The central legal point established in the judgment is the application of Section 531-A of the Companies Act to lease agreements executed by a company in liquidation, and the court's emphasis on safeguarding the assets of the company in liquidation and protecting the interests of secured creditors and employees.

R. BANUMATHI, J.

1. Being aggrieved by the Order passed by the learned single Judge in C.A.No.2729 of 2007 in C.P.No.174 of 2001 dated 25.1.2008, the appellant/ 3rd party has preferred this appeal.

2. The brief facts, which led to the filing of this appeal are as follows:-

M/s.Union Motors Services Limited was ordered to be wound up by the order of this Court dated 21.9.2004 made in C.P.No.174 of 2001. The Official Liquidator was appointed as a liquidator of the said Company with a direction to take charge of all assets and effects of the company in liquidation. Pursuant to the aforesaid directions,

Official Liquidator has taken possession of the assets of the Company situated at (i) No.32 and 46 Thiru.Vi.ka Industrial Estate, Ekattuthangal, Chennai - 32 and (ii) 3 branch offices situated at No.4, Pattulos Road, Chennai - 2 and (iii) another Branch Office situated at 118 Manapet, Bathoore Commune Panchayat, Union Territory of Pondicherry and at No.104, bridge Station Road, Sellur, Madurai-2.

3. The Official liquidator has also valued the aforesaid assets and filed sale application.

By order dated 5.12.2007 made in C.A.No.2729 of 2007, this Court has directed the Official Liquidator to sell the immovable properties situated at Madurai and Pondicherry and in this appeal, we are concerned with the property situated at Pondicherry. For the said property in Manapet, Court has fixed the upset price at Rs.115 lakhs. On 25.1.2008, Court has considered the offer made by 9th respondent - S.Dorai for a sum of Rs.1,85,00,000/- as the highest offer and confirmed the same in favour of the 9th respondent. In the said property at Manapet, the appellant Trust is running a Teacher Training institute under the name of Krishnaswamy College of Teacher Training Institute under agreement of lease and the appellant institute also participated in the auction conducted on 25.1.2008. Recording the submission made by the Official Liquidator that the appellant Trust is in occupation of the immovable property situated at Pondicherry under a lease agreement, by the order dated 25.1.2008, Court has directed the Trust to hand over vacant possession of the property to the Official Liquidator within first week of July 2008 and directed the Official Liquidator to communicate the order to the appellant Trust. Accordingly, the Official Liquidator sent the letter dated 11.2.2008 addressed to the Managing Trustee of the Appellant with a request to make necessary arrangements to hand over the said premises to the official Liquidator.

4. Being aggrieved by the direction of the Court to hand over vacant possession, the appellant Trust has preferred this appeal.

5. Learned counsel for appellant has submitted that the appellant became tenant in the property by virtue of a lease agreement dated 22.1.2000 and subsequently renewed by another lease agreement dated 22.12.2000 on a monthly rent of Rs.5,000/- with 20 percent increase for every five years. Case of Appellant is that as a tenant, the appellant is in lawful possession of the property and that the appellant cannot be evicted except under process of law and any direction to hand over vacant possession is not legal and without jurisdiction. On behalf of the appellant it was contended that it has obtained appropriate recognition from NCTE for running the teacher training institution in the said premises and if the appellant is directed to vacate the premises it will have the effect of closing the institution itself and therefore prays for setting aside the said order dated 25.1.2008. Further contention of appellant is that the appellant, being a lawful tenant, is entitled to protect his possession and cannot be evicted under the guise of auction sale in favour of the 9th respondent or in any manner except under due process of law.

6. The learned Senior Counsel for Official Liquidator Mr.AR.L.Sundaresan would further contend that the appellant Trust is aware of the sale proceedings and the appellant Trust itself p