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Judgment
The Court : The appeal is directed against an order of November 20, 2018 by which the appellant's application for disclaimer under Section 535 of the Companies Act, 1956 was dismissed. It is evident from the order impugned that the company Court did not enter into the merits of the matter and rejected the application in limine since the affidavit in support thereof was affirmed by a person who was admittedly not an employee of the appellant herein and the authority to file the application on behalf of the appellant was also not disclosed.
The official liquidator is represented.
The appellant makes a clean breast of things. The appellant acknowledges that the appellant was the transferee of an immovable property of the company in liquidation at a time when such transfer could not have been made since a winding-up petition had already been presented and even admitted and, in terms of Section 531 of the Act, such a transfer has to be regarded as fraudulent preference. The appellant claims to be an associate concern of the company in liquidation, in the sense that the management of the appellant is more or less the same as the persons who were in control of the company in liquidation prior to its liquidation. The appellant has filed an affidavit through a director admitting that the lease in respect of the plot of land measuring about 61,600 sq.ft. situated at Mouza Dirghanga Municipality, Baidyabati, P.S. Serampur, District - Hooghly bearing R.S. Dag No. 2590, 2547, 2548 and R.S. No. 910, J.L. No. 4 was created after the order of winding-up had been passed.
Upon the official liquidator taking steps to take possession of such land of the company in liquidation, the appellant sought a disclaimer by way of the application that has been dismissed by the order impugned herein.
The appellant has no rights over the property in question and the lease apparently granted in the appellant's favour by the company is void and can confer no rights in respect of the land covered thereby in favour of the appellant. However, it appears that the appellant is in actual possession of the land and is running a manufacturing facility thereat. In the circumstances, even if the official liquidator is entitled to dislodge the appellant from the relevant property, it might not enure to the benefit of the company in liquidation or to any other person since the sale of the property in question may take some time. The official liquidator informs the Court that a letter for directions has been taken out by the official liquidator seeking directions for sale of the relevant property.
The appellant merely seeks to continue to be in occupation of the property in question till such time that the sale in respect thereof is conducted by the company Court. The appellant has agreed to pay the occupation charges in respect of the property in question with effect from the date of the lease till date and in respect of the future period that the appellant may be in occupation of the property at the market rate as may be determined by a valuer to be appointed by the official liquidator upon obtaining specific directions of the company Court in such regard. Subject to the appellant paying occupation charges at such market rate within a month of the official liquidator's demand on such account and subject to the appellant not creating any rights in respect of the property in question in favour of any person or parting with possession of any part thereof in favour of any person till the sale is concluded, the appellant may continue in possession of the property merely as a licensee under the official liquidator and with no further rights whatsoever.
In the affidavit filed on behalf of the appellant in this appeal, the appellant has undertaken to participate at the sale of the property. The appellant has also undertaken that in the event the appellant is not the highest bidder for the land in question, the appellant would deliver vacant and peaceful possession thereof within 15 days of the Court sale being conducted.
In the light of the admission of the appellant that the lease executed in its favour is of no effect and the undertaking of the appellant that it would vacate the land within 15 days of the Court sale being conducted in the event the appellant is unsuccessful at such sale, the appellant is permitted to continue to remain in occupation of the land in question since the appellant claims to carry out manufacturing activities thereat and the immediate dispossession of the appellant would not only result in some form of industry being shut but also render persons with jobs at the manufacturing facility redundant.
It is recorded that this order will create no equity in favour of the appellant, whether at the proposed Court sale or otherwise.
APO No. 369 of 2018 and ACO No. 42 of 2018 are disposed of.
There will be no order as to costs.