1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION jmi COMPANY APPLICATION NO.35 OF 2010 IN COMPANY PETITION NO. 385 OF 2002 IN BIFR CASE NO. 50 OF 1998. M/s. Associated Engineers. ..Petitioners. And Mr. H.S. Billimoria. ..Applicant. vs. The Official Liquidator of Swadeshi Mills Co. Ltd. & Anr. ..Respondents. .... Mr. V.R. Dhond, a/w. Ms. Vaishnavi Nair, i/b. Mulla & Mulla & Craigie Blunt & Caroe, for Applicant. Mr. Gyani, a/w. Dr. Poornima Advani, a/w. H. Kode & Ms. Rupali Pawar, i/b. M/s. The Law Point, for Respondent No.2-LIC. Official Liquidator, present. .... CORAM : S.J. KATHAWALLA, J. DATE : 5TH FEBRUARY 2010. P.C. By this company application, the applicant is seeking appropriate orders and directions for handing over of possession of flat no. 4A in Jeevan Jyot Building Setalved Lane, Off Nepean Sea Road, Mumbai-400 006 (the said flat). The applicant has also sought leave for substitution of the Official Liquidator of Swadeshi 2 Mills Company Limited in place of the applicant in the proceedings before the learned Estate Officer and for stay of the said proceedings. 2. According to the applicant, the owners of the said flat are the Life Insurance Corporation of India (LIC). The said flat was given on tenancy to the Swadeshi Mills Company Limited by LIC. However, the rent receipt was issued in the name of Tata Textiles. It is submitted that Tata Textiles is a brand of Swadeshi Mills Company Limited. The applicant has further submitted that on or before 28th November 2007, LIC filed an eviction application under the public premises (Eviction of Unauthorised Occupants) Act, 1971 against the applicant and Tata Textiles. The applicant recently learnt that by an order dated 13th February 2002 passed by this Court in B.I.F.R. case no.50 of 1998, the Official Liquidator had been appointed as the Provisional Liquidator of Swadeshi Mills Company Limited (the said Company), who is the tenant in respect of the said flat. The applicant has submitted that on 25th November 2009, he filed an application for stay of the proceedings before the learned Estate Officer inter-alia on the ground that leave under section 446 of the Companies Act, 1956 is not procured. The application for stay of the hearing 3 filed by the applicant was rejected by the Estate Officer. 3. Since the applicant was not desirous of continuing in occupation of the said flat, he also addressed a letter dated 4th December 2009 to the Official Liquidator to let him know whether the possession of the said flat should be handed over to the Official Liquidator or to LIC. The Official Liquidator by his letter dated 24th December 2009 informed the applicant not to hand over the possession of the said flat to LIC. It appears that the correspondence between the Liquidator and the learned Advocate for LIC pertaining to the said flat is being exchanged since the last several months. By his letter dated 4th December 2009, the Official Liquidator has addressed a letter to LIC’s Advocate pointing out several letters exchanged between the Swadeshi Mills Company Limited and LIC including a letter wherein LIC has referred to Swadeshi Mills Company Limited as a tenant of LIC in respect of the said flat, and sought a clarification from LIC within a period of two weeks. The Advocates for LIC have by their letter dated 24th December 2009 addressed a letter to the Official Liquidator inter-alia alleging that LIC is the owner of the said flat and that Swadeshi Mills Company Limited was at no time the tenant of the said flat and that Tata Textiles was their tenant. A 4 personal hearing was also sought from the Official Liquidator by the Advocates for LIC, which was granted and certain records/ documents were produced before the Official Liquidator on behalf of LIC. According to the Official Liquidator further meeting/s with LIC Advocates/ Officials are required after which the Liquidator will submit his report and obtain necessary directions. 