Company tenancy in liquidation remains protected asset; employee-occupant cannot claim independent possession after termination of service.

A company's tenancy in premises used by its business remains an asset in liquidation and stays under the custody of the company court through the official liquidator. The stay under section 18FA of the Industries (Development and Regulation) Act, 1951 was inapplicable because the flat did not form part of the industrial undertaking taken over by the Central Government, so the objection to the winding-up process failed. An employee-occupant who entered the flat by virtue of service could not claim an independent tenancy or continue in possession after termination of employment, absent lawful surrender or disclaimer of the tenancy. The occupant was therefore treated as unauthorised and directed to vacate and deliver possession to the official liquidator.

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Issues: (i) Whether the pending winding-up proceedings and the proposed action against the official liquidator were barred or stayed by the Industries (Development and Regulation) Act, 1951; (ii) whether the occupant of the flat was in lawful possession or was liable to be directed to vacate and deliver possession to the official liquidator.

Issue (i): Whether the pending winding-up proceedings and the proposed action against the official liquidator were barred or stayed by the Industries (Development and Regulation) Act, 1951.

Analysis: The stay under section 18FA of the Industries (Development and Regulation) Act, 1951 was held inapplicable because the flat in question did not form part of the industrial undertaking taken over by the Central Government. Only the relevant industrial division was under statutory control, while the tenancy in the flat remained an asset of the company in liquidation and therefore within the custody of the company court through the official liquidator.

Conclusion: The objection based on the Industries (Development and Regulation) Act, 1951 was rejected.

Issue (ii): Whether the occupant of the flat was in lawful possession or was liable to be directed to vacate and deliver possession to the official liquidator.

Analysis: The correspondence and affidavits showed that the occupant had entered the premises as an employee of the company and that any later payments or arrangements were only provisional and subject to settlement with the company. There was no effective surrender of the tenancy by the company, and the occupant's service had already been terminated. On winding up, the company's tenancy continued as an asset, and the occupant could not claim an independent tenancy or continued employment. The court also relied on its powers in winding-up jurisdiction and under the Companies (Court) Rules to prevent multiplicity of proceedings and protect company property.

Conclusion: The occupant was held to be in unauthorised occupation and was directed to vacate and deliver vacant possession to the official liquidator.

Final Conclusion: The company's tenancy was treated as property of the company in liquidation, the occupation of the flat was found to be unauthorised, and possession was ordered to be restored to the official liquidator.

Ratio Decidendi: In winding-up proceedings, a tenancy held by the company remains an asset in the custody of the company court, and a person who occupies company premises only by reason of employment cannot continue in possession after termination of service or assert an independent right absent a lawful surrender or disclaimer of the tenancy.

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