Liquidation assets and tenancy rights can be assigned by court-sanctioned sale despite tenancy and property law objections.

Monthly tenancy rights and unexpired leasehold interests of a company in liquidation are treated as valuable assets available for realisation in winding-up. Where the Official Liquidator acts with the Court's sanction, the sale or assignment is an involuntary transfer by operation of law, not a voluntary transfer by the company. On that basis, the Companies Act, 1956 and the Companies (Court) Rules permit such disposition for beneficial winding-up, and the West Bengal Premises Tenancy Act, 1956 and the Transfer of Property Act do not bar it in these circumstances. Objections based on forfeiture or re-entry clauses do not defeat the Court's power to realise the assets, and acceptance of rent after the relevant events may amount to waiver where the facts justify it.

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Issues: Whether the monthly tenancy and unexpired leasehold interests of a company in liquidation form part of the company's assets and can be sold, assigned or transferred by the Official Liquidator under the Court's sanction, and whether such disposition is hit by the tenancy and lease law restrictions or by clauses of forfeiture and re-entry.

Analysis: The Court held that, on a winding-up order, the company's properties come into the custody and control of the Court and the Official Liquidator functions as the Court's officer for realisation of assets. Reading the Companies Act, 1956 and the relevant Companies (Court) Rules as a whole, the Court concluded that monthly tenancy rights and leasehold rights are valuable assets of the company and may be dealt with for beneficial winding-up. A sale or assignment made by the Official Liquidator with the Court's sanction is not a voluntary transfer by the company but an involuntary transfer by operation of law. The Court further held that the West Bengal Premises Tenancy Act, 1956 and the Transfer of Property Act do not bar such a Court-directed disposition in these circumstances, and that objections based on forfeiture or re-entry clauses do not defeat the Court's power to realise the assets. On the question of waiver, acceptance of rent after the relevant events was treated as capable of amounting to waiver where the facts justified it.

Conclusion: The monthly tenancy rights and leasehold rights of a company in liquidation are saleable or assignable as assets through the Official Liquidator under the Court's order, and such transfer is an involuntary transfer by operation of law, not prohibited by the tenancy or property law objections raised.

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