U.P.STATE INDUSTRIAL DEV.CORPN. LTD. Vs MONSANTO MFG. (P) LTD.
Bench: SUDHANSU JYOTI MUKHOPADHAYA,V. GOPALA GOWDA
Case number: C.A. No.-002731-002731 / 2005
Diary number: 28252 / 2004
Advocates: RAKESH UTTAMCHANDRA UPADHYAY Vs
K. V. MOHAN
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.2731 OF 2005
U.P. STATE INDUSTRIAL DEV.CORPN. LTD. APPELLANT VS. MONSANTO MANUFACTURES (P) LTD. & ANR. RESPONDENTS WITH C.A.NO.1310 OF 2006
C.A.NO.1318 OF 2015 (@SLP(C) NO.16404 of 2006)
C.A.NO. 1319 OF 2015 (@SLP(C) NO.5838 of 2008)
J U D G M E N T
Leave granted in SLP (C) No.16404 of 2006 and SLP(C) No.5838 of
2008.
2. The Government of Uttar Pradesh acquired land in various districts and conveyed the same to the appellant-U.P. State
Industrial Development Corporation (hereinafter referred to as,
‘the Corporation’ for short) for the purpose of setting up
industrial area. The Corporation thereafter divided the said land
into plots for leasing the same to industrial units. The
respondents-Companies, applied to the appellant-Corporation for
grant of lease. On receiving part premium of the plot, the
appellant executed an agreement for licence and later executed
lease deed in favour of the respondents-Companies. Later the
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appellant-Corporation made an allegation that the respondents-
companies’ share holders transferred their company/their shares to
new shareholders without the consent of appellant-Corporation,
which amounted to transfer of interest, for which transfer levy is
required to be deposited. Demand notices were issued by the
appellant-Corporation to the respondents-Companies. Those demand
notices were challenged by the respondents-Companies in different
writ petitions or suits which were allowed by the Division Bench
of the High Court of Judicature at Allahabad by impugned
judgments.
3. In the aforesaid cases the High Court held that unless the respondents-Companies transfer its right in the plot in question
in favour of another legal entity, there is no question to apply
clause 4(h) of the Agreement for licence. The High Court further
held that mere change in shareholders or Directors, does not
change legal entity of the Company and as such it continues
unchanged.
4. The questions that arise for our consideration in these appeals are:
(i) Whether by the alleged action the respondents-
Companies directly or indirectly had transferred or
parted with their interest/benefit under their
respective agreements for licence.
(ii) Whether the respondents-Companies violated the
terms as contained in Clause 4(h) of agreement and
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Clause 3(p)of their lease deed and
(iii) Whether the respondents-Companies are liable to pay
transfer fee for alleged transfer of its own
interest.
5. The facts leading to the cases are as follows:- Monsanto Manufactures Private Ltd.(A Company registered under the Companies Act, 1956)
The respondent-Company applied to the appellant-Corporation for
grant of lease of plot of land bearing no.38/1-A situated in
Sahibabad Industrial Area, Site No.4 of Tehsil and District
Ghaziabad admeasuring 14,533 square yards for the purpose of
constructing an industrial unit. The appellant-Corporation after
receiving part premium of the plot land executed an agreement for
licence on 12th June, 1978 in favour of the respondent-Company. The
possession of the land was given on 12th June, 1978. After
construction of the building of the factory, the respondent-
Company and the appellant-Corporation executed a deed of lease on
5th September, 1979 for a period of 90 years. Later, the appellant-
Corporation vide letter dated 12th April, 1994 asked the
respondent-Company to provide the list of its Directors and
shareholders duly certified by the Chartered Accountant. The same
was furnished by the respondent-Company to the appellant-
Corporation on 7th May, 1994. According to the appellant-
Corporation the respondent-Company changed the Directors and
shareholders without prior permission and consent of the
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appellant-Corporation and since the respondent-Company was
purchased by the present Directors from the previous Directors.
