Liquidator duty to surrender premises when no longer required - landlord entitled to quiet, vacant and peaceful possession.

Where premises held by a company in liquidation are no longer required for winding up activities, the liquidator cannot retain exclusive possession or enter into arrangements that effectively sublet or license the premises; the proper course is surrender of possession to the landlord. Protecting tenants under rent legislation does not permit the liquidator to use facades to retain or monetise possession. Pendency of an eviction suit, alleged commonality of directors, or absence of creditor notice in the post winding up stage do not preclude the Companies Act remedy. Where factual prerequisites for surrender exist, the liquidator must hand over quiet, vacant and peaceful possession, subject to orderly sale or storage of movables and agreed sharing of security charges.

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Issues: Whether the Official Liquidator should be directed to deliver quiet, vacant and peaceful possession of leased premises to the landlord where the premises are no longer required by the company in liquidation or the Official Liquidator.

Analysis: Applicable legal principles include the rule that where premises held by a company in liquidation are no longer required for carrying on winding up activities the liquidator cannot retain exclusive possession or enter into arrangements (including caretaker agreements) that effectively sublet or license the premises; in such circumstances the proper course is surrender of possession to the landlord. The position in the cited authority establishes that protecting tenants under the Rent Act does not permit the liquidator to flout statutory prohibitions by using facades to retain or monetise possession. The Court examined objections raised by the workers' union - pendency of an eviction suit by the landlord does not preclude invocation of the Companies Act remedy; alleged commonality of directors between landlord and company did not affect the landlord's separate juristic standing; notice to creditors was not required in the present post-winding-up stage; and transfer or assignment under section 56 of the Maharashtra Rent Control Act, 1999 could not be effected without the landlord's consent. The record showed the Official Liquidator and ex-director conceded the premises were no longer required for the company in liquidation and the factual prerequisites for directing surrender of possession were therefore present. The Court framed the operative mechanism for handing over possession, including orderly sale or storage of movables and sharing of security charges with a secured creditor.

Conclusion: The application is allowed and the Official Liquidator is directed to hand over quiet, vacant and peaceful possession of the premises to the landlord in accordance with the terms set out by the Court (including sale or storage of movables and proportionate sharing of security charges).

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