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Issues: (i) whether the Company Court could release the tenancy property in favour of the landlord and direct removal of occupants in exercise of powers under the Companies Act; (ii) whether the alleged sub-tenancy dispute required adjudication by a suit instead of immediate eviction in the company proceedings.
Issue (i): whether the Company Court could release the tenancy property in favour of the landlord and direct removal of occupants in exercise of powers under the Companies Act.
Analysis: The tenancy asset was found to be of no use for the winding up and was treated as onerous property. The Court held that, although the Official Liquidator had not taken physical possession, the property was deemed to be in the custody of the liquidator by reason of the winding up proceedings. In that setting, the Court held that the Company Court could exercise jurisdiction under the Companies Act to release the property in favour of the present owner and to direct removal of trespassers from the portion not claimed by any objector.
Conclusion: The issue was answered in favour of the applicant, and the Official Liquidator was directed to release the property and remove trespassers from the vacant portion.
Issue (ii): whether the alleged sub-tenancy dispute required adjudication by a suit instead of immediate eviction in the company proceedings.
Analysis: The interveners claimed lawful sub-tenancy on the basis of alleged agreements, while the applicant disputed any written consent of the landlord for sub-letting. The Court noted the absence of any produced written consent and the existence of circumstances creating doubt, but also took note of the long occupation and rent payments. On that factual matrix, the Court held that the issue as to lawful sub-tenancy should be resolved by a suit before the Company Court under section 446(2) rather than by immediate final eviction of the interveners in the present application.
Conclusion: The issue was kept open for adjudication in a suit, and the applicant was granted liberty to institute proceedings for recovery of possession against the Company in liquidation and the interveners.
Final Conclusion: The application succeeded to the extent of release of the property and eviction of trespassers from the unoccupied portion, while the rival claim of sub-tenancy was left for determination in separate proceedings under the Companies Act.
Ratio Decidendi: In winding up proceedings, the Company Court may summarily release onerous property and direct removal of trespassers, but where lawful sub-tenancy is seriously disputed on facts under the rent law, the controversy may require adjudication in appropriate proceedings under section 446(2) of the Companies Act, 1956.
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