Case Note & Summary
The appeal arises from an order of a Single Judge of the Bombay High Court in a company application filed by Respondent No.3 (original applicant) against the Official Liquidator of M/s.Modella Textiles Industries Private Limited (Respondent No.1) and M/s.Modella Woollens Ltd. (Appellant). The company application sought declarations that the appellant, in occupation of office premises No.4-C on the 4th floor of Vulcan Insurance Building, Mumbai, was a trespasser with no legal right to occupy, and that a licence purportedly created by the company in liquidation was illegal, fraudulent, and void ab initio. Further, a decree passed by the Court of Small Causes, Mumbai in RAD Suit No.5937 of 1986, which held the appellant to be a deemed tenant, was sought to be declared a nullity and set aside. The Single Judge made the application absolute in terms of prayer clauses (a), (b), and (c), directing the Official Liquidator to make a report within eight weeks. The appellant appealed under clause 15 of the Letters Patent. The court considered whether the licence created after the winding up petition was valid and whether the deemed tenancy decree was binding. The court held that the licence was void ab initio as it was created after the winding up petition, and the decree was a nullity. The appeal was dismissed, upholding the Single Judge's order.
Headnote
A) Company Law - Winding Up - Void Licence - A licence created by a company after the filing of a winding up petition is void ab initio and does not confer any rights on the licensee. The Official Liquidator is entitled to recover possession from such a licensee who is a trespasser. (Paras 1-3) B) Property Law - Deemed Tenancy - Nullity Decree - A decree of deemed tenancy obtained by a licensee after the winding up petition is a nullity and not binding on the Official Liquidator. The court can set aside such a decree in company proceedings. (Paras 3-5) C) Civil Procedure - Letters Patent Appeal - Clause 15 - An appeal lies against an order of a Single Judge in company matters under clause 15 of the Letters Patent. The appellate court can examine the validity of the order. (Para 1)
Issue of Consideration
Whether a licence created by a company after the filing of a winding up petition is valid and whether a decree of deemed tenancy obtained by the licensee is binding on the Official Liquidator.
Final Decision
Appeal dismissed. Order of Single Judge dated 13th April 1995 upheld.
Law Points
- Winding up petition
- relation back doctrine
- void licence
- trespasser
- deemed tenant
- nullity decree
- company liquidation
- possession recovery
