Transferability of leasehold rights upheld where perpetual lease permitted assignment and no statutory bar prevented realisation by the liquidator.

Leasehold rights under perpetual lease deeds were treated as transferable where the deed expressly permitted assignment and the parties' conduct showed repeated transfers without objection. Even on the assumption that rent control law applied, section 15(1) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 did not bar transfer where the contract allowed it, and section 108 of the Transfer of Property Act, 1882 supported assignability absent a statutory or contractual prohibition. The alleged rent default did not, by itself, justify restoration of the land to the lessors in the absence of ejectment proceedings. The leasehold interest could therefore be realised by the official liquidator for the benefit of creditors and contributories.

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Issues: Whether the leasehold rights in the subject land, created under perpetual lease deeds, could be transferred and sold by the official liquidator, or whether the land was liable to revert to the original lessors on liquidation.

Analysis: The lease deeds expressly permitted assignment and transfer of the lessee's interest, and the record showed repeated transfers of the leasehold rights without objection by the lessors or their predecessors. Even assuming the rent control legislation applied, Section 15(1) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 did not prohibit transfer where the contract allowed it. The leasehold interest was treated as a transferable capital asset with market value, and Section 108 of the Transfer of Property Act, 1882 supported its assignability in the absence of a statutory or contractual prohibition. The alleged default in rent payment did not justify return of the property to the appellants in the present proceedings, particularly when no ejectment proceedings had been initiated under the relevant legal regime.

Conclusion: The leasehold rights were transferable and could be realised by the official liquidator for the benefit of creditors and contributories; the appellants were not entitled to restitution of the land.

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