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S. Rao, Official Liquidator Vs. Jyoti Associates - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtMumbai High Court
Decided On
Case NumberCompany Application No. 313 of 1977 in Company Petition No. 73 of 1970
Judge
Reported in[1980]50CompCas27(Bom)
AppellantS. Rao, Official Liquidator;amtee Properties Pvt. Ltd.
RespondentJyoti Associates;jyoti Associates
Appellant AdvocateM.J. Mistree, Adv.;M.H. Shah, Adv.
Respondent AdvocateR.A. Kapadia, Adv.
Excerpt:
company - licenced premises - applicant pray that official liquidator should be directed inter alia to recover possession of licenced premises from respondent and to hand them over to applicants - applicant stated that respondent inducted third parties into possession of licenced premises - it seems patent that to accommodate in said premises each of three parties a camouflage has been resorted to - held, respondent has committed breaches of agreements entered with official liquidator and breaches of undertakings given by respondent to court that respondent would abide by terms of agreements - applicant's prayer accepted. - - if the licensee does or permit any act to be done which tends and operates to give or claim or represent to be in exclusive possession of the said premises or..........of the licenced premises. the said affidavit states that in a part of the licenced premises a motor garage is being conducted and that one shed of the licenced premises has been given to haryana breweries ltd. and another shed to narendra & co. mr. mistree also brought to my notice photographs relied upon in the affidavit on behalf of the applicant. one of these photographs shows the front of a shed in the licenced premises with the name haryana breweries ltd. and their symbol, the pelican, emblazoned all over the front and in the left-hand corner of the front, diminutively painted, the words 'goods warehoused by jyoti associates'. another photograph shows the name boards of 'narendra & co., clearing and forwarding agents', prominently displayed on the counter wall of another of the.....
Judgment:

Bharucha, J.

1. The applicants are the landlords of certain premises of which the company in liquidation was the tenant. The tenancy was terminated and suits for ejectment were filed in the Small Causes Court. On 21st August, 1970, the company was ordered to be wound up and the official liquidator was appointed liquidator of the company. On 28th December, 1972, the official liquidator, upon the directions of the company judge, granted to the respondent leave and licence to use the greater part of the said premises (hereinafter called 'the licenced premises') for industrial and commercial purposes, including warehousing and storage of goods belonging to her and to her customers and clients and for ancillary purposes. The agreement was for 5 years. On 27th June, 1977, after the company court's directions had been obtained, a fresh agreement was entered into between the official liquidator and the respondent in similar terms.

2. Clauses 6, 9, 14, 18 and 20 of the said agreements read as under :

'6. Notwithstanding anything contained in clause No. 5 of the agreement, the licensor may terminate the licence hereby granted, at any time if the licensee commits any defaults in payment of the licence fee for any month. In the case of non-performance or breach of any of the covenants and conditions herein contained the licensor shall give a notice to the licensee specifying the breach and if the same is not remedied within a fortnight from the receipt of the notice, then the licence shall be liable to be cancelled.

9. The licensee shall be at liberty to use aforesaid the said premises and the licensee shall not have or be entitled to claim any possession at any time of the whole of the said premises exclusive of the licensor. If the licensee does or permit any act to be done which tends and operates to give or claim or represent to be in exclusive possession of the said premises or any part thereof to the licensee or if the licensee in any way hinders or obstructs the licensor from having free and unrestricted access to the said premises or any part thereof or commits breach of any of the terms of this agreement on her part to be observed and performed the licence hereby created notwithstanding anything herein contained to the contrary, shall be liable to be terminated and thereupon all the permission shall stand revoked and thereupon all rights under these presents qua the licensee shall stand extinct and the licensee her servants and agents and all other persons claiming through or under the licensee shall forthwith thereupon be deemed to be trespassers on the said premises and without prejudice to all their other rights the licensor, his servants and authorised agents shall be entitled to break open all or any locks or locking or barring devices whatsoever in or outside the said premises employed authorisedly or otherwise and/or to physically remove from the said premises the licensee her servants and agents and all persons claiming through or under and in like manner to remove deal with or dispose of all or any property belonging to the licensee her servants and agents or any other person or persons claiming through or under her as to the licensor may seem expedient or necessary ......

14. The official liquidator being liquidator of the said company has been given sanction by the Hon'ble High Court of Bombay to allow the licensee to occupy the said portion on leave and licence basis on terms and conditions herein mentioned and on express undertaking given by the licensee to the Hon'ble court a copy whereof is annexed hereto and marked Ex.A. ...

18. This licence is personal and the permission herein granted to use the premises is not transferable and the licensee shall not purport to transfer the licence or assign her permission hereunder to any other persons, firm or company whatsoever or permit any one else to occupy or use the said premises or any portion thereof which she has been permitted hereunder to occupy and use. However, the licensee is permitted to take partners with her or to work in collaboration with any person or person but the possession of the said premises shall always be of the licensee and shall remain with the licensee and on the termination of the licence the right of the partners or collaborators or of the persons or parties to occupy the said premises with the licensee shall cease, provided that the person or persons so associated shall also give an undertaking to the court in the same manner as the licensee has given in the event of such person or persons seeking to remain on the premises along with the licensee ......

20. In the event of any dispute or differences in respect of or relating to or concerning or touching any question or matter arising from or out of this arrangement between the official liquidator and the licensee or about the interpretation of these terms and conditions or incidental or in any-wise relating thereto the same will be referred to the Hon'ble Judge of the High Court at Bombay taking company matters whose decision shall be binding on both the official liquidator and the licensee.'

3. On 21st December, 1972, in respect of the earlier agreement and on 27th June, 1977, in respect of the later agreement, the respondent gave undertakings to the court that she would not transfer her possession as licensee and the rights and benefits which she held under the agreements and that she would observe and comply with her obligation thereunder.

