Fixed-term lease rights survive winding up, and leasehold interest remains transferable unless contract or local usage excludes it.

A 199-year lease was held to continue according to its contractual term despite the lessee-company's winding up, and the Bombay Rent Act could not be used to recover possession before expiry where the lease deed itself did not provide a corresponding forfeiture ground. The lessee's leasehold interest remained transferable under the Transfer of Property Act because the deed did not exclude that right and no contrary local usage was shown; the objection based on absence of prior notice was premature. The lease was found to be in favour of the company, and no actionable change of user was established because the deed did not impose a specific restrictive purpose.

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Issues: (i) whether the Bombay Rent Act could be invoked to recover possession of land let for 199 years before expiry of the lease term merely because the company-lessee had gone into winding up; (ii) whether the leasehold rights could be treated as incapable of assignment or sale by the Official Liquidator and whether absence of prior notice to the lessors vitiated the proposed transfer; and (iii) whether the lease was executed in favour of the managing agent alone or in favour of the company, and whether change of user entitled the lessors to re-entry.

Issue (i): whether the Bombay Rent Act could be invoked to recover possession of land let for 199 years before expiry of the lease term merely because the company-lessee had gone into winding up.

Analysis: The lease deed created a fixed-term contractual tenancy for 199 years. The governing principle applied was that a long-term lease continues according to its terms and is not cut short merely because the lessee-company goes into liquidation. The Court relied on the distinction between a subsisting lease and grounds of eviction, and held that the Bombay Rent Act did not override the contractual term in the same manner as the Karnataka enactment considered in the cited precedent. The statutory grounds under Section 13 of the Bombay Rent Act could not be used to truncate the lease period unless the lease deed itself provided an equivalent ground of forfeiture. The only relevant default contemplated was non-payment of rent, and the record showed readiness and willingness to pay rent.

Conclusion: The lessors were not entitled to recover possession during the subsistence of the 199-year lease merely because of winding up. This issue is against the appellants.

Issue (ii): whether the leasehold rights could be treated as incapable of assignment or sale by the Official Liquidator and whether absence of prior notice to the lessors vitiated the proposed transfer.

Analysis: The Court held that the lessee's rights under Section 108(j) of the Transfer of Property Act remained available because the lease deed did not exclude them and there was no local usage to the contrary. A contractual clause permitting subletting did not take away the statutory right to transfer or assign leasehold interest. The challenge based on want of prior notice was premature because the leasehold rights had not yet been assigned, and the authorities relied on concerned procedural objections in different contexts. The Court also noted that the lessors' own rights would not be extinguished by an assignment of the leasehold interest.

Conclusion: The leasehold interest was capable of assignment and the objection based on absence of notice did not justify interference. This issue is against the appellants.

Issue (iii): whether the lease was executed in favour of the managing agent alone or in favour of the company, and whether change of user entitled the lessors to re-entry.

Analysis: On the language of the lease deed and the surrounding documents, the Court accepted the finding that the lease was executed for and on behalf of the company and was signed by the relevant company representatives. The Court also held that no specific restrictive purpose of use was shown in the lease deed, and therefore a plea of change of user under Section 108(o) of the Transfer of Property Act was not made out. The asserted right of re-entry on that basis was inconsistent with the terms of the lease.

Conclusion: The lease was in favour of the company and no case of actionable change of user was established. This issue is against the appellants.

Final Conclusion: The fixed-term lease continued to govern the parties notwithstanding winding up, the lessors had no immediate right to possession, and the company's leasehold interest could be dealt with in liquidation subject to the lease terms and outstanding rent obligations.

Ratio Decidendi: A long fixed-term lease is not curtailed by winding up or by rent-control grounds unless the lease deed itself provides a corresponding forfeiture basis, and the lessee's statutory right to transfer leasehold interest under the Transfer of Property Act remains available unless expressly excluded by contract or local usage.

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