2004 (8) TMI 731 - HC - Companies Law

Summary

Issues Involved:
1. Review of the order confirming the sale of property.
2. Determination of unearned increase payable to the DDA.
3. Validity and timing of the application for transfer of leasehold rights.

Issue-wise Detailed Analysis:

1. Review of the Order Confirming the Sale of Property:
The Official Liquidator (OL) filed an application for the review of the order dated 18.8.1983, which confirmed the sale of property in favor of the respondents. The OL argued that the property was undervalued, and the confirmation order should be recalled. However, the matter was settled between the company/OL and the respondents during the proceedings. The court sanctioned the compromise/settlement in respect of Plot No.16-A, Rani Jhansi Road, Motia Khan, New Delhi, on 18.8.1983. The respondents agreed to pay Rs. 75,000 to the OL in settlement of the company's rights against respondents 1 to 5.

2. Determination of Unearned Increase Payable to the DDA:
An incidental issue arose regarding the unearned increase payable to the DDA, leading to a dispute between the purchaser (M/s. Aero Shine) and the DDA. The court noted that M/s. Aero Shine agreed to be responsible for the payment of unearned increase to the DDA for the registration of the leasehold in their favor. Despite several adjournments and delays, the DDA eventually demanded a sum of Rs. 70,59,773 as unearned increase. The DDA's stand was that the unearned increase should be calculated based on the market rates prevailing on the date of approval of the mutation by the Competent Authority. The DDA also claimed that the lessee was liable to pay misuse charges and damages over and above the unearned increase.

3. Validity and Timing of the Application for Transfer of Leasehold Rights:
The core issue was whether an application for the transfer of leasehold rights was made by M/s. Aero Shine to the DDA and, if so, when it was made. The court examined various orders and affidavits to determine the timing of the application. The court concluded that an application was indeed submitted before 16.8.1985, specifically on 2.7.1985, based on the following factors:
- The DDA was involved in the compromise talks from the beginning and was asked to determine the unearned increase.
- Court proceedings indicated that such an application had been moved, as recorded in the orders dated 23.7.1985, 6.8.1985, and 10.9.1985.
- An affidavit dated 8.8.2002 by Shri Avtar Singh, partner of M/s. Aero Shine, confirmed the submission of the application on 2.7.1985.

Conclusion and Directions:
The court directed the DDA to calculate the unearned increase based on the pre-determined market rate as of the application date, 2.7.1985, and not on the date of approval of the mutation. The DDA was entitled to interest at the rate of 9% p.a. on the unearned increase from 2.7.1985 until payment. The DDA was instructed to make the necessary calculations within four weeks and inform the applicant, who was then required to pay the amount within six weeks thereafter.