4. In the judge's summons before me, the applicants pray that the official liquidator should be directed, inter alia, to recover possession of the licenced premises from the respondent and to hand them over to the applicants.

5. Mr. Mistree, learned counsel for the applicants, brought to my notice the statements made in paras. 12 and 13 of the affidavit in support of the judge's summons wherein it has been stated that the respondent has inducted third parties into the possession of the licenced premises. The said affidavit states that in a part of the licenced premises a motor garage is being conducted and that one shed of the licenced premises has been given to Haryana Breweries Ltd. and another shed to Narendra & Co. Mr. Mistree also brought to my notice photographs relied upon in the affidavit on behalf of the applicant. One of these photographs shows the front of a shed in the licenced premises with the name Haryana Breweries Ltd. and their symbol, the pelican, emblazoned all over the front and in the left-hand corner of the front, diminutively painted, the words 'Goods warehoused by Jyoti Associates'. Another photograph shows the name boards of 'Narendra & Co., Clearing and Forwarding Agents', prominently displayed on the counter wall of another of the sheds. Mr. Mistree also drew my attention to the visiting card of one Bhatena, describing himself as a partner of Zorastrian Paint and Auto Works, whereon the address of the works is given as 'Jyoti Associates' Estates, 35, Dr. E. Moses Road .....'.

6. Paragraphs 30 and 31 of the affidavit-in-reply filed by the respondent deal with paras. 12 and 13 of the affidavit-in-support. In these paragraphs there is not denial whatsoever of the allegation that a motor garage is being conducted in the licenced premises, and that one shed has been given to Haryana Breweries Ltd. and another shed to Narendra & Company; nor have the photographs been referred to, although I was fairly to by Mr. Kapadia, learned counsel for the respondent, that they had been inspected by the respondent. No explanation has been given about the motor garage, Haryana Breweries and Narendra and Co.

7. In so far as the motor garage was concerned, Mr. Kapadia stated that the respondents had not seen the visiting card because it had not been disclosed. He stated that since 1973 there is a motor garage being run in the licenced premises; that it is being run by a partnership firm of which the respondent is not a partner; but that the respondent is a collaborator with that firm. This is, of course, not on the respondent's affidavit. Mr. Kapadia contended that the respondent had committed no breach of the agreements entered into with the official liquidator, because, under the terms of clause (18) thereof, the respondent was entitled to work in collaboration with any person or party. When asked by me whether any of the partners of the motor garage firm had given an undertaking in the same manner as the respondent had given, as required by the terms of clause (18) of the agreements, Mr. Kapadia stated that no such undertaking had been given. He stated that the respondent was willing to bring before me the partners of the firm to give an undertaking to remedy that failure.

8. In so far as the shed given to Narendra & Co. is concerned, Mr. Kapadia stated that the photograph concerned was of the year 1972. He said that Narendra & Co. were warehousing agents and were customers of Jyoti Associates and that their presence in the licenced premises constituted no breach of the said agreements. This also is not on affidavit.

9. In so far as the shed given to Haryana Breweries is concerned, Mr. Kapadia said that the front of the shed as shown in the relevant photograph shows that the goods of Haryana Breweries Ltd. are merely being warehoused by Jyoti Associates.

10. I am not satisfied with any of these explanations. It seems to me patent that to accommodate in the said premises each of the three parties, viz., the firm conducting the motor garage, Haryana Breweries Ltd. and Narendra & Co., a camouflage has been resorted to.

11. It does not seem reasonable that Haryana Breweries should be permitted to paint their name all over the front of one shed of the licenced premises if all that is happening is that their goods are being warehoused in the licenced premises by the respondent. This is more consonant with reason if the respondent has given over the use of the particular shed to Haryana Breweries Ltd., and to that specific allegation in the affidavit-in-support of the judge's summons there is no denial by the respondent.

12. If Narendra & Co. are only customers of the respondent, one would not expect their name boards, which advertise Narendra & Co. as Bank's Mukadams and Clearing and Forwarding Agents, to be put up out-side the licenced premises. The fact that the name boards are now removed does not alter my conviction that Narendra & Co. are conducting their business in the licenced premises.

13. I have also no doubt that the respondent is not collaborating in the running of the motor garage - whatever that means. If she had any connection with that business it would have been more natural for her to have become a partner in the firm running the motor garage in the licenced premises since 1973. Any agreement of collaboration is only a ruse to hand over to the firm conducting the motor garage a portion of the licenced premises to carry on the business of repairing motor vehicles.

14. I am satisfied and decide that the respondent has committed breaches of the agreements entered into by her with the official liquidator and breaches of the undertakings given by her to the court that she would abide by the terms of the agreements.

15. I must also point out that the respondent has on 27th June, 1977, given an undertaking to the court of which she committed a breach at the very moment she gave it. On so worthless an undertaking she persuaded the court to grant her leave and licence to use the licenced premises for 5 years more. I find it most repugnant that the court should be trifled with, and I am convinced that firm action should be taken against those who have the temerity to do so. The basis upon which the court granted permission must first and foremost be restored, if not restored the permission must stand revoked.

16. I direct the official liquidator forthwith to issue a notice to the respondent specifying the breaches I have referred to above and to call upon the respondent to remedy the same within a fortnight of the date of the receipt by her of such notice. In the event of the breaches not being remedied within that time, the official liquidator is directed to act forthwith under the terms of clause (9) of the agreements.

17. The judge's summons qua prayers (b), (c), (d) and (e) stands adjourned for four weeks.

18. I make it clear that my decision and the directions that I have given are regarding prayer (a) of the judge's summons as also, as company judge, de hors the judge's summons, on the basis of information received in the company court.


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