1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY APPLICATION NO.1350 OF 2007 IN COMPANY PETITION NO.767 OF 1997 Shri Brihad Bhartiya Samaj .. Applicant Vs. Orkay Industries Ltd. Mumbai .. Respondents Mr.R.M.Vasudeo for the applicant Mr.S.Ramakantha, Dy.Official Liquidator present CORAM : S.C.DHARMADHIKARI, J CORAM : S.C.DHARMADHIKARI, J CORAM : S.C.DHARMADHIKARI, J DATED : 6TH JUNE, 2008 DATED : 6TH JUNE, 2008 DATED : 6TH JUNE, 2008 P.C.: 1. This is a Company Application whereby the Applicant trust seeks a direction to the Liquidator to hand over possession to it of an immovable property admeasuring 3950 sq.ft. on the Southern side of the first floor of NKM International House, 178, Backbay Reclamation, Mumbai 400 020 hereinafter referred to as the said premises. Further relief sought is that the Arrears of Rent as mentioned in prayer clause (b) to the Company 2 Application be also directed to be paid to the Applicant. 2. In the affidavit in support, it is stated by the applicant that the Company in Liquidation is a tenant of the applicants in respect of the said premises and the monthly rent is Rs.39,500/- excluding taxes and water charges. The applicants claim ownership of the building on the basis of a lease deed executed by the then Collector of Bombay and State of Maharashtra in their favour. It is a Trust registered under the Bombay Public Trust Act, 1950, and it is the owner of the building. Portions / parts of the building have been let out by the applicant trust and the company in liquidation was a tenant in respect of the said premises. 3. It is not in dispute that the Company was wound up by this court. Initially the applicants called upon the Official Liquidator who has been appointed Liquidator of the Company in Liquidation to pay arrears of rent or else the Demand notice stated that the Company would be compelled to 3 initiate legal proceeding. However, all notices which were addressed to the Company in Liquidation / Official Liquidator at the address of the Company in Liquidation were returned back with remark ’closed’. 4. The specific case of the applicants is that the premises have been kept locked and unused for quite some years. The Company in Liquidation is not using the premises. Moreover, the Official Liquidator does not require the premises for the purposes of the beneficial and proper winding up of the Company. In other words, none of the operations and functions with regard to the winding up of the company’s activities and business have been carried out or are being carried out in the said premises. Reliance is placed by Shri Vasudev on the decision of the Supreme Curt in the case reported in AIR 1983 SC 1061 in the case of AIR 1983 SC 1061 in the case of AIR 1983 SC 1061 in the case of Ravindra Ishwardas Sethna and another v. Official Ravindra Ishwardas Sethna and another v. Official Ravindra Ishwardas Sethna and another v. Official Liquidator, High Court, Bombay and another and AIR Liquidator, High Court, Bombay and another and AIR Liquidator, High Court, Bombay and another and AIR 1993 SC 1380 in the case of Smt.Nirmala R.Bafna, 1993 SC 1380 in the case of Smt.Nirmala R.Bafna, 1993 SC 1380 in the case of Smt.Nirmala R.Bafna, Kershi Shiva Cambatta and others v. Khandesh Kershi Shiva Cambatta and others v. Khandesh Kershi Shiva Cambatta and others v. Khandesh Spinning & Weaving Mills Co.Ltd. and another, Spinning & Weaving Mills Co.Ltd. and another, Spinning & Weaving Mills Co.Ltd. and another, 4 Official Liquidator and others. Official Liquidator and others. Official Liquidator and others. Shri Vasudev submits that the Company application be made absolute in the light of the factual position and the law laid down by the Honourable Supreme Court. 5. The Official Liquidator has filed a report which had been placed before the court earlier. Thereafter, a further report is filed on 23.04.08 and written submissions have also been handed in. The only reason and ground on which the request of the applicants is opposed by the Official Liquidator is that the applicants have not forwarded a copy of the Tenancy agreement under which the Company in Liquidation was inducted as a tenant. It has been urged that what the applicants have produced is a lease agreement dated 27.04.1973 executed between Government of Maharashtra and the applicant. However, the Official Liquidator has himself referred to the surrender letter dated 31.01.98 issued by the Company in Liquidation and the rent receipts dated 16.12.98. The argument is that the transaction has taken place during the period of commencement of winding up proceeding as the date of presentation of winding up petition is 5 dated 2.9.97. Further, in the written submission, it is urged that this application should not be taken cognisance of as it is hopelessly barred by Limitation. The trust has failed to explain the delay in filing this application. 6. To my mind, the present application cannot be dismissed on the ground of delay as urged. The Supreme Court in the case of Ravindra Ishwardas Sethna (Supra) has held that the provisions of Companies Act and more particularly section 457 enables the Liquidator in winding-up by the court, with the sanction of the court, amongst others, to carry on the business of the Company so far as may be necessary for the beneficial winding up. In para 6 and 7 of the decision, the Supreme Court has referred to the settled principles and has held that the liquidator can retain the premises or hold on to the same only if they are required for the purposes of beneficial winding up or for efficiently carrying on winding up proceedings. Merely because the landlord / owner approaches the court after some delay, it is not open, in all cases and in this particular case, for the 6 Liquidator to urge that the application should be dismissed. More so, when the averments and statements in the affidavit in support are not denied. No where in the report or the written submission has the Official liquidator stated that he has been carrying on business of the Company in Liquidation from the said premises or they are required to be retained for the beneficial and efficient winding up operations. 7. In such circumstances, the law laid down in the decision would squarely apply to the facts of the present case. With regard to the claim of ownership of the Company, I have satisfied myself from a perusal of the original lease deed in favour of the applicants that the lease agreement and the property card, evidence creation of a right in favour of the applicants in respect of the said premises / building. The compilation of documents handed in contains several letters addressed by the Company in liquidation to the applicant forwarding therewith monthly rent and municipal tax so also water charges. If there was no relation of landlord and tenant / lessor and lessee, then, 7 there were no occasion for the Company in Liquidation to address such letters or forward the amount of rent and taxes. The Company in liquidation has vacated / surrendered portion of the said premises to the applicants. Thus, there is no dispute about the letters being addressed and received. There is no denial of the fact that the claim of ownership has been substantiated. Merely because there is no written lease agreement between the applicant and the Company in liquidation does not mean that the relief claimed in the application has to be denied. 8. It is well settled that the lease / tenancy was governed by the Bombay Rent Act, 1947. The rent receipts, evidence creation of tenancy. There is a notice of demand as well. In such circumstances, merely because the applicants have failed to produce the written lease agreement does not mean that the liquidator cannot be directed to hand over possession of the premises. 9. For the reasons stated above, the Company Application succeeds. It is made absolute in terms 8 of prayer clause (a). At the request of the Official Liquidator, time of 6 weeks is granted to surrender possession of the said premises to the applicant. However, as far as prayer clause (b) is concerned, liberty is granted to the Applicant to lodge their claim with regard to payment of arrears of municipal tax, water charges and municipal rent. Such a claim, if lodged, should be processed and scrutinised by the Official Liquidator strictly in accordance with law and orders be made thereon as expeditiously as possible and within a period of 6 weeks from the date of receipt thereof. Official Liquidator is at liberty to take away movables or articles of the Company in liquidation lying in the said premises. (S.C.DHARMADHIKARI,J.) (S.C.DHARMADHIKARI,J.) (S.C.DHARMADHIKARI,J.)