1995 (11) TMI 471 - HC - Companies Law

Issues Involved:
1. Jurisdiction of the court to entertain the application.
2. Interpretation of the order dated October 31, 1984, regarding the transfer of leasehold rights.
3. Whether the transfer in question is a first or second transfer.
4. Obligation to pay differential premium for the transfer.
5. Validity of respondent No. 1's demand for premium.
6. Compliance with transfer guidelines by respondent No. 1.
7. Conditions to be imposed on the applicants for granting relief.

Issue-wise Detailed Analysis:

1. Jurisdiction of the court to entertain the application:
The court asserted its jurisdiction under Section 457(1)(c) of the Companies Act, 1956, which empowers the liquidator to sell the company's property with the court's sanction. The court emphasized that it has the authority to issue necessary directions to effectuate the sale of the company's assets, including leasehold rights, during winding-up proceedings. The court dismissed the contention that Section 446 was relevant, clarifying that it deals with the stay of suits or proceedings, which was not applicable in this case.

2. Interpretation of the order dated October 31, 1984, regarding the transfer of leasehold rights:
The court examined the order dated October 31, 1984, which granted consent for the transfer of leasehold rights without charging additional premium. The court noted that Clause 3 of the order restricted further transfers without fresh consent but clarified that the current transfer was the first transfer by the official liquidator to applicant No. 2 as a nominee of applicant No. 1. Thus, the order's restriction on further transfers did not apply.

3. Whether the transfer in question is a first or second transfer:
The court determined that this was a first transfer by the official liquidator to applicant No. 2 as a nominee of applicant No. 1. The leasehold rights had not been previously transferred to applicant No. 1, and therefore, the restriction on further transfers did not apply. The court emphasized that the official liquidator's deed of transfer would be the first deed of transfer.

4. Obligation to pay differential premium for the transfer:
The court rejected the respondent's demand for a differential premium of Rs. 65 lakhs, stating that the order dated October 31, 1984, exempted such a payment. The court held that respondent No. 1 was bound by its earlier decision to grant consent for the transfer without charging additional premium.

5. Validity of respondent No. 1's demand for premium:
The court found no merit in respondent No. 1's demand for premium, reiterating that the transfer was the first transfer and that the earlier order exempted the payment of additional premium. The court also dismissed the allegation that applicant No. 2 was incorporated to evade the transfer fee, stating that respondent No. 1 failed to prove any fraud or circumvention.

6. Compliance with transfer guidelines by respondent No. 1:
The court referred to the transfer guidelines published by respondent No. 1, which stipulated that no differential premium was payable for formal transfers, including transfers between holding and subsidiary companies. The court directed the applicants to pay the standard transfer fee of Rs. 10 per square meter and comply with the guidelines, ensuring the relationship between the holding and subsidiary companies continued for at least two years.

7. Conditions to be imposed on the applicants for granting relief:
The court imposed several conditions on the applicants to ensure compliance and protect the interests of respondent No. 1:
- The official liquidator was directed to execute the transfer deed in favor of applicant No. 2 within four weeks.
- The applicants were required to pay the standard transfer fee of Rs. 3,27,600.
- Applicants Nos. 1 and 2 were to file written undertakings ensuring the holding-subsidiary relationship continued for two years.
- Applicant No. 1 was to furnish a written guarantee for applicant No. 2's performance for two years.
- All costs, charges, and expenses related to the transfer were to be borne by applicant No. 2.

Conclusion:
The court granted the relief sought by the applicants, directing the official liquidator to execute the transfer deed and respondent No. 1 to recognize the transfer without charging additional premium, subject to the conditions imposed. The court emphasized the binding nature of the earlier order and the compliance with the transfer guidelines.

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