Tenancy rights in liquidation cannot be attached on bare allegations, and unused premises must be returned to the landlord.

Tenancy rights of a company in liquidation under the Bombay Rent Act are not automatically transferable, assignable, or attachable; the statutory prohibition in section 15(1) is subject to limited exceptions, but those exceptions did not apply where the business had ceased and there was no transfer of a live business with stock-in-trade and goodwill. The Court also noted that attachment before judgment under Order 38 CPC and appointment of a receiver under Order 40 CPC require a prima facie basis and cannot rest on bare allegations or financial distress. Separately, where tenanted premises are not required for beneficial winding up, the Official Liquidator must surrender possession to the landlord under section 457 of the Companies Act, 1956.

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Issues: (i) whether the tenancy rights of a company in liquidation under the Bombay Rent Act were capable of being transferred, assigned or attached so as to support an order of attachment before judgment and appointment of a receiver; (ii) whether, on winding up, the Official Liquidator was bound to retain the tenanted premises or had to hand over possession to the landlord when the premises were not required for beneficial winding up.

Issue (i): whether the tenancy rights of a company in liquidation under the Bombay Rent Act were capable of being transferred, assigned or attached so as to support an order of attachment before judgment and appointment of a receiver.

Analysis: The prohibition on transfer or assignment under section 15(1) of the Bombay Rents, Hotel and Lodging House Rents Control Act, 1947 is not absolute, but the recognised exceptions were held not to apply on the facts. The record showed that the company's business had already ceased, the premises were locked up by the Receiver, and the assets were not being dealt with as a going concern. The notification under the proviso to section 15(1) could not assist the Bank because there was no transfer of the entire interest in leasehold premises together with a live business, stock-in-trade and goodwill. The Court further held that attachment before judgment under Order 38 of the Code of Civil Procedure, 1908 could not rest on bald allegations or mere financial difficulty, and the material on record disclosed no prima facie basis for such drastic relief. Appointment of a receiver under Order 40 of the Code of Civil Procedure, 1908 was likewise unsupported for the immovable premises.

Conclusion: The tenancy rights were not shown to be attachable or assignable on the facts, and the orders of attachment before judgment and receivership in respect of the immovable premises were unsustainable.

Issue (ii): whether, on winding up, the Official Liquidator was bound to retain the tenanted premises or had to hand over possession to the landlord when the premises were not required for beneficial winding up.

Analysis: The governing principle under section 457 of the Companies Act, 1956 is that where a company is being wound up and the Official Liquidator does not require tenanted premises for carrying on business or for beneficial winding up, possession should be handed back to the landlord. The company had been defunct for years before the winding-up order, and the Official Liquidator expressly stated that the premises were not required for beneficial winding up. On that basis, the landlord's claim to possession was accepted.

Conclusion: The Official Liquidator was required to surrender possession of the premises to the landlord.

Final Conclusion: The appeals failed because the immovable premises could not be retained under a legally sustainable attachment or receivership, and the liquidator had no continuing need to keep the tenanted property for winding up.

Ratio Decidendi: A tenant's interest in premises cannot be attached before judgment on mere assertions or financial distress, and where a company in liquidation does not need tenanted premises for beneficial winding up, possession must be restored to the landlord.

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