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TMI Blog1986 (4) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... any due from January 30, 1976, upto date and also to direct him to allot the prescribed quota hereafter and also to allot the prescribed quota of coal and other raw materials required for the operation of the plant. ( c ) Pass such other orders just and expedient in the circumstances of the case including the award of costs". The petitioner came to be incorporated as a company under the provisions of the Indian Companies Act. On January 17, 1976, a certificate of registration was produced by the petitioner as per annexure D. One Mr. R. N. Agarwal, managing director of Sri Balaji Textile Mills P. Ltd., Bangalore, entered into an agreement with the third respondent to purchase the industrial undertaking known as "Narain Vegetable Products" situate at Sitapur, Uttar Pradesh, owned by the third respondent, on December 17, 1975, for a sum of Rs. 50 lakhs and paid a sum of Rs. 2,01,000 through a cheque. A receipt to that effect was executed by the third respondent. A copy of the same is produced as annexure A. The possession of the industrial unit in question, according to the case of the petitioner, was handed over on January 3, 1976, as per annexure B. The further case of the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner is entitled to have its name substituted in the licence relating to the industrial undertaking of M/s. Narain Vegetable Products, Sitapur, issued under the Industries (Development and Regulation) Act, 1951 (hereinafter referred to as "the Act"), in place of the third respondent ? (3)Whether the petitioner is entitled to have a direction issued to the second respondent to supply the prescribed quota of imported oil required for manufacture of vanaspati at the manufacturing unit at Sitapur known as "Narain Vegetable Products, Sitapur" ? Point No. 1. -No doubt on the date when the agreement to sell was arrived at, the petitioner was not incorporated as a company. But the agreement dated January 8, 1976, which is not disputed by the third respondent, specifically refers to the petitioner which was to be promoted shortly by the buyer with the main object of commencing business in vegetable oil products and allied business with the aid of the assets from the seller. Thus, the agreement can very well be accepted as having been made in favour of the petitioner. That it is so is also not disputed. The head office of the petitioner is at No. B-82, Industrial Estate, P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as desired by you in your letter number reference in para 3, we are enclosing herewith a copy of the memorandum and articles of association of our company along with the list indicating the name and address of the board of directors of our company. Hope your honour will be satisfied with the documentary evidence submitted by us in support of our request for necessary amendments in the industrial licence and will approve the labels at the earliest." There is also another letter dated February 3, 1977, produced as annexure 0 sent by the Ministry of Industry, Department of Industrial Development, to the petitioner to its Bangalore address, which reads thus : To M/s. Balaji Vegetable Products (P) Ltd., B-82, Industrial Estate, Peenya, Bangalore. Sub. : Transfer of Industrial licence No. L/28(2)/N-12/70, dated 14-12-1970 issued in favour of M/s. Narain Vegetable Products. Dear Sir, I am directed to refer to your representation No. BVP/76/130/4214, dated December 16, 1976, addressed to the Minister for Industry on the above subject, and to say that it has been noted that you have acquired the factory of M/s. Narain Vegetable Products, Sitapur. It has, however, been o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecember 14, 1970, for manufacturing 50 tonnes of vanaspati oil per day by entering the name of the petitioner as owner of the industrial undertaking in question. The facts necessary for granting the aforesaid relief are whether action to have the change effected has been taken within the jurisdiction of this court; whether a decision in that regard has been communicated to the petitioner to its address at Bangalore which is within the jurisdiction of this court. These things have taken place within the jurisdiction of this court. In addition to this, it is also pertinent to notice that the registered office of the petitioner is at Bangalore. Under section 15A of the Act, where a company owning an industrial undertaking is being wound up by or under the supervision of the High Court, and the business of such company is not being continued, the Central Government, may, if it is of opinion that it is necessary in the interests of public and, in particular, in the interests of production, supply or distribution of articles or class of articles relatable to the concerned scheduled industry, to investigate into the possibility of running or restarting the industrial undertaking, an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R.N. Agarwal on behalf of the petitioner and Sri N. K. Seth on behalf of the third respondent dated January 8, 1976, produced as annexure C stands undisputed. The receipt of a sum ofRs. 6,50,000 as per annexure A dated December 17, 1975, is also undisputed. Annexure B which evidences handing over of possession of the industrial unit in question is also not disputed. In the suit (Suit No. 91 of 1981) for specific performance filed by the petitioner in the Civil Judge Court at Sitapur, at para. 3 of the plaint, the petitioner has stated thus: "That the plaintiff has already been put in