The appellant-Corporation by letter dated 27th May, 1994 asked for
details in order to take necessary action in accordance with the
terms of the lease deed. The respondent-Company categorically
denied the allegations levelled by the appellant-Corporation by
their letter dated 27th September, 1994.
6. By letter dated 1st October, 1999 the appellant-Corporation demanded Rs.25,51,781/- from respondent-Company towards transfer
levy charges as the original shareholders of the respondent-
Company transferred their entire shareholding and interest to the
new shareholders and there was change in the Directors of the
respondent-Company. According to the appellant such change makes
the shifting of the controlling interest of the respondent-Company
and transfer levy for the same was demanded from the respondent-
Company as per the rules of the Corporation. The Company submitted
its reply vide letter dated 8th December, 1999 and reiterated its
earlier stand to the effect that there is no breach of any terms
of the lease deed as no transfer or assignment or sale of premises
in question has been made. However, it was not accepted by the
Corporation, who sent another reminder dated 13th January, 2000
asking the Company to pay a sum of Rs.25,51,781/- towards transfer
levy charges.
The aforesaid demand notice was challenged by the respondent-
Company before the High Court of Allahabad which by impugned
judgment dated 11th May, 2004 allowed the writ petition.
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U.P. Twiga Fiberglass Limited (A Company registered under the Companies Act, 1956) 7. The appellant-Corporation executed an agreement with respondent-Company followed by lease deed dated 27th May, 1977 by
which the Corporation leased plot nos.9 and 23-A admeasuring
approximately 1,10,926 square meters of land situated at
Sikandrabad Industrial Area, District Bulandshahr, Uttar Pradesh
to the respondent-Company. The lease was executed for 90 years.
In the year 1994, the respondent-Company suffered heavy losses to
the tune of Rs.42 crores. Therefore, the respondent-Company sold
almost its entire shares including shares of its promoters and
shares lying with financial institutions to a foreign company
known as “Rotar India Ltd.”. As entire shares of the respondent-
Company transferred to Rotar India Ltd., the promoters of the said
Company were replaced by new promoters/Directors.
8. According to the appellant-Corporation, in view of the above disposal of controlling interest in the venture of the existing
allottee, they were liable to pay transfer levy as per Clause 6(f)
of the guidelines of the Corporation pertaining to reconstitution
and transfer.
9. The Corporation vide its letter dated 26th April, 1995 requested the respondent-Company to supply list of new
shareholders, list of new Directors and copies of Memorandum of
Association and Articles of Association. However, it is alleged
that respondent-Company neglected the same and refused to supply
the documents. The appellant-Corporation thereafter vide letter
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dated 15th May, 1995 asked the respondent-Company to pay a sum of
Rs.24,95,835/- towards transfer levy as there was disposal of
controlling interest in the venture by the existing allottee. The
said demand of transfer levy, according to appellant, was as per
lease deed and guidelines of the Corporation pertaining to re-
constitution and transfer.
10. Being aggrieved the respondent-Company filed suit bearing No.876 of 1996 before Civil Judge, Bulandshahr seeking permanent
injunction and praying for restraining the appellant-Company from
claiming any amount as transfer levy. The appellant filed written
statement and contested the suit.
11. The Civil Judge, Bulandshahr vide judgment and decree dated 23rd January, 1999 allowed the suit and directed the appellant-
Corporation not to charge transfer levy from the respondent-
Company. The Civil Judge, held that the respondent-Company is a
legal person and disposal of its majority shares in the name of a
foreign Company namely Rotar India Ltd. does not change the legal
status of the Company and therefore, there is no transfer.
12. The appellant-Corporation being dissatisfied with the aforesaid order filed Civil Appeal No.45 of 1999 in the Court of District
Judge, Bulandshahr which was dismissed vide order dated 15th July,
2000. Thereafter, the appellant-Corporation filed Second Appeal
No.1425 of 2000 before the High Court of Judicature at Allahabad
and the same dismissed by impugned judgment dated 24th October,
2005.
