1. Company Application No.294/2009 is filed by the legal heir of original lessor of land admeasuring 57870 sq. mtrs. situated at survey nos.474 and 476 at Rakhial, District Ahmedabad, Town Planning Scheme No.11, Final Plot No. 15 (here-in-after referred to as “the subject land”).

2. One Ramji Harilal, the predecessor-in-title of the applicant had executed a lease deed on 20.06.1919 through his aunt Ichaben Bapuji Bajibhai, as he was minor at the relevant time in respect of the subject land in favour of Khushaldas Gokaldas.

3. It is the case of the applicant that subsequent to the aforesaid transfer of land in favour of Khushaldas Gokaldas, he executed lease deed on 16.06.1920 in favour of M/s. Marsden Spinning and Manufacturing Company Limited in respect of the subject land as per the same terms and conditions of the first lease deed.

4. Thereafter, the said mill was taken into winding up and in the year 1986, management of the said mill was taken over by Gujarat State Textile Corporation Limited (For short “GSTC Ltd.”) as per the provisions of the the Gujarat Closed Textile Undertakings (Nationalisation) Act, 1986 (for short ‘Act,1986’) enacted for revival of 16 sick textile mills.

5. However, GSTC LTd. also could not achieve its object of revival of sick textile mills and was taken to Board For Industrial and Financial Reconstruction (BIFR) for its revival.

6.Thereafter, as per opinion of BIFR, GSTC Ltd. was also ordered to be wound up by this Court (Coram : Hon’ble Mr. Justice S.D. Pandit,J. As His Lordship was then) vide order dated 6.02.1997 in Company Petition No.205 of 1996.

7. The applicant being a lessor of the land was receiving lease rent of from lessee Khushaldas Gokaldas and thereafter from his legal heirs upto 1986. It is the case of the applicant that after 1986, the applicant has not received any lease rent from the lessee or from the liquidator of GSTC Ltd.(In Liquidation).

8. The applicant has therefore, filed this application with a prayer to handover the vacant and peaceful possession of the subject land and has further prayed to direct the Official Liquidator to make the payment of arrears of lease rent due and payable by GSTC Ltd. (In Liquidation) in view of lease agreement dated 20.06.1919. It was also prayed to direct the Official Liquidator to disclaim the subject land in favour of the applicant. The other incidental prayer made by the applicant is to direct the Official Liquidator to clarify as to how the advertisement at Annexure-D was published in Gujarat Samachar newspaper to sell leasehold rights in absence of any order of this Court.

9. This Court (Coram : Hon’ble Mr. Justice Jayant Patel, As His Lordship was then) by order dated 24.07.2009 disposed of this Company Application No.294 of 2009 applying the decision in case of Legal Heirs of Deceased Fakir Chand Ambaram Patel v. Official Liquidator of Amruta Mills Ltd. & Ors. reported in 2002(3) GLH 367 as well as the decision of Division Bench of this Court in case of Jabal C. Lashkari & Ors. vs. Official Liquidators & Ors rendered in OJ Appeal No.66/2006 and allied matters vide order dated 17.10.2008 and it was observed that reliefs as prayed by the applicant cannot be granted. It was pointed out on behalf of the applicant before the Court that the matter arising from OJ(Appeals) was carried before the Supreme Court, however, in absence of any application by the applicant to move the Apex Court or the stay granted by the Apex Court, the application was decided rejecting such contention of the applicant.

10. With regard to the second prayer for getting arrears of lease rent, the applicant was directed to produce proof of the succession of the original lessor along with details of the outstanding rent to the Official Liquidator, if any, and Official Liquidator was directed to examine the aspect of entitlement of the applicant of the lease rent after arriving at finding that the applicant is one of the successor of original lessor and then proportionate payment was ordered to be made of the arrears of the rent minus the liability, if any, to be borne by the lessor.

11. With regard to the clarification for issuance of advertisement, it was held by this Court that the Official Liquidator may examine the grievances of the applicant with regard to his claim over the subject land. It was further directed to the Official Liquidator to confirm that the property of the company in liquidation was not permitted to be used without express leave of the Court.

12. After passing of the order dated 24.07.2009, the applicant filed SLP (Civil) No. 31354 of 2009 (Civil Appeal No.3168/2016) challenging the said order which was tagged with the pending matter arising out of OJ(Appeals).

13. The State Government also filed Company Application Nos. 450, 451, 452, 466 and 467 of 2009 seeking the possession of leasehold land belonging to five textile undertakings of GSTC Ltd.(In Liquidation) including the subject land for the public purpose of setting up a Garment Park. By common order dated 22.07.2010 the learned Company Judge directed the Official Liquidator to handover the possession of the subject land to the State Government.

14. Being aggrieved, the applicant filed SLP(C)No.32445/2010(Civil Appeal No.3170/ 2016) challenging the order dated 22.07.2010 in Company Application No.451 of 2009 before the Hon’ble Supreme Court which was also tagged with the pending matter arising out of OJ(Appeals).

15. The applicant had also filed Company Application No.266 of 2010 for joining party in Company Application No.451/2009 which was also rejected. The applicant therefore, filed SLP(C) No.32444/2010 (Civil Appeal No.3169/2016) challenging the order dated 22.07.2010 whereby the Company Application No.266/2010 was rejected.

16. The applicant filed IA No.4/2013 in SLP(C) No. 31354/2009 (Civil Appeal No.3168/ 2016) seeking status-quo in respect of the subject land because public advertisement dated 25.08.2012 was issued whereby tenders for selling the leasehold rights of the subject land were invited by the GIDC. The Hon’ble Supreme Court vide order dated 3.5.2013 granted ad interim stay which was continued by order dated 23.08.2013.

17. The Hon’ble Supreme Court after hearing all the Civil Appeals including the SLPs converted into Civil Appeals filed by the applicant upheld the order of this Court in case of Jabal C. Lashkari & Ors.(supra) which was the main matter deciding the issue of legal rights of the lessor of the company in liquidation on the basis of specific clauses of the lease deed in the said matter. However, the Apex Court while allowing such appeals quashed and set aside the orders of High Court impugned in each of the Civil Appeals and remitted all other matters to the High Court for fresh consideration in accordance with the observations and principles of law laid down in the said judgment with a direction to examine specific clauses of lease deed in each matter.

18. Hence, the judgment and order dated 24.07.2009 was also quashed and set aside and this application is again restored to file to be decided afresh as per the law laid down by the Apex court after considering the specific clauses of the lease deed in this application.

19. The Official Liquidator has filed an official report dated 2.08.2018 stating chronology of events with regard to the liquidation process of Marsden Mill, a unit of GSTC Limited (In Liquidation) along with copy of the order of the Apex Court in case of Jabal C. Lashkari & Ors. v. Official Liquidator & Ors. reported in 2016 (12) SCC 44, [LQ/SC/2016/459] the same can be summarised as under:

1) By order dated 6.02.1997 passed in Company Petition No.205/1996, this Court ordered to wind up GSTC Ltd.(In Liquidation).

2) The Official Liquidator thereafter has taken over the assets of the company in liquidation i.e. 16 Textile units including Marsden Mill.

3) The Sale Committee was constituted as per order dated 22.07.1998 passed in Company Application No.211/1997 filed by the Official Liquidator.

4) In the meeting held on 26.11.2008 Sale Committee decided to get the valuation of the properties through Government Approved Valuer and after obtaining the valuation report, the Sale Committee decided on 1.04.2009 to sale all the immovable properties of the company in liquidation. The building structure and movable assets (except records) of the factory premises of M/s. Marsden Mill was put up for sale for Rs. 5 Lakh as per the Official Liquidator Report No.119/2009 which was rejected by order dated 6.11.2009.

5) The Ex-Director of the company in liquidation filed Statement of Affairs under section 454 of the Companies Act, 1956 in case of Marsden Mill disclosing the following assets and properties of the said mill as on 6.02.1997 i.e. date of winding up order :

A. Freehold property,

Land & Building – Rs. 1,49,69,320/-

B. Liabilities of the Company

a. Preferential Creditors Rs.60,20,20/-

b. Unsecured Creditors Rs.21,19,472/-

c. Equity Shareholders Rs.1,12,78,907/-

6) The State Government through Deputy Secretary, Industries and Mines department filed Company Application No. 451/2009 and other allied matters in case of five mills of GSTC Ltd. (In Liquidation) for transfer and handing over the possession of the immovable assets and properties including the subject land of Marsden Mill free from all encumbrances, liabilities and charges under section 457(l)(e) of the Companies Act, 1956.

7) As per the common order dated 22.07.2010, the official Liquidator was directed to hand over the entire assets of five units of GSTC Ltd. (In Liquidation) to the State Government including the subject land and transfer Rs. 50 Crore in the account of the State Government after filing an undertaking by the State Government before this Court stating that in case in future if any liability arises either from the creditors or from the workers and for discharge of such liability, if any amount is required to be paid, the same shall be remitted forthwith by the State Government.

8) The State Government filed an undertaking on 4.08.2010 before this Court stating that the Government of Gujarat will discharge all the liabilities including the workers and creditors dues that may arise in future in respect of five units including Marsden Mill.

9) Thereafter the Official Liquidator handed over the possession of the entire assets of five units of GSTC Ltd. (In Liquidation) including the subject land on 4.09.2010 to the Government of Gujarat.

10) The Official Liquidators also transferred amount of Rs. 50 Crore on 30.09.2010 for discharging liability, if any, that may arise in future.

11) The Official Liquidator has therefore, prayed to direct the applicant to approach State Government for redressal of any grievance in respect of subject land as possession of the same was already handed over by the Official Liquidator on 04.09.2010 pursuant to order dated 22.07.2010 passed by this Court. The Official Liquidator also prayed to join the Under Secretary, Industries and Mines department of the State Government and Manager of GIDC as respondents.

20. The Supreme Court has passed the order in SLPs converted into Civil Appeals filed by the applicant and other allied matters after confirming the order passed in case of Jabal C. Lashkari & Ors.(supra) as under:

“23. Though we have affirmed the order dated 17.10.2008 of the Gujarat High Court passed in O.J. Appeal Nos. 65 of 2006, 66 of 2006 and 67 of 2006 and dismissed the civil appeals arising out of SLP(C) Nos. 29282-29284 of 2008 [Jabal C. Lashkari & Ors. Vs. Official Liquidator & Ors.], our decision to affirm the said judgment of the High Court is based on a consideration of the specific clauses in the lease deed between the parties to the case. What would be the effect of the principles of law underlying the present order vis-a-vis the specific clauses of the lease deed between the parties in the other cases is a question that has to be considered by the High Court in each of the cases. That apart whether the order dated 17.07.2006 passed in Company Application No. 250 of 2006 has attained finality in law and forecloses the question raised and further whether constructions have been raised on such land by the State Government for the benefit of the general public, as has been submitted to dissuade us from interfering with the order of the High Court, are questions that would require a full and complete consideration by the High Court on the materials available. To enable the said exercise to be duly performed, we set aside the order of the High Court impugned in each of the aforesaid civil appeals and remit all the matters to the High Court for a fresh consideration in accordance with the observations and principles of law contained in the present order.”

21. The Official Liquidator has also referred to order dated 6.04.2018 passed by the Division Bench in OJ Appeal No. 13/2007 in case of Virendra Bhogilal Shah (HUF) v. O.L. of Sarangpur Cotton Manufacturing Company Limited.(unit of GSTC Ltd.) with regard to the question of leasehold rights acquired by the GSTC Ltd. (In Liquidation) pursuant to provisions of the Act, 1986. It was, therefore, prayed on behalf of the Official Liquidator that the applicant is entitled to get lease rent only and not possession of the subject land.

22. In view of above facts, it would therefore, be necessary to refer to and analyse the relevant clauses of the lease deed for which this matter is remanded back by the Apex Court. English translation of relevant clauses original lease deed dated 20.06.1919 in Gujarati is as under :

“1. In the said land the party of the second part should construct the houses, the party of the second part should construct houses and get construct for workshop of spinning waiving etc and utilize of get it utilized in every manner or to use it for anything.

2. The party of the second part had taken all such farms permanently from the party of the first part wherein the party of the second part shall construct the houses for spinning waiving or get it construct or utilize it in any work and utilize freely or to use for anything, wherein the party of the first part or the guardians, heirs of the party of the first part should not have to raise any objection dispute.

5. There are trees in the said farms, if it cause impediments to the party of the second part than the party of the second part shall have to cut it and the woods thereof should have been taken by the party of the first part and except that, whatever the trees are there and whatever fruit, flowers produce from it, that the party of the second part shall have to take it permanently. So the party of the second part take it permanently and the party of the first part should not cause any interference to the party of the second part and now hereinafter cropped up new trees the right to take its produce shall be of the party of the second part and guardians, heirs of the party of the second part and the party of the first part should not have to take any objection and if any of the tree dried up than the party of the first part have no right to take its woods, hence the dried up woods be taken by the party of the second part.

6. That all such farms have been taken by the party of the second part from the party of the first part for permanently but if the party of the second part wants to put it than giving the rent for a year to the party of the first part, the party of the second part put it but if the party of the second part wants to keep it than without paying the payable rent it cannot be taken from the party of the first part in any manner but if the Government, Municipality interfere to make the houses etc than the party of the second part should return such numbers, for which the party of the first part cannot take any objection.

8. If the party of the second part should keeping intact the constructed houses and arranged things in the said farms sold it to others than keeping as it is all the agreements of the said lease give it so that, all the agreements of the lease shall be acceptable to the purchaser who take it on sell or in any other manner from the party of the second part.”

