Court-directed disclaimer of leasehold property is effective by order itself, despite non-filing by the liquidator.
A transfer of shares made after commencement of winding-up was void and could not support an application to revive the company or stay the winding-up on that footing alone, although contributories were not wholly barred from moving the court. The proposed revival scheme also lacked confidence in funding and liability repayment. On disclaimer, where the court directs the official liquidator to disclaim leasehold property at the instance of the adverse party, the order itself makes the disclaimer operative; the liquidator's failure to file the disclaimer does not defeat it. Subsequent relief undertaking notifications could not revive an interest already validly disclaimed.
Issues: (i) whether the appellants could maintain the application and seek relief after the transfer of shares made during the winding-up period, and (ii) whether the disclaimer of the leasehold interest became operative notwithstanding that it was not filed in court.
Issue (i): whether the appellants could maintain the application and seek relief after the transfer of shares made during the winding-up period.
Analysis: The shares in question were transferred after commencement of winding-up, attracting the prohibition against such transfers. The transfer was therefore void and could not confer an effective basis on appellant No. 1 to insist on revival or to seek the relief in the manner claimed. Although the contributories were parties and an application at their instance was not wholly incompetent, the case for staying the winding-up could not be sustained on the footing of appellant No. 1 alone, and the proposed revival scheme did not inspire confidence in the availability of adequate funds for payment of liabilities and revival of the business.
Conclusion: The challenge based on maintainability and the revival proposal failed, and the relief sought on that footing was not accepted.
Issue (ii): whether the disclaimer of the leasehold interest became operative notwithstanding that it was not filed in court.
Analysis: The statutory scheme under the Companies Act and the Companies (Court) Rules contemplates filing of a disclaimer where the liquidator disclaims property pursuant to leave of court. But where the court itself directs disclaimer at the instance of the adverse party, the liquidator cannot defeat the court's order by omitting to file the disclaimer. In such a situation, the order directing disclaimer operates as the effective disclaimer, and the subsequent notifications under the West Bengal Relief Undertakings Act could not affect a disclaimer that had already become operative.
Conclusion: The disclaimer was held to have taken effect, and the relief undertaking notifications did not revive the leasehold interest.
Final Conclusion: The appeal failed because the appellants had no effective basis to undo the operative disclaimer or to obtain a stay of the winding-up proceedings, and the dismissal of the application was upheld.
Ratio Decidendi: Where the court directs the official liquidator to disclaim property at the instance of the opposite party, the disclaimer becomes effective by force of the court's order and is not defeated merely because the liquidator does not file it in court under the procedural rule requiring filing of a voluntary disclaimer.
TaxTMI 
AI Drafter ✕
TaxTMI 
