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Judgment
S.J. Kathawalla, J.—This Company Application is taken out by the Applicant M/s. Hardcastle Waud Manufacturing Company Limited, seeking directions against the Official Liquidator, High Court, Bombay, being the liquidator of M/s. Enamelled Wires Limited (in liquidation) to hand over quiet, vacant and peaceful possession of the property admeasuring about 3096 sq. yds. or thereabout situated at Netivali Baug, Kalyan survey No. 35 in the registration sub-district of Kalyan, District Thane (the said land) to the Applicant. The Applicant has also sought directions against the Official Liquidator to pay to the Applicant a sum of Rs. 14,250/towards arrears of rent and arrears of municipal property tax till the date of handing over of quiet, vacant and peaceful possession of the said land.
The Company Application is filed in the following facts and circumstances:
(i) The Applicant is the owner of a large portion of land out of which the said land was given on lease to the Respondent Company under a registered lease deed dated 30th June 1960 effective from 1st June 1960 on a monthly rent of Rs. 125/for a period of 25 years, with an option to the Respondent Company to obtain renewal of the lease for a further period of 25 years on the Respondent Company giving to the Applicant six months advance notice of its intention to obtain the said renewal and having observed all the conditions of the lease deed.
(ii) Pursuant to the said lease deed, the Respondent Company was put in possession of the said land who in course of time constructed factory buildings and installed machinery therein. The Respondent Company had also availed financial facilities from the Canara Bank and in lieu thereof created a charge on the property including the said land in favour of the lender Bank. By an order dated 14th January 1983 passed by this Court in Company Petition No. 334 of 1979, the Company Enamelled Wires Limited (in liquidation) was ordered to be wound up and the Official Liquidator was appointed as the Liquidator of the Company. Pursuant to the said order, the Official Liquidator took possession of the said land in the year 1983 and is presently in possession of the said land. The lease period of the first 25 years expired on 31st May 1985. The Official Liquidator thereafter at the instance of the Canara Bank, the secured creditor of the Company, exercised option for renewal of lease for a further period of 25 years. However, the Applicant had by then raised dispute qua the nonpayment of rent by the Company.
(iii) The Applicant vide its letter dated 27th January 1983 called upon the Official Liquidator to hand over possession of the said land to the Applicant, on the ground that the lease deed had terminated. The Applicant thereafter filed Company Application No. 526 of 1995 before this Court, seeking possession of the said land from the Official Liquidator. By an order dated 14th December 2000, this Court disposed of the said Company Application with liberty to the Applicant to adopt appropriate proceedings to recover the possession of the said land. However, by the said order, the Canara Bank was directed to deposit the arrears of lease and all future lease rent with the Official Liquidator and the Official Liquidator was directed to pay the lease rent to the Applicant.
(iv) Pursuant to the order passed by this Court dated 14th December 2000 in Company Application No. 526 of 1995, the Applicant filed Regular Civil Suit No. 181 of 2003 before the Civil Judge (S.D.) at Kalyan, seeking possession of the said land interalia on the grounds that the lessee is not using the said land, is in arrears of rent and that the said land is bonafide required by the lessor.
(v) The said Suit filed by the Applicant is dismissed by an order dated 2nd September 2009 from which the Applicant has preferred an Appeal before the Additional District Judge, Kalyan. The said Appeal is admitted and is presently pending for hearing and final disposal.