23. Learned Senior Advocate Mr. S.N. Shelat with learned advocate Mr. M.G.Nagarkar submitted that Civil Application No.1 of 2022 in this application is filed to join the State of Gujarat as a necessary and proper party in this application in view of the fact that the rights including leasehold rights, title and interest of properties of Marsden Spinning and Manufacturing Mills vested with the Stated Government under the Gujarat Closed Textile Undertakings (Nationalisation) Ordinance 1985 which was later replaced by the Gujarat Closed Textile Undertakings (Nationalisation) Act, 1986 and thereafter the same vested in GSTC Ltd. (In Liquidation) free from any charges. It was submitted that the State Government is having 100% shareholding in GSTC Ltd. (In Liquidation) and is also a major creditor and therefore, entitled to get the possession of all the subject land.

23.1 It was therefore, submitted that considering the various orders passed by this Court qua the various textile units of GSTC Ltd. (In Liquidation), leasehold rights qua the subject land stood vested in Government and possession of which was taken over by the Government and was utilised for public purposes like setting up of hospitals and medical colleges, metro rails, etc.

23.2 It was submitted that once the leasehold rights in the subject land vested in Government, the Official Liquidator cannot auction the said property or land in question for paying the liability of the GSTC Ltd. (In Liquidation) and/or dues of Marsden Mill. It was therefore, submitted that the State Government is required to be joined as respondent party in Company Application No.294/2009 and accordingly, Civil Application No. 1/2022 is required to be granted.

24. Learned advocate for the applicant Mr. M.I. Hava raised objection with regard to joining the State Government as the respondent in the Company Application No.294/2009 as the subject land cannot be said to be vested in the State Government by operation of law under the Act, 1986 and handing over the possession of the subject land for any other public purpose would amount to acquisition other than for specific purpose for reviving of closed textile mills. It was therefore, submitted that the Company in liquidation being the statutory tenant, the applicant is entitled to get back the possession and the State Government cannot be joined as respondent as it is neither a necessary nor a proper party in this proceeding.

25. Considering the controversy which has arisen in the Company Application No. 294/2009 and the contentions raised by learned advocate Mr. Hava with regard to the objection of the vesting of the land in the State Government in view of provisions of the Act, 1986, in my opinion, the State Government is a necessary and proper party in facts and circumstances of the case and accordingly Civil Application No. 1/2022 is allowed and the State Government is ordered to be joined as respondent in Company Application No. 294/2009 as a necessary party. Civil Application is disposed of accordingly.

26. Learned advocate Mr. Hava for the applicant made the following submissions distinguishing the facts and grounds from the facts and grounds than those in case of Jabal C. Lashkari & Ors.(supra):

1) The Lease of the subject land is not a fixed term lease and the duration is indefinite so long as the lessee goes on paying rent whereas in case of Jabal C. Lashkari & Ors.(supra), it was a fixed term lease for 199 years and about 100 years remained unexpired on the date of liquidation.

2) The Official Liquidator was the contractual lessee or tenant of first degree in the case of Jabal C. Lashkari & Ors. (supra) whereas in the present case, the Official liquidator steps into the shoes of GSTC Ltd.(In Liquidation) who is a statutory tenant and not a contractual tenant as there is no contractual assignment of leasehold rights from Marsden Mills to GSTC Ltd.(In Liquidation) but the leasehold rights have vested in the State Government under section 3(1) of Act, 1986 and under section 3(2) divested in GSTC Ltd.(In Liquidation). Moreover, the assignment of leasehold rights of the whole interest in the subject land including reversionary rights of the original lessee Khushaldas Gokaldas in favour of Marsden Mills was in breach of clause (1) read with clause 8 of the first lease, however under Section 15(2) of the Bombay Rent Act, the possession of Marsden Mills was deemed to be valid and therefore it also became a statutory tenant.

3) The lease deed of the subject land specifically provides for the purpose of construction of buildings or factories for Spinning and Weaving Textile Mill, whereas there was no purpose whatsoever stipulated in the case of Jabal C. Lashkari & Ors.(supra).

4) The lease deed of the subject land, in Clause 8 contains a restrictive covenant and permits assignment thereof only with buildings constructed thereon together with Plant & Machinery duly installed and erected there i.e. as a going concern and not an assignment or transfer of open barren land. There was no such restrictive covenant contemplated under the lease in case of Jabal C. Lashkari & Ors.(supra).

5) Clause 6 of the lease deed in question provides that in the event of construction thereon not being permitted either by the Government or by the Local Authority, the land should be returned back to the lessor. No such provision is made in the lease in case of Jabal C. Lashkari & Ors.(supra).

6) It was submitted that besides the terms of the lease, the grounds urged before the Supreme Court in the case of Jabal C. Lashkari & Ors.(supra) are also distinct and different from the facts of the present case. It was submitted that it was urged before the Supreme Court in case of Jabal C. Lashkari & Ors.(supra) that the lease was granted to Managing Agent of the Mill Company who had assigned the same to Prasad Mills which went into liquidation which argument was on the strength that the assignment from Agent to the Mill Company was in violation of the lease as the lease permitted only sub-lease and not assignment and hence liable to eviction under Section 13(1)(e) of the Rent Act. It was submitted that this ground is not urged in the same context as that in case of Jabal C. Lashkari & Ors.(supra) by the applicant in the present case. It was submitted that the applicant also does not press the ground of non-payment of rent as was the ground in case of Jabal C. Lashkari & Ors.(supra). It was submitted that the ground under section 13(1)(k) of the Rent Act, was taken in the context of the Prasad Mills in liquidation whereby the possession of the land was in the hands of the liquidator whereas admittedly in the present case, the possession is not with the liquidator and the same has been handed over to the State Government pursuant to the order of this Court in Company Application 451 of 2009, which order despite being quashed and set aside, the possession still admittedly remains with the State Government. It was submitted that the Supreme Court while remitting the matters specifically distinguished the matters relating to Nationalization i.e., matters pursuant to order dated 17.7.2006 and after hearing State and GIDC at length, the Supreme Court has specifically stated that such matters pursuant to order dated 17.7.2006 have unique facts and grounds distinct to the facts and grounds in case of Jabal C. Lashkari & Ors.(supra) and they require full and complete consideration by this Court as per the direction of the Apex Court.

26.1 Learned advocate Mr. Hava thereafter, submitted that the judgment of the Supreme Court in case of Jabal C. Lashkari & Ors.(supra) is not applicable to the facts of the case inasmuch as the lease in question is not a fixed term lease and the Official Liquidator who steps into the shoes of GSTC Ltd. (In Liquidation) is not a contractual tenant as there is no contractual document executed by Marsden Mills Ltd. in favour of GSTC Ltd. (In Liquidation) and GSTC Ltd. acquired the possession of the land in question under Section 3(2) of the Act, 1986 and by virtue of such vesting and divesting, it became a statutory tenant in absence of a contract whose possession is protected under the Rent Act.

26.2 It was further submitted that the rights of GSTC Ltd. (In Liquidation) are creation of statute and not contract, in other words GSTC Ltd. (In Liquidation) derives rights under the statute as against absence of contractual assignment by Marsden Mills in favour of GSTC Ltd.(In Liquidation) and, hence the rights of GSTC Ltd. (In Liquidation) are statutory and by operation of law pursuant to the Act, 1986 and vesting of leasehold rights qua the subject land thereunder.

26.3 It was submitted that the Official Liquidator of GSTC Ltd. (In Liquidation) cannot claim any right under the lease deed of 1919 or the lease deed of 1920 as there is no contractual transfer or assignment of leasehold rights by the Marsden Mills Ltd and thereby the Liquidator of GSTC Ltd. (In Liquidation) is merely a statutory tenant. In support of such submission reliance is placed on decision in case of G Shridharmathy vs Hindustan Petroleum Company reported in 1995 (6) SCC 605 [LQ/SC/1995/923] and decision in case of Subhashchandra and others vs BPCL reported in 2022 SCC 98 online.

26.4 It was submitted that the subject land is a part of Gomtipur Village which is covered under the Schedule of the Rent Act and the Rent Act is applicable to the premises and occupation thereof. It was further submitted that insofar as statutory tenant is concerned, only its possession is protected and hence, official liquidator cannot transfer or assign or part with possession in any manner as the same cannot be said to be a property of the Company in liquidation, failing which, protection qua possession is lost and liable for ejectment. Reliance was also placed on decision in case of Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association reported in 1992 (3) SCC 1 [LQ/SC/1992/368] in support of his submissions.

26.5 Learned advocate Mr. Hava in the alternative submitted that even if for the sake of argument and without admitting and without prejudice to the aforementioned contentions, the Official Liquidator is considered to be enjoying rights under the lease by virtue of vesting under Section 3(2) of the Act,1986 the lease of 1919 as well as 1920 provided for assignment only as a Going concern together with constructions on the subject land with Plant and Machinery duly erected thereon. It was submitted that the facts of the present case clearly demonstrates that the original lessee in defiance of the terms of the tenancy assigned his whole interest in favour of Marsden Mills without making any construction and installing plant and Machinery for Mill Company as was stipulated under the original lease and consequently, the assignee was not entitled to put any construction as he had no right to construct on the land in question. In support of such contention, reliance was placed on decision in case of Shantibhai and others Vs Dinkar Balkrishna Vaidya reported in 1994 (4) SCC 85 [LQ/SC/1994/301] and in case of Jaisingh Morarji and others v. M/s. Sovani Pvt. Ltd and others reported in 1973 (1) SCC 197 [LQ/SC/1972/488] . It was further submitted that under Section 15(2) of the Rent Act, since Marsden Mill was in possession of the premises in question in 1959, its possession of the premises came to be validated and thereby also it became a statutory tenant.

26.6 Learned advocate Mr. Hava further submitted that the Official Liquidator has demolished the construction and dismantled the Plant and Machinery of the Marsdern Mills and sold the same and now it is an open barren land which cannot be sold, assigned or transferred by the Liquidator neither under the terms of the lease nor as a statutory tenant or an ordinary tenant governed by Rent Act and apart from the restrictions provided under Sections 15 and 18, 19 of the Rent Act which propounds the public policy of the statute and for that reason also there is no justification, legal or otherwise, for the Liquidator to retain the possession of the land which is not an asset for the purpose of sale or distribution under the provisions of the Companies Act, 1956. In support of such contention, reliance was placed on the Full Bench Judgment of the Delhi High Court in case of Official Liquidator of Globe Associates vs H.P. Sharma reported in ILR 1971 1 Del 149.

26.7 It was further submitted even in cases of permanent tenancy, such tenancy would enure in respect of a living person during his lifetime and it will come to an end on his death, similarly in respect of juristic person it will enure till the juristic person/company lasts. Reference in this regard was made to decision in case of Bavasaheb Walad Mansursaheb Korti and another v. West Patent Co. Ltd. and others reported in AIR 1954 Bombay 257.

26.8 It was submitted that the said judgment is holding the field till today and has been referred to and approved in case of Chapsibhai Dhanjibhai Danad v. Purshottam reported in 1971 (2) SCC 205 and in case of Juthika Mullick vs Mahendra Yashwant Bal and Others reported in 1995 (1) SCC 560.

26.9 Learned advocate Mr. Hava therefore, submitted that the lease is indefinite having certainty of tenure as clause 6 read with clause 11, stipulates the words "so long as the rent is paid" and therefore, on the true interpretation of the clauses of lease deed concerned, the same are only for the lifetime of the juristic person.

26.10 It was submitted that in case of ICICI Bank vs SIDCO reported in 2006 (10) SCC 452, the Hon'ble Apex Court has held that:

"Liquidation proceedings although are collective enforcement mechanism for the unsecured creditor, the question which invariably arises is what would be the meaning of Assets of the Company in the Indian context. For the said purpose, the Court has to bear in mind that the Liquidation is also the occasion for termination of Company's affairs. Asset of the Company would include debenture holder assets, free hold assets and sometimes floating assets".

26.11 It was further submitted that the leasehold rights being a frozen asset or non transferable asset or an asset having restrictions of the Rent Act, could not be an asset of the Company in liquidation and further in view of the substratum of the company having been gone, there is certainty for the very existence of the Company in liquidation i.e. GSTC Ltd. (In liquidation) to end.

26.12 It was therefore, submitted that in view of the restrictions of the Rent Act, there arises no question of the Liquidator being permitted by this Court to further transfer the leasehold rights in the subject land.

26.13 Learned advocate Mr. Hava further submitted that the leasehold premises governed by the Rent Act, is also not an asset in Liquidation available to the Liquidator for distribution amongst the creditors under the Companies Act,1956 and for that reason the Liquidator has no right to retain the land in question and in the facts of the case the Liquidator does not require it any further even for beneficial winding up as the Building and Machinery has already been dismantled and sold.

26.14 It was submitted that the lease hold rights in the subject land are governed by the provisions of the Rent Act and the Rent Act specifically prohibits sub-letting, assignment or transfer under Section 15 and further Sections 18 and 19 forbids the landlord, tenant and any other person in occupation from claiming and/or receiving any consideration/premium for transferring/ assigning tenancy rights and or surrendering the tenancy rights and for that reason the Liquidator cannot claim or receive any consideration for transferring, sub-letting or assigning the leasehold rights in question. In support of such contention, reliance is placed on decision in case of Ravindra Ishwardas Sethna vs Official Liquidator reported in (1983) 4 SCC 269 [LQ/SC/1983/201] . Reliance was also placed on the following decisions:

i) Nirmala R. Bafna(Smt) /Kershi Shivax Cambatta and othes reported in 1992 (2) SCC 322 [LQ/SC/1992/191] .

ii) Official Liquidator Of Globe Associates Ltd. vs HP Sharma reported in 1971 SCC Online Delhi 51

iii) M/s. Modella Wollens Ltd. Vs The Official Liquidator and others reported in 2005 SCC online Bom 1170

iv) Devindrakumar Bajaj vs Pure Drinks reported in 2000 SCC Online Delhi 815

26.15 It was therefore, submitted that in view of the above submissions, the possession of the land in question be handed over to the petitioners as has been done by this Court in similar fact situation in the following cases:

i) Anilkumar Vaikunthlal Patel vs O.L. of Abad Jubilee Spinning and Manufacturing Mills Co. in Company Application No. 16/1999 vide judgment dated 3.09.2021.

ii) Uttra Achyut Chinubhai Vs O.L. of Nanikram Shobraj Mills in Company Application nos. 370 of 2006; 318 of 2006, Judgment dated 17.0.2009.

iii) Dhairyasinh P Rajda Vs Ahmedabad Manufacturing & Calico Mfg. Co. Ltd. in Company Application no. 371 of 2009, judgment dated 29.09.2015.

iv) Anil Pvt. Ltd. vs O. L. Of GSTC being Company Application no. 174 of 2001, order dated 10.05.2002.

