Liquidator's disclaimer of leasehold premises upheld where the tenancy had ended and the asset was no longer needed for winding up.

A leasehold premises in liquidation was treated as no longer fit to be retained where rent had remained unpaid, notice to quit had been served, the business had ceased, and repeated attempts to realise the property had failed. The court noted that the tenancy was not protected by the West Bengal Premises Tenancy Act, 1956, and that the liquidator should not keep possession merely to preserve an unrealizable asset or continue an unnecessary rent liability. On those facts, the company court could direct disclaimer of the leasehold interest and delivery of possession because the property was not required for efficient winding up.

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Issues: Whether the official liquidator could be directed to disclaim the leasehold premises and hand over possession to the lessors on the facts that the lease had been terminated for default and liquidation, no rent had been paid, the business had ceased, and the property was no longer required for winding up.

Analysis: The lease conferred a limited right of assignment and sub-letting, but the premises were not protected by the West Bengal Premises Tenancy Act, 1956. The contractual tenancy was treated as having come to an end because rent had not been paid for a substantial period, the company had gone into liquidation, the notice to quit had been served, and the lease was nearing expiry. The court also noted that repeated attempts to sell the property had failed, the business was not being carried on, and the assets on the land were not needed for efficient winding up. In those circumstances, the official liquidator could not retain possession merely to preserve an unrealizable asset or continue a liability to pay rent. The leasehold interest was therefore not one that ought to be retained for the winding-up administration.

Conclusion: The appeal was allowed. The order refusing relief was set aside, and the official liquidator was directed to disclaim the premises and deliver possession to the appellants, with ancillary directions regarding removal or sale of structures and inventory.

Ratio Decidendi: Where a leasehold interest has ceased to be useful or saleable for the purposes of winding up, the contractual tenancy has effectively come to an end, and continued retention by the liquidator is unjustified, the company court may direct disclaimer and delivery of possession.

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