4. The Official Liquidator has submitted that prima-facie Swadeshi Mills Company Limited appears to be the tenant of LIC in respect of the said flat. Though the respondents have in their affidavit-in-reply annexed two letters dated 12th November 1987 and 24th December 1996 (Exhibit ‘C’ Colly.) addressed to Tata Textiles and Swadeshi Mills Company Limited respectively, returning the cheques drawn by the Swadeshi Mills Company Limited on the ground that the premises stand in the name of Tata Textiles, the subsequent correspondence between LIC and the Swadeshi Mills Company Limited (Exhibit-1 to the affidavit-in- support of the company application) shows that not only LIC has had regular discussions with the Swadeshi Mills Company Limited subsequent to the year 1996, but in fact, LIC addressed a letter dated 17th April 2000 to the Swadeshi Mills Company Limited recording that the said tenancy stands in the name of Swadeshi 5 Mills Company Limited and asking them to inter-alia confirm whether the premises were in their possession. Again, though in the year 1987 and 1996, the cheques issued by Swadeshi Mills Company Limited towards the rent of the said flat were returned on the ground that the same may be drawn by Tata Textiles, LIC has on 10th July 1997 issued a deposit memorandum to the Swadeshi Mills Company Limited acknowledging having received their cheque towards the tenancy of the said flat. From the aforesaid documents, it is prima-facie established that though between the years 1987 to 1996, LIC had raised some issues pertaining to the tenancy standing in the name of Tata Textiles and not in the name of Swadeshi Mills, subsequently from the year 1997 onwards, LIC has changed its stand and has accepted the Swadeshi Mills Company Limited as their tenants. 5. The learned Advocate appearing for LIC has submitted that the letter dated 17th April 2000 issued to Swadeshi Mills Company Limited stating that the tenancy stands in the name of Swadeshi Mills Company Limited was a mistake. However, no such contention is found in the affidavit in reply. Again, LIC has not explained in the reply or even at this stage as to why LIC accepted the rent in respect of the said tenancy from Swadeshi 6 Mills Company Limited in the year 1997 when in 1987 as well as in the year 1996 cheques issued by the Swadeshi Mills Company Limited were returned to the said Swadeshi Mills on the ground that Tata Textiles were the tenants of LIC. 6. The respondents have contended that in the cross- examination before the Estate Officer the applicant has contended that he is a sub-tenant of Tata Textiles and the rent receipts have been issued by LIC in the name of Tata Textiles. To this, Mr. Dhond, learned Advocate for the applicant has submitted that the entire cross-examination of the applicant needs to be gone through and not one sentence without understanding the entire context. Mr. Dhond has also stated that since Tata Textiles is only a brand of Swadeshi Mills and is neither a Company nor a partnership nor a sole proprietory, the question of a brand of Swadeshi Mills being a tenant of LIC does not arise. 7. In view of what is stated hereinabove prima-facie it appears that LIC has treated Swadeshi Mills Company Limited as their tenant, though they have continued to issue the rent receipts in the name of Tata Textiles which is a brand of Swadeshi Mills Company Limited. The Official Liquidator is looking into the claim of LIC, and after considering the record/ documents 7 produced before him by LIC and after giving them a further hearing will produce his report before this Court dealing with the claim of LIC. However, since the applicant through his Advocates has informed the Court that he is not interested in retaining possession of the said premises and is willing to handover the same as per the directions of this Court, I see no reason why an unwilling individual should be made to retain the occupation / possession of a very valuable premises in respect of which the Official Liquidator prima-facie appears to be having tenancy rights. In fact, the property needs to be protected. In view thereof, the following order is passed :- (i) The applicant is allowed to hand over the keys of the said flat to the Official Liquidator. (ii) The Official Liquidator shall give a further hearing to the Advocates/ Officials of LIC on 10th February 2010 at 5.00 p.m. at his office and thereafter, submit his report to this Court on or before 18th February 2010 seeking further directions from this Court including whether he should represent himself in the proceedings before the Estate Officer. (iii) The Estate Officer shall fix the next hearing in the matter after 18th February 2010. 8 (iv) The company application is disposed of. 8. The learned Advocate appearing for LIC submits that the order passed by this Court be stayed for a period of six weeks. Since the order passed hereinabove does not prejudice any of the parties, the application for stay is rejected. [ S.J.KATHAWALLA, J. ]