26.16 It was further submitted that Section 13(1)(a) of the Rent Act read with Section 108(o) of the Transfer of Property Act forbids the tenant from using or permitting another to use the premises for any other purpose other than the purpose for which it was let. It was submitted that in the facts of the present case, it is clear that the purpose for which the premises have been let stands defeated whereby the substratum of the Mill Company has gone on account of its closure, dismantling of Plant and Machinery, demolition of buildings and sale of all the moveable assets of the company. It was submitted that there is no scope of revival of the company at present and even at the time of winding up in 1997 and before that when the matter was before BIFR under SICA all attempts failed and the whole purpose of enactment of the Act, 1986 stood frustrated and vanquished on account of liquidation of the GSTC Ltd., and thus, the Vehicle which was created for the sole purpose of revival of the closed mills failed. It was submitted that in any event, the subject land is not being used for the purpose of letting since the closure of the mill company and that it has been about 25 years since the GSTC Ltd.(In liquidation) was ordered to be wound up in 2009.

26.17 It was therefore submitted that the Official Liquidator cannot in terms of section 108(o) of the Transfer of Property Act allow or permit any other person including the State Government to use the subject land for any other purpose other than the purpose of letting i.e., "Construction of Factories for Spinning and Weaving" and therefore, admittedly the Liquidator in breach of above principle has permitted the State Government to use the land for other public purpose. In support of such contention reliance is placed on decision in case of Dashrath Baburao Sangale and others v. Kashimath Bhaskar Data reported in 1994 Supp(1) SCC 504.

26.18 It was further submitted that Official Liquidator cannot be permitted to handover the possession of the leasehold lands to the State Government allegedly for the use of public purposes. It was pointed out that such submission was made by the State Government before the Supreme Court in case of Jabal C. Lashkari & Ors.(supra),but the same was not accepted by the Supreme Court and the order dated 22.7.2010 handing over possession to the State Government in Company Application No.451/2009 and other allied matters was quashed and set aside for that reason.

26.19 It was submitted that the Official Liquidator is now again changing the stand and instead of opposing the handing over the possession as was done before the High Court and Supreme Court previously, is canvassing for handing over the possession to the State Government for utilizing it for public purposes in flagrant violation of the Clause 8 of the lease deeds of 1919 and 1920 as well as provisions of section 13(1)(a) of the Rent Act read with Section 108(o) of the Transfer of Property Act.

26.20 It was submitted that the purpose of the lease has clearly been defined under clauses 1 and 2 of the lease deed read with clause 8 of lease deed of 1919 which is for "Construction of Factories for Spinning and Weaving" i.e. Textile Mills and the other incidental uses permitted under the said clauses are to be read as ejusdem generis being incidental usages to fulfill the primary or the dominant purpose or object of the lease being that of factories for spinning and weaving.

26.21 It was submitted that when a huge parcel of land is let out for construction of factories for Spinning and Weaving, there would certainly be a requirement for some land to be used for putting up houses for the employees of the Mill company or for canteens or for parking spaces etc. However all such uses should be for fulfilling the dominant purpose i.e. for Factories for Spinning and Weaving. It was therefore, submitted that under such circumstances the distinction between purpose and usage is pertinent in interpreting the purpose clause of the lease. In this regard, reliance was placed on decision in case of Precision Steel & Engg. Works and another v. Prem Deva Niranjan Deva Tayal reported in 2003 (2) SCC 236 [LQ/SC/2002/1295] and in case of Allenbury Engineers Pvt.Ltd. v. Ramkrishna Dalmia and others reported in 1973 (1) SCC 7 [LQ/SC/1972/444] .

26.22 Learned advocate Mr. Hava pointed out that in case of Jabal C. Lashkari & Ors. (supra), there was no defined purpose in the lease and hence the ground under Section 13(1)(a) was not considered by the Court. It was therefore, submitted that the Official Liquidator and the State Government are liable to be evicted under Section 13(1)(a) of the Rent Act.

26.23 Learned advocate Mr. Hava further submitted that Section 15 of the Rent Act prevents the sub-letting, transfer or assignment by the tenant and in breach thereof the Liquidator had parted with possession of the leasehold land in question in favour of the State Government taking shelter under the order dated 22.07.2010 of this Court in Company Application 451 of 2009. It was submitted that although it was done pursuant to an order of the Court as submitted earlier, it was an act of voluntary transfer by the Liquidator as against an involuntary transfer by operation of law and was in breach of provisions of Sections 15 and 19 of the Rent Act. It was further submitted that it is a settled position of law now that an act of a Liquidator despite being an act in furtherance to an order of the Court is a voluntary act and not an involuntary act by operation of law. In support of such contention, reliance was placed on decision in case of M/s. Parasram Harnanand Rao v. M/s. Shanti Prasad Narinder Kumar Jain and another reported in 1980 (3) SCC 565 [LQ/SC/1980/172] . It was therefore, submitted that the said breach which was committed pursuant to the order dated 22.7.2010 is still persisting inasmuch as the Official Liquidator has not taken any steps to get back the possession nor has the State Government bothered to handover the possession to the Official Liquidator despite the said order of possession being quashed and set aside by the Supreme Court and not only does the breach continue at behest of State but the breach has further been aggravated by GIDC issuing tender under PPP model inviting bids from private developers and acting as a freehold owner of the land in the tender document denying the title of the land owners and profiteering therefrom. It was therefore, submitted that the breach of Sections 15 and 19 of the Rent Act is continuing as on today and hence, the Official Liquidator and the State Government are liable to be evicted under Section 13(1) (e) of the Rent Act.

26.24 Learned advocate Mr. Hava submitted that the transfer was made in favour of the State Government in consideration of the State Government having paid the dues of the creditors and thereby in violation of the provisions of Section 19 of the Rent Act, as also provisions of the Companies Act, 1956 in relation to winding up and the Official Liquidator has rendered himself liable for eviction on account of unlawful transfer in favour of the State Government, particularly, when the Court has stated in its judgment dated 22.7.2010 at paragraph no. 17 regarding the offer of the State Government in the following words "Mr. Shelat further submitted that the State Government would treat its due as discharged to the extent of this Court accepting the request of the State Government to return the remaining assets of all these five Textile Units as a creditor and as a sole contributory of the company".

26.25 Learned advocate Mr. Hava further referred to paragraph 34 of the said judgment in Company application No.451 of 2009 wherein it is stated that “the Court is of the view that since the State Government has discharged the liability of the Mill Companies towards secured creditors and workers and there is still huge surplus fund of about Rs. 81 Crore lying with the Official Liquidator in the account of GSTC Ltd. and since the State Government has still undertaken to discharge the liabilities if any that may arise in future, there shall not be any objection on part of the Official liquidator in handing over the possession of the immovable properties of all five units in question of GSTC to the State Government.”

26.26 It was submitted that this arrangement as approved by the Court and the transfer of the subject land by the Official Liquidator to the State Government pursuant to the judgment dated 22.07.2010 amounts to violation of Sections 19 and 15 of the Rent Act.

26.27 It was submitted that clause 8 of the lease deed provides only for transfer along with Building and Machinery permanently intact i.e., as a Going concern and that the transfer of premises as open land by the Official liquidator to the State Government is in contravention to the provisions of the lease deed and thereby the Official Liquidator and the State Government are liable for eviction under Section 13(1)(e) of the Rent Act.

26.28 Learned advocate Mr. Hava further submitted that in case of Jabal C. Lashkari & Ors.(supra), the transfer in violation of section 13(1)(e) of the Rent Act was repelled observing that the unlawful assignment was in the favour of Prasad Mill by the erstwhile lessee and there was no contention as regards any transfer being made by the Official Liquidator, also the contention of violation of Section 19 of the Rent Act was repelled on the ground that the event is yet to occur as the advertisement inviting offers was not violative of provisions of Section 19 of the Rent Act as no consideration had passed. It was submitted that the pendency of Scheme of Revival of the Mill Company weighed with the Supreme Court for denying the possession of the land to the owner and the fixed term lease of 199 years was yet to expire whereby about 100 years were left. It was submitted that in the present case, the Official Liquidator has already committed the breach of sections 15 and 19 of the Rent Act by voluntarily transferring possession in favour of State Government in consideration of the State paying dues of the creditors and undertaking to pay any outstanding liabilities. It was therefore, submitted that the Official Liquidator and the State are liable to be evicted as per the provision of Section 13(1)(e) of the Rent Act.

26.29 Learned advocate Mr. Hava submitted that insofar as non-user of the premises for purpose of letting apropos Section 13(1)(k) of the Rent Act is concerned, after the winding up order, the Official Liquidator has already transferred the possession of the leasehold premises in favour of the State Government and the Official Liquidator is no long holding possession of the leasehold premises, whereas in case of Jabal C. Lashkari & Ors.(supra), the Official Liquidator was in possession and was not using the same, however the Hon'ble Supreme Court upheld the non user on account of pendency of winding up proceedings. It was submitted that in the facts of the present case, the Official Liquidator has parted with possession of the subject land as far back as in 2010 and all along the same remained in possession of the State Government despite the order dated 22.07.2010 being quashed and set aside by the Hon'ble Supreme Court vide its judgment dated 29.03.2016. It was submitted that more than six years have passed since the order of the Supreme Court and the Official Liquidator has blissfully ignored and contumaciously disregarded the order of the Supreme Court.

26.30 Learned advocate Mr. Hava therefore, submitted that the petitioner is entitled to eviction under Section 13(1)(K) of the Rent Act. In support of his contention, reliance is placed on the judgments of Supreme Court in case of Vora Rahimbhai Haji Hasanbhai Popat vs Vora Sunderlal Manilal & another reported in 1985 (4) SCC 551 [LQ/SC/1985/346] and in case of Dunlop India Ltd. Vs A. A. Rahana & Anr reported in 2011 (5) SCC 778 [LQ/SC/2011/665] . Reliance was also placed on decision in case of National Textile Corporation vs Radha Soami Charitable Society reported in 2013 SCC Online P&H 25828 whereby the Punjab and Haryana High Court granted eviction of a Nationalised Undertaking which was in liquidation on the ground of non-user and an SLP preferred from this judgment was dismissed by the Supreme Court upholding the judgment of the High Court in SLP no.1354 of 2014.

26.31 Learned advocate Mr. Hava submitted that as regards the position of the State Government, it had filed a similar application to that of Company Application No.451 of 2009 previously being Company Application no. 348 of 1997 as also stated in the Report of the Official Liquidator dated 2.3.2010. The said Company Application no. 348 of 1997 was disposed of by this Court (Coram R. Balia J, As His Lordship was then) vide order dated 22.7.199 granting permission to withdraw the application with liberty to file appropriate application proposing a Scheme for Revival of the Company. It was submitted that the State Government has instead of filing a Scheme for Revival of the company moved the Company Application No.451 of 2009 again which being similar to that of Company Application No.348 of 1997 deserves to be rejected at the outset. It was submitted that the Supreme Court has after hearing all the parties, quashed and set aside all the orders under Company Application No. 451 of 2009 where again the same grounds were raised by the State as in the group of matters in case of Jabal C. Lashkari & Ors.(supra) which were not accepted by the Supreme Court and present proceedings are the third round of litigation where the State is reiterating the same grounds which have time and again been rejected by the hierarchy of Courts. It was submitted that the State Government is merely an ordinary creditor and is governed by Section 530 of the Companies Act, 1956 whose rights as regards assets of a company in liquidation are limited and confined to that of an ordinary creditor. It was submitted that the plank of the State Government to grab the land of the applicant without compensation and without acquiring it under the provisions of the Land Acquisition Act under the guise of it being an ordinary creditor under Companies Act is in flagrant breach of the rights of the application under Article 300A and Article 14 of the Constitution of India which is further aggravated by the GIDC floating tenders in respect of the subject land as "Freehold Land" and profiteering out of it by entering into Public Private Partnership with Private Developers which process was injuncted by the Apex Court after hearing parties at length.

