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Issues: (i) Whether the procedure adopted for ordering eviction of the appellant was in accordance with 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 ordering eviction of the appellant was in accordance with law.
Analysis: The proceeding was entertained by the company court on the official liquidator's request and the appellant was called upon to file an affidavit and contest its claim. In a winding-up matter, section 446(2) confers jurisdiction on the company court to decide any claim or question relating to the company, including disputes of law or fact arising in the course of winding up. The provision is intended to avoid multiplicity of proceedings and permits a summary determination after affording an opportunity of hearing to the affected party.
Conclusion: The procedure adopted was held to be lawful and in 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 held to be tainted by the company's prior undertaking to the Reserve Bank of India not to alienate its assets without approval, and the subsequent renewal was executed after presentation of the winding-up petition. The Court applied the principle that a party cannot take advantage of its own wrong and held that the renewal constituted a disposition after commencement of winding up attracting section 536(2). The claim of statutory monthly tenancy under the Andhra Pradesh rent legislation was also rejected as inapplicable on the relevant dates.
Conclusion: The leases were held to be void, and the appellant had no right to remain in possession.
Final Conclusion: The appeal failed on both the procedural and substantive challenges, and the eviction order was upheld.
Ratio Decidendi: In a winding-up proceeding, the company court may summarily determine disputes over company assets under section 446(2), and any disposition made after commencement of winding up is void under section 536(2) unless the court orders otherwise.
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