possession by the defendant on January 3, 1976, before the final agreement dated January 8, 1976, was signed and the plaintiffs are in possession of all movable and immovable assets of Narain Vegetable Products since then, a copy of a letter confirming the delivery of possession is filed along with the suit and is part of it (Annexure 2)." In the written statement with reference to the aforesaid averments contained in para, 3 of the plaint, the third respondent has stated thus : "Only delivery of possession is admitted. Rest denied." In para. 5 of the written statement, it is further stated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement to sell and a sum of about Rs. 24 lakhs in addition to the augmented interest and penalty is still due to the answering respondent. Respondent No. 3 is ready to sell the assets of Narain Vegetable Products to the petitioner company provided the petitioner company is ready and willing to pay the balance consideration. It cannot be emphasised adequately that there is no sale of the said assets and all that has been entered into is an agreement to sell, the terms of which have been breached by the non-compliance on the part of Sri R.N. Agarwal with the obligations undertaken by him under the agreement. The contents of paragraph 3, as stated, are wrong and denied. Whereas it is admitted that letter dated, January 3, 1976, was issued by respondent No. 3, the possession given thereby was not exclusive but joint along with that of respondent No. 3. In view of the agreement to sell covering only the sale of the assets of Narain Vegetable Products and not the entire business known as Narain Vegetable Products, as is borne out by paragraph 5 of the agreement, there was no question of this respondent giving exclusive possession of Narain Vegetable Products." Thus, it is estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner for a sum of Rs. 50 lakhs and possession of the same was also delivered subject to the conditions mentioned in the agreement for sale. No doubt, as already pointed out, the suit for specific performance is pending and it is the case of the third respondent that the petitioner has not complied with all the terms of the agreement, and, therefore, it is not entitled to the specific performance. I am not expressing any opinion on the point whether the petitioner is entitled to a decree for specific performance or not as this has to be decided in the Civil Suit No. 91 of 1981 pending on the file of the Court of the Civil Judge at Sitapur between the parties. For the purpose of this petition, the only question that has to be considered is whether having regard to the provisions contained in the Act and the Rules, the petitioner is entitled to have the change in ownership of the industrial undertaking in question endorsed as per rule 19(2) of the Rules in the licence relating to it. As per sub-rule (2) of rule 19A of the Rules, any change in the owner of a registered industrial undertaking or an undertaking in respect of which a licence or permission has been granted, the new ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the owner of the unit. It does not necessarily mean that a person in whose name the licence relating to the industrial undertaking coming under the provisions of the Act and the Rules is issued, is the absolute owner of it. It may be possible and it is permissible, having regard to the provisions contained in the Act and the Rules, to issue a licence in the name of a person who may not be the absolute owner of the unit and the absolute owner may be a different person. For the purpose of determining whether the person concerned is the owner of the unit for the purpose of the Act and the Rules, it is enough if it is shown that the person has the ultimate control over the affairs of the undertaking. It is already pointed out that the possession of the unit has been handed over to the petitioner pursuant to the agreement of sale. The recitals contained in paras 1 and 7 of the agreement of sale which are reproduced earlier go to show that the possession of the industrial undertaking in question was handed over to the petitioner and the petitioner is entitled to run it as the absolute owner thereof with possession and free from all encumbrances with effect from January 1, 1976. In add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs recorded on point No. 2, it will have to be held that the petitioner is entitled to have the supply of the prescribed quota of imported oil required for manufacture of vanaspati at the manufacturing unit at Sitapur. The question as to whether the petitioner is entitled to have the quota due from January 30, 1976, up to date is left to be decided by the second respondent. The petitioner is permitted to file an application before the second respondent the petitioner, shall decide the same within four months from the date of filing of the application. As far as the supply of quota from today onwards is concerned, the same be allowed as per the rules and regulations governing the allotment of imported oil in question. Point No. 3 is answered accordingly. For the reasons stated above, this writ petition is allowed in the following terms : ( i )The communication dated February 3, 1977, produced as annexure-Q. bearing No. 3(15)/76-LA-II/76, issued by the Under Secretary to the Government of India, Ministry of Industry, Department of Industrial Development Secretariat for Industrial Approvals, LA II section, is hereby quashed; ( ii )Respondents Nos. 1 and 2 are directed to transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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