R.K. Manik vs Altos India Ltd. and Others

S.S. Nijjar, J.—Written statements on behalf of respondents Nos. 2 and 7 filed today in court, taken on record. Respondent No. 7 adopts the written statement filed on behalf of respondent No. 2.

This application has been made by the applicant under very exceptional circumstances. He has come to the court on a mercy plea as he seems to have been caught between the misfortunes of the company in liquidation and the secured creditors through no fault of his own.

Briefly stated the facts may be noticed :

The applicant had given premises known as 278, Udyog Vihar, Phase II, Gurgaon, to the company M/s. Altos India Ltd. (hereinafter referred to as the company in liquidation) on rent. The rent agreement was entered on January 13, 1993, for a period of five years at Rs. 2.10 lakhs per month for the first three years and for the balance two years at Rs. 2.52 lakhs per month. The agreement expired on January 12, 1998. Subsequently, a supplementary agreement was also executed on January 20, 1993, by which the rent was increased by a further 20 per cent, on the agreed rent. By May 30, 1998, a sum of Rs. 42,20,778 was due to the applicant on account of arrears of rent. In Company Petition No. 196 of 1997, the company in liquidation was wound up. The official liquidator, therefore, took charge of the assets of the company. He sealed the premises mentioned above on July 7, 1998. Thereafter the assets of the company in liquidation were sought to be sold on a number of occasions. Most of the property was in the form of sophisticated and sensitive computer equipment. When efforts to sell the property failed the applicant was constrained to file C. A. No. 282 of 1999 under rules 6 and 9 of the Companies (Court) Rules, 1959, for a direction to the official liquidator to hand over possession of the demised premises and to pay the arrears of rent. In the aforesaid company application a number of interim orders were passed. At that stage, the applicant suggested that in order to help and assist the official liquidator, an alternative site would be located and the goods lying in the premises owned by the applicant shall be shifted to the alternative site. This request was accepted by the official liquidator. The company application was disposed of by order dated May 18, 2001. In this order, it was directed that the official liquidator shall shift the goods lying in the premises owned by the company to the alternative site on or before June 1, 2001. Accordingly, the goods were shifted to the alternative site. This site has been taken on lease by the applicant from M/s. R. C. Gupta and Sons HUF by lease deed dated April 10, 2001. Rent of Rs. 25,000 per month was agreed to be paid for the godown which was taken on lease. Till January, 2002, the applicant had paid the rent at the rate of Rs. 25,000 per month. A sum of Rs. 1,45,000 had been paid on account of shifting charges, and a sum of Rs. 23,126 were paid to the expert arranged by the official liquidator to supervise the shifting of machinery. Rs. 72 were paid as bank commission charged for preparation of demand draft. Rs. 1,200 were paid for the rent of generator for shifting period. According to Mr. Chhibbar a sum of Rs. 4,69,398 is now due and payable by the company under liquidation. He has further submitted that the applicant has been going through a most unfortunate financial situation. Although the premises at 278, Udyog Vihar, Phase-II, Gurgaon, have been vacated, the applicant has not been able to find any alternative tenant. Thus he is not getting any income from the aforesaid premises. On the other hand, the applicant is burdened with a sum of Rs. 25,000 per month for storing the property belonging to the secured creditors.

It is submitted that once the official liquidator has put the seal on the premises, the charges for storage and security have to be paid by the secured creditors. It is not even disputed by Mr. Munish Jain, advocate, that expenses incurred by the official liquidator for appointment of the security guards are usually reimbursed by the secured creditors. I am of the considered opinion that the situation in the present case has to be resolved by making a similar arrangement. After all, it is the property of the creditors of the company in liquidation which is being kept in the premises, which have been hired by the applicant. The original lease deed expired on January 12, 1998. Therefore, at the time when the order for winding up the company under liquidation was passed no leasehold interest subsisted in favour of the company under liquidation. The applicant cannot be made to bear the expenses of hiring an alternative site for storing the goods of the company under liquidation, forever. He is a total stranger to the proceedings between the company in liquidation and the creditors. It is for the secured creditors to store and safeguard the property which has been hypothecated to them ; or on which they have registered a charge.

The application is, therefore, allowed.

Respondents Nos. 2 and 3 are financial institutions and respondents Nos. 4 to 11 are nationalised banks. These respondents have to do all acts necessary for the protection and safe custody of the immovable and movable assets of the company in liquidation. This would ensure a fair distribution of the sale proceeds of the property of the company in liquidation amongst its creditors.

In view of the above, respondents Nos. 2 to 11 are directed to pay the rent of the godown through the official liquidator to the landlord with effect from January, 2002. The official liquidator is also directed to execute a fresh lease deed for the same premises known as Industrial Shed, 14/4, Mathura Road, Faridabad, for the purposes of storing the goods of the company under liquidation. The expenses incurred by the liquidators as rent shall be reimbursed by respondents Nos. 2 to 11 on a pro rata basis.

The adjudication of the claim of Rs. 4,69,398 made by the applicant shall be considered and paid by the official liquidator along with case of the secured creditors at the first instance. The amount spent by the secured creditors on account of rent shall also be paid in the first instance at the time payments are made to the creditors as per section 529A of the Companies Act.