Winding-up jurisdiction and void leases: company court can summarily decide asset disputes and set aside post-winding-up dispositions.

In company winding-up proceedings, the company court may exercise wide summary jurisdiction under section 446(2) to decide claims, defences, and questions of law or fact without requiring a separate suit. The article notes that the appellant had been heard and participated, so the eviction procedure was not contrary to due process. It also states that leases granted in favour of the appellant were void, because the first lease conflicted with the company's undertaking not to alienate assets without prior approval, and the renewal lease fell within the prohibition on dispositions after commencement of winding up under section 536(2) unless the court otherwise ordered. The appellant's claim to continue in possession therefore failed.

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Issues: (i) Whether the procedure adopted for eviction in the company winding-up proceedings was contrary to due process of law. (ii) Whether the leases created in favour of the appellant were void under the Companies Act, 1956.

Issue (i): Whether the procedure adopted for eviction in the company winding-up proceedings was contrary to due process of law.

Analysis: The proceeding was treated as one falling within the company court's jurisdiction under section 446(2) of the Companies Act, 1956. The appellant had been heard, had filed an affidavit, and participated in the proceeding. Section 446(2) confers wide summary jurisdiction on the company court to decide claims, defences, and questions of law or fact arising in winding up, without requiring a separate suit.

Conclusion: The procedure adopted was held to be in accordance with law and not violative of due process.

Issue (ii): Whether the leases created in favour of the appellant were void under the Companies Act, 1956.

Analysis: The first lease was tested against the company's undertaking to the Reserve Bank of India not to alienate its assets without prior approval, and the renewal lease was examined in light of section 536(2) of the Companies Act, 1956, which renders dispositions after commencement of winding up void unless the court otherwise orders. The court also rejected reliance on the Andhra Pradesh rent control protection, holding it inapplicable on the relevant facts.

Conclusion: The leases were held to be void, and the appellant's claim to continue in possession failed.

Final Conclusion: The appeal was found to be devoid of merit and the eviction order in favour of the official liquidator was sustained.

Ratio Decidendi: In winding-up proceedings, the company court may summarily decide disputes concerning the company's assets under section 446(2), and any disposition of company property made after commencement of winding up is void under section 536(2) unless the court orders otherwise.

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