Case: Smt. Nirmala R. Bafna/Kershi Shivax Cambatta Andors Vs. Khandesh Spinning And Weaving Mills Co. Ltd. Andanr./Offici

consent to the sub-tenancy in favour of the appellant. Counsel submitted that the conditions imposed by the Division Bench are contrary to law inasmuch as the protection of Bombay Rent Control Act. Act available to the appellant cannot be ignored or undone merely because the company has gone into liquidation. He submitted that the appellant can be evicted only by an authority under the Rent Control Act on the grounds specified in the Act. The enhancement of rent from Rs. 600/ - to Rs. 7,500/- is equally incompetent for the same reason. He submitted further that the tenancy interest the company had in the said flat is not an asset of the company in liquidation and that, at any rate, the liquidator cannot trade in the said right. He complained that the appellant had a right to be in possession of the said premises in her own right as a sub-tenant, and that the Division Bench acted illegally in converting the appellant into an agent of the official liquidator. The company court had no jurisdiction to direct the official liquidator to take possession of the entire flat including the portion in possession of the appellant, he submitted. 15. Sri Mehta, learned counsel for the official liquidator supported the reasoning and directions given by the Division Bench. He submitted that the story of sub-tenancy is untrue besides being invalid. The story of consent of landlord to the alleged sub-tenancy agreement is equally untrue. The trustee (representing the landlord-trust) acted beyond the authority in consenting to the said sub-tenancy, assuming that there was such a consent. Having regard to the close relationship of the appellant with one of the directors of the company (and the Manager of the company), and in all the facts and circumstances of the case, the directions made by the Division Bench are perfectly just and that this court ought not to interfere with the same. He submitted that the directions made by the Division Bench are discretionary in nature and have been made without prejudice to the rights and contentions of the parties in the said suit. The Bench has further empowered the company Judge to vary the said directions at any time he thinks proper. Having regard to the prevailing rents in Bombay, the location of the flat and all the circumstances of the case, the monthly compensation fixed by the Division Bench is in fact on the lower side, submitted the counsel. 16. At this stage, we must refer to the stand taken by the counsel for the landlord trust. The two SLPs. filed by the landlord trust were posted and heard along with this SLP. Sri G. L. Sanghi, learned counsel for the landlord trust stated before us that the trustees have indeed consented orally to the sub-tenancy agreement between the company and the appellants. We must say that this circumstance was not present before the Division Bench and evidently for this reason that the Bench appears to have rejected the theory of consent of the landlord. We cannot however refuse to take notice of the said statement of the counsel. We do so for the limited purpose of this appeal.17. From the facts narrated above, it would be evident that the rights of the appellant have to be. adjudicated in the suit filed by her which is now transferred to the High Court with the consent of both the parties. Whether the sub-tenancy is true, whether it is valid in law and whether the consent of the landlord is true and valid, are all questions which arise for decision in the suit. We cannot pronounce upon them at this stage. The only question for our consideration is whether the directions given by the Division Bench, extracted hereinabove, are justified in the circumstances of the case and in law.? 18. It is admitted by the official liquidator that the Board of directors of the company had indeed passed a special resolution affirming the agreement of sub-tenancy in favour of the appellant. (In her plaint in Suit No. 4873 of 1984 the appellant has referred to the said special resolution of the Board of directors.) This fact coupled with the statement of the learned counsel for the landlord trust establishes, prima facie, the appellants plea of sub-tenancy. That she was in possession of a major portion of the said flat on the date of appointment of liquidator is also not in dispute. According to the sub-tenancy agreement, the rent payable by the appellant is Rs. 600/ - per month as against Rs. 900/- per month payable by the company to the landlord for the entire -flat. In the above circumstances, we cannot reject, prima facie speaking, the appellants claim of protection of Bombay Rent Control Act. In addition to this factual situation, there are two other circumstances which must be taken into. consideration, viz.,a. The tenancy rights, the company had, in the said flat may not be an asset for the purpose of liquidation proceedings and. b. merely because a company goes in liquidation and a liquidator/ official liquidator is appointed, the rights of the company vis-a-vis its landlord and/ or its tenants, do not undergo any change.19. In view of the above facts and circumstances, we are of the opinion that the directions made by the Division Bench were not really warranted at this stage. The said directions have the effect of dispossessing the appellant from the said premises at an interlocutory stage. The character of her possession has also been altered - she is now permitted to be in occupation of a portion of the flat as the agent of the liquidator. These directions, in our opinion, were not really warranted, at any rate, at this stage of the proceedings, when the rights of the appellant are yet to be adjudicated upon. One important circumstance, which was not present before the Division Bench and which has been brought to our notice is the consent of the landlord to the sub-tenancy in her favour.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]We cannot however refuse to take notice of the said statement of the counsel. We do so for the limited purpose of this appeal.17. From the facts narrated above, it would be evident that the rights of the appellant have to be. adjudicated in the suit filed by her which is now transferred to the High Court with the consent of both the parties. Whether the sub-tenancy is true, whether it is valid in law and whether the consent of the landlord is true and valid, are all questions which arise for decision in the suit. We cannot pronounce upon them at this stage.It is admitted by the official liquidator that the Board of directors of the company had indeed passed a special resolution affirming the agreement of sub-tenancy in favour of the appellant. (In her plaint in Suit No. 4873 of 1984 the appellant has referred to the said special resolution of the Board of directors.) This fact coupled with the statement of the learned counsel for the landlord trust establishes, prima facie, the appellants plea of sub-tenancy. That she was in possession of a major portion of the said flat on the date of appointment of liquidator is also not in dispute. According to the sub-tenancy agreement, the rent payable by the appellant is Rs. 600/ - per month as against Rs. 900/- per month payable by the company to the landlord for the entire -flat. In the above circumstances, we cannot reject, prima facie speaking, the appellants claim of protection of Bombay Rent Control Act. In addition to this factual situation, there are two other circumstances which must be taken intoconsideration, viz.,a. The tenancy rights, the company had, in the said flat may not be an asset for the purpose of liquidation proceedingsmerely because a company goes in liquidation and a liquidator/ official liquidator is appointed, the rights of the company vis-a-vis its landlord and/ or its tenants, do not undergo any change.19. In view of the above facts and circumstances, we are of the opinion that the directions made by the Division Bench were not really warranted at this stage. The said directions have the effect of dispossessing the appellant from the said premises at an interlocutory stage. The character of her possession has also been altered - she is now permitted to be in occupation of a portion of the flat as the agent of the liquidator. These directions, in our opinion, were not really warranted, at any rate, at this stage of the proceedings, when the rights of the appellant are yet to be adjudicated upon. One important circumstance, which was not present before the Division Bench and which has been brought to our notice is the consent of the landlord to the sub-tenancy in her favour. In the light of all the circumstances, we are of the opinion that the directions extracted hereinbefore in para were really not called for, at the interlocutory stage.L. P. No. 15678 ofbe, the liquidator can do so, but we cannot force him to do so, long as the reason given by him for continuing in possession is a relevant one. Secondly, the fact that the proposal of the Rashtriya Girni Kamgar Sangh, who are said to have formed an action Committee of the Khandesh Mill Employees Industrial Production Co-operative Society, for revival of the said Company was an equally relevantdo not know. Suffice it to say that the reasons for which the application filed by the appellant-landlord (and his appeal) have been dismissed cannot said to be irrelevant. We cannot, therefore, interfere with the said orders.