Post-winding-up licence fees for beneficial use rank as liquidation expenses, with security deposit set-off and vacant possession required.

Licence fees for post-winding-up use of premises by an Official Liquidator to store and value company assets were treated as expenses of winding up, with priority over claims under Sections 529, 529A and 530 of the Companies Act, 1956. The premises had to be vacated once the movables were shifted to another company property. The security deposit could be adjusted against licence fee arrears, and only the balance, if any, remained payable in liquidation.

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Issues: Whether the Official Liquidator was required to vacate the licensed premises after shifting the company's movables, and whether the licence fees for the post-winding-up period were payable as liquidation expenses after adjustment of the security deposit.

Analysis: The premises were found to have been used by the Official Liquidator for storage and valuation of the company's assets for the purposes of winding up. Licence fees incurred for such beneficial use after the winding-up order were therefore treated as expenses of winding up and accorded priority over claims under Sections 529, 529A and 530 of the Companies Act, 1956. As to the security deposit, the applicant was entitled to adjust it against the licence fee arrears, and the balance alone, if any, would remain payable in liquidation. The premises were also directed to be vacated after the movables were shifted to another company property.

Conclusion: The application was allowed. The Official Liquidator was directed to shift the movables, hand over vacant possession of the premises, and pay the post-winding-up licence fees after adjusting the security deposit.

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