26.32 It was therefore, submitted that the Official Liquidator being the statutory tenant on account of vesting, the Liquidator does not derive rights under the contracts of lease as the possession of GSTC Ltd. (In Liquidation) as tenant is creation of statute and by operation of Law as against being a creation of contract. It was submitted that as a consequence, the Official Liquidator is merely a statutory tenant whose tenancy is protected merely by Rent Act. It was submitted that the provisions of Rent Act apply to all tenancies irrespective of the fact that tenure and the land of Marsden Mills is located in village Gomtipur which is covered under the Schedule of the Rent Act. It was submitted that the lease is indefinite and is only for the lifetime of the Company in liquidation and the lease has a covenant permitting transfer of leasehold rights only in case of assignment as a Going concern along with Building and Machinery installed thereon. It was submitted that the Building and Machinery have already been dismantled and sold and assignment or transfer of barren open land is not permissible under the lease. It was therefore, submitted that the Official Liquidator does not require the subject land for beneficial winding up or for carrying out the business of the Company and the rights of the Liquidator are being governed by the restrictions of the Rent Act being part of Public Policy which do not permit the Liquidator to sale or assign the leasehold rights and further make penal provision in respect of any transfer or assignment for any consideration. It was submitted that the Official Liquidator has already once unlawfully and voluntarily transferred the possession in favour of the State Government for consideration, which breach continues till date and the GIDC has further aggravated the said breach by floating tenders and claiming the premises in question to be Freehold Land which process was injuncted by the Apex Court after hearing the parties. It was further submitted that tenancy rights of a company in liquidation are not transferable asset when governed by the restrictions of the Rent Act and cannot be retained by the Liquidator as the same are not required for beneficial winding up of the company. It was further submitted that the State cannot be permitted to violate Articles 14 and 300A of the Constitution by grabbing land of applicant under the garb of alleged Public Purpose without payment of compensation and profiteering from it by entering into Public Private Partnership with Private developers, nor can the Court lend assistance to Liquidator in giving any directions which may be violative of statutory provisions of the Rent Act, the Companies Act and in defiance of the purpose and terms of the Lease.

26.33 Learned advocate Mr. Hava therefore, submitted that the reliefs claimed in Company Application No. 294 of 2009 may please be granted and the Official Liquidator may please be directed to take possession of the subject land from the State Government and handover the same to the applicants.

27. On the other hand learned Senior Advocate Mr. S.N. Shelat submitted that on perusal of the relevant clauses of lease deed dated 20.06.1919, it is clear that it was a permanent lease and therefore, the facts of the present case are identical to that of the case of Jabal C. Lashkari & Ors.(supra). It was submitted that the decision of Apex Court while upholding the decision of this Court in case of Jabal C. Lashkari & Ors. (supra) would be applicable as the Supreme Court has considered all the submissions made by the lessor in context of the Rent Act and therefore, the facts which were tried to be distinguished on behalf of the applicant is not appearing from the bare perusal of the covenants of the lease deed.

27.1 Learned Senior Advocate Mr.Shelat invited the attention of the Court to clause 1 of the lease deed in question which stipulates for utilising the land in every manner or to use it for anything. It was submitted that clause 2 of the lease deed also provides that land can be used by lessee freely or to use for anything wherein the party of the first part or the guardians, heirs of the party of the first part should not have to raise any objection or dispute. Similarly, it was further pointed out that clause 5 of the lease deed provides that lessee is entitled to transfer the right on the same terms and conditions whereas clause 6 of the lease deed provides that lessor is entitled to recover the arrears of rent through available remedies. It was therefore, submitted that considering the lease deed as a whole, it cannot be said that same was for a limited period and land would revert back to the original lessor in any circumstances. It was submitted that facts of the present case stand on a better footing as lease deed in facts of the case is for permanent lease whereas in facts of Jabal C. Lashkari & Ors. (supra) it was for a fixed term for 199 years.

27.2 It was submitted that State Government by provisions of the Act, 1986 acquired the sick textile mills which were transferred to 100% owned GSTC Ltd. with an objective to revive sick textile mills. However, object could not be fulfilled and ultimately, GSTC Ltd. (In Liquidation) on failure of proceedings before the BIFR was ordered to be wound up.

27.3 It was therefore, submitted that in such peculiar facts, entire assets and properties of GSTC Ltd. (In Liquidation) vest in the State Government by virtue of provisions of the Act, 1986 and also by the fact that 100% shareholding is of the State Government in GSTC Ltd. (In Liquidation).

27.4 Learned Senior Advocate Mr. Shelat submitted that in the facts of the present case, the leasehold rights of the land in question also vest in the State Government under sections 3(1) and 3(2) of the Act, 1986. Therefore, reliance placed by the applicant on the relevant provisions of the Rent Act would not be applicable in facts of the case.

27.5 Learned Senior Advocate Mr. Shelat relied upon decision of the Apex Court in case of Harshad Govardhan Sondagar v. International Assets Reconstruction Company Ltd. and others reported in 2014 (6) SCC 1 in which the Apex Court considering the status of tenant under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (For short “SARFAESI Act”) has analysed the provisions of section 65A and section 105 of the Transfer of Property Act.

27.6 Learned Senior Advocate Mr. S.N.Shelat also referred to and relied upon the lease deed executed by Patel Khushaldas Gokaldas on 16.06.1920 in favour of M/s. Marsden Spinning and Manufacturing Company Limited to point out that clause 1 of the said lease deed also provides for entitlement of lessee to use the land in any manner whereas clause 2 stipulates that lessor is prohibited to object use of land in any manner by the lessee and clause 5 provides that lessee is entitled to transfer the right on same terms and conditions and clause 6 further provides that lessor is entitled to recover arrears of rent through available remedies. It was therefore, submitted that both the lease deeds dated 20.06.1919 and 16.06.1920 are having similar terms and conditions and there was no breach of any terms and conditions of lease deed dated 20.06.1919. It was therefore, submitted that the order of the Apex Court in case of Jabal C. Lashkari & Ors.(supra) would squarely apply in the facts of the case and reliance placed on behalf of the applicant upon various provisions of the Rent Act would not be applicable more particularly in view of provisions of Act, 1986.

27.7 Learned Senior Advocate Mr. S.N. Shelat also referred to and relied upon the decision of Division Bench in case of Virendra Bhogilal Shah (HUF) (supra) wherein Division Bench in similar facts of the said case held that decision in case of Jabal C. Lashkari & Ors.(supra) would be applicable with full force and therefore, the applicant was denied the relief of possession as claimed/prayed. It was therefore, submitted that in similar facts, Division Bench has already decided the issue which are again agitated on behalf of the applicant in this application and therefore, the application deserves to be dismissed.

27.8 It was submitted that this Court has passed the following orders for handing over the possession of the assets under lease hold right to the State Government :

1) In Company Application No. 237/2004 vide order dated 23.12.2005 in case of New Jehangir Vakil Mills, Bhavnagar.

2) In Company Application No.562/2007 vide order dated 05.03.2008 in case of Priyalaxmi Mills Baroda.

3) In Company Application No.77/2008 vide order dated 05.03.2008 in case of Monogram Mills, Ahmedabad.

4) In Company Application No.250/2006 vide order dated 17.07.2006 in case of Sarangpur Cotton Mills, Ahmedabad and MCA No.126/2006 vide order dated 17.08.2006 in case of Silver Cotton Mills, Ahmedabad.

5) In Company Petition No. 203/2004 vide order dated 28.12.2006 in case of New Swadeshi Mill, Ahmedabad and in case of Bhalakia Mill, Ahmedabad.

27.9 It was submitted that considering the fact that the State Government was having highest liability in various textile mills of GSTC Ltd. (In Liquidation) and considering the fact that State Government is 100% equity shareholder of GSTC Ltd. (In Liquidation), the entire assets and liabilities of the GSTC Ltd. (In Liquidation) would vest in the State Government. It was therefore, submitted that leasehold rights of such textile mills also would vest in the State Government and the Official Liquidator therefore, would not be required to exercise any rights under the provisions of the Companies Act,1956.

27.10 With regard to payment of lease rent, it was submitted that the Manager, GIDC of GSTC Cell, Ahmedabad regularly paid the lease rent of the subject land to one Yogendra Ratilal Patel for the year 2021-2022 who is legal heir of Late Khushaldas Gokaldas. It was also submitted that Yogendra Ratilal Patel had sent the outstanding lease rent to the applicant amounting to Rs.29,016/- through RPAD letter on 20.08.2021, however, the same was not accepted. It was submitted that one Arvind Manilal Shah accepted the lease rent of Rs. 108/- for the period of one year from 1.7.2021 to 30.6.2022 sent by said Yogendra Ratilal Patel. It was pointed out that Yogendra Ratilal Patel informed GIDC about the payment of outstanding lease rent which was not accepted by the applicant. It was therefore, submitted that lease rent is regularly paid by the lessee to the lessor and as such, there is no fault on part of either Official Liquidator or the State Government to make the payment of outstanding lease rent and the State Government is always ready and willing to make the payment of lease rent to the lessor as per the lease deed.

28. In rejoinder, learned advocate Mr. Hava submitted that on account of the Act, 1986 the rights of Marsden Mill under lease dated 16.06.1920 as per section 3(1)(e) of the Act, 1986 vested in the State Government and as per the provisions under section 3(2), the same stood divested in GSTC Ltd.(In Liquidation). It was therefore, submitted there was no contractual transfer or assignment of leasehold rights and it is merely transfer by operation of law or creation of rights of GSTC Ltd. (In Liquidation) by operation of Law of Vesting which amounts to diversification of rights by GSTC Ltd. (In Liquidation) under the law. It was therefore, submitted that once there is a transfer by operation of law under a statute, the provisions of Transfer of Property Act are not applicable.

28.1 Reliance was placed on the decision of the Supreme Court in case of Bharat Petroleum v. P. Keshvan & Ors. reported in 2004 (9) SCC 772, [LQ/SC/2004/472] wherein it is held that the provisions of Transfer of Property Act, 1882 has no application in a case where transfer of property takes place by operation of law.

28.2 It was therefore, submitted that as per the provisions of section 23 of the Act, 1986, Nationalisation Act, being a special Act would prevail over Transfer of Property Act, which is general in nature.

28.3 Reliance was placed on the decision of Apex Court in case of Subhash Chander and Ors. v. Bharat Petroleum Corporation Ltd. & Ors. reported in 2022 SCC Online SC 98 wherein the Apex Court considered such issue and held that leasehold rights would come to an end as such right stood transferred and vested in the Government in view of acquisition of Burmah Shell company. It was therefore, submitted by learned advocate Mr.Hava that in absence of the rights of GSTC Ltd. (In Liquidation), being an inter vivos transfer, the concept of Privity of Contract which are applicable to inter vivos contracts and those under the Transfer of Property Act would not apply. It was submitted that the leasehold rights of the sub-lessor i.e., Khushaldas Gokaldas stood abrogated and/or extinguished on account of statutory vesting in view of provisions of Act, 1986 whereby all rights stood transferred and vested in State Government/ GSTC Ltd. and it is only the right of reversion of the applicant that would survive under Nationalisation Act being the original owners of land and such right would remain intact and would not vest in the State Government and/or GSTC Ltd. by operation of law.

28.4 In support of his submission reliance was placed on the decision of Apex Court in case of Shantibai (Smt) and others v. Dinkar Balkrishna Vaidya and others reported in 1994 (4) SCC 85 [LQ/SC/1994/301] wherein the Apex Court has drawn distinction between the transfer of ownership and transfer of interest in the property.

28.5 It was submitted that the rights of lessee Khushaldas Gokaldas under lease deed dated 20.06.1919 stood determined and terminated in law after assignment made by him by executing lease deed dated 16.06.1920 and therefore, the applicant has rightly not joined the legal heirs of Khushaldas Gokaldas as the applicant is superior title holder after the leasehold rights were transferred in favour of Marsden Mills which in turn vested in GSTC Ltd. (In Liquidation).

28.6 It was further submitted that the right of the applicant as the owner of the land have not been acquired and only right of lessee to occupy and or possess land belonging to Marsden mills have been vested. Reliance was placed on decision of the Apex Court in case of NTC Ltd. v. Nareshkumar B. Jagad reported in 2011(12) SCC 695, wherein the Apex Court after analysing the provisions of sections 3(1) and 3(2) of the Textile Undertakings (Nationalisation) Act, 1995 enacted by the Parliament held that what has vested in Government was right, title and interest of the lessee and nothing else. It was therefore, submitted that vesting under the Act, 1986 was for the specific purpose of revival of the closed textile undertakings as is evident from the Preamble of the Act, and GSTC Ltd. (In Liquidation) was incorporated by the State Government as the vehicle for accomplishment of the said objects and despite the State Government contributed to the share capital of the GSTC Ltd. (In Liquidation) and was also guarantor to the secured creditors thereof, none of the Textile Mills could be revived by GSTC Ltd. (In Liquidation) and ultimately, it miserably failed to comply with the objects of the and was ordered to be wound up as per the recommendation of BIFR as per the observations of this Court by order dated 06.02.1997. It was therefore, submitted that vesting was for the specific purpose which failed and since no compensation has been paid to the owners of land inspite of the fact that their ownership rights have been kept intact in the land, the applicant is entitled to claim back the possession of the land from the Official Liquidator as the same is no longer required for either carrying on business of the company in winding up or for beneficial winding up of the Company.

28.7 It was submitted that the contention of the State Government that the land is required for using it for public purpose is without any basis inasmuch as neither the land is vested in the State Government nor any compensation has been paid by the State Government for acquisition of ownership rights in land. Referring to the provisions of section 15A of the Bombay Rent Act, it was submitted that it starts with a non obstante clause and provides that it shall not be lawful for the Official Liquidator to grant license to the State Government and hand over the possession of the premises on license for monetary consideration without the prior permission of the landlord and such bar is absolute. Learned advocate Mr. Hava also referred to section 13(1)(ee) of the Rent Act which provides that the tenant is liable to be evicted and landlord is entitled to recover possession of the premises if the Court is satisfied that the tenant has after commencement of the 1963 Amendment, Act has parted with the whole or any part of the premises on license for monetary consideration to any person without previous permission of the landlord. It was therefore, submitted that the possession of the land could not have been handed over to the State Government without any compensation being paid to the lessor-original owners of the subject land.

28.8 With regard to various clauses of lease deed, it was submitted that relevant clauses being clauses 1, 2, 6 and 8 of the lease deed dated 20.06.1919 are relevant for ascertaining for the purpose and tenure of lease. It was submitted that Clause 6 is divided into three parts, the First Part conveys that though the tenure is indefinite,the lessee may surrender tenancy at its volition upon payment of rent for a year in advance, the Second Part provides that the lessee can retain possession so long as the rent is paid, and the Third Part read with the purpose of the lease provides that in case the Government or relevant authority does not permit construction of Mill Company or construction of factories for spinning and weaving then the lessee may return the said land or part thereof for which the lessor shall have no objection. It was therefore, submitted that reading entire lease deed, as a whole, it is not a permanent lease but lease with various stipulation for determination and termination of the lease by virtue of action of vesting.

