Priority for post-liquidation rent depends on winding-up expenses, not mere liquidators' occupation of the premises.

Under the Indian Companies Act, 1913, a rule framed for winding-up could not enlarge the statutory classes of preferential debts beyond those given priority by section 230. Rent accruing after a winding-up order, while the premises remained in the liquidators' occupation, did not automatically rank in priority under rule 97; it remained an ordinary unsecured debt unless the occupation was for liquidation purposes and the rent was properly referable to the costs and expenses of winding up. On the facts, the landlord was not entitled to priority payment, and the rent claim ranked with ordinary creditors.

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Issues: Whether rent accruing after the winding-up order, in respect of premises continued in the occupation of the liquidators but not used for the purpose of liquidation, was entitled to priority payment over ordinary debts under rule 97 of the Company Rules.

Analysis: The statutory scheme in the Indian Companies Act, 1913 confined priority to the categories specified by section 230, while section 246 empowered rule-making only consistently with the Act. Rule 97 preserved the landlord's right to claim rent accruing after the winding-up order, but did not itself create a new class of preferential debt. Rent payable under an un-disclaimed subsisting tenancy remained, in the ordinary case, an unsecured debt ranking with other creditors, unless the court treated it as part of the costs and expenses of winding up. Priority could be justified only where the liquidator's occupation was for the purpose of liquidation and the rent was properly referable to winding-up expenses.

Conclusion: The landlord was not entitled to priority payment merely because the premises remained in the liquidators' occupation; the rent claim ranked as an ordinary debt and did not fall within costs and expenses of winding up on the facts found.

Ratio Decidendi: A rule made under the winding-up provisions cannot confer priority in payment beyond the debts to which the Act itself grants priority, and rent accruing during liquidation is payable in priority only when it properly forms part of the costs and expenses of winding up.

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