Clean hands and clear title are essential before seeking possession or compensation in company liquidation proceedings.

An applicant seeking vacant possession and compensation in proceedings under section 446 of the Companies Act, 1956 read with Rule 9 of the Companies (Court) Rules, 1959 must establish clear title and come with clean hands. Where reliable title documents, including a certified sale deed, are not produced and the record raises serious doubt about ownership and locus, relief may be refused. The Court also considered allegations of diversion of funds from the company in liquidation and material indicating the applicant's alignment with the erstwhile management. In those circumstances, it held that the corporate veil could be lifted to identify the real beneficiaries, and the applicant was not entitled to possession or compensation.

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Issues: Whether the applicant was entitled to directions for handover of vacant possession of the property and payment of compensation under section 446 of the Companies Act, 1956 read with Rule 9 of the Companies (Court) Rules, 1959.

Analysis: The applicant failed to place reliable and complete title documents on record, including a certified copy of the sale deed, and the record raised serious doubts about its ownership and locus. The applications were also assessed against the background of large-scale diversion of funds from the company in liquidation, the apparent connection of the applicant with the erstwhile management, and material suggesting that the applicant was aligned with the very persons who had siphoned off the company's funds. In these circumstances, the applicant was found not to have approached the Court with clean hands, and the Court held that the corporate veil could be lifted to examine the real beneficiaries behind the applicant.

Conclusion: The applicant was not entitled to the relief of possession or compensation.

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