JUDGMENT

A.K. Sikri, J. A common feature prevalent in most of the liquidation proceedings where a company is ordered to be wound tip, provisionally or finally, is that applications are filed by the landlords/owners of the premises leased out by them to such companies in liquidation. Whenever order of winding up is passed and Provisional Liquidator or the Liquidator is appointed, the next necessary direction which follows with his appointment is to direct him to take possession of the assets and books of accounts/records etc. of the company in respect of which such an order is passed. While taking possession of the assets of such a company the leased premises are also included wherein the assets, belongings and records of the company are also generally kept. Since the company goes into liquidation and liquidation process is time consuming, landlord who lease out the premises to the company wants his premises back. This is natural impulse, for no landlord would like his leased premises to be sealed/locket without fruition as he would not be getting the rent any longer. In such circumstances, it is neither in public interest nor in the interest of company and much less in the interest of the creditors that such premises are kept idle and without use by simply locking them. Therefore, normally in those cases where the O.L. also finds that the premises would not be required by the company or for liquidation purposes any longer, it is always proper to give back these premises to the landlord as soon as possible so that he is not made to suffer in the process.

2. This statement of law can be found in the judgment of the Supreme Court in Ravindra Ishwardas Sethna and Another Vs. Official Liquiilator, High Court, Bombay and Another reported in (1983) 4 SCC 269. That was a case where a chit fund company went into liquidation. It had tenanted premises. The Liquidator after taking possession of these premises gave the same to third party on monthly payment. The Supreme Court held that it was not permissible and the Liquidator should have surrendered the premises to the landlord. The Court, in the process, made the following observations:

"The Company was a tenant or a lessee of the premises of which the appellants are the landlords. The date of the commencement of the lease is not made available to us, but it is also hot claimed on behalf of the Liquidator that there was lease of long duration. If so, the company was a statutory tenant under the Rem Act. The statutory tenancy confers the right to be in possession but if the possession of the premises on license or on sub-lease. The learned Company Judge therefore spelt out a third way of parting with the possession by the Liquidator, namely, that he may give the premises to the second respondent under a caretaker's agreement. This caretaker's agreement appears to us to be an euphemism for collecting compensation which is nothing else but the charge for use and occupation of premises exclusively by the second respondent. Whether it is sub-lease or license does not can for decision. For the purpose of the present proceedings it is enough for us to say that the Company and its Liquidator no more need the premises for its own use. The Liquidator does not need the use of the premises for carrying on the winding up activities of the Company because he sought direction for parting with possession. We are not impressed by the learned Judge saving that there is some third mode of parting with possession of the premises exclusively in favour of the second respondent, namely, caretaker's agreement which appears to us to be a facade to wriggle out of the provisions of the Rent Act. The Rent Act is no doubt enacted for protecting the tenants, and indisputably its provisions must receive such interpretation as to advance the protection and thwart the action of the landlord in rendering tenants destitute. But this does not imply that the court should lend its aid to flout the provisions of the Rent Ac