JUDGMENT

S.P.BHARUCHA, J.

(1) THE Naskarpara Jute Mills Co. Ltd. was wound up under the orders of the High court at Calcutta on 28/07/1981 and the Official Liquidator was appointed its liquidator.

(2) THE company had taken on lease from Bharat Abhyudaya Cotton Mills Ltd. about 7 bighas of land under a deed dated 2/07/1931. The lease was for 99 years and permitted renewal on the same terms for another 99 years. The rent under the lease was Rs. 1,200.00 per annum. On September 25, 1935 the lessors interest in the said land was purchased by Brij Mohan Saraogi who settled the same upon a trust called the Brij Mohan Saraogi Charitable Trust. The company attorned to the Trust as its tenant in respect of the said land. At the time when the winding-up petition was filed the company had been in default of rent and consent terms had been arrived at whereunder the company had undertaken to pay the arrears.

(3) ON 13/08/1981, the United Bank of India filed a suit against the company in liquidation after having obtained the leave of the court under Section 448 of the Companies Act for a decree in the sum of Rs. 1,81,07,623.64 with interest up to 31/07/1981. Upon the application of the Bank the Official Liquidator was appointed Receiver of the goods, stocks and assets hypothecated by the company in liquidation to the Bank and all immovable property, including the said land and the factory premises which stood upon it, which had been mortgaged to the Bank.

(4) ON 8/10/1982 the High court, in the winding-up proceedings directed the sale of the property and assets of the company in liquidation. The sale was to be effected by the Official Liquidator as directed by the court. Public advertisements were issued consequent upon such directions and sealed offers received on 3/12/1982. The Trust opposed the sale, so that consideration of the offers was deferred. On 25/01/1982 the Trust wrote to the Official Liquidator asking him to disclaim the said land and surrender its possession to the Trust because it was burdened with onerous covenants. On 31/01/1983 the Trust took out a Judges Summons asking the High court to direct the Official Liquidator under Section 535 of the Companies Act to disclaim the said land because it was burdened with onerous covenants. The Bank opposed the Judges Summons and pleaded that the said land was a security for the loans that it had advanced to the company in liquidation and that it should be available to the secured and unsecured creditors; the covenants of the lease were not onerous and there was a saleable interest in the said land. On February 4, 1983 the Company Judge directed the Official Liquidator to return the offers to the parties who had made them. On 7/07/1983 the Company Judge made the Judges Summons absolute and directed the Official Liquidator to disclaim the said land and hand over possession thereof to the Trust.

(5) THE Bank appealed against the order of the Company Judge. The division bench which heard the appeal dismissed it. It held, inter alia, that the lease of the said land stood forfeited and/or terminated by reason of the Trusts notice dated 25/01/1983. It held that no notice in writing to the company in liquidation for remedy of the breach was necessary because the Trust did not want to file a suit for ejectment. The division bench rejected the contention based upon Section 114 of the Transfer of Property Act because the Official Liquidator was not in a position to apply for any relief against forfeiture by tendering arrears of rent and interest. As the lease stood forfeited, the said land ceased to be a part of the assets of the company in liquidation and the company in liquidation had from the date of the notice of termination no right or interest therein. It could not therefore, be transferred or sold by the Official Liquidator. Inasmuch as, in spite of forfeiture of the lease, the Official Liquidator was continuing in possession of the said