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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
SURAJ GOVINDARAJ, J.
Shri N.R. Ravi, S/o Late Shri N.G. Ramakrishna Reddy – Appellant
Versus
The Official Liquidator Of M/s. Sem India Systems Private Limited (IN LIQN.) - Respondent
Company Application No.8 of 2016
Decided on : 30-06-2022
Companies Act, 1956 – Section 530, 529-A, 476, Companies (Court) Rules, 1959 – Rule 338 – All revenues, taxes, cesses and rates – Power to order costs – Free for one month and pay only if you like it – Whether upon Official Liquidator taking possession of premises belonging to a third party, which was in possession of Company in liquidation, Official Liquidator would be required to make payment of rentals to such third party land owner or could Official Liquidator contend that any claim of landlord of said premises would only be a preferential claim made by such landlord – Held, Court of considered opinion that Official Liquidator ought to have decided, if Official Liquidator intended to continue in possession or not – Having chosen to continue in possession, post that date, Court of considered opinion that Official Liquidator would have to make payment of rentals to landlord as cost of winding up since possession, which is continued by Official Liquidator is only in furtherance of winding up proceedings – Court answer point to be determined by holding that upon Official Liquidator taking possession of premises belonging to a third party, which was in possession of Company in liquidation, Official Liquidator would be required to make payment of rentals to such third party land owner as costs of winding p, landlord being entitled to rentals immediately as per terms of the lease deed – Appeal allowed.
ORDER :
1. The Applicant is before this court seeking for the following reliefs;
b. To direct the Official liquidator to pay the arrears of rents from 15.07.2014 to 31.12.2015 which is 14 ½ Months which amounts to Rs.13,80,995/-for the ground floor premises. Any pay future rents till handing over of possession of the premises.
c. To direct the Official liquidator to pay the arrears of rents from 15.07.2014 to 31.12.2015 which amounts to Rs.13,43,238/-for the First floor premises. And pay future rents till handing over of possession of the premises.
d. Pass such other Order as the nature and circumstances of the case may require.
e. Cost of this application.
2. The Applicant claims to be the owner of the property which has been leased out to the Company in liquidation on 15.05.2008. As per the terms of the lease agreement, the Company in liquidation had deposited with the Applicant an interest free refundable security deposit of Rs.13,63,000/-and in terms of the lease agreement, certain amount was required to be paid as monthly lease rental for the schedule premises.
3. Though the lease period expired after a period of eleven months, the Company in liquidation did not hand over possession of the premises and continued to occupy the same. Subsequently, the Company in liquidation stopped payment of rentals and in the meanwhile, winding up proceedings being filed before this Court, this Court directed for winding up of the Company and appointed the Official Liquidator to take over the assets of the Company, which infact was taken over on 15.07.2014.
4. The grievance of the Applicant is that though the Official Liquidator took over possession of the premises on 15.07.2014, no rentals have been paid by the Official Liquidator to the land owner, i.e., the Applicant and it is in that background, the present C.A.No.8 of 2016 has been filed seeking for direction to the Official Liquidator to make payment of the monies as claimed therein.
5. During the pendency of the above proceedings, the possession has been handed over on 08.05.2017.
6. The claim, which is required to be considered in the above application is only regards the rentals to be paid. The Official Liquidator has filed his objections and a memo contending that the Official Liquidator cannot be directed to make payment of the rentals but the claim of the Applicant would be treated as a preferential claim with the Applicant requiring to stand in the Queue along with the other creditors of the Company.
7. This Court had directed the Applicant to file a claim before the Official Liquidator for adjudication. The same came to be adjudicated vide order dated 31.05.2022 wherein the Official Liquidator has admitted an amount of Rs.23,30,807/-as preferential claim and an amount of Rs.29,98,319/-as an ordinary claim and rejected an amount of Rs.25,95,446/-.
8. The claim of the Applicant was Rs.79,24,572/-, out of which, an amount of Rs.32,64,820/-was claimed as past due rentals from April 2010 till 15.07.2014 after giving due deduction to the adjustment of the security deposit held by the landlord.
9. Further claim was made from 15.07.2014 to 30.04.2017 as regards the ground floor amounting to Rs.24,84,759/-after giving due deduction to a sum of Rs.1,57,826/-being the rental paid by the Official Liquidator. A further amount of Rs.25,40,494/-was claimed on account of rentals due towards the first floor from 15.07.2014 to 31.05.2017 after giving due deduction of a sum of Rs.1,54,952/-being the rentals paid by the Official Liquidator.
10. The Official Liquidator being of the opinion that no amount was required to be paid towards the first floor as no claim was made towards the first floor till 15.07.2014 has considered that no amount for the subsequent period is also required to be paid and has rejected the claim of Rs.25,95,446/-, in so far as the 1st floo
Claims for costs incurred during liquidation are distinct from debts owed to creditors under the Companies Act.
Tenancy rights are not assets of a company in liquidation, and the official liquidator must substantiate the need for premises to retain possession under Section 446 of the Companies Act.
The Official Liquidator needs to verify the ownership of the property and take steps to release it in favor of the landlord. The court may award costs for delay in handing over the property by the Of....
A statutory body retains no right to resume possession of leased land post-winding up without permission from the Company Court, despite lease cancellation being legally permissible.
The tribunal has exclusive jurisdiction under the insolvency code to order the eviction of occupants from a corporate debtor’s assets. This authority is a mandatory statutory duty that overrides stat....
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