Mr. Tulzapurkar, the learned Senior Advocate appearing for the Applicant has submitted that as per the original lease dated 30th June 1960, the same was valid for an initial period of 25 years with an option to the Respondent Company to obtain renewal of the same for further 25 years upon giving six months notice in advance. The first 25 years expired on 31st May 1985. No notice of any nature whatsoever as contemplated under the lease deed was issued by the Respondent Company or the Official Liquidator expressing their intent to get the lease renewed. The lease therefore, stood determined on 31st May 1985. It is further submitted that even assuming without admitting that the issue of further renewal of lease deed was required to be adjudicated upon, the lease deed at best could only be renewed for a further period of 25 years, i.e. upto 31st May 2010. Thus, the period of lease (including the renewal period) stood determined on 31st May 2010 and the Official Liquidator who has stepped into the shoes of the Respondent Company cannot hold on to the said land beyond the entitlement of the Respondent Company. It is submitted that the determination of the lease (including the renewed period of 25 years), by efflux of time has taken place on 31st May 2010. It is submitted that in view of the determination of the lease, a fresh cause of action has accrued in favour of the Applicant and this situation was not in existence at the time when the order dated 14th December 2000 was passed by this Court.
Mr. Tulzapurkar has further submitted that in view of the determination of the lease due to the efflux of time on 31st May 2010, the Applicant is entitled to the possession of the said land forthwith. It is submitted that the Applicant is entitled to file and maintain the present Application as the same is an independent remedy available to the Applicant. In any event, the Official Liquidator, having stepped into the shoes of the Respondent Company, cannot be permitted to continue the enjoyment of the said land beyond the entitlement of the Respondent Company and it is bound to hand over the said land to the Applicant. Mr. Tulzapurkar submits that though the Official Liquidator has taken possession of the said land as far back as 1983, the said land has not been used for any purpose for more than the last 25 years. The said land is neither used nor required by the Official Liquidator in any manner whatsoever to wind up the affairs of the Company. The said land has not been used for any beneficial enjoyment by the Official Liquidator. In fact, the said land is not even properly maintained by the Official Liquidator except for posting a few guards thereon. The Official Liquidator has not even paid the municipal property taxes in respect of the said land for a period much before the year 2000 and the arrears of the same have mounted to over Rs. 6,50,000/which is evident from the municipal bills for the period ending March 2009. The Maharashtra Electricity Distribution Company Limited (MSEDCL) has permanently disconnected the electrical connection to the said land since the Official Liquidator has failed to use the said land and has failed to pay for/ consume electricity. Admittedly, there is no records of Kalyan Dombivli Municipal Corporation (KDMC) in respect of any water connection in the name of the Respondent Company. It is, therefore, submitted that the Official Liquidator cannot retain possession of the said land when the lease itself has come to an end. The leasehold right is no more an asset of the Respondent Company capable of being assigned or sublet. It is submitted that the Official Liquidator has no right or entitlement to the said land and this Court may direct the Official Liquidator to forthwith hand over the possession of the said land. Mr. Tulzapurkar in support of his submission that irrespective of a pending Suit or Appeal, the Applicant is entitled to take out the present proceeding under the provisions of the Companies Act, 1956 and in support of his submission that the Applicant is entitled to obtain quiet, vacant and peaceful possession of the said land from the Official Liquidator has relied on the decision of Patel Engineering Co. Ltd. v. Official Liquidator, High Court, Bombay, reported in (2004) 2 Comp. LJ. 482 (Bom.), wherein it is held that merely because the landlord has instituted Suit for eviction against the tenant, who happens to be Company in liquidation, that alone cannot be the basis of non-suiting the landlord to invoke the present remedy which is an independent and special remedy available to him by virtue of the provisions of the Companies Act, 1956. It is further held that the claim of the landlord cannot be resisted, especially when it is established from the record that the premises in question are no longer required for the Company in liquidation.
The learned Advocate appearing for the Canara Bank has submitted that the said land was mortgaged by the Respondent Company to the Bank. The Bank had filed proceedings for recovery of its dues against the Respondent Company and has also obtained reliefs qua the said land being the security of the Bank. However since the lease period in respect of the said land has come to an end due to efflux of time, there are no takers for the said land.
Mr. J.P. Sen, the learned Advocate appearing for the Official Liquidator has submitted that the only instructions that he has for opposing the Company Application is that the possession of the said land cannot be handed over to the Applicant since the Civil Suit filed by the Applicant before the Kalyan Court is dismissed and the Appeal is pending before the Kalyan Appellate Court and that by an order dated 14th December 2000 passed by this Court, it was held that the Applicant is not entitled to take possession of the said land.