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M/s Enrich Engineering Works Pvt. Ltd.(A Company registered under the Companies Act, 1956) 13. One M/s Tyres & Tubes Co. Pvt. Ltd. having its registered office at Scooters India Ltd. Premises, Sarojini Nagar, PO Lucknow
through its Directors Shri S.Sounderarajan s/o of late Shri S.
Srinivasan applied to appellant-Corporation for allotment of plots
of land. After agreement which was followed by lease deed dated
21st December, 1976 the appellant-Corporation allotted industrial
plot no.A-4 and A-5 admeasuring approximately 40,489 square yards
and 8.36 square yards respectively situated at site no.2, Rai
Bareilly, Uttar Pradesh to M/s Tyres & Tubes Company Pvt. Ltd. The
lease was for 90 years. M/s Tyres & Tubes Co. Pvt. Ltd. suffered
heavy losses and pursuant to its winding up, Allahabad High Court
vide judgment and order dated 9th January, 1996 appointed Official
Liquidator. The Official Liquidator sold the properties of M/s
Tyres & Tube Co. Pvt. Ltd. including right and interest on the
land in question to respondent M/s Enrich Engineering Pvt. Ltd.
The said sale was affirmed by the Allahabad High Court vide order
dated 9th February, 2000. Pursuant to the order of the Allahabad
High Court dated 10th September, 2003 the Official Liquidator
issued sale certificate dated 12th March, 2004 in favour of
respondent-Company.
14. The appellant-Corporation was not a party in the winding up proceedings nor was any notice issued to the appellant-Corporation
by the Official Liquidator. On knowing about transfer of the
rights of the original allottee- M/s Tyres & Tubes Co. Pvt. Ltd.,
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the appellant-Corporation demanded transfer levy amounting to
Rs.3,80,621.25/- from respondent-Company. According to the
appellant, such demand was made from the respondent-Company, as
the said company had purchased M/s Tyres & Tubes Co. Pvt. Ltd.,
with all its assets and liabilities.
15. Against the demand, respondent-Company preferred a writ petition being Civil Misc. Writ Petition No.56982 of 2005 before
the Allahabad High Court which was allowed by the impugned
judgment dated 27th April, 2006. The demand notice was set aside
by the High Court in view of judgment rendered in another similar
case.
M/s Super Tannery (India) Ltd.(A Company registered under the Companies Act, 1956) 16. The appellant-Corporation entered into an agreement dated 10th October, 1990 with one M/s Super Agro Tech Ltd. for setting up
of specialty paper unit in industrial plot nos.A-9 and A-10
admeasuring approximately 45,080/- square meters in Industrial
Area Unnao Site-2. No right whatsoever in regard to transfer of
said plots were given to the licensee M/s Super Agro Tech Ltd. The
possession of the said plots was handed over on 25th January, 1991
and subsequently lease was also executed. M/s Super Agro Tech
Ltd. thereafter did not set up any specialty paper unit and no
investment was made. According to the appellant-Corporation said
licensee M/s Super Agro Tech Ltd. with a view to enrich itself
started amalgamation proceeding with the new company namely M/s
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Super Tannery (India) Ltd.-respondent herein. The said
amalgamation was a mutual understanding between M/s Super Agro
Tech Ltd. and M/s Super Tannery (India) Ltd. The Allahabad High
Court vide order dated 9th May, 1997 sanctioned the amalgamation in
Company Petition No.32 of 1997. Though the land belongs to the
appellant-Corporation, it was not made a party to the said
petition. According to the appellant-Corporation, the amalgamation
does not create any right whatsoever on respondent-M/s Super
Tannery (India) Ltd. over industrial plots in question and the
said two plots cannot be legally transferred to the new Company
i.e. M/s Super Tannery (India) Ltd.
17. The respondent-Super Tannery (India) Ltd. made an application for the transfer of the said industrial plot. On such
request, the appellant-Corporation demanded transfer levy from M/s
Super Tannery (India) Ltd. for transfer of the said industrial
plot. However, no amount was deposited. The Corporation by
notice dated 3rd November, 2001 demanded a sum of Rs.34,23,954.51/-
as on that date from M/s Super Tannery (India) Ltd. towards
transfer levy. The aforesaid notice was challenged by the
respondent-M/s Super Tannery (India) Ltd. by filing a writ
petition being Civil Misc. Writ Petition No.18535 of 2002 before
Allahabad High Court and the same was allowed, by the impugned
judgment dated 22nd August, 2007 following the decision rendered in
another case.
