ORDER:- This is an application by the Official Liquidator for a direction to Inder Raj Swarup to hand over possession of certain assets of the Moradabad Flour Milling and Refrigeration Co. Ltd. (in liquidation).

2. According to the Official Liquidator the assets mentioned in the application belong to the Company in liquidation and are being illegally withheld by Sri Inder Raj Swarup.

3. The Company aforesaid went in creditors voluntary liquidation on 29th September, 1962, On 20th December, 1971, this Court passed an order placing the Company under compulsory winding. Thereupon the Official Liquidator made the application mentioned above.

4. Sri Inder Raj Swarup opposed the prayer. He set up a partnership agreement between him and the Company (in liquidation) and claimed that in virtue of the aforesaid agreement he was the owner in Possession of the assets and was entitled to retain possession thereof till his dues were paid off. The learned Company Judge held that the agreement did not transfer the title of the assets in question from the Company to the partnership firm. Sri Inder Raj Swarup was hence not entitled to retain possession on the ground that he was the owner of the assets. The learned Company Judge directed the Official Liquidator to take possession over the assets in question.

5. Sri Inder Raj Swarup went up in appeal. A Division Bench of this Court by its judgment dated 18th April, 1972, affirmed the finding that on a construction of the various terms and conditions mentioned in the agreement dated 24th April, 1958, it was clear that the assets which originally belonged to the Company continued to remain with the Company and their ownership did not stand transferred to Sri Inder Raj Swarup.

6. The Division Bench further repelled the submission made on behalf of Sri Inder Raj Swarup that he was entitled to remain in possession so long as the agreement continued. The Bench held that the agreement was for ten years. That period came to an end in 1968. Further, the effect of the Company going into liquidation was the same as if the Company had met with a Civil death, and that with the death of partnership the partnership agreement came to an end. Sri Inder Raj Swarup was, therefore, not entitled to retain possession under the clause which entitled him to continue to remain in possession for the duration of the agreement.

7. Before the Division Bench it was urged on behalf of Sri Inder Raj Swarup that in view of clauses (3) and (18) of the agreement he had a charge or lien over the assets of the Company and in enforcement of that lien he was entitled to remain in possession even against the liquidator so long as the money due to him under the agreement was not paid up. It was also argued that the status of the appellant was that of a partner and in circumstances like the present the appellant was entitled to invoke the lien contemplated by Section 221 of the Contract Act and thereunder to retain possession till his dues were paid off. The Division Bench felt that these aspects though raised before him were not dealt with by the learned company Judge. It, therefore, while affirming the finding that the assets remained under the ownership of the Company, set aside the ultimate order and sent the case back for consideration of these various aspects.

8. Thus the two principal questions which require consideration are, first, whether Sri Inder Raj Swarup had a charge or a lien in enforcement of which he could remain in possession even against the Liquidator, and secondly, whether he was entitled to invoke the lien under Section 221 of the Contract Act.

9. Section 125 of the Companies Act provides that a "charge created on or after the 1st day of April, 1914, by a Company and being a charge to which this section applies shall, as far as security on the Companys property or undertaking is conferred thereby be void against the Liquidator and any creditor of the Company, unless the prescribed particulars of charge, together with the i

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