2023 (10) TMI 154 - HC - Indian Laws

Charging Lease transfer fee - Amalgamation of company - Claim of transfer fees by the respondent no.1 - petitioners submits that the stipulation of taking prior approval before entering into a scheme of amalgamation is neither a pre-condition nor is mandatory, inasmuch as no penal consequence is specified for non-compliance of the same - HELD THAT - In the present case, nothing has been produced by the respondents to rebut the contention of the petitioners that the companies among which there was an amalgamation of the petitioners are group companies of the petitioner no.1. The annexures to the writ petition indicate that the shareholding and Board of Directors were common between the said companies. Hence, the amalgamation of the petitioner no.1 squarely comes within the exception clause carved out of transfer as per the General Policy of the respondent no.1 itself. The respondent no.1 is not entitled to claim transfer charges, as applicable to other entities, in case of the petitioners. Only the processing fee of Rs.10,000/- can be claimed by the respondent no.1. Whether such transfer is between entities identical on point of shareholding and directorship, thus coming within the exclusion contemplated in the General Policy and minutes of meeting of the WBSIDCL itself, as annexed to the opposition of the WBSIDCL - an amalgamation of the lessee within its group companies is not considered as transfer for the purpose of charging transfer fees under the said policy of the WBSIDCL. This Court is of the opinion that the respondent no.1 acted de hors its own General Policy and meeting resolutions in claiming full transfer fees from the petitioners by treating the amalgamation between the petitioners no.1 and its companies as a transfer within the contemplation of the General Policy of the respondent no.1, although it falls within the exception clause thereof. Petition allowed.

Summary

Issues Involved:
1. Validity of lease termination by WBSIDCL.
2. Requirement of prior approval for amalgamation.
3. Classification of amalgamation as a "transfer" under the General Policy.
4. Claim of transfer fees by WBSIDCL.

Summary:

1. Validity of Lease Termination:
The predecessor of the petitioners, Sona Promoters Pvt. Ltd., obtained a lease from WBSIDCL, which was terminated by a notice on December 9, 2019. This termination was challenged and an ad interim order was granted restraining the termination. The Division Bench dismissed the appeal by WBSIDCL and allowed the writ petition. The Supreme Court ultimately dismissed the appeal by WBSIDCL on March 18, 2020.

2. Requirement of Prior Approval for Amalgamation:
During the pendency of the Supreme Court appeal, petitioner no.1 amalgamated with Sona Promoters Pvt. Ltd. and other group companies, sanctioned by NCLT on March 5, 2020. WBSIDCL argued that prior approval was necessary for the amalgamation as per the General Policy and lease clauses. However, the petitioners contended that prior approval was neither a pre-condition nor mandatory, and no penal consequence was specified for non-compliance.

3. Classification of Amalgamation as a "Transfer":
The petitioners argued that the leasehold interest vested in them post-amalgamation, and since the shareholders and directors of Sona Promoters and petitioner no.1 were the same, it should not be treated as a transfer. The General Policy of WBSIDCL excludes amalgamation within group companies from being considered as a transfer, provided prior intimation is given. The court noted that WBSIDCL, by considering the petitioners' request for approval after the transfer, effectively waived the requirement for prior approval.

4. Claim of Transfer Fees by WBSIDCL:
WBSIDCL demanded Rs.18,76,000/- as transfer charges plus GST, treating the amalgamation as a transfer. The court observed that the General Policy excludes such amalgamations from transfer fees, requiring only a processing fee of Rs.10,000/-. The court held that WBSIDCL acted contrary to its own policy and guidelines in claiming full transfer fees.

Conclusion:
The court set aside WBSIDCL's claim of Rs.18,76,000/- as transfer charges and Rs.3,37,680/- as GST, directing WBSIDCL to accept and ratify the transfer of lease upon payment of Rs.10,000/- as processing fees. The writ petition was allowed with no order as to costs.