333. Disclaimer of onerous property
(1) Where any part of the property of a company which is being wound up
consists of—
(a) land of any tenure, burdened with onerous covenants;
(b) shares or stocks in companies;
(c) any other property which is not saleable or is not readily saleable by reason
of the possessor thereof being bound either to the performance of any onerous act or
to the payment of any sum of money; or
(d) unprofitable contracts,
the Company Liquidator may, notwithstanding that he has endeavoured to sell or has taken
possession of the property or exercised any act of ownership in relation thereto or done
anything in pursuance of the contract, with the leave of the Tribunal and subject to the
provisions of this section, by writing signed by him, at any time within twelve months after
the commencement of the winding up or such extended period as may be allowed by the
Tribunal, disclaim the property:
Provided that where the Company Liquidator had not become aware of the existence of
any such property within one month from the commencement of the winding up, the power
of disclaiming the property may be exercised at any time within twelve months after he has
become aware thereof or such extended period as may be allowed by the Tribunal.
(2) The disclaimer shall operate to determine, as from the date of disclaimer, the rights,
interest and liabilities of the company in or in respect of the property disclaimed, but shall
not, except so far as is necessary for the purpose of releasing the company and the property
of the company from liability, affect the rights, interest or liabilities of any other person.
(3) The Tribunal, before or on granting leave to disclaim, may require such notices to
be given to persons interested, and impose such terms as a condition of granting leave, and
make such other order in the matter as the Tribunal considers just and proper.
(4) The Company Liquidator shall not be entitled to disclaim any property in any case
where an application in writing has been made to him by any person interested in the
property requiring him to decide whether he will or will not disclaim and the Company
Liquidator has not, within a period of twenty-eight days after the receipt of the application or
such extended period as may be allowed by the Tribunal, give notice to the applicant that he
intends to apply to the Tribunal for leave to disclaim, and in case the property is under a
contract, if the Company Liquidator after such an application as aforesaid does not within
the said period or extended period disclaim the contract, he shall be deemed to have adopted it.
(5) The Tribunal may, on the application of any person who is, as against the Company
Liquidator, entitled to the benefit or subject to the burden of a contract made with the
company, make an order rescinding the contract on such terms as to payment by or to either
party of damages for the non-performance of the contract, or otherwise as the Tribunal
considers just and proper, and any damages payable under the order to any such person may
be proved by him as a debt in the winding up.
(6) The Tribunal may, on an application by any person who either claims any interest
in any disclaimed property or is under any liability not discharged under this Act in respect
of any disclaimed property, and after hearing any such persons as it thinks fit, make an order
for the vesting of the property in, or the delivery of the property to, any person entitled
thereto or to whom it may seem just that the property should be delivered by way of
compensation for such liability as aforesaid, or a trustee for him, and on such terms as the
Tribunal considers just and proper, and on any such vesting order being made, the property
comprised therein shall vest accordingly in the person named therein in that behalf without
any conveyance or assignment for the purpose:
Provided that where the property disclaimed is of a leasehold nature, the Tribunal shall
not make a vesting order in favour of any person claiming under the company, whether as
under-lessee or as mortgagee or holder of a charge by way of demise, except upon the terms
of making that person—
(a) subject to the same liabilities and obligations as those to which the company
was subject under the lease in respect of the property at the commencement of the
winding up; or
(b) if the Tribunal thinks fit, subject only to the same liabilities and obligations as
if the lease had been assigned to that person at that date,
and in either event as if the lease had comprised only the property comprised in the vesting
order, and any mortgagee or under-lessee declining to accept a vesting order upon such
terms shall be excluded from all interest in, and security upon the property, and, if there is no
person claiming under the company who is willing to accept an order upon such terms, the
Tribunal shall have power to vest the estate and interest of the company in the property in
any person liable, either personally or in a representative character, and either alone or jointly
with the company, to perform the covenants of the lessee in the lease, free and discharged
from all estates, encumbrances and interests created therein by the company.
(7) Any person affected by the operation of a disclaimer under this section shall be
deemed to be a creditor of the company to the amount of the compensation or damages
payable in respect of such effect, and may accordingly prove the amount as a debt in the
winding up.