THE OFFICIAL LIQUIDATORS, U. P. UNION BANK •LTD. versus SHRI RAMESHWAR NATH AGGARWAL

Citation: [1960] 2 S.C.R. 189 · Decided: 10-11-1959 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Appeal(s) allowed

Judgment (excerpt)

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.... 
S.C.R. 
SUPREME COURT REPORTS 
189 
murders and the part played by the appellants, it 
would not be justified in imposing the lesser sentence. 
We see no good reasons for differing from the High 
Court and interfering with the sentence. 
For the reasons given above, the appeal fails and is 
dismissed. 
Appeal dismissed. 
THE OFFICIAL LIQUIDATORS, 
U. P. UNION BANK •LTD. 
v. 
SHRI RAMESHWAR NATH AGGARWAL 
(P. B. GAJENDRAGADKAR, K. SuBBA RAo and 
J. 0. SHAH, JJ.) 
Company Law-Winding up of Bank-Landlord's claim for 
rent of bank premises after order of winding up:_Official Liquid-
ators calling upon Landlord to take possession of the premises and 
not using the same for the purposes of winding up-Landlord 
refusing to take possession-Whether Official Liquidators liable-
Indian Companies Act, I9I3 (VII of i9I3), ss. I93· 230, 230(3)-
Company Rules framed by the Allahabad High Court r. 97 (Proviso). 
I 
The U. P. Union Bank was in occupation of a building 
belonging to the respondent as a tenant. After the passing of the 
winding up order of the bank the Official Liquidators removed 
the offices of the bank from the premises and called upon the 
respondent landlord to take possession thereof. The respondent 
refu5ed to do so as part of the premises was occupied by some 
trespassers. Thereafter the Official Liquidators did not do· any 
business in the building in connection witn the winding up of 
the bank. The respondent claimed the entire rent from the 
date of the winding up order up to the date on which the 
Official Liquidators wouid give him vacant. possession of the 
premises. 
The High Court held• that in view of the proviso 
to r. 97 of. the Rules framed by the High Court under the 
Companies Act the respondent was entitled to recover the entire 
rent claimed by him and not pro-rata with the 9ther creditors of 
the bank. 
The proviso to r. 97 of the Company Rules runs thus: 
"Provided that where the official liquidator remains in 
occu1·ation of .premises demised to a company which is being 
wound up, nothing herein contained shall prejudice or affect 
the rights of the landlord of such premises to claim payment 
I959 
Bharwad 
Mepa Dana 
v. 
State of Bombay 
S.K. Das]. 
I959 
November IO 
'959 
Official 
Liquidators, U. P. 
Un£on Bank Lid. 
v. 
R. N. Aggarwal 
Shah ]. 
190 
SUPRE11E COURT REPORTS [1960 (2)] 
by the Company or the Official Liquidator of rent dnring 
the period of the company's or the Official Liquidator's 
occupation." 
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On appeal by the Official Liquidators by a certificate of the 
High Court: 
Held, that the landlord respondent was not entitled to claim 
priority in respect of payment of rent because the proviso to 
r. 97 of the Company Rules framed by the High Court affirms 
the right, of the landlord to claim payment of rent accruing due 
since the date of winding up but does not deal with the question 
of priority in payment thereof, and further because the building 
in question did not remain in the possession of the liquidators 
for the purpose of liquidation. 
In re Oak Pits Colliery Company, 1882 Ch. D. 321, followed. 
Held, further, thats. 230 of the Companies Act, lqr3, which 
specifies categories to which priority in payment should be 
given, does not give priority to rent due to landlord and it is not 
within the competence of the High Court to give priority by its 
rnb to a category which is not included in that section. 
Under s. 193 th~ Court has power to order payment of the 
costs and expen~es of winding in such priority as it thinks fit in 
cases \Vhere the assets are insufficient to discharge the liabilities, 
and s. 230(3) empowers the Court to direct the company to 
retain such sums as may be necessary for the costs and expenses 
of winding up even before discharging the debts for which 
priority is given by s. 230. 
If a debt can reasonably be described as costs and expenses 
of winding up the court may direct preferential paymentlhereof, 
otherwise only pro-rata payment with the other ordinary credi-
tors can be claimed out of the assets of the company. 
CIVIL APPELLATE JURISDICTION: 
Civil Appeal No. 
28of1958. 
Appeal from the 
judgment and order dated 
April 17, 1956, of the Allahabad High Court, in Special 
Appeal No. 20 of 1954, arising out of the judgment 
and order dated :February 10, 1954, of the said High 
Court (Compt>ny Jurisdiction}, in Application No. 29 
of 1953/Company case No. 24of1949. 
1959. October 30. 
H. N. Sany al, 
Additional Solicitor-
Gene

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