Case Note & Summary
The applicant, Smt. Nandini Dinesh Shingte, is the absolute owner of an immovable property situated at Shiye Phata, Old National Highway No.4, Tuluqa, Hatkanangale, Kolhapur District. She had leased the property to M/s. N G E F Ltd. (in liquidation) by executing a lease deed dated 30.07.1983, effective from 01.08.1983, at a monthly rent of Rs. 2,500/-. The company was ordered to be wound up by the High Court of Karnataka. The applicant filed Company Application No. 1115/2015 under Section 446(2) of the Companies Act, 1956, read with Rules 6 and 9 of the Companies (Court) Rules, 1959, praying for a direction to the respondent (the Official Liquidator) to pay arrears of rent amounting to Rs. 16,22,036 from 01.01.2004 till the date of filing. The Official Liquidator, represented by Sri. G.C. Yadav, admitted the claim and sought directions from the court. The court, after hearing both sides, held that the claim for rent arrears is an admitted liability and directed the Official Liquidator to pay the amount within eight weeks. The application was allowed accordingly.
Headnote
A) Company Law - Winding Up - Rent Arrears Claim - Section 446(2) Companies Act, 1956 - The applicant, owner of property leased to the company in liquidation, sought payment of arrears of rent from 01.01.2004 to the date of filing. The Official Liquidator admitted the claim but sought court directions. Held that the claim for rent arrears is an admitted liability and the Official Liquidator is directed to pay the amount of Rs. 16,22,036 to the applicant within eight weeks. (Paras 1-5)
Issue of Consideration
Whether the applicant, as a lessor of property to a company in liquidation, is entitled to payment of arrears of rent from the Official Liquidator under Section 446(2) of the Companies Act, 1956, without requiring leave of the company court?
Final Decision
The application is allowed. The Official Liquidator is directed to pay the sum of Rs. 16,22,036 to the applicant within eight weeks from the date of the order.
Law Points
- Section 446(2) of Companies Act
- 1956
- Leave of Company Court
- Rent arrears claim
- Company in liquidation
- Official Liquidator's duty to pay admitted dues
Case Details
2016 LawText (KAR) (03) 13
Company Application No. 1115/2015
Sri. Vishwanath H.M. for applicant; Sri. G.C. Yadav (Official Liquidator) with Sri. K.S. Mahadevan and V. Jayaram for Official Liquidator
Smt. Nandini Dinesh Shingte
M/s. N G E F Ltd., (In Liqn), Rep. herein by the Official Liquidator
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Nature of Litigation
Application under Section 446(2) of the Companies Act, 1956 for payment of arrears of rent by the Official Liquidator of a company in liquidation.
Remedy Sought
Direction to the respondent (Official Liquidator) to pay Rs. 16,22,036 towards arrears of rent from 01.01.2004 to the date of filing of the application.
Filing Reason
Non-payment of rent by the company in liquidation to the applicant-lessor.
Issues
Whether the applicant is entitled to payment of arrears of rent from the Official Liquidator under Section 446(2) of the Companies Act, 1956?
Submissions/Arguments
Applicant's counsel argued that the rent arrears are an admitted liability and the Official Liquidator should be directed to pay.
Official Liquidator admitted the claim and sought directions from the court.
Ratio Decidendi
Under Section 446(2) of the Companies Act, 1956, the company court has jurisdiction to entertain claims against a company in liquidation. Where the Official Liquidator admits the claim, the court may direct payment of the admitted amount without requiring the claimant to obtain separate leave.
Judgment Excerpts
Heard Sri. Vishwanath H.M., learned counsel appearing for the petitioner and Sri. G.C. Yadhav, learned Official Liquidator, who has addressed the arguments on this application with the leave of this court.
The applicant, who is the absolute owner of the immovable property ... had undisputedly leased said property in favour of the Company (in liquidation) by executing lease deed dated 30.07.1983 ...
The Official Liquidator has admitted the claim of the applicant and seeks direction from this court.
In the light of the above, the application is allowed. The Official Liquidator is directed to pay the sum of Rs. 16,22,036 to the applicant within eight weeks from today.
Procedural History
The applicant filed Company Application No. 1115/2015 under Section 446(2) of the Companies Act, 1956, read with Rules 6 and 9 of the Companies (Court) Rules, 1959, seeking payment of rent arrears from the Official Liquidator of M/s. N G E F Ltd. (in liquidation). The application was heard on 11.03.2016 and allowed.
Acts & Sections
- Companies Act, 1956: Section 446(2)
- Companies (Court) Rules, 1959: Rules 6 and 9
