2015 (7) TMI 1382 - HC - Indian Laws

Levy of Differential charges - change in the constitution of the company or not - petitioner claims the change to be Formal Transfer - HELD THAT - Since in the instant matter, transfer of share holding to the extent of more than 51% does not amount to formal transfer, MIDC is entitled to claim differential premium. If petitioner is not willing to deposit differential premium and does not abide by the notice, MIDC may take appropriate steps as deemed fit in consonance with the lease agreement and relevant rules and regulations. Reliance is placed on judgment in the matter of UP. STATE INDUSTRIAL DEV. CORPN. LTD. VERSUS MONSANTO MANUFACTURES (P.) LTD. ANR. 2015 (4) TMI 846 - SUPREME COURT . The matter was taken up to the Supreme Court in identical circumstances whereunder U.P. State Industrial Development Corporation directed levy of amount on account of transfer of interest in the property by the lessee in favour of different company. No interference is called for in the instant matter - Writ petition is devoid of substance hence stands dismissed.

Summary

Issues:
1. Challenge to levy of differential charges by MIDC.
2. Interpretation of the term 'Formal Transfer' in the context of shareholding changes.
3. Validity of the circular dated 12.05.1998 issued by MIDC.
4. Competence of MIDC to levy differential charges under the Maharashtra Industrial Development Act.
5. Application of section 15(a) of the Act in the matter of transfer of share holdings.
6. Comparison with the judgment in U.P. State Industrial Development Corporation Ltd. Vs. Monsanto Manufacturers (P) Ltd.

Analysis:
1. The petitioner objected to the levy of differential charges by MIDC amounting to Rs. 6,09,900, claiming that the changes in shareholding constituted a 'Formal Transfer' and hence not liable for the charges. However, the court found that there was a transfer of more than 51% shares to private limited companies, which did not fall under the definition of 'Formal Transfer,' leading to the rejection of the petitioner's contention.

2. The petitioner also challenged the circular dated 12.05.1998 issued by MIDC, which outlined guidelines for transfers and premium charges. The petitioner argued that the levy of premium was beyond the scope of the Maharashtra Industrial Development Act. However, the court noted that section 15(a) of the Act empowered MIDC to impose conditions regarding property transfers, including the levy of charges for violations, supporting MIDC's right to claim the differential premium.

3. Regarding the competence of MIDC to levy differential charges, the petitioner contended that such charges were not authorized under the Act, as regulations for the same were not framed by the State Government. However, the court upheld MIDC's authority based on section 15(a) of the Act, emphasizing the prohibition on share transfer without consent and the consequent entitlement to claim the differential premium.

4. Drawing parallels with the judgment in U.P. State Industrial Development Corporation Ltd. Vs. Monsanto Manufacturers (P) Ltd., the court highlighted the significance of substantial share transfers and the impact on the lessor's interests. Citing the Supreme Court's observations on ownership changes and the adverse effects on planned development, the court dismissed the writ petition, finding it devoid of substance and aligned with the principles laid out in the referenced case.

5. The court concluded that no interference was warranted in the present matter, as per the observations and reasoning from the referenced judgment. Consequently, the writ petition was dismissed, and any pending civil applications were disposed of accordingly.