2011 (4) TMI 1531 - HC - Companies Law

Summary

Issues Involved:
1. Requirement of Lessor's Permission for Lease Assignment
2. Validity of Lease Assignment for 99 Years
3. Compensation for Ex-Post Facto Permission

Summary:

1. Requirement of Lessor's Permission for Lease Assignment:
The applicant, a statutory body, objected to the assignment of a lease by the Official Liquidator without their prior permission, as required by Clause 6(i) of the lease agreement. The Court agreed that the Official Liquidator should have obtained express prior permission from the applicant before assigning the lease. The Court noted that the Official Liquidator could not confer any better title to the property than what the company-in-liquidation had, and the absence of such permission rendered the assignment invalid.

2. Validity of Lease Assignment for 99 Years:
The applicant contended that the current industrial policy of the Jharkhand Government only allowed for a new lease to be executed for a period of 30 years. The Court examined the terms and conditions of the sale and found that the Official Liquidator had not properly represented the title in the sale notice, leading to a misunderstanding that the property was being sold as freehold. The Court held that the defect in the title was significant and the sale was void ab initio due to the lack of prior permission from the applicant.

3. Compensation for Ex-Post Facto Permission:
The applicant was willing to grant ex-post facto permission for the lease assignment if compensated with Rs. 53,78,472/-, calculated as the land cost. The Court decided that both the Official Liquidator and the purchaser were equally responsible for the oversight and should bear the compensation equally. The Official Liquidator and the purchaser were each ordered to pay 50% of Rs. 53,78,472/- to the applicant within four weeks. Upon receipt of the payment, the applicant would be deemed to have accorded their ex-post facto permission.

Conclusion:
The Court ordered that the Official Liquidator and the purchaser each pay 50% of Rs. 53,78,472/- to the applicant for ex-post facto permission. The payment by the Official Liquidator was to be treated as expenses of winding up. The order was executable as a decree, and both applications were disposed of with no order as to costs.