2013 (5) TMI 214 - HC - Companies Law

Winding up u/s 483 Demand for unearned increase on transfer of leased land - Appellant had granted the leasehold rights of Plot to one M/s Amar Singh & Co. who, prior to the order of winding up of M/s Globe Associates (P) Ltd. had agreed to sell/transfer the same to the said M/s Globe Associate (P) Ltd. As per the terms and conditions of the perpetual lease deed executed by the appellant to M/s Amar Singh & Co., the same were transferable after obtaining permission of appellant and on payment of unearned increase . M/s Globe Associates (P) Ltd. being ordered to be wound up respondent M/s Aeroshine and which was approved by the learned Company Judge. Held that - In the present case, the transfer is under the aegis of the Company Judge of this Court. The counsel for the appellant has throughout been involved in the same. The appellant was thus fully conscious that the transfer of the leasehold rights had been approved by this Court and the respondent had taken over the responsibility to pay the unearned increase and for which purpose the appellant had been called to the Court. Thus, it would be highly unjust and unfair to ask the respondent who though has purchased the leasehold rights at the rates of the year 1983-85, to pay unearned increase to the appellant DDA of the year 2004 or of today. Therefore there is no reason to interfere with the order of the learned Company Judge, insofar. However, we are of the opinion that the interest at the rate of 9% per annum awarded by the learned Company Judge, on the arrears of unearned increase, is on the lower side. All the facts and circumstances and the fact that the appellant DDA itself generally charges interest at the rate of 12% per annum, therefore interest of justice would be served if the rate of interest is enhanced from 9% per annum to 12% per annum. We thus, while dismissing this appeal, direct the respondent to within four weeks hereof deposit with the appellant DDA the amount due towards such additional interest for the period from 03.07.1985 to 31.01.2005.

Summary

Issues Involved:
1. Validity of the application for transfer of leasehold rights.
2. Calculation of unearned increase.
3. Interest on the unearned increase amount.

Detailed Analysis:

Issue 1: Validity of the application for transfer of leasehold rights

The appellant, Delhi Development Authority (DDA), contended that no application for permission to transfer the leasehold rights was made by the respondent, M/s Aeroshine, until the impugned order dated 31.08.2004. The respondent argued that an application was submitted on 02.07.1985. The learned Company Judge inferred that an application was indeed submitted before 16.08.1985, based on the entirety of the facts and the affidavit filed by the partner of M/s Aeroshine. The Judge concluded that the DDA was aware of the intended transfer and was involved in the proceedings since 1985. Therefore, the DDA's argument that no application was made until 2004 was dismissed.

Issue 2: Calculation of unearned increase

The learned Company Judge directed that the unearned increase should be calculated based on the application dated 02.07.1985. The DDA argued that the unearned increase should be calculated at the rates prevalent at the time of approval, which was in 2004. The respondent contended that the unearned increase should be calculated at the rates prevalent when the application was first submitted to the DDA, which was in 1985. The Judge held that the unearned increase should be calculated based on the rates as of 1985, considering the delays by the DDA in processing the application and the fact that the transfer of leasehold rights was under the aegis of the Court since 1985.

Issue 3: Interest on the unearned increase amount

The learned Company Judge awarded interest at the rate of 9% per annum on the unearned increase amount from 02.07.1985 until the date of payment. The DDA generally charges interest at the rate of 12% per annum. Considering the pendency of the litigation and the fact that the unearned increase remained unpaid for 20 years, the Court enhanced the interest rate from 9% to 12% per annum.

Conclusion:

The appeal was dismissed, and the respondent, M/s Aeroshine, was directed to deposit the additional interest amount with the DDA within four weeks. The demand made under the interim order and the documents executed pursuant thereto were to be regularized upon payment. The Court upheld the calculation of unearned increase based on the rates of 1985 and enhanced the interest rate to 12% per annum.