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Case wise stand of the parties and finding of this Court. Monsanto Manufactures Private Ltd. 18. Learned counsel for the appellant-Corporation submitted that the respondent-Company has violated Clause 3(p) of lease deed
dated 5th September, 1979 entered into between the said Company
and appellant-Corporation inasmuch as its “Memorandum of
Association” and “Article of Association” were altered without the
written consent of Lessor i.e. appellant-Corporation. In view of
the same the appellant-Corporation has the right to determine the
said lease deed dated 5th September, 1979.
19. On the other hand, according to counsel for the respondent as the Company has got separate legal status and the Corporation
has allotted the industrial plot to it by name and not in the name
of its Directors, the Directors being only officials working on
behalf of the Company, mere change of names of Directors or
shareholders does not in any way or manner affect the legality or
status of the respondent-Company. It was further contended that
change of names of Directors, shareholders duly done within the
purview of the Companies Act, 1956, does not affect the legal
status of the respondent-Company and much less there has been any
transfer of the site by the Company to any other individual person.
20. For deciding the issue involved in the present case it is necessary to refer certain clauses of licence agreement, lease
deed and guidelines issued by the appellant-Corporation which are
common in all the cases.
21. Clause 4(h) of the licence agreement prohibits licensee’s
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acts to directly or indirectly transfer, assignment, sale,
encumber or part with its interest under the benefit of the said
Agreement without previous consent in writing of the Grantor,
relevant portion of which reads as follows:
“4(h). That the Licence will not directly or indirectly transfer, assign, sell, encumber or part with its interest under or the benefit of this Agreement or any part thereof in any manner whatsoever without the previous consent in writing of the Grantor and it shall be open to the Grantor to refuse such consent or grant the same subject to such conditions as may be laid down by the Grantor in the behalf.”
22. Sub-Clause (p) of Clause 3 of lease deed also prohibits any alteration in the Memorandum and Articles of Association or in its capital structure without the written consent of the Lessor, relevant portion of which reads as follows:
“3(p) That the Lessee being a registered partnership firm declares, affirms and undertakes that during the subsistence of the terms of this agreement, the said partnership shall not be dissolved, reconstituted or wound up, and/or dealt with in any way which may jeopardize the rights and interests of the Lessor in the matter of this lease, nor shall its constitution be altered in any manner otherwise written consent of the Lessor, first and obtained, and it shall not stand dissolved on the death or insolvency of any of its partners;
OR The Lessee being an individual or sole
proprietor of a firm, shall not allow any person(s) as partner(s) with him without the prior written consent of the Lessor;
OR The Lessee being a Company shall not
make or attempt to make any alterations, whatsoever in the provisions of its Memorandum and Articles of Association or in its capital structure without the written consent of the Lessor, first had and obtained, and the Lessee hereby undertakes to
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get registered the prescribed particulars of the charge hereunder created with Registrar of Joint Stock Companies under Section 126 of Companies Act, 1956, within stipulated period.
While granting its consent as aforesaid the Lessor may require the successor in interest of the Lessee to enter into a binding contract with the Lessor to abide by and faithfully carry out the terms, conditions, stipulations, provisos and agreements herein contained or such other terms and conditions as the Lessor may, in its discretion, impose including the payment by the successor-in-interest such additional premium and/or enhanced rent as the Lessor may in its discretion think proper. In the even of breach of this condition the agreement shall be determined at the discretion of the Lessor.
