompassed therein is a
direction to the official liquidator to let the State Bank of India
know the precise amount that is required to be paid on
account of rent and, thereafter, to pay the same to the official
liquidator whereafter it has been left open for the lessors to
withdraw the said amount from the official liquidator. Such
an order by no stretch of reasoning would be one
contemplated under Section 12(3)(b). In the aforesaid
situation, the finding of the High Court that the landlord is not
entitled to seek eviction on the ground of non payment of rent
under Section 12 of the Bombay Rent Act cannot be said to be
so inherently infirm so as to require the interference of this
Court.
18. This will bring the Court to a consideration of the liability
of the official liquidator to a decree of eviction on the ground
contemplated under Section 13(1)(e) of the Bombay Rent Act.
As already discussed in a preceding paragraph of the present
order, the non obstante clause of Section 13 (1) overrides only
the other provisions of the Bombay Rent Act and is also
subject to the provisions of Section 15. Section 15 which
deals with sub-letting and transfer, though overrides the
provisions contained in any other law, is subject to any
contract to the contrary. Though in the present case the lease
deed (clause 7) is capable of being read as permittingPage 24
24
sub-letting and not assignment what has been held in the
present case by the High Court, by virtue of the decision of
this Court in Laxmidas Bapudas Darbar vs. Rudravva
(supra), is that in view of the limited operation of the non
obstante clause in Section 15 of the Bombay Rent Act, unlike
Section 21 of the Karnataka Act, the provisions of the Transfer
of Property Act [Section 118 (o)] will not become irrelevant to
the relationship between the parties in which event
assignment may also be permissible notwithstanding the
specific content of clause 7 of the lease deed in question.
However, we need not dwell on this issue at any length or
would also be required to consider the efficacy of the
arguments of the learned Additional Solicitor General on the
strength of the two Privy Council decisions mentioned above
i.e. Hans Raj vs. Bejoy Lal Sel and Ram Kinkar Banerjee
vs. Satya Charan Srimani (supra) inasmuch as from
Company Application No. 34 of 2004, which deals with the
claim of the appellants for eviction of the official liquidator
from the leased property, what is clear and evident is that the
case of sub-letting of the leased premises on which basisPage 25
25
eviction has been prayed for is not sub-letting/assignment by
the official liquidator but assignment of the leased premises to
Prasad Mills by the original managing agents in whose favour
the initial lease was executed by the predecessors of the
present owners. The ground of unauthorized and
impermissible assignment by the official liquidator on the
strength of the notice/advertisement for disposal of the leased
land thereby making the said authority liable for eviction is an
argument advanced only at the hearing of the appeals before
us. That apart the said argument overlooks the fact that the
assignment was only sought to be made by the
advertisement/notice issued and did not amount to a
completed action on the part of the official liquidator so as to
attract the relevant provisions of the Bombay Rent Act dealing
with the consequential liability for eviction. Such argument
also belies the injunctive/prohibitory relief sought for in the
Company Applications, as already noticed, insofar as the
contemplated sale/transfer/assignment of the leased property
by the official liquidator is concerned. The arguments
advanced on the strength of the provisions of Section 19 of thePage 26
26
Bombay Rent Act would also stand answered on the above
basis.
19. Insofar as liability under Section 13(1)(k) of the Bombay
Rent Act is concerned what is to be noticed is the requirement
of unjustified non-user for a period exceeding 6 months which
evidently is not be attracted to the present case in view of the
pendency of the liquidation proceedings. That apart, Clause 5
of the lease deed which deals with non-user of the leased land
does not contemplate eviction on account of such non-user
but merely entitles the lessor to receive rent for the period of
such non-user of the land.
20. The mere fact that the company has been ordered to be
wound up cannot be a ground to direct the official liquidator
to handover possession of the land to the owners inasmuch as
the company in liquidation continues to maintain its corporate
existence until it stands dissolved upon completion of the
liquidation proceedings in the manner contemplated by the
Companies Act. In the present case it has been repeatedly
submitted before this Court by both sides that presently
revival of Prasad Mills is a live issue pending before the
Gujarat High Court, a fact which cannot be ignored by this
Court in deciding the above issue against the appellants.
21. For the aforesaid reasons we affirm the order of the High
Court dated 17.10.2008 in O.J. Appeal Nos. 65 of 2006, 66 of
2006 and 67 of 2006 and dismiss the civil appeals arising out
of SLP(C) Nos. 29282-29284 of 2008 wherein the said order is
under challenge.
22. The other civil appeals, which have been heard
analogously, can be divided into two categories. The first is
where the order dated 17.10.2008 passed in O.J. Appeal No.
65 of 2006 [Jabal C. Lashkari & Ors. Vs. Official Liquidator &
Ors.] impugned in civil appeals arising out of SLP(C) Nos.
29282-29284 of 2008 has been followed. In the other group
are the cases where the said order has been followed and also
an additional ground has been cited namely that in view of the
order dated 17.07.2006 passed in Company Application No.
250 of 2006 a direction has been issued to handover
possession of the leased premises to the State Government;
hence the question of putting the property to sale does not
arise.
23. Though we have affirmed the order dated 17.10.2008 of
the Gujarat High Court passed in O.J. Appeal Nos. 65 of
2006, 66 of 2006 and 67 of 2006 and dismissed the civil
appeals arising out of SLP(C) Nos. 29282-29284 of 2008 [Jabal
C. Lashkari & Ors. Vs. Official Liquidator & Ors.], our decision
to affirm the said judgment of the High Court is based on a
consideration of the specific clauses in the lease deed between
the parties to the case. What would be the effect of the
principles of law underlying the present order vis-a-vis the
specific clauses of the lease deed between the parties in the
other cases is a question that has to be considered by the High
Court in each of the cases. That apart whether the order
dated 17.07.2006 passed in Company Application No. 250 of
2006 has attained finality in law and forecloses the question
raised and further whether constructions have been raised on
such land by the State Government for the benefit of the
general public, as has been submitted to dissuade us from
interfering with the order of the High Court, are questions that
would require a full and complete consideration by the High
Court on the materials available. To enable the said exercise to
be duly performed, we set aside the order of the High Court
impugned in each of the aforesaid civil appeals and remit all
the matters to the High Court for a fresh consideration in
accordance with the observations and principles of law
contained in the present order.
.……......................,J.
[RANJAN GOGOI]
.……......................,J.
[PRAFULLA C. PANT]
NEW DELHI,
MARCH 29, 2016.
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