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of <h1>Court rules lessors entitled to full rent post-liquidation without priority, payment through rateable distribution.</h1> <h3>Abdul Qadir Versus Akhtar Husain</h3> The court ruled in favor of the lessors, determining that they were entitled to receive the full rent amount post liquidation, starting from a specified ... Winding up - Preferential payments Issues:1. Entitlement of lessors to full rent payment post liquidation.2. Priority of lessors in rent payment over other creditors.3. Treatment of lease as an asset of the company.4. Possession of demised premises post liquidation.Detailed Analysis:1. The main issue in this case was the entitlement of lessors to receive full rent payments post liquidation. The appellants argued that they should receive the full rent amount due after the winding up order, as per established English practice. The court referred to previous English cases that supported the lessors' right to receive full rent post liquidation, distinguishing between amounts due before and after the winding up order. The court agreed with the appellants' contention and ruled that they were entitled to receive the full rent amount of Rs. 600 per month starting from July 1934, along with interest as per the lease agreement.2. Another issue raised was the priority of lessors in rent payment over other creditors. The appellants initially claimed priority for their rent over other creditors, but the learned Judge of the Court ruled against this contention, stating that the lessors must rank as ordinary creditors. However, the appellate court, following the English principle, held that the lessors were entitled to receive the full rent amount post liquidation, without priority over other creditors, but through rateable distribution out of the assets realized by the liquidator.3. The treatment of the lease as an asset of the company was also a significant aspect of the case. The liquidator argued that the rent from the lease should be considered part of the general assets of the company for rateable distribution among creditors. However, the court disagreed with this argument, stating that the lease was an asset with a liability to pay rent, and the lessors were entitled to receive the full rent amount as per the English principle, without treating it as part of the general assets for distribution.4. Lastly, the issue of possession of the demised premises post liquidation was raised in the grounds of appeal. The court did not pass a definite order on this matter, leaving it to be settled between the lessors, the liquidator, and the present occupant of the premises. The court suggested that if the parties could reach an amicable arrangement to terminate the lease before its normal expiry date, there would be no objection. The court allowed the appeal in part, granting the appellants their costs to be paid by the liquidator from the company's assets.In conclusion, the judgment clarified the entitlement of lessors to full rent payments post liquidation, the priority of lessors in rent payment, the treatment of the lease as an asset, and the issue of possession of the demised premises, providing a detailed analysis based on legal principles and precedents.
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