28.9 Reliance was placed on the decision of this Court in case of Anilkumar Vaikunthlal Patel vs Official Liquidator of Ahmedabad Jubilee Mills Ltd. in OJ. Appeal No. 1 of 2003, wherein the Division bench of this Court has considered and interpreted the provisions of the lease deed of the said case which are pari materia to the provisions of the lease deed of 1919. It was submitted that the clauses of the lease deed in the present case are distinct from the clauses of lease which have been interpreted by the Supreme Court in the case of Jabal C. Lashkari & Ors. (supra) and in case of Virendra Bhogilal Shah (HUF)(supra), and therefore the facts of the present case are distinct and not covered by these decisions and have to be considered fully and completely as per the direction of the Supreme Court while remanding the matter.

28.10 Learned advocate Mr. Hava further submitted that on perusal of clauses of the lease deed in question, it cannot be said to be a permanent lease. Reliance was placed on the decision in case of Chapsibhai Dhanjibhai Danad (supra), to submit that when leasehold rights are not heritable and when the lease was undoubtedly for an indefinite period, which only means that it was to enure for the lessee’s lifetime and reference in it of the heirs of the lessee is only for the limited purpose and not for making the leasehold interest heritable. It was therefore, submitted that the leasehold rights of the permanent lease cannot be said to be heritable and would continue to vest in GSTC Ltd. (In Liquidation) in any manner.

28.11 Learned advocate Mr.Hava referred to and relied upon Clause 8 of the lease deed of 1919 and clause 5 of the lease deed of 1920 which are pari materia to the clauses which were considered in the case of Anilkumar Vaikunthlal Patel (supra) whereby upon interpreting the said clauses, the Division Bench held that clause which permits transfer of the leasehold rights shows that what the parties intended was transfer of the subject property with building, plant and machinery which were permanent in nature, and not vacant land, and therefore, the intention of the parties appears to be to permit transfer of leasehold rights as a Going concern. It was therefore, submitted that now constructions being demolished and plant machinery etc. dismantled, the Official Liquidator cannot transfer leasehold rights as a Going concern and the Official Liquidator being a statutory tenant governed by the provisions of the Rent Act, cannot transfer the tenancy for consideration/ premium which is forbidden and is made an offence under Sections 18 and 19 of the Rent Act.

28.12 Reliance was placed on the decision in case of Lodna Colliery Company Limited v. Bepin Behary Bose reported in AIR 1920 Patna 383, wherein it is held that person who is bound by covenant of the lease deed and executes another lease deed then subsequent sub-lessee is also bound by the covenant. It was therefore submitted that the lease deed executed in 1920 is bound by covenants of the lease deed executed in the year 1919 and as such, covenants of lease deed of 1919 can provide for transfer of property and not the vacant land and in such circumstances, the Official Liquidator is bound to return the possession of the land in question to the applicant.

28.13 In support of above submission, reliance was placed on decision in case of Ravindra Ishwardas Sethna (supra) wherein it is held that the Rent Act is no doubt enacted for protecting the tenants, and indisputably its provisions must receive such interpretation as to advance the protection and thwart the action of the landlord in rendering tenants destitute. But this does not imply that the Court should lend its aid to flout the provisions of the Rent Act so as to earn money by unfair and impermissible use of the premises and it was therefore, submitted that Official Liquidator is intending to do the same and the Court should not extend its help to the Liquidator and should not permit holding on to possession of the subject land, not needed for efficiently carrying on winding up proceedings and the only course open to the Court was to direct the Liquidator to surrender possession to landlords and save recurring liability to pay rent.

28.14 It was submitted that the aforesaid decision was considered by the Division Bench in case of Anilkumar Vaikunthlal Patel (supra) and directed the Official Liquidator to handover the possession to the original owner/lessor as it would not be permissible for the Official Liquidator to sub-let or to assign the leasehold right and any direction by this Court would be in violation of the provisions of sub-section(1) of section 15 and sub-section(1) of section 19 of the Rent Act. It was therefore, submitted that application deserves to be allowed by directing the Official Liquidator to handover the possession of the subject land to the applicant.

29. Having heard the learned advocates for the respective parties and having gone through the lease deeds as well as relevant provisions of law and settled legal position as per the various judgments cited by the learned advocates, it appears that this application is filed by the persons who claim to be the legal heirs of the original lessor of the subject land. It is prayed by the applicant to handover the vacant possession of the subject land and also pay the accumulated lease rent. From the facts emerging from record, it is clear that the order passed by this Court rejecting this application was set at naught by the Apex Court by judgment and order in case of Jabal C. Lashkari & Ors.(supra) to consider specific clauses of the lease deed between the parties and whether the constructions have been raised on the subject land by the State Government for general public are kept open so as to apply the principles of law laid down by the Apex Court vis-a-vis the specific clauses of the lease deed.

30. Therefore, specific clauses of the lease deed are required to be considered to find out whether the principles of law laid down by the Apex Court in the facts of the case of Jabal C. Lashkari & Ors.(supra) are applicable to the facts of the present case also or not. The second issue which is required to be considered is the effect of use of the subject land by the State Government for the benefit of the general public in the facts of the case vis-a-vis rights of the applicant, if any.

31. Before adverting to the specific clauses of the lease deed in question in facts of the case, it would be germane to refer to the principles of law laid down by the Apex Court in facts in case of Jabal C. Lashkari & Ors. (supra).

32. The Apex Court has considered the applicability of the provisions of Bombay Rent Act and the liability of the Liquidator and has held that mere fact that the company has been ordered to be wound up cannot be a ground to direct the Official Liquidator to handover the possession of the land to the owner inasmuch as the company in liquidation continues to maintain its corporate existence until it stands dissolved upon completion of liquidation proceedings in the manner contemplated under the Companies Act. After considering the provisions of sections 12, 13(2) read with section 12(3)(b), 13(1)(e), 13(l) and section 15 of the Bombay Rent Act, the Apex Court considered the provisions of section 118(o) of the Transfer of Property Act vis-a-vis the specific contents of clause 7 of the lease deed in question in case of Jabal C. Lashkari & Ors.(supra). The Apex Court after considering the aforesaid provisions and specific clauses of the lease deed in the said case held as under :

“17. Section 12 of the Rent Act confers protection on a tenant who is regularly paying or is ready and willing to pay the rent. In the present case while there is no doubt that rent has not been paid, equally, there is no doubt that the secured creditors including the State Bank of India had all along been ready and willing to pay the rent and the reasons for nonpayment appears to be (para 43 of the impugned order of the High Court) lack of communication by the official liquidator to the SBI of the precise amount of rent due. While there can be no doubt that mere readiness and willingness to pay without actual payment cannot enure to the benefit of the tenant in perpetuity what is required under Sub-section (2) of Section 12 is a notice in writing by the landlord raising a demand of rent and only on the failure of the tenant to comply with such notice within a period of one month that the filing of a suit for recovery of possession is contemplated. The service of notice giving an opportunity to the tenant to pay the unpaid rent is the first chance/opportunity that the Rent Act contemplates as a legal necessity incumbent on the landlord to afford to the tenant. Admittedly, in the present case, no such notice as contemplated by Section 13 (2) has been issued by the landlord; at least none has been brought to our notice. In such a situation, the readiness and willingness of the tenant to pay the rent, though may have continued for a fairly long time without actual payment, will not deprive the tenant of the protection under the Rent Act. Though the order of the High Court in para 43 of the impugned judgment has been placed before the Court as an order under Section 12(3)(b) of the Rent Act we do not find the said order to be of the kind contemplated by Section 12(3)(b) inasmuch as not only the order does not mention any specific rent which has to be tendered in Court but what is encompassed therein is a direction to the official liquidator to let the State Bank of India know the precise amount that is required to be paid on account of rent and, thereafter, to pay the same to the official liquidator whereafter it has been left open for the lessors to withdraw the said amount from the official liquidator. Such an order by no stretch of reasoning would be one contemplated under Section 12(3) (b). In the aforesaid situation, the finding of the High Court that the landlord is not entitled to seek eviction on the ground of nonpayment of rent under Section 12 of the Bombay Rent Act cannot be said to be so inherently infirm so as to require the interference of this Court.

18. This will bring the Court to a consideration of the liability of the official liquidator to a decree of eviction on the ground contemplated under Section 13(1)(e) of the Bombay Rent Act. As already discussed in a preceding paragraph of the present order, the non obstante clause of Section 13 (1) overrides only the other provisions of the Bombay Rent Act and is also subject to the provisions of Section 15. Section 15 which deals with subletting and transfer, though overrides the provisions contained in any other law, is subject to any contract to the contrary. Though in the present case the lease deed (clause 7) is capable of being read as permitting sub-letting and not assignment what has been held in the present case by the High Court, by virtue of the decision of this Court in Laxmidas Bapudas Darbar vs. Rudravva (supra), is that in view of the limited operation of the non obstante clause in Section 15 of the Bombay Rent Act, unlike Section 21 of the Karnataka Act, the provisions of the Transfer of Property Act [Section 118 (o)] will not become irrelevant to the relationship between the parties in which event assignment may also be permissible notwithstanding the specific content of clause 7 of the lease deed in question. However, we need not dwell on this issue at any length or would also be required to consider the efficacy of the arguments of the learned Additional Solicitor General on the strength of the two Privy Council decisions mentioned above i.e. Hans Raj vs. Bejoy Lal Sel and Ram Kinkar Banerjee vs. Satya Charan Srimani (supra) inasmuch as from Company Application No. 34 of 2004, which deals with the claim of the appellants for eviction of the official liquidator from the leased property, what is clear and evident is that the case of sub-letting of the leased premises on which basis eviction has been prayed for is not sub-letting/assignment by the official liquidator but assignment of the leased premises to Prasad Mills by the original managing agents in whose favour the initial lease was executed by the predecessors of the present owners. The ground of unauthorized and impermissible assignment by the official liquidator on the strength of the notice/advertisement for disposal of the leased land thereby making the said authority liable for eviction is an argument advanced only at the hearing of the appeals before us. That apart the said argument overlooks the fact that the assignment was only sought to be made by the advertisement/notice issued and did not amount to a completed action on the part of the official liquidator so as to attract the relevant provisions of the Bombay Rent Act dealing with the consequential liability for eviction. Such argument also belies the injunctive/prohibitory relief sought for in the Company Applications, as already noticed, insofar as the contemplated sale/transfer/assignment of the leased property by the official liquidator is concerned. The arguments advanced on the strength of the provisions of Section 19 of the Bombay Rent Act would also stand answered on the above basis.

19. Insofar as liability under Section 13(1)(k) of the Bombay Rent Act is concerned what is to be noticed is the requirement of unjustified non-user for a period exceeding 6 months which evidently is not be attracted to the present case in view of the pendency of the liquidation proceedings. That apart, Clause 5 of the lease deed which deals with non-user of the leased land does not contemplate eviction on account of such non-user but merely entitles the lessor to receive rent for the period of such non-user of the land.

20. The mere fact that the company has been ordered to be wound up cannot be a ground to direct the official liquidator to handover possession of the land to the owners inasmuch as the company in liquidation continues to maintain its corporate existence until it stands dissolved upon completion of the liquidation proceedings in the manner contemplated by the Companies Act. In the present case it has been repeatedly submitted before this Court by both sides that presently revival of Prasad Mills is a live issue pending before the Gujarat High Court, a fact which cannot be ignored by this Court in deciding the above issue against the appellants.”

33. Relevant clauses of the lease deed are already extracted here-in-above. On perusal of the clauses 1 and 2 of the lease deed in question, it is apparent that the lease deed dated 18.06.1919 is in the nature of permanent lease. Clause 5 of the said lease deed also reiterates that the lease deed was executed for an indefinite time and permanent in nature as no fixed term is stipulated in any of the clauses of the lease deed. Similarly clause 8 also indicates that lease deed executed was for permanent lease.

34. Clause 12 of the lease deed provides that the ownership and possession of the step-well and well on the subject land also was given permanently to the lessee. An attempt was made on behalf of the applicant by learned advocate Mr.Hava to distinguish the lease deed to contend that clause 8 of the lease deed indicates that the construction made on the land to be kept as it is if it is to be sold by lessee to some other person, however same cannot be accepted because lease deed has to be read as a whole and considering the terms of the lease deed, there is no doubt that the lease was permanent in nature. Therefore, on conjoint reading of clauses 1, 2, 5,6 and 8, it emerges that lessee is entitled to the land in any manner whereas lessor was prohibited to object the use of land in any manner by the lessee. Lessee was entitled to transfer the rights on same terms and conditions and the lessor was entitled to recover the arrears of rent through available remedies.

35. Similarly, the distinction sought to be drawn between the lease deed in question and lease deed in case of Jabal C. Lashkari & Ors.(supra) is to the effect that lease in the facts of the case though it is for indefinite period so long as lessee goes on paying the rent whereas in case of Jabal C. Lashkari & Ors.(supra), it was a fixed period of 199 years.

36. Reliance placed on behalf of the applicant on the provisions of section 3(1) of the Act, 1986 to canvas the contention that the Official Liquidator has stepped into the shoes of the GSTC Ltd.(In Liquidation) who is a statutory tenant and not contractual tenant as there is no contractual assignment of leasehold rights from Marsden Mills in favour of GSTC Ltd. (In Liquidation) but such leasehold rights vested under section 3(1) of the Act, 1986 in the State Government which in turn as per the provisions of section 3(2) of the Act, 1986 divested in GSTC Ltd. (In liquidation) and therefore, the facts of the case are different than that of contractual lease in case of Jabal C. Lashkari & Ors.(supra), though appears very attractive at first blush but on closer scrutiny of the facts, it appears that the specific clauses of the lease deed in the present case as well as in case of Jabal C. Lashkari & Ors.(supra) are similar.

