Banking-company winding up and lease assignment: subsisting lease, valid liquidator transfer, and rent-control objections rejected.

In a banking-company winding up, the High Court's special jurisdiction extended to connected landlord-tenant and assignment issues because the company was already being wound up and a provisional liquidator had been appointed. The lease termination was invalid: suspension of banking activity did not amount to breach of the user clause, and arrears were not satisfactorily proved. As the lease therefore continued and the deed permitted assignment, the liquidator could assign the lease despite section 15 of the Rent Act. Section 6 of the Land Requisition Act did not render the assignment void, and the liquidator was not required to disclaim the premises as part of winding up administration.

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Issues: (i) Whether the High Court had jurisdiction to entertain the petition under the Banking Regulation Act, 1949 despite the landlord-tenant dispute and the non-obstante clause in section 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947; (ii) whether the lease had been validly terminated and, if not, whether the subsisting lease could be assigned notwithstanding section 15 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947; (iii) whether the proposed assignment was invalid under section 6 of the Bombay Land Requisition Act, 1948; and (iv) whether the official liquidator was bound to disclaim the premises as unnecessary for winding up.

Issue (i): Whether the High Court had jurisdiction to entertain the petition under the Banking Regulation Act, 1949 despite the landlord-tenant dispute and the non-obstante clause in section 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.

Analysis: The petition concerned a banking company being wound up under the special regime of the Banking Regulation Act, 1949. The expression "being wound up" was construed to include the stage where winding up proceedings were pending and a provisional liquidator had been appointed. In that situation, the High Court alone was held to be the court in seisin of the winding up proceedings and competent to deal with connected questions and claims. The later amendment, if any, cured any procedural defect, and the special banking legislation prevailed over the general rent control forum objection.

Conclusion: The High Court had exclusive jurisdiction and the petition was maintainable.

Issue (ii): Whether the lease had been validly terminated and, if not, whether the subsisting lease could be assigned notwithstanding section 15 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.

Analysis: The termination notice did not establish a contractual breach sufficient to invoke the re-entry clause. Suspension of banking activity did not, by itself, amount to a breach of the user clause, and the alleged arrears of rent and outgoings were not satisfactorily made out. As the termination was invalid, the lease continued to subsist. The lease deed itself contained an express covenant permitting assignment, and section 15 of the Rent Act was subject to a contract to the contrary. On that footing, the assignment by the liquidator was not prohibited.

Conclusion: The lease was not validly terminated and the assignment was valid and not hit by section 15.

Issue (iii): Whether the proposed assignment was invalid under section 6 of the Bombay Land Requisition Act, 1948.

Analysis: Section 6 was held to impose duties of intimation and restrictions on the landlord when premises become vacant, but it did not create a prohibition rendering an assignment void. Any occupation by the assignee would only be at the risk of the premises being requisitioned under the statute.

Conclusion: The assignment was not invalid under the Bombay Land Requisition Act, 1948.

Issue (iv): Whether the official liquidator was bound to disclaim the premises as unnecessary for winding up.

Analysis: The leasehold rights were treated as valuable assets of the company in liquidation. Since the lease was subsisting and assignable, and the court had sanctioned the assignment in the context of the winding up administration, there was no legal basis to require disclaimer merely because the liquidator was not carrying on the bank's former business in the premises.

Conclusion: The official liquidator was not required to disclaim the premises.

Final Conclusion: The petitioners were not entitled to eviction, possession, or ancillary reliefs, and the challenge to the assignment failed on all material grounds.

Ratio Decidendi: In a banking-company winding up, the High Court exercising special statutory jurisdiction can determine connected property claims; an unexpired lease may be assigned by the liquidator where termination is invalid and the lease deed permits assignment, and such assignment is not defeated by general rent-control or requisition provisions absent a statutory prohibition.

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