Provided that the right to determine this agreement under this clause will not be exercised if the industry at the premises has been financed by the State Government or the Industrial Finance Corporation of India or the Industrial Credit and Investment Corporation of India, or the U.P. Financial Corporation or Pradeshiya Industrial and Investment Corporation of Uttar Pradesh or any scheduled bank(including the State Bank of India) and the said financing body or bodies mentioned above decide to take over possession or sell, or lease or assign the mortgaged assets in exercise vesting in it or them by virtue of the deeds or deed executed in its or their favour by the Lessee as provided herein above, or under any law for the time being in force.”
23. The Corporation has issued guidelines for transfer/re- construction in respect of the plots in the industrial area of the
Corporation. Clause 6.01(E) of the said guidelines prescribes
Transfer Levy and Clause 6.01(F) defines transfer. The aforesaid
provisions reads as follows:
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“6.01(E) Transfer Levy – per sq.m. @ 5% to 15% of the rate of premium in fast moving areas and 2.5% to 7.5% of the current premium in slow moving areas prevailing on the date of issuance of transfer approval letter will be changed as applicable. While calculating the transfer levy the locational charges of a particular plot will not be considered and only basic premium will be taken into account.
6.01(F) Transfer – Means disposal of controlling interest in the venture by the existing allottee. In the case of reconstitution, the existing allottee retains controlling interest except in case, where interest is transferred to family members as defined in 6.3(iv)(a) below or where there is change in the constitution of the allottee due to inheritance, succession or operation of law.”
24. In the present case the entire shareholding of Goyal family headed by Mr. Amar Nath Goyal in the said company was transferred
to the Mehta-Lamba Family. The entire list of shareholders,
Managing Director and Board of Directors was provided by Monsanto
to the appellant-Corporation vide letter dated 7.5.1994. The
record shows that the original subscribers of shares were members
of Goyal family and the entire shareholding was transferred to
Mehta-Lamba family. Therefore, the original subscribers of shares
of respondent No. 1 Company were totally changed.
25. The “Memorandum of Association” of a company limited by shares mandatorily prescribes in “Table-B” (Table-B of 1956 Act and Table-A of 2013 Act deals with Company Limited by shares) of the Companies Act mandatorily prescribed that the names,
addresses, description, occupation of subscribers shall be given
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in Memorandum of Association. In this case as the original
subscribers of shares were changed in 1994, there was material
alteration in the “Memorandum of Association” of respondent no. 1
Company.
26. It was also contended that there was an alteration in “Articles of Association” of respondent no. 1 Company as well.
The last column of “Articles of Association” also mandatorily
provides for giving names, addresses and description of
subscribers. In this case, the subscribers of shares has been
completely changed from the Goyal Family to Mehta-Lamba Family and
hence there was material alteration of “Articles of Association”
of the respondent no. 1 Company.
27. In this case, the ownership of a huge Industrial plot measuring 14,533 sq. ft. in the prestigious and economically
affluent area of Sahibabad (Ghaziabad) has been transferred from
Goyal family to the Mehta-Lamba family for material financial
gains, by adopting clever means that too without taking written
consent of the Lessor i.e. appellant-Corporation. There are many
instances/examples in which the lessee gets allotment of huge
industrial plots and thereafter sells the same for huge monetary
gains. This adversely affects the aims and objectives of
appellant-Corporation i.e. the planned development of industrial
areas in the State of Uttar Pradesh. The Hon'ble High Court ought
not to have interfered in the matter looking into the public
interest involved and Clause 3(p) of the lease deed.
U.P. Twiga Fiberglass Limited
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28. Similar submissions as made in the above case were made by the learned counsel for the appellant in the present case also.
It was contended that the respondent-U.P. Twiga Fiberglass Ltd.
has violated Clause 3(p) of lease deed dated 27th May,1977 entered
between the said company and appellant-Corporation inasmuch as its
“Memorandum of Association”, “Articles of Association” and capital
structure were altered without the written consent of Lessor
appellant-Corporation and in view of the same, the appellant-
Corporation has the right to determine the said lease deed dated
27th May,1977.