37. Distinction sought to be drawn by the applicant between the lease deed executed in facts of the case on the ground that whole interest including the reversionary interest of the lessee Khushaldas Gokaldas was assigned in favour of Marsden Mills was in breach of clause 1 read with clause 8 of the lease deed and by virtue of the provisions of section 15(2) of the Rent Act, possession of the Marsden Mills was deemed to be valid, and therefore, also Marsden Mills became statutory tenant, is not tenable because the concept of statutory tenant and the applicability of the Rent Act though argued at length by learned advocate Mr. Hava again to distinguish the facts in case of Jabal C. Lashkari & Ors.(supra) cannot be accepted more particularly, when the Apex Court after considering the provisions of the Rent Act in case of Jabal C. Lashkari & Ors.(supra) confirmed the order passed by the Company Judge as well as the Division Bench in OJ Appeal No. 66/2006.

38. The Division Bench of this Court in similar facts in case of Virendra Bhogilal Shah (HUF)(supra) has considered the decision of the Apex Court in case of Jabal C. Lashkari & Ors.(supra) in detail and as such, the issue with regard to the applicability of the said decision of the Apex Court if the specific clauses of the lease deed are similar, the same is required to be applied.The Division Bench in case of Virendra Bhogilal Shah (HUF)(supra) in OJ Appeal No. 13/2007 after considering the provisions of Act, 1986 held as under :

“[8.0] Heard the learned Counsel appearing on behalf of the respective parties at length.

At the outset it is required to be noted that possession of the land in question has been handed over to the State Government earlier for the purpose of using the same for Apparel Park (pursuant to the order passed by the learned Company Court dated 17.07.2006 passed in Company Application No.250/2006) and now the possession is handed over to MEGA to use it for public purpose of Metro Rail between Gandhinagar and Ahmedabad. Thus, it is not in dispute that the land in question is to be used for public purpose. Even the learned Counsel for the appellant has also not disputed the above that the land in question is required, needed and to be used for public purpose.

[8.1] It is required to be noted that earlier the Division Bench of this Court dismissed the present appeal following the decision of this Court in the case of Legal Heirs of Deceased Fakir Chand Ambaram Patel (Supra) and consequently confirmed the order passed by the learned Company Court dated 13.10.2005 passed in Company Application No.211/2001 rejecting the prayer of the appellant to hand over the vacant and peaceful possession of the land which was in possession of the Company in liquidation. However, pursuant to the decision of the Hon’ble Supreme Court in the case of Jabal C. Lashkari (Supra), the Hon’ble Supreme Court has remanded the present appeal to this Court to consider the appeal in light of the observation that the decision in the case of Jabal C. Lashkari (Supra) in SLP (C) Nos.2928284 of 2008 and for consideration of the specific clauses in the lease deed and to consider what would be the effect of the principles of law underlying in the case of Jabal C. Lashkari (Supra) visavis specific clauses of the lease deed between the parties. Therefore, while considering the present appeal, observations made by the Hon’ble Supreme Court in the case of Jabal C. Lashkari (Supra) are required to be considered including the relevant clauses of the lease deed in the case of Jabal C. Lashkari (Supra).

[8.2] In the case before the Hon’ble Supreme Court in the case of Jabal C. Lashkari (Supra), one Durgaprasad Lashkari had leased out land admeasuring 35772 sq. meter in favor of one Bechardas Spinning and Weaving Mills Ltd. (subsequently known as Prasad Mills Ltd.) for the period of 199 years by a lease deed dated 10.12.1916. A secured creditor of the Prasad Mills Ltd. in the year 1984 filed a company petition seeking the winding up of the aforesaid Prasad Mills Ltd. While the company petition was pending, some of the legal heirs of Durgaprasad Lashkari had filed a suit in the Small Causes Court seeking permanent injunction against the sale of assets of company more particularly the sale of the leased property. An order was passed by the learned Company Judge directing the winding up of Prasad Mills Ltd. and the appointment of an official liquidator. That the official liquidator took the charge and possession of all the assets of the company. An application was filed by another heir of Durgaprasad Lashkari in the winding up petition seeking direction to further prosecute the suit pending before the Small Causes Court. The learned Company Judge ordered that the suit may be withdrawn and instead directions may be sought from the Company Court for return of the leased property. Pursuant thereto a Company Application was filed by some of the heirs of Durgaprasad Lashkari for return of the leased property and also for orders restraining the official liquidator from selling/transferring the leased property. It appears that return of the leased land was sought on the twin grounds that in view of the winding up order, the Company no longer required the land and furthermore default in payment of rent had occurred. For the second relief sought it was urged that the official liquidator was not authorised to transfer/alienate the leased property in view of the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. While the above Company Application was pending, the building, superstructure, plant and machinery of the company was sold in a public auction. An advertisement was issued by the official liquidator for the sale of the leased property. As against the aforesaid advertisement, Jabal C. Lashkari and others – heirs of Durgaprasad Lashkari filed Company Application No.33 of 2004 for a declaration that the official liquidator had no right to sell the leased property. The grounds urged were principally on the basis of lack of any such empowerment in the lease agreement and in view of the bar/restriction contained in Section 15 of the Bombay Rent Act. Another Company Application i.e. C.A. No.34 of 2004 was filed seeking permission from the Company Court to file a suit before the appropriate court for eviction of the official liquidator from the leased property. Eviction of the official liquidator was claimed, inter alia, on the following grounds:

(i) the occupant Company i.e. Prasad Mills had no document in its favour entitling it to be in possession of the demised land;

(ii) admitted non payment of rent for a period of over 15 years rendering the company and now the official liquidator liable to eviction under Section 12 of the Bombay Rent Act;

(iii) admitted non user of the land for a period of over 6 years attracting Section 13(1)(k) of the Rent Act;

(iv) subletting in favour of the company, Prasad Mills, in violation of Section 13(1)(e) of the Rent Act.

[8.3] That the learned Company Judge vide order dated 13.10.2004 rejected all the three company applications. Jabal C. Lashkari and other legal heirs of Durgaprasad Lashkari filed three separate appeals before the Division Bench of this Court. The High Court by a detailed judgment and order reported in 2008 (3) GLH 528 dismissed the aforesaid appeals. By a decision reported in (2016) 12 SCC 44, [LQ/SC/2016/459] the Hon’ble Supreme Court has dismissed the SLPs and has confirmed the decision of the Division Bench of this Court in the case of Jabal C. Lashkari reported in 2008 (3) GLH 528. That the Hon’ble Supreme Court considered the relevant provisions of the Bombay Rent Act and also considered the relevant clauses of the lease deed. In the case before the Hon’ble Supreme Court in the case of Jabal C. Lashkari (Supra), the terms of the lease deed were as follows:

“............;And whereas the above mentioned three pieces of land are owned by the First Party, and the Second Party has rented the same from First Party;

And whereas the rent is fixed at Rs.350100 – Rupees three thousand five hundred and one. for one year of 12 months to be paid to First Party, by the Second Party; as rent on the following conditions :

(1) The said rent will be given to First Party, by Second Party every year and if the Second Party does not pay the rent due to them every year, the First Party will give registered notice for recovery of rent; and in spite of such notice the Second Party or their successors, heirs or administrators do not pay the rent, First Party or their successors, heirs, attorneys or administrators are entitled to obtain possession of the land with buildings, either by mutual understanding or through government.

(2) This rent note is valid for 199, in words one hundred ninety nine years, agreed by Second Party and on expiry of the said period, we, the Second Party will vacate the land, resurface it and will give it to the First Party or their successor with any amount of rent due, by the Second Party or their successors or administrators, whosoever would be, and while giving back the possession, Second Party will not raise any dispute or objection, and even if raised will not be admissible by virtue of this agreement.

(3) The First Party, or their successors, heir, are not entitled to sale or pledge, or give possession of these pieces of land, to any other party, and even if they do so, it will be void by virtue of this agreement.

(4) In case the government needs this land and/or if the government purchase some part of this land; then the right to receive compensation for such acquisition is of First Party; however, interest at the rate of one percent per hundred of whatever amount the First Party thus receive. will be adjusted by the Second Party from the rent payable, or the Second Party will give such reduced rent to First Party after adjusting the said amount, in the following years; and the First Party will have no right to any objection or dispute, and even if they raise any dispute it will be not sustainable by virtue of this agreement.

(5) In case the Second Party, or their successors, attorneys. administrators, assinee or executors do not stay, or do not make use of, or do not store material, on the land; or

vacate the land and give possession to the First Party, before the specified period, then the First Party is entitled to receive rent till the date of possession so given; and the First Party has no right to claim rent for the remaining period.

(6) The municipal tax for the land is Rs.50000 per year which will be paid by the Second Party; and the Second Party will give rent of Rs.3501/ to First Party every year. However, the Second Party do not pay the municipal tax of Rs.500/ and the same has to be paid by the First Party, then the Second Party, or their successors will reimburse such amount with six percent interest per hundred per year thereon.

(7) The First Party will not object upto 199 years, if the Second Party, or their successors, heirs or administrators, construct buildings with necessary government permission, or use a free land or the Second Party give on rent or on lease, and the First Party is entitled to take possession of the land immediately on expiry of 199 years.

(8) The First Party, or their successors, heirs, administrators or attorneys are entitled to take possession of the land before the expiry of rent period, if the Second Party fail to pay rent to First Party every year.

(9) The government tax on this land is to be paid by we, First Party; but if some additional tax is levied because of construction on the land, it will be borne by the Second Party. Municipal tax is Rs.500/ per year at present. However, hereafter if municipality levies some additional tax on First Party or on Second Party; or the government decide to levy some new tax; then all such taxes will be borne by the Second Party, and will not claim it from First Party; nor will adjust it against rent payable to the First Party; and the First Party has no right to take possession of the land before expiry of 199 years, but the First Party has right to receive amount of rent till the above period.

(10) The First Party and the Second Party and their successors, heirs, administrators, attorneys and assignees, are accepting the terms and conditions set out in this agreement.

Thus the Second Party has rented the pieces of land, from the First Party under the terms set out in this agreement, at our will, and signed and sealed this agreement.”

[8.4] After considering various other decisions of the Hon’ble Supreme Court, the Hon’ble Supreme Court confirmed the reasoning and the conclusion arrived at by the Division Bench that the Rent Act do not obliterate the effect of provisions of Section 108(j) of the Transfer of Property Act, which vest right in the lessee not only to sublet but also to assign the subject matter of lease granted to him by the original lessor. The Hon’ble Supreme Court also did not accept the contention on behalf of the appellants that as the Company has been wound up it no longer required the leased land for its use. The Hon’ble Supreme Court confirmed the conclusion arrived at by the Division Bench with the liability/obligation to pay rent for the leased land by observing that it does not constitute an onerous obligation on the company in liquidation so as to justify surrender of the leased land by the Official Liquidator or any direction to the said effect under Section 525 of the Companies Act. That thereafter the Hon’ble Supreme Court has dismissed the SLPs and confirmed the judgment and order passed by the Division Bench of this Court in the case of Jabal C. Lashkari by observing and holding in paras 17 to 22 as under:

“17. The main plank on which the appellants have based their case, as already noticed, is the operation of Sections 12 (default), 13(1) (e) (unauthorized assignment) and 13(1)(k) (non user of the leased land). We may now take up the aforesaid issues in seriatim.

18. Section 12 of the Rent Act confers protection on a tenant who is regularly paying or is ready and willing to pay the rent. In the present case while there is no doubt that rent has not been paid, equally, there is no doubt that the secured creditors including the State Bank of India had all along been ready and willing to pay the rent and the reasons for non payment appears to be (para 43 of the impugned order of the High Court) lack of communication by the official liquidator to the SBI of the precise amount of rent due. While there can be no doubt that mere readiness and willingness to pay without actual payment cannot enure to the benefit of the tenant in perpetuity what is required under Subsection (2) of Section 12 is a notice in writing by the landlord raising a demand of rent and only on the failure of the tenant to comply with such notice within a period of one month that the filing of a suit for recovery of possession is contemplated. The service of notice giving an opportunity to the tenant to pay the unpaid rent is the first chance/opportunity that the Rent Act contemplates as a legal necessity incumbent on the landlord to afford to the tenant. Admittedly, in the present case, no such notice as contemplated by Section 13 (2) has been issued by the landlord; at least none has been brought to our notice. In such a situation, the readiness and willingness of the tenant to pay the rent, though may have continued for a fairly long time without actual payment, will not deprive the tenant of the protection under the Rent Act. Though the order of the High Court in para 43 of the impugned judgment has been placed before the Court as an order under Section 12(3)(b) of the Rent Act we do not find the said order to be of the kind contemplated by Section 12(3)(b) inasmuch as not only the order does not mention any specific rent which has to be tendered in Court but what is encompassed therein is a direction to the official liquidator to let the State Bank of India know the precise amount that is required to be paid on account of rent and, thereafter, to pay the same to the official liquidator whereafter it has been left open for the lessors to withdraw the said amount from the official liquidator. Such an order by no stretch of reasoning would be one contemplated under Section 12(3)(b). In the aforesaid situation, the finding of the High Court that the landlord is not entitled to seek eviction on the ground of non payment of rent under Section 12 of the Bombay Rent Act cannot be said to be so inherently infirm so as to require the interference of this Court.

