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Issues: (i) Whether employees of a company in compulsory liquidation continue to have a right to resist vacation of staff quarters and invoke industrial dispute remedies before the company court; (ii) whether, after a winding-up order, the company court and the official liquidator can require surrender of company property and evict occupants from staff quarters.
Issue (i): Whether employees of a company in compulsory liquidation continue to have a right to resist vacation of staff quarters and invoke industrial dispute remedies before the company court.
Analysis: On a winding-up order, the business of the company comes to an end and the employment of the erstwhile workmen stands discharged forthwith under section 445(3) of the Companies Act, 1956. Any claim based on industrial law, including a claim under the Industrial Disputes Act, 1947, has to be worked out before the appropriate forum and not in the company court. The court distinguished cases dealing with voluntary closure by the employer from liquidation ordered by the court and held that the Industrial Disputes Act did not control the present application for continued occupation of the quarters.
Conclusion: The claim to continue in occupation and to resist eviction was rejected; the applicants had no enforceable right in the company court to prevent vacation of the quarters.
Issue (ii): Whether, after a winding-up order, the company court and the official liquidator can require surrender of company property and evict occupants from staff quarters.
Analysis: Upon winding up, company assets come into the custody of the court. Rule 9 of the Companies (Court) Rules, 1959, read with sections 446 and 456(2) of the Companies Act, 1956, supports the court's control over the property, and section 468 authorises directions for delivery and surrender of property to the official liquidator. Section 630 further underlines that persons withholding company property are liable to proceed against. On that basis, the official liquidator was entitled to take effective steps for eviction with police assistance.
Conclusion: The official liquidator was entitled to secure eviction and recover possession of the staff quarters.
Final Conclusion: The applications failed and the liquidation court's directions for eviction and surrender of possession were upheld.
Ratio Decidendi: A compulsory winding up operates as a statutory discharge of employees, and company property in liquidation falls under the court's control so that occupation can be terminated and possession recovered through the official liquidator.
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