29. Per contra, according to the respondent, the aforesaid contention(s) are fallacious, misconceived and untenable. Learned
counsel for the respondent made the following submissions:
i) The Lease-Deed dated 27th May, 1977 has been executed by the
respondent-company, in the capacity of a “lessee”. Consequently,
the provisions of the Lease-Deed obligate the Lessee/the Company
and not its shareholder(s);
ii) The Lease-Deed contains no clause whatsoever, that
authorises such levy of transfer-fee, nor does it prohibit any
change in the share-holding of the respondent-company. Even
otherwise, such change in share-holding was committed with the
express consent and approval of the petitioner;
iii) Law recognises a categorical distinction between a Company
and its share-holders, who have otherwise no right whatsoever on
the assets of a company. Reliance was placed on Constitution Bench
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decision in Bacha F. Guzdar, Bombay vs.Commissioner of Income Tax,
Bombay, AIR 1955 SC 74, which observed as follows:
“A share-holder has got no interest in the property of the company though he has undoubtedly a right to participate in the profits if and when the company decides to divide them”.
And “the Company is a juristic person and is
distinct from the share-holders. It is the Company which owns the property and not the share- holders”.
iv) In a relationship between the Lessor and a Lessee, it is
the Lease-Deed which is paramount and whose contents are binding
on the parties.
v) A unilateral guideline issued by the Lessor cannot be held
applicable or binding to a lessee. On the face of the lease deed,
such guideline has no binding force. Further, change in share-
holding was admittedly done with the express consent/approval of
the appellant; and
vi) Any fee, penalty, compensation, damages or transfer charges
to be claimed by the lessor from the lessee must necessarily be
provided in the lease-deed. Otherwise, such fee, penalty,
compensation, damages or transfer charges being beyond the terms
of the Lease-Deed cannot be sought or claimed by the Lessor; Thus
the levy of transfer-fee as sought and claimed by the appellant is
illegal, misconceived and untenable, being beyond the terms of the
lease deed. It is not a transfer in law, since transfer in share-
holding does not amount to any transfer in the Company's assets,
immovable or otherwise. It is equally not a transfer in fact,
since the provisions of the Lease-Deed do not recognise/nor
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prohibit any such transfer.
vii) The Guidelines and in particular Clause 6.01(F) is not
applicable in the present case as there has been no “disposal of
controlling interest in the venture by an existing allottee”.
Undoubtedly, the respondent-company is the “existing allottee” and
the respondent-company has not disposed its “controlling interest
in the venture”. In other words, there is no transfer even upon a
literal construction of the Guidelines.
30. It is not in dispute that the appellant-Corporation on 27th
May, 1977 allotted huge plot measuring 1,10,926 sq. mtrs. to
respondent no. 1 Company in the industrial area, Sikandarabad,
Bulandshehar on nominal amount. The respondent no. 1 clearly
admitted that it had a huge debt of Rs.13,14,00,000/- the
different financial institutions and, therefore, it sold shares
of company, its own shares, shares of promoters and shares of
financial institutions to the foreign company, namely, “M/s Rotar
Ltd.”
31. The appellant-Corporation in written statement filed in Suit No. 876/1996 clearly and categorically mentioned that the
shares of original promoters were transferred in the name of new
promoters of foreign company and therefore, the appellant-
Corporation demanded list of new shareholders and Memorandum and
“Articles of Association” of the Company. The change of original
promoters shares to the new promoters means the subscribers of
shares were changed and, therefore, there is material change in
the “Memorandum of Association” and “Articles of Association” of
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the Company.
32. The appellant-Corporation clearly brought on record that there is change in “Capital Structure” of the company and the
“Capital structure” in common parlance means “debt-equity ratio”.
In this case admittedly there a huge amount of Rs. 13,14,00,000/-
was funded by the foreign company, i.e. “M/s Rotar Ltd.” towards
settling the debt. In this background the appellant alleged that
there is change in “debt-equity ratio” resulting alteration in the
“capital structure” of the company.