19. This will bring the Court to a consideration of the liability of the official liquidator to a decree of eviction on the ground contemplated under Section 13(1)(e) of the Bombay Rent Act. As already discussed in a preceding paragraph of the present order, the non obstante clause of Section 13 (1) overrides only the other provisions of the Bombay Rent Act and is also subject to the provisions of Section 15. Section 15 which deals with subletting and transfer, though overrides the provisions contained in any other law, is subject to any contract to the contrary. Though in the present case the lease deed (clause 7) is capable of being read as permitting subletting and not assignment what has been held in the present case by the High Court, by virtue of the decision of this Court in Laxmidas Bapudas Darbar vs. Rudravva (supra), is that in view of the limited operation of the non obstante clause in Section 15 of the Bombay Rent Act, unlike Section 21 of the Karnataka Act, the provisions of the Transfer of Property Act [Section 118 (o)] will not become irrelevant to the relationship between the parties in which event assignment may also be permissible notwithstanding the specific content of clause 7 of the lease deed in question. However, we need not dwell on this issue at any length or would also be required to consider the efficacy of the arguments of the learned Additional Solicitor General on the strength of the two Privy Council decisions mentioned above i.e. Hans Raj vs. Bejoy Lal Sel and Ram Kinkar Banerjee vs. Satya Charan Srimani (supra) inasmuch as from Company Application No. 34 of 2004, which deals with the claim of the appellants for eviction of the official liquidator from the leased property, what is clear and evident is that the case of subletting of the leased premises on which basis eviction has been prayed for is not subletting/assignment by the official liquidator but assignment of the leased premises to Prasad Mills by the original managing agents in whose favour the initial lease was executed by the predecessors of the present owners. The ground of unauthorized and impermissible assignment by the official liquidator on the strength of the notice/advertisement for disposal of the leased land thereby making the said authority liable for eviction is an argument advanced only at the hearing of the appeals before us. That apart the said argument overlooks the fact that the assignment was only sought to be made by the advertisement/notice issued and did not amount to a completed action on the part of the official liquidator so as to attract the relevant provisions of the Bombay Rent Act dealing with the consequential liability for eviction. Such argument also belies the injunctive/prohibitory relief sought for in the Company Applications, as already noticed, insofar as the contemplated sale/transfer/assignment of the leased property by the official liquidator is concerned. The arguments advanced on the strength of the provisions of Section 19 of the Bombay Rent Act would also stand answered on the above basis.

20. Insofar as liability under Section 13(1)(k) of the Bombay Rent Act is concerned what is to be noticed is the requirement of unjustified nonuser for a period exceeding 6 months which evidently is not be attracted to the present case in view of the pendency of the liquidation proceedings. That apart, Clause 5 of the lease deed which deals with nonuser of the leased land does not contemplate eviction on account of such nonuser but merely entitles the lessor to receive rent for the period of such nonuser of the land.

21. The mere fact that the company has been ordered to be wound up cannot be a ground to direct the official liquidator to handover possession of the land to the owners inasmuch as the company in liquidation continues to maintain its corporate existence until it stands dissolved upon completion of the liquidation proceedings in the manner contemplated by the Companies Act. In the present case it has been repeatedly submitted before this Court by both sides that presently revival of Prasad Mills is a live issue pending before the Gujarat High Court, a fact which cannot be ignored by this Court in deciding the above issue against the appellants.

22. For the aforesaid reasons we affirm the order of the High Court dated 17.10.2008 in O.J. Appeal Nos. 65 of 2006, 66 of 2006 and 67 of 2006 and dismiss the civil appeals arising out of SLP (C) Nos. 2928229284 of 2008 wherein the said order is under challenge.”

As observed hereinabove, the appeals have been remanded to this Court to consider the relevant clauses of the lease deed in the present case visavis the observations made by the Hon’ble Supreme Court in the case of Jabal C. Lashkari (Supra).

[8.5] It is required to be noted that in the present case in the application before the learned Company Court, the appellant herein claiming to be the assignee of the rights of the original owner/successor sought the reliefs restraining the Official Liquidator and/or its agents, or servants from selling, mortgaging, alienating or transfering in any manner whatsoever to any person the land in question and to direct the Official Liquidator to hand over the vacant and peaceful possession of the land admeasuring 33500 sq. meter bearing Survey No.542 and 543, Final Plot No.56 of T.P. Scheme No.9 situated at Mouje Raipur – Hirpur, District Ahmedabad City on the ground of arrears of rent; nonuse of the land in question by the lessee and also on the ground of bonafide requirements. Thus, as such the appellant herein – original applicant sought the aforesaid reliefs basically invoking the provisions of the Bombay Rent Act. As observed hereinabove, it is also the case on behalf of the appellant now that delivery of handing over the possession to the GIDC for Apparel Park and thereafter to MEGA for Metro Rail, it can be said to be subletting by the Official Liquidator and even the same can be said to be implied surrender and therefore, the appellant is entitled to the possession of the lands in question. However, at this stage it is required to be noted that the learned Counsel appearing on behalf of the appellant has stated at the Bar that in view of the fact that the possession is handed over to MEGA now, it is to be used now for the public purpose, the appellant is not insisting for relief of possession, however the appellant may be awarded the compensation.

[8.6] While considering the issue involved in the present appeal, the relevant clauses of the lease deed are required to be referred to and considered. The English translation of the lease deed is as under:

“The land situated within four khuts, as per original boundary of the agricultural field including fence border, trees, border of agricultural field, well, has been leased permanently by the first partyto the second party . The details of the agreement thereof;

That the amount of Rs. 1801/ (in words Eighteen Hundred and One Rupees) has been paid against the rent of the said land annually and the same shall be paid by the second party to the first party. We shall not cause any hurdle or create any interest, and if any obstruction is created, the same shall be recovered by way of filing a law suit. Further, until the amount of rent against the said land is paid by the second party every year in advance to the first party, they shall not take over the possession by way of vacating this land. The first party shall not create any kind of obstacle or obstruction in the way we keep the said land as a waste land or rent to somebody or use it casually or use it at our will.

(4) As and when we, the second party, release the possession at our will, the erected construction of the building will be removed and the possession of the land shall be handed over to you, the first party by clearing the land and making it cultivable as per the present area.

(5) We, the second party, erect constructions of the building as per the rule and permission of the Government on the said land or use it as per our willingness. The first party or their guardian shall not create any obstruction and if we, the second party, do any act against the rule and without obtaining permission of the Government, the second party shall be responsible for it. Therefore, if any loss caused to the tilling right of the first party, the second party shall be held accountable for it.

(6) Whatever cess or tax is required to be paid in the Government against the construction erected on the said land or whichever Government tax is required to be paid shall be the liability of the second party and the same shall be paid in the name of first party as land holder and as occupant.

(7) Trees like mango trees, tamarind trees are existing on the said land. If out of these trees, any tree is creating obstruction to the second party and they are required to be cut, we, the first party shall not create any dispute in this regard. If they dry and fall down, the first party has right to collect their wood and the second party has right to collect yield of the said tree.

(8) The rent against the said land shall be paid by the second party to the first party every year by way of issuance of receipt by the first party and no dispute shall be created on this issue. Therefore, it remains the dispute of second party.

(9) It shall be the liability of the second party to pay whatever amount of Municipal tax or local fund in respect of construction on the said land is required to be paid.

(10) The first party or their guardians, heirs, executors, assignees, etc. shall not create any obstruction, if the second party sells the buildings constructed over the said land or give right of lease or assign or alienate in any other manner or they are sold as per the agreement of the lease condition.

(11) At the time of erecting construction on the said land by the second party if any application is required to be made for obtaining permission from the Government or any agreement is required to be entered into with the Government in this regard or any receipt is required to be given, the same shall be done by us as land occupier or as an occupant on behalf of the second party.

(12) We, the second party, have taken the said land on rent from the first party. The rent against it is accrued from 13th June, 1927, but trees like mango tree, etc. existing on this agricultural land are not connected with this agricultural land. Nobody holds any kind of share therein.

(13) We, the second party, have taken this land on lease permanently from the first party. Wherever it is written second party shall be construed as the agents, assignees, executors of the party of the second part at the relevant time and the same is agreed upon by the first party, their guardians, heirs, administrators, executors, etc.

(14) We, the first party, do hereby alienate the said land in the name of the second party.”

Thus, considering the relevant terms /clauses of the lease deed referred to herein above, it appears that the lease was permanent in nature viz. permanent lease; lessor was entitled to Rs.1801 p.a. from the lessee; till the lessee pays and/or ready and willing to the lease rent i.e. Rs.1801 p.a. the lessor is not entitled to get back the possession; the lessee is entitled to use the land in question as it likes and even if the leased property is kept padtar and/or given on lease to others, lessor shall not restrain the lessee; the lessee can even put up the construction as it likes and the lessor shall not obstruct the lessee; even the construction put up on the land by the lessee is sold and/or leased and/or assigned to any other person, the lessee shall not obstruct and/or interfere with the same. Thus, considering the clauses of the lease, the lease can be said to be permanent lease and all rights are assigned to the lessee as if the land is owned by the lessee and that the lessor shall be entitled to Rs.1801 p.a. only by way of lease rent.

[8.7] Considering the terms of the lease deed it appears that the landlord / lessor has carved out absolute transferable interest in favour of the lessee in the perpetual lease. There is no forfeiture clause. There is no right to reentry and therefore, the passage relief upon from Transfer of Property Act Mulla, page 771 shall not be useful and/or of any assistance to the appellant.

[8.8] Applying the law laid down by the Hon’ble Supreme Court in the case of Jabal C. Lashkari (Supra) to the facts of the case on hand more particularly with respect to the terms of the lease deed referred to hereinabove, the decision of the Hon’ble Supreme Court in the case of Jabal C. Lashkari (Supra) shall be applicable with full force to the facts of the case on hand. Applying the law laid down by the Hon’ble Supreme Court in the case of Jabal C. Lashkari (Supra) to the facts of the case on hand more particularly terms of the lease deed, the provisions of the Bombay Rent Act shall not be applicable and therefore as such appellant herein – original applicant shall not be entitled to the possession on the ground set out in the application before the learned Company Court i.e. on the ground of (1) arrears of rent; (2) nonuser and (3) bonafide requirement. As observed by the Division Bench of this Court in the case of Jabal C. Lashkari (Supra), confirmed by the Hon’ble Supreme Court, the parties to the lease agreement shall be governed by the terms of the lease deed agreed between the parties and that the enactment of the Rent Act is not intended to restrict/curtail the rights of the tenant under the provisions of Transfer of Property Act or ordinary law relating to inheritance. Thus, considering the terms of the lease deed, when the lease is a permanent lease and under the lease deed the only right available to the lessor is the rent at Rs.1801 p.a. and considering other terms of the lease deed referred to herein above and as observed hereinabove, the provisions of the Bombay Rent Act shall not be applicable and therefore, the appellant shall not be entitled to the possession on the grounds set out in the Company Application viz. (1) arrears of rent; (2) nonuser and (3) bonafide requirement. We are of the opinion that the learned Company Court has rightly rejected the prayer of the appellant for possession.

[8.9] Now, so far as the submission on behalf of the appellant that as the company / lessee has been wound up and therefore, the land is not needed and/or to be used by the lessee and/or by transfer of leased property in favour of the State Government / now MEGA would tantamount to subletting is concerned, considering the aforesaid terms of the lease deed referred to hereinabove, the same has no substance. Considering the terms of the lease the lessee is authorised and/or permitted to lease and/or give on rent the property to any other person and even if leased property is not used and is kept padtar in that case also the lessor is not entitled to get back the possession. The only right under the lease deed is to get the rent at the rate of Rs.1801 p.a. and the lease is a permanent lease the lessor has no other right and/or interest in the leased property in question. Therefore, as such the subletting / subleasing is also permissible. Under the circumstances, the submission on behalf of the appellant that by transfer there is an implied surrender and therefore, the appellant is entitled to the possession has no substance and is required to be rejected outright.

At this stage it is required to be noted that as such the possession of the leased property in question has been handed over initially to State Government for Apparel Park and thereafter to MEGA for Metro Rail pursuant to the order passed by the learned Company Court and the order passed by the learned Company Court directing the Official Liquidator to hand over the possession to the State Government initially for Apparel Park and thereafter to MEGA has attained the finality. Therefore, none of the decisions relied upon by the learned Counsel appearing on behalf of the appellant on implied surrender shall be applicable to the facts of the case on hand.

[8.10] It is also required to be noted at this stage that after the lessee – Sarangpur Cotton Mills Co. Ltd. was ordered to be wound up, the same was taken over by the GSTC under the provisions of the Act, 1986. Even the GSTC also ordered to be wound up and Official Liquidator was appointed. Thus, the Official Liquidator became the custodian of the properties of the Company owned by the GSTC. Considering the provisions of the Act, 1986 the leasehold rights of the lessee of the specified textile undertaking vest in the State Government. All encumbrances are extinguished and even any decree of the Court cannot be executed. After the order for liquidation of GSTC, the leasehold rights of the GSTC would continue to vest in the GSTC (in liquidation). Pursuant to the order passed by the learned Company Judge in Company Application No.250/2006, the possession of the leased property belonging to the Company has been directed to be handed over for use of public purpose. That the appellant is neither the creditor nor the contributory. The State Government is the sole creditor / shareholder.

