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TMI Blog2014 (4) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... at akin to a situation as stipulated in Clause 1(b) of the said policy, inasmuch as clause 1(b) deals with a situation of conversion of a partnership firm into a private limited company comprising only original partners as Directors/ Subscribers/ShareHolders, namely, mere reorganisation of the business. The Policy specifically provides for no unearned increase to be charged in such a situation - it is clarified that it is not every case of demerger that the unearned increase will not apply. There may be cases where an element of sale is involved. In such a situation the issue would be different. The respondent is not entitled to charge any unearned increase in the facts and circumstances of the present case keeping in mind a meaningful r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e demerger scheme the stainless steel plant at Hissar and the property at Bhikaji Cama Place New Delhi devolved upon appellant No.2. It is the case of the appellants that 98.62% shares of appellant No.2 were held by appellant No.1. 5. Pursuant to the scheme of demerger being approved the appellant No.2 requested DDA to mutate the property in its name. Thereafter appellant No.1 sent a letter to withdraw the request made for mutation and prayed that the property be converted to freehold and for which an application was submitted on January 19, 2004. 6. Relying upon Clause 6 of the perpetual lease-deed DDA demanded ₹ 6,17,53,998/-(Six Crore Seventeen Lac Fifty Three Thousand Nine Hundred and Ninety Eight only) towards unearned incr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the appellants has strenuously urged that the impugned order is liable to be set aside inasmuch as there is no sale that has taken place and no consideration whatsoever has passed between the appellants. Reliance is also placed on Clause 1(b) of the Instructions of respondent/DDA relating to charging of unearned increase. 11. Learned counsel appearing for respondents has relied upon the decision of the Division Bench of this Court in the case Indian Shaving Products Limited vs. Delhi Development Authority (supra) and Clause 6(a) of the perpetual lease-deed. 12. We have a look at the clause 6 of the perpetual lease deed dated September 28, 1993 which reads as follows:- ?(6)(a) The Lessee shall not sell, transfer, assign or other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Policy for charge of unearned increase to hold that the appellants are covered by the said clause and are hence liable to pay unearned increase. Clause 2(d) of the policy reads as under:- ?2(d) In case where a private limited company/public limited company separately floating a new company although Directors may be the same and the name of old company has not changed and if still exists as it was, 50% unearned increase will be chargeable in such cases.? 17. Reference may also be had to clause 1(b) (which deals with situations where no unearned increase is to be charged) of the policy which reads as follows:- ?1(b) In case of conversion of partnership firm into private limited company comprising original partners as Directors/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court in Indian Shaving Products Limited vs. DDA (supra), in our view, the said judgment would not be applicable to the facts of the present case. That was a case where the petitioner had bought the entire shareholding of a company called Sharpedge limited in 1987. The said company became a sick company under SICA. Under a proposal of rehabilitation a scheme of amalgamation was approved by BIFR in 1992 under which all the properties of the transferor company Sharpedge Limited vested with the transferee company i.e. petitioner. It was in those facts that the Court held that DDA is entitled to recover unearned increase. 23. In view of the above, we allow the present appeal and set aside the impugned order dated August 16, 2012 passed in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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