Company Court jurisdiction over leased premises in liquidation upheld where the assets are not genuinely needed for liquidation.

Section 446 of the Companies Act, 1956 was treated as conferring wide jurisdiction on the winding-up court to deal with proceedings against a company and matters relating to its assets in liquidation, including landlords' requests for recovery of possession of leased premises. The Delhi HC applied its earlier Full Bench view and held that rent-control protection does not bar the Company Court from examining whether the premises are genuinely required by the Official Liquidator for liquidation purposes. On the stated facts, the premises were no longer needed for liquidation or any viable revival scheme, rent had remained unpaid for years, and the applications for possession were maintained, with restoration directed to the landlords.

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Issues: Whether the Company Court could entertain the landlord's applications for recovery of possession of premises in the company's liquidation despite the Delhi Rent Control Act, 1959, and whether the Official Liquidator should be directed to restore possession to the landlords.

Analysis: Section 446 of the Companies Act, 1956 was held to confer wide jurisdiction on the winding-up court in respect of proceedings against the company and matters relating to its assets in liquidation. The earlier Full Bench view of the Court was applied to hold that proceedings for recovery of possession of leased premises from a company in liquidation are capable of being dealt with by the Company Court, even where rent-control protection exists, because the court must examine whether the premises are genuinely required by the Official Liquidator for liquidation purposes. On the facts, the premises had been let for the personal office of the managing director and a guest house, rent had not been paid for years, the managing director had died, and the premises were not shown to be needed either for liquidation or for any viable revival scheme. In those circumstances, the protection under the Rent Act did not justify continued occupation.

Conclusion: The applications were maintainable and the landlords were entitled to recovery of possession; the Official Liquidator was directed to hand over the premises, including the occupied servant quarters, to the applicants.

Ratio Decidendi: A winding-up court can entertain and decide an application for recovery of possession of premises in the occupation of a company in liquidation, notwithstanding rent-control protection, if the premises are not genuinely required for liquidation and the landlord establishes entitlement to possession on the facts.

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