2008 (11) TMI 741 - HC - Companies Law

Summary

Issues Involved:
1. Payment of Rs. 2,05,806/- to the Director of Industries and Commerce.
2. Entitlement to the sale deed for the land measuring 0.75 Acres.

Summary:

Issue 1: Payment of Rs. 2,05,806/- to the Director of Industries and Commerce

The Original Side Appeal questions the Judgement and Decree dated 01.03.2007 made in C.A. No. 1327 of 2005 in C.P. No. 61 of 1992, whereby the learned single Judge, while rejecting the said application taken out by one Mr. P.N. Kumar, the Director of M/s. Sears Electronics Limited, seeking for a direction to the Official Liquidator to pay a sum of Rs. 2,05,806/- to the Director of Industries and Commerce, Government of Tamil Nadu, in respect of the allotment order under reference in No. 41179/EL3/87, dated 29.09.1987 and to get the sale deed in favour of M/s. Sears Electronics Limited, a company in liquidation, directed the assignment of the land comprised in Plot No. 2, in Dr. Vikram Sarabhai Instronics Estates, Thiruvanmiyur, Chennai-41 measuring an extent of 0.75 Acres to M/s. Sears Electronics Limited.

The company defaulted payment and therefore, by exercising the conditions under para - 9 of the terms and conditions of the agreement, action was taken to cancel the hire purchase agreement. The learned single Judge found no ground to accept the prayer in the application to issue any direction to the Official Liquidator to pay the said sum and get the sale deed in favour of the company in respect of the shed. The company has not preferred any appeal questioning the said order and that portion of the order has become final.

Issue 2: Entitlement to the Sale Deed for the Land Measuring 0.75 Acres

The controversy in this appeal is that the learned Judge while dismissing the application, had directed the Director of the Industries and Commerce to assign the vacant land measuring an extent 0.75 Acres, which was allotted to the very same Company by a separate allotment order dated 09.10.1985. Aggrieved by the said Order, the present appeal is directed at the instance of the Director of Industries and Commerce.

A vacant land measuring an extent of 0.75 Acres in Plot No. 2, in Dr. Vikram Sarabai Instronics Estates, Chennai was originally allotted to M/s. Happy House (TV) Manufacturing Division, Madras by fixing a tentative cost of Rs. 60,000/- per acre vide allotment order No. 190532/EE1/84-2, dated 09.10.1985. Thereafter, the name of the company was changed to M/s. Sears Electronics Limited on 02.02.1987. Initially, the company had paid the tentative cost amounting to Rs. 22,500/-. There is no dispute that thereafter the company has paid the entire tentative cost of Rs. 60,000/-. However, neither regular allotment order was made nor the sale deed was executed, as the department had not finalized the final cost. In the meantime, the company went into Liquidation and winding up order was passed by the Company Court on 26.11.1993.

Mr. V. Veeraraghavan, learned Additional Advocate General, appearing for the appellant, argued that the sale of the plot will be contrary to the terms and conditions of the allotment. He further submitted that the final cost could not be arrived at and the sale deed could not be executed in favour of the Company, in view of the fact that the Government issued G.O.Ms. No. 27, Small Industries (SIE-2) Department, dated 17.04.1995. The department had not finalized the final cost due to pending writ petitions, which were eventually dismissed. Therefore, the sale deed could not be executed in favour of the company.

Mr. Sriram Panchu, learned senior Counsel appearing for the first respondent, contended that the right of the company to have a sale deed cannot be defeated merely because the final cost was not arrived and the sale deed was not executed. He argued that the delay in executing the sale deed was on the part of the department and should not be held against the company. He also submitted that the Company Court, in exercise of equitable jurisdiction, would be justified in ordering the sale of the land which was allotted in a separate allotment order.

The Court found that the company court would not have jurisdiction to pass such a direction, which are totally outside the scope of the grievance and the pleadings put forth by