J.V Gupta, J.:— This revision petition is directed against the order of the executing Court dated February 18, 1986, whereby the execution has been stayed in view of the provisions of section 446 of the Companies Act, 1956 (hereinafter called the Act).
2. The facts are not in dispute. The premises in dispute belong to the petitioner Harbans Lal Sharma. They were taken on lease by the respondent-company known as M/s Chemical Vessels Fabricators Pvt. Ltd. Eviction order dated December 11, 1984, was passed by the Rent Controller against the tenant. Meanwhile, the liquidation proceedings under the Act were taken against the respondent-judgment-debtor in the Calcutta High Court where the winding up order was passed on September 18, 1985. Consequently, a receiver liquidator was appointed who now represents the judgment debtor. It is the common case of the parties that certain goods and machinery etc. belonging to the judgment-debtor were hypothecated with the State Bank of India and are still living in the premises, in dispute. Vide order dated September 18, 1985, the High Court of Calcutta ordered the winding up of the judgment-debtor and appointed the official-liquidator. All the properties etc. belonging to the company in liquidation came into the custody of the official liquidator from the date of the said order. The landlord decree-holder sought execution of the ejectment order dated December 11, 1984, wherein the official liquidator filed objections on the ground that the proceedings could not proceed without the leave of the Calcutta High Court, in view of the provisions of section 446 of the Act. That application was contested on behalf of the decree-holder on the plea that the official liquidator had nothing to do with the present proceedings as the judgment-debtor had no right, title or interest in the premises after the passing of the ejectment order. However, the objection raised by the official liquidator prevailed with the executing Court. It stayed the proceedings till the orders were obtained from the Calcutta High Court. Dissatisfied with the same, the decree-holder (landlord) has filed this revision petition in this Court.
3. The learned counsel for the petitioner contended that section 446 of the Act is not applicable on the facts admitted and, therefore, the execution proceedings could not be stayed. According to the learned counsel, the official liquidator had nothing to do with the demised premises because the judgment-debtor had no right, title or interest in the demised premises. Under the circumstances, it could not be said to be the assets or the effects of the judgment-debtor in any manner. In support of the contention, the learned counsel relied upon the judgment of the Kerala High Court in Joshi Trading Co. (P) Ltd. v. Essa Ismail Sait . 1980 50 Com. Cas. 801.. He also referred to the Division Bench judgment of this Court in Banarsi Dass v. Devi Dayal . 1967 69 PLR 417., to contend that the relationship of the landlord and tenant between the parties comes to an end after the eviction order is passed. On the other hand, the learned counsel for the judgment-debtor represented by the official liquidator submitted that in view of the provisions of section 446 read with section 537, no proceedings could be commenced against the company except by leave of the Calcutta High Court. Therefore, the impugned order was valid. In support of the contention, the learned counsel relied upon Zainab Bai v. Navayug Chitrapat Co. . AIR 1969 Bom 194. and Bansidhar v. Md. Ibrahim . 1970 3 SCC 900, and also an unreported judgment of this Court in Company Petition No. 123 of 1983 (Dr. (Mrs. Dr. Avtar Chawla v. Sehgal Papers Ltd. 123 of 1983.) decided on February 15, 1985.
4. The sole controversy in this petition is: whether the provisions of section 446 read with section 337 of the Act, are attracted or not?
5. It could not be disputed that the judgment-debtor had no right, title or interest in the premises which were let out to it and with respect to which the eviction order had already been passed on December 11, 1984. The object of section 446 is to see that the assets of the company are brought under the control of the winding up Court, to avoid wherever possible expensive litigation and to see that all matters in dispute which are capable of being expeditiously disposed of by the winding up Court are taken up by that Court. This does not, however, mean that all disputes wherein a company is involved should be proceeded with only by the company Court or that if they are pending with other statutory bodies, leave of the company Court should be obtained. Somewhat similar matter came up for consideration before the Kerala High Court in Essa Ismail Sait's case (supra) wherein it was observed,—
“It is a well-known matter that the object of section 446 is to see that the assets of the company are brought under the control of the winding up Court, to avoid wherever possible expensive litigation and to see all matters in dispute which are capable of being expeditiously disposed of by the winding up Court are taken up by that Court. This does not, however, mean that all disputes wherein a company is involved should be proceeded with only by the company Court or that if they are pending with other statutory bodies, leave of the company Court should be obtained Matters where collection or distribution of assets are not involved, these which are outside the purview of the winding-up Court and other Courts of law and these which are within the exclusive jurisdiction of other statutory bodies may not come under the purview of section 446. Thus, it has been held in M.K Ranganathan v. Government of Madras (1955) 25 Comp. Cas. 344 (SC), that a secured creditor who falls outside the purview of the winding-up Court, who has the right to realise his security by sale of the mortgaged premises, need obtain leave of the Court under S. 171 of the Act of 1913 only when intervention 1984 of a Court is sought. A sale by the receiver of the trustees appointed by mortgagee-debenture-holders without leave of the winding up Court was uphold in that case.”
6. Thus, the matter is not res Integra. The judgment in the above said case is based upon the Supreme Court decisions relied upon therein. No judgment taking a contrary view has been cited at the bar.
7. The unreported judgment of this court in Dr. (Mrs.) Avtar Chawla's case (supra) has absolutely no applicability to the facts of the present case, as no such point was raised before this Court therein. In that case, the proceedings were transferred to this Court without any objection on the part of any party. Ultimately, by the company judge the case was sent back to the Rent Controller for decision on merits in accordance with law. A combined reading of section 446 and 537 of the Act, clearly provide that the words, “no suit or legal proceedings… … … against the company”, in section 446 will mean the proceedings in which the assets or the effects of the company are involved. In the present case, the premises were let out to the company and the eviction order was passed much earlier before the winding up order was passed by the Calcutta High Court on September 18, 1985. Thus, the lessee company had no more any right, title or interest in the said premises and the decree-holder landlord was entitled to seek ejectment of the company and now the official liquidator. It is not disputed that the goods and machinery etc., lying in the premises and hypothecated with the Bank belonged to the company and the decree-holder did not claim the same in any manner. At present he was interested only in getting back the possession of the demised premises because of the eviction order already passed against the company against which winding up order had been passed on September 18, 1985, by the Calcutta High Court. The decree-holder could not be deprived of its possession simply because the judgment-debtor was brought under liquidation after the eviction order.
8. Consequently, this revision petition succeeds and is allowed. The impugned order is set aside. The executing Court is directed to proceed with the execution application in accordance with law. The parties have been directed to appear in the executing Court on 16.2.87
R.M.S
Petition allowed.