1964 (2) TMI 49 - DSC - Companies Law

Landlords' Business Intention Valid under Landlord and Tenant Act

The court found that the landlords' intention to occupy the premises for their business activities, specifically to provide detailed administration for ... Winding up - Powers of liquidator Issues Involved:1. Whether the landlords' intention to occupy the premises for their own purposes under section 30(1)(g) of the Landlord and Tenant Act, 1954, is valid.2. The legal status and implications of the Universities Central Council on Admissions' occupation of the premises.3. The effect of the landlords' voluntary winding up and section 281 of the Companies Act, 1948, on their ability to carry on business.4. The impact of the transfer of the landlords' assets to a new chartered company on their intention to occupy the premises.Issue-Wise Detailed Analysis:1. Landlords' Intention to Occupy the Premises:The landlords, a limited company, opposed the granting of a new lease to the tenants, arguing that they required the premises for their own activities as per section 30(1)(g) of the Landlord and Tenant Act, 1954. The landlords must demonstrate that 'on the termination of the current tenancy the landlord intends to occupy the holding for the purposes, or partly for the purposes, of a business to be carried on by him therein, or as his residence.' The court found that the landlords intended to occupy the premises to provide detailed administration for the Universities Central Council on Admissions, which constitutes a business activity under section 23(2) of the Act. Therefore, the landlords' intention to occupy the premises was valid under section 30(1)(g).2. Legal Status of the Universities Central Council on Admissions:The tenants contended that the council was a separate entity and that the landlords did not want the premises for their own occupation. The court recognized that the council, although not a body corporate, could be considered a body unincorporate with a juridical personality. The landlords provided accommodation, equipment, and staff for the council, which was part of their business activities. Thus, the landlords and the council shared the occupation of the premises, and the landlords' activities in providing administrative support were considered a business activity under section 23(2).3. Effect of Voluntary Winding Up and Section 281 of the Companies Act, 1948:The tenants argued that the landlords, being in voluntary liquidation, had no power to carry on business as per section 281 of the Companies Act, 1948, which states that a company in voluntary winding up shall cease to carry on business except for the beneficial winding up thereof. The court disagreed, stating that the objective of the winding up need not be financial and could include ensuring a smooth transfer to the new chartered company. The landlords' activities were necessary for the beneficial winding up, and section 281 did not preclude them from carrying on business.4. Impact of Transfer to New Chartered Company:The landlords were in the process of transferring their assets to a new chartered company, the Association of Commonwealth Universities. The tenants argued that this transfer meant the landlords did not intend to occupy the premises themselves. The court held that the landlords intended to occupy the premises for a short period before transferring to the new company, which was sufficient to satisfy section 30(1)(g). The transfer was not for financial consideration, and the continuity of activities between the old and new entities supported the landlords' intention to occupy the premises.Conclusion:The court concluded that the landlords had established the statutory ground of opposition under section 30(1)(g) of the Landlord and Tenant Act, 1954. The landlords' intention to occupy the premises for their business activities, even for a short period before transferring to the new chartered company, was valid. The appeal was allowed, and the tenants were not entitled to a new lease.