I have considered the submissions advanced on behalf of the Applicant, the Official Liquidator as well as the Canara Bank. The period of lease (including the renewal period) stood determined on 31st May 2010. The Official Liquidator has taken possession of the said land as far back as 1983. The said land has not been used for any purpose for the last more than 25 years. The said land is neither used nor required by the Official Liquidator in any manner whatsoever to wind up the affairs of the Company. The said land has not been used for any beneficial enjoyment by the Official Liquidator. The security created by the Respondent Company in favour of the Canara Bank in respect of the said land would be in force only upto the expiry of the lease period, i.e. upto 31st May 2010. Thereafter, since the Respondent Company itself would not have any rights over the said land, the Respondent Company would not be in any position to offer the said land as security to the Bank. As regards the contention of the Official Liquidator that the Civil Suit filed by the Applicant in Kalyan Court is dismissed and the Appeal is pending before the Kalyan Appellate Court, admittedly, the said Suit is filed by the Applicant on grounds that the lessee is in arrears of rent, is not using the said land and the said land is bonafide required by the lessor. The dismissal of the said Suit only means that the Applicant has failed to prove the grounds for claiming back the said land in the Suit. Even if the Applicant fails to succeed in the Suit all the way, the fact remains that the lease deed stands determined by efflux of time on and from 31st May 2010 and the Official Liquidator admittedly having not used the land since last more than 25 years and not having any intention to use the said land in future, is bound to hand over the said land to the Applicant. The Official Liquidator cannot be permitted to continue enjoyment of the said land beyond the entitlement of the Respondent Company as held in the decision of Patel Engineering Co. Ltd. (supra). As regards the contention that this Court in Company Application No. 526 of 1995 by its order dated 14th December 2000 had declined to grant possession of the said land to the Applicant and had required the Applicant to adopt appropriate proceedings to recover the possession of the said land, I am of the view that the said decision under the present changed facts in the matter is of no assistance to the Official Liquidator. The said order dated 14th December 2000 proceeded on the ground that when the Official Liquidator took possession of the said land, the lease was in subsistence. Even after the appointment of the Official Liquidator and the possession of the land being taken by him, the Applicant did not adopt appropriate proceedings on the ground that the lease stood determined. Thus, the question whether the lease was validly determined or not, remained to be answered and therefore, the Applicant was directed to adopt appropriate proceedings. At the relevant time, the issue whether the Applicant had validly terminated the lease was not adjudicated by any Competent Court. In view of the determination of the lease, a fresh cause of action has accrued in favour of the Applicant which situation was not in existence at the time when the order dated 14th December 2000 was passed by this Court. As regards the maintainability of the Company Application as held by this Court in the case of Patel Engineering Co. Ltd. (supra), merely because the landlord has instituted Suit for eviction against the tenant, who happens to be the Company in liquidation, that alone cannot be the basis of non-suiting the landlord to invoke the present remedy which is an independent and special remedy available to him by virtue of the provisions of the Companies Act, 1956.
Under the circumstances, I pass the following order:
(i) The Official Liquidator shall remove the movables which are presently lying on the said land within a period of three months from today and upon such removal, hand over the vacant possession of the said land to the Applicant.
(ii) The Applicant shall upon receiving possession of the said land from the Official Liquidator forthwith withdraw the Appeal filed by the Applicant before the Additional District Judge, Kalyan.
(iii) Since the second renewal of 25 years was sought by the Official Liquidator from the Applicant at the instance of Canara Bank, the secured creditor of the Company pursuant to the letter issued by their Solicitors M/s. Smetham Byrne Lambert and Dubhash dated 31st March 1983, the Applicant may pursue its claim pertaining to the arrears of rent, taxes, electricity and water charges, etc., if any, against the said Canara Bank.
(iv) The Company Application is accordingly, disposed of, with no order as to costs.