33. There is larger public interest involved in incorporating alteration in “Capital Structure” in Clause 3(p) of the lease
deed. There are many instances where the company takes loan from
third parties on the security and land and structure allotted to
them in lease, keeping in dark the lessor which amounts to
incurring liabilities on the property without the knowledge of the
lessor. In this case also there was huge amount of debt on the
company as it took loan on land and building/factory from
different financial institutions. Therefore, there is public
interest involved for which consent of lessor was necessary.
M/s Enrich Engineering Works Pvt. Ltd 34. In this case also similar submission has been made by the parties.
35. It is not in dispute that the huge plot of about 40, 489 & 8.35 sq. yards in the industrial area of Rai Bareilly (U.P.) was
allotted by appellant-Corporation to M/s Tyres and Tubes Company
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Pvt. Ltd. As the said company suffered heavy losses, on 9.1.1996
the company Judge of Allahabad High Court appointed Official
Liquidator and perused High Court’s Order on 12.3.2004 the said
company was sold to M/s Enrich Engineering Works Pvt. Ltd., by the
Official Liquidator.
36. Learned counsel for the respondent submitted that it was a case of reconstitution and therefore payment of transfer fee does
not arise. However, such submission can not be accepted in view of
Clause 6.01(E) & (F) of the guidelines. The fact that there is a
change of hand of the asset including the land in question by
transfer. Therefore, the respondent is liable to pay transfer fee.
M/s Super Tannery (India) Ltd. 37. Learned counsel for the appellant submitted that the huge plot of 45080 sq. mtrs. in Kanpur was allotted to M/s Supre Ago
Tech Ltd. for establishing and running a “Specialty Paper
Industry”. In this case, only a “License Agreement” dated
10.10.1990 was executed by UPSIDC and the admitted fact on record
is that no lease deed was executed by UPSIDC with M/s Super Agro
Tech. Ltd.
38. In view of the above, M/s Super Agro Tech Ltd. was merely a licensee and as per the license agreement dated 10.10.1990 it
had no authority whatsoever to transfer the said industrial land
to M/s Super Tannery (I) Ltd.
39. On the other hand, according to the learned counsel for the respondents, due to various constraints over head costs and
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financial hardship company became non viable and the major
production activities was not feasible to run the company. In
order to avoid the future problem a scheme of amalgamation was
prepared as per the provisions of the Companies Act, seeking
amalgamation under Chapter V of the Companies Act. A joint
application was filed before the Allahabad High Court. The High
Court vide order dated 9.5.1997 allowed the petition for
amalgamation and sanctioned the scheme of amalgamation and ordered
that M/s Super Agro will be merged into M/s Super Tannery (India)
Ltd.
40. In the present case it has not been denied that respondent company M/s Super Tannery (India) Ltd. and the other company Super
Agro Tech. Ltd. are family held companies of the same family
having common Directors/Promoters. Pursuant to the order of
amalgamation by the High Court the plot of land in question namely
A-9, A-10, Industrial Area Unnao Site-II which was allotted to
Super Agro Tech. Ltd. became the asset of the respondent company
M/s Super Tannery (India) Ltd. As per Amalgamation Scheme, all
the property, rights and power of Super Agro Tech. Ltd., having
its office at 184/170, Jajmau Kanpur was transferred without
further act or deed to M/s Super Tannery (India) Ltd. Thus it is
clear that by the order of the Court the premises in question was
transferred in favour of the other Company.
41. In view of the aforesaid facts as noticed in each case, we hold that the appellant rightly issued notice demanding transfer
fee from each of the respondents and there was no reason for the
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High Court to interfere with the same.
42. For the reason aforesaid, we set aside the impugned judgments dated 11th May, 2004 in C.W.P.No.5094 of 2000, 24th
October, 2005 in Second Appeal No.1425 of 2000, 27th April, 2006 in
Civil Misc.W.P.No.56982 of 2005 and 22nd August, 2007 in C.M. Writ
Petition No.18535 of 2002 passed by the High Court of Judicature
at Allahabad and allow the appeals.
...........................J. (SUDHANSU JYOTI MUKHOPADHAYA)
...........................J. (V. GOPALA GOWDA)
NEW DELHI; JANUARY 29, 2015
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