[8.11] The Gujarat Closed Textile Undertaking Nationalized Ordinance, 1985 came to be promulgated in the year 1985. The said Ordinance was repealed and replaced by Gujarat Closed Textile Undertaking Nationalized Act, 1986. It appears that under the provisions of the said Act, leasehold rights of the Company came to be acquired. In the year 1997 the Official Liquidator became the custodian of the properties of the company owned by the GSTC. The Government of Gujarat is the largest creditor of the company in liquidation to the extent of Rs.827.31 Crore. The Government of Gujarat also was the only contributory of the GSTC. Even considering the relevant provisions of the GSTC Act, 1986 more particularly sections 2(1)(f)(i), 3 and 4, the leasehold rights of the lessee of the Specified Textile Undertaking – respondent Company vests in the State Government. At this stage it is required to be noted that pursuant to the earlier order dated 17.07.2006 passed by this Court in Company Application No.250/2006, the possession of the land in question was handed over to the State Government / GIDC for public purpose – for use of public purpose and thereafter now the same is handed over to MEGA for Metro Rail which is also a public purpose. It appears that the State Government claimed its right because the State Government is the only secured creditor and only contributory and on liquidation of the company the State Government would be entitled to possession of surplus assets of the company towards its claim as the largest secured creditor and only contributory. As observed herein above, the only right the lessor / original landlord possesses is the right to recover the lease rent at Rs.1801/ per annum. Therefore also, the appellant shall not be entitled to the possession of the leased property which as observed herein above was a permanent lease. The aforesaid observations are made over and above, as observed herein above, considering the relevant clauses of the lease deed. The decision of the Hon’ble Supreme Court in the case of Jabal C. Lashkari (Supra) shall be applicable with full force and therefore also, the appellant shall not be entitled to the relief of possession as claimed / prayed.

[8.12] Now, so far as the alternative submission on behalf of the appellant to award the compensation for the land in question is concerned, at the outset it is required to be noted and as observed hereinabove the only right available to the lessor as per the lease deed is to receive the rent at Rs.1801 p.a. only. The appellant seems to be the assignee under the Deed of Assignment. The appellant and the subsequent purchaser who is alleged to have purchased the land in question in a Court auction as an assignee, the appellant cannot have any better right than the original lessor / original owner. Under the circumstances, the appellant shall not be entitled to even the compensation for the land in question. Whatever the appellant would be entitled to, the appellant would be entitled to under the provisions of the Act, 1986 and from the amount, if any deposited by the State Government, under the provisions of the Act, 1986. However, in any case the appellant shall not be entitled to even compensation in respect of the land in question even under the provisions of the Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement Act, 2015.”

39. Thus as held by the Division Bench in similar facts both the questions which are arising in this application have been answered against the original lessor by considering in detail the same arguments as canvassed by learned advocate Mr. Hava before this Court.

40. Learned advocate Mr.Hava has heavily relied upon the decision of Division Bench in case of Anilkumar Vaikunthlal Patel (supra) wherein the Division Bench after considering the facts of the said case and considering in detail all the judgments which are relied upon by learned advocate Mr. Hava before this Court has held in favour of lessor and held as under :

“99. To summarise: - While the duration of the lease deed dated 4th August, 1911 is indefinite, it is not permanent in nature.

The lease of 1911 cannot be said to be a periodic lease inasmuch as in case of a periodic lease the contract is determinable by notice to quit on the part of either lessor or lessee, whereas in the facts of the present case, the lessor has no right to issue a notice to quit except in the case of non-payment of rent.

The agreement of 1983 being an unregistered document, cannot be considered to be valid for a lease exceeding one year and has to be considered to be for a lease for a period less than one year as contemplated under second part of Section 107 of the Transfer of Property Act. The agreement of 1983 is, therefore, deemed to create a month-tomonth tenancy, termination whereof is governed by section 106 of the Transfer of Property Act.

The unregistered agreement dated 26th April, 1983 is not a valid document and none of its clauses, including the clause whereby the leasehold rights of Calico Limited are transferred to it can be read in evidence.

Once the agreement of 1983 cannot be admitted in evidence, the lease deed of 1911 cannot be looked into as the rights under the lease deed of 1911 are claimed by the Official Liquidator under the agreement of 1983. Hence, neither can the agreement of 1983 nor the lease deed of 1911 be read in evidence.

Since the document of transfer of leasehold rights exceeding one year requires a document to be registered, the agreement of 1983 cannot be looked into for the purpose of establishing such right inasmuch as it cannot be said to be a collateral transaction.

In the absence of the tenancy being governed by the conditions of any contract, the tenancy is a statutory one and would be solely governed by the provisions of the Rent Act.

The controversy involved in the case of ICICI Limited v. Official Liquidator (supra) is confined to the parties to the said dispute and is not a judgment in rem. The rights decided in that case were between ICICI Limited claiming through Calico Limited and Jubilee Mills and hence, the said decision does not in any manner affect the rights of the applicant.

The doctrine of part performance under section 53A of the Transfer of Property Act would be applicable to the parties to the agreement and those claiming under them. In the present case, the applicant does not claim any right in the subject property through either the transferor or transferee, and hence, the provisions of section 53A would not be applicable. The Official Liquidator, therefore, cannot press into service the right to protect possession against Calico Limited against the applicant herein.

Sub-section (1) section 13 of the Rent Act does not employ the expression ‘only’ and therefore, does not limit eviction under the said Act to the grounds mentioned thereunder. Therefore, sub-section (1) of section 13 cannot be read to mean that eviction under the Rent Act can be only on the grounds stated down therein. While invocation of section 13 of the Rent Act may be restricted to the grounds specifically provided thereunder, it would still be permissible for a landlord to seek eviction of the tenant under section 12 of the Rent Act, if the requirements of sub-section (2) thereof are satisfied.

Calico Limited falls within the ambit of the expression “tenant” as defined in section 5(11) of the Rent Act.

Since under the agreement of 1941, Calico Limited was assigned the leasehold rights over the subject property under the lease deed of 1911, which contained a clause permitting transfer of the subject property, the transfer from Calico Limited to Jubilee Mills, is not violative of the provisions of sub-section (1) of section 15 of the Rent Act.

In the absence of any condition prescribing the purpose for which the premises are to be used or for eviction on the ground of non user, the provisions of clause (k) of section 13 (1) of the Rent Act cannot be invoked.

No ground for eviction has been made out by the applicant for recovery of possession under any of the grounds envisaged under section 13 of the Bombay Rent Act.

In this case no notice under subsection (2) of section 12 of the Rent Act has been issued by the applicant to the Official Liquidator of Jubilee Mills prior to filing either of the two applications. Consequently, in the absence of the requirements of subsection (2) of section 12 of the Rent Act being satisfied, the applicant is not entitled to seek eviction of the Official Liquidator by taking recourse to the said sub-section.

In the present case there is no contract to the contrary as envisaged under section (1) of section 15 of the Rent Act. Consequently, in view of the provisions of sub-section (1) of section 15 of the Rent Act, it shall not be lawful for the Official Liquidator to sublet the whole or any part of the premises let to the company in liquidation or to assign or transfer in any manner his interest therein;

In terms of the notification issued under the proviso to sub-section (1) of section 15 of the Rent Act, the leasehold premises can be sold as a going concern; whereas in the facts of the present case, the buildings and plant and machinery have been removed from the subject property which is now comprised of vacant lands, therefore, the said notification would have no applicability to the facts of the present case.

In the absence of a contract to the contrary, subletting of the subject property is barred by sub-section (1) of section 15 of the Rent Act; sub letting of any premises in violation of section 15(1) of the Rent Act is unlawful under sub-section (1) of section 19 and is an offence punishable with imprisonment and fine under subsection (2) thereof. Therefore, in any event, the Official Liquidator cannot sublet or transfer the tenancy rights in the subject property for a consideration as a condition of such transfer of the tenancy rights of Jubilee Mills in the subject property.

Since it is not permissible for the Official Liquidator to sublet or assign the leasehold land, any direction issued by this court empowering the Official Liquidator to transfer the leasehold rights for consideration and comply with the provisions of section 529 of 529A of the Companies Act would be in violation of the provisions of sub-section (1) of section 15 and subsection (1) of section 19 of the Rent Act, which is also an offence under punishable under sub-section (2) of section 19.

Since the Official Liquidator neither needs the subject property for efficiently carrying on winding-up proceedings, nor is he in a position to sub-let or transfer the subject property for consideration, as held by the Supreme Court in Rajendra Ishwardas Sethna v. Official Liquidator (supra), the only course open to this court is to direct the Official Liquidator to surrender possession of the subject property to the applicant and save recurring liability to pay rent.

100. In the light of above discussion, the applications succeed and are accordingly allowed to the following extent. It is hereby ordered that the Official Liquidator of the Ahmedabad Jubilee Spinning and Manufacturing Company Limited be deleted and in place thereof, the name of the Official Liquidator of Ahmedabad Jubilee Mills Limited (in liquidation) be substituted. The Official Liquidator is directed to hand over peaceful and vacant possession of the lands bearing Survey No.53 admeasuring 4 acres 16 gunthas and Survey No.55 admeasuring 0 acres 16 gunthas of Village DariapurKazipur of Town Planning Scheme No.14 bearing Final Plot No.41, District and Sub-District Ahmedabad to the applicant within a period of four months from the date of receipt of a copy of this judgment. Insofar as the payment of arrears of rent is concerned, such amount has already been paid during the pendency of these proceedings. Insofar as payment of monthly taxes, mesne profit, etc. is concerned, the applicant may claim the same in the winding up proceedings.”

41. The Division Bench in case of Anilkumar Vaikunthlal Patel (supra) has come to the aforesaid conclusion in the facts of the said case wherein the lease was held to be not permanent in nature, whereas in the facts of the present case and on perusal of the various clauses of the lease deed, there is no doubt that the lease is permanent in nature.

42. Moreover, in the facts of the case before Division Bench in case of Anilkumar Vaikunthlal Patel (supra), the question with regard to the vesting of the subject land in the State Government and thereafter in GSTC (In Liquidation) was not arising. In the said case, facts were with regard to the execution of lease deed in the year 1911 and the effect of such leasehold rights in winding up proceedings.

43. In facts of the said case, the learned Company Judge passed the judgment and order dated 30.07.2002 in Company Application No.16/1999 by a common judgment whereby it was held as follows:

“40. To summarise : [a] Leasehold interest is an intangible asset, which is valuable in nature though the valuation may differ from case to case depending upon the unexpired period of lease. [b] Such an asset is transferable subject to the same terms and conditions as may be stipulated in the lease deed. [c] Once there is a contract which has not been determined, the relationship of the parties to the contract continues to subsist till the period for which the contract is in existence subject to an express condition to the contrary. [d] There is a distinction between the point of time when an order of winding up is made and at the point of time when an order of dissolution is made, the company continues to exist between the two terminii. [e] A condition in the lease deed permitting a lessee to give back the possession as and when the lessee chooses to do so cannot be converted into an obligation entitling the lessor to seek possession. [f] A condition in the lease deed by way of requirement to pay rent, per se, does not create an onerous covenant, once readiness and willingness is shown by the lessee, or on its behalf, to discharge such obligation. 41. In light of what is stated hereinbefore, it is not possible to accept the case of the applicants. The possession of the land in question cannot be directed to be handed over to the applicant landlords for the various reasons stated hereinbefore. The applications are therefore rejected. There shall be no order as to costs.”

44. Against the aforesaid judgment, OJ Appeal Nos. 65 to 67 of 2006 were preferred and ultimately, the said appeals were dismissed and the Supreme Court confirmed the same by judgment and order dated 29.03.2016 in case of Jabal C. Lashkari.

45. The contentions raised by learned advocate Mr. Hava for the applicant are similar to the contentions raised before the Division Bench in case of Anilkumar Vaikunthlal Patel (supra). However, such contentions raised by Mr.Hava relies upon the provisions of the Rent Act and the attempt made to draw similarity between the clauses of the lease deed of the present case with those referred to in the said decision, is not tenable because in the facts of the present case, the clauses of the lease deed are similar to those in the cases of Virendra Bhogilal Shah (HUF)(supra) and Jabal C. Lashkari(supra). Therefore, the decision of Division Bench in case of Virendra Bhogilal Shah (HUF)(supra) would be applicable in facts of the present case and not the decision in case of Anilkumar Vaikunthlal Patel (supra) as sought to be canvassed by learned advocate Mr. Hava.

46. The alternative contention of the learned advocate Mr. Hava with regard to compensation for the subject land if used for general public purpose is concerned, it would be pertinent to note that by provisions of sections 3(1) and 3(2) of the Act, 1986, the leasehold rights in the subject land vested in the State Government and thereafter, the same divested in GSTC Ltd. (In Liquidation) which is now ordered to be wound up. It is also not in dispute that the State Government is having 100% shareholding of the shares of the GSTC Ltd. (In Liquidation) and has also undertaken before this Court to pay any liability which may arise. The Official Liquidator has also paid Rs. 50 Crore to the State Government for the said purpose under the order of this Court. Therefore, in effect when the State Government has taken over the entire liability of the GSTC Ltd. (In Liquidation), there would not be any further requirement to pass any separate order for the purpose of entitlement of the applicant to claim the compensation for use of the subject land by the State Government.

47. The Official Liquidator has also disclosed and pointed out before this Court that a separate application is filed for completion of winding up process of the GSTC Ltd. (In Liquidation) under section 481 of the Companies Act, 1956 and therefore, the applicant is entitled to raise its claim with regard to the subject land before the State Government.

48. In view of decision in case of Virendra Bhogilal Shah (HUF)(supra) as the specific clauses of the lease deed are similar to that in case of Jabal C. Lashkari (supra) as well as in facts of the case before Division Bench which is considered in detail by the Division Bench as reproduced here in above, the same is not repeated for the sake of brevity and following the same reasonings, this application is ordered to be dismissed with liberty to the applicant to approach the State Government for redressal of the grievances with regard to the recovery of the outstanding lease rent as well as further entitlement under the provisions of the applicable laws for the use of the subject land by the Government for any other purpose than for which the original lease was granted, which may be considered in accordance with law.

49. In view of forgoing reasons, Civil Application No. 1 of 2022 to join the State Government is allowed and Company application No.294 of 2009 is dismissed accordingly. There shall be no order as to cost.