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TMI Blog2011 (4) TMI 1531X X X X Extracts X X X X X X X X Extracts X X X X ..... dustrial purposes. Now, this lease had some restrictive covenants which have become very important for the purposes of adjudication of the disputes in this application. The clauses are Clause 6(i) and Clause 6(v). They read as follows: 6(i) That the lessee will not assign, mortgage, underlet or part with the possession over the land or any right or interest therein or in respect thereto without the provisions (previous [sic]) consent of and also without due approval of any such deed by the lessor or his nominee:... (v) If at any time the said land or any part or parts thereof shall no longer be required by the lessee for the purposes for which it is leased out to him the lessee shall while selling or assigning the said land or such part or parts thereof as aforesaid first make an offer of the same to the State Government / Adityapur Industrial Area Development Authority.... Their import was that the lessee could not assign the lease without the previous consent of the applicant. The deed of assignment had also to be approved by them. In such case the applicant had also a pre-emptive right to take the property. Now M/s. Jamshedpur Cement Ltd went into liquidation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchaser/assignee Hi-tech Chemical Private Limited upon their making payment of a sum of ₹ 53,78,472/- as land cost. On 6th August, 2008, they submitted this claim to the Official Liquidator. On 28th January, 2009, an order was passed by this Court directing the Official Liquidator to execute the conveyance in favour of the said purchaser/assignee. On 31st March, 2010 such conveyance for the unexpired term of the lease, that is, 77 years was executed by the Official Liquidator in favour of the purchaser/assignee. The applicant has taken out two applications. The first is C.A. No. 117 of 2009. The prayers in the Judge's Summons in that application are as follows: i. The lease with regard to the 12 acres of land situated at M-20P, 6th Phase, Adityapur Industrial Area, District - Seraikella, Kharsawan in the State of Jharkhand, Jamshedpur - 832108, Adityapur, be granted in favour of the applicant for a period of 30 days as per the Land Allotment Order dated 16th April, 2008 being Annexure A hereto and as per the Bond executed by the applicant dated 21st may, 2008 in favour of the Respondent No. 1/ Petitioner being Annexure C hereof in accordance with the Indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the landlord / lessor thereof; d) Injunction restraining the applicant / purchaser from taking any steps or further steps in furtherance of the sale order dated 5th January 2007 and the order dated 28th January 2009 or making any investment and / or further construction on the said land till the disposal of the instant applicant; e) Ad-interim order in terms of prayers above; f) Appropriate order as to costs; g) Such further or other order or orders be passed and / or direction or directions be given as to this Hon'ble Court may deem fit and proper; DISCUSSION: The arguments of the respective learned Counsel for the parties will appear as I discuss the merits of this matter. The sale of the assets of the company-in-liquidation by the official liquidator is not a voluntary sale or a sale by operation of law but is a voluntary sale to which the general principles of law governing transfer of property apply. (see Revenue Divisional Officer v. Brunton and Co. (Engineers) Ltd., reported in 69 Comp. Cas. 497; Parasram Harnand Rao v. Shanti Prasad Narinder Kumar Jain and Anr., reported in AIR 1980 SC 1655; Cox Kings Ltd. and Anr. v. Chander Malhotra (Smt), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laration holding that since prior approval of the State Government was not obtained the notification under Section 28 and declaration under Section 32 of the Adhiniyam were invalid and inoperative. Question before this Court was whether it would be prior approval or approval given subsequent to the notification under Section 28 or declaration under Section 32 of the Adhiniyam was valid in law. This Court observed that if prior approval would have been a pre-condition for further steps, the Act would have said so and this not having been done what is materials is to obtain the approval of the State Government. This Court said that the reason for this appeared to have been that when a scheme has been framed the land suitably required for effective implementation of the scheme should alone be acquired and not in excess in the guise of framing the scheme. Relying on its two earlier decisions in Life Insurance Corpn. of India v. Escorts Ltd. (1986) 1 SCC 264 : AIR 1986 SC 1370 and The Lord Krishna Textile Mills Ltd. v. Workmen AIR 1961 SC 860, this Court held (Para 5 of AIR SCW: AIR): This Court in Life Insurance Corpn. of India v. Escorts Ltd. considering the distinction between sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of revision in rate of supply to WBSEB as a whole for which Government should be moved. In its letter dated April 27, 1992 to DPL the State Government granted approval for revision of tariff for different categories of consumers and as regards rate applicable to Graphite the letter said as existing w.e.f. 8-4-91 . We do not think any argument is needed for us not to hold that ex post facto approval was granted for tariff revision as regards the supply to Graphite from April 8, 1991. It is also difficult to accept the argument of the Graphite that unless approval is granted there cannot be any revision in tariff. It is not the requirement of law even if Sixth Schedule of Supply Act is held to be applicable that approval has to be granted within 60 days of the notice given to the State Government. That revision can certainly become applicable after the expiry of the period of 60 days. If approval is not granted, the increased charges paid by the consumer are liable to be adjusted / refunded. In this connection reference may be made to the constitution of the Rating Committee under Section 57A of the Supply Act. Under forth proviso to Clause (1) of the Sixty Schedule it is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 55(1)(a) or Section 108(a). The last sub paragraph of Section 55 enacts that any failure to make such disclosure by the seller can be described as fraudulent. If a sale or transfer is fraudulent, it is avoidable and can be set aside. Furthermore, at this stage I would like to state that the phrase as is where is basis does not include any property being sold or demised with a defective title but refers to the state of the property at the time it is sold. eg: with tenants, occupants structures and so on. Nevertheless, in my opinion, the instant defect is not a defect which the buyer / assignee could not discover with ordinary care. Diligent enquiry could have revealed that the lease could only be assigned with the permission of the applicant. In my judgment, in the absence of an express prior permission by Adityapur, the Official Liquidator had no title at all to sell the property. If the Official Liquidator had no title to sell the property, the defect in the property was far more serious than the defect contemplated in Section 55(1)(a) which makes the sale fraudulent. If a sale is fraudulent the sale is voidable and can be set aside. But if the defect in title i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany in liquidation and such liabilities would get priority over all other liabilities of the company. The Official Liquidator having rejected the claim of the Nigam on the basis of his interpretation of Section 530 of the companies Act and Rule 154 of the Companies (Court) Rules, the impugned rejection of Proof of Debts was held not sustainable in law and, therefore, the impugned notices of rejection were set aside. While holding that the Official Liquidator would be bound to discharge the tax liability as per the claim of the Nigam even for the post-liquidation period, the Official Liquidator was granted liberty to file appeal against the demands raised by the Nigam within the date specified therein and it was further directed that if such appeal is filed within the date specified, the appeal shall be considered on merits waiving limitation, if any. 12. There is no express provision in the sale notice that the liability to bear charges on account of water and property taxes must be borne by the purchaser. We are unable to comprehend that the expression as is where is whatever there is basis comprises within its ambit the liability to clear statutory charges as might have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not properly representing his title in the terms and conditions of sale. As a result the purchaser/assignee paid less and got the conveyance. Now, to ask him to pay the entire claim of the Applicant would be unjust. Equally unjust would be an order asking the Official Liquidator to pay the entire amount, as that would affect the creditors. Considering the above circumstances, I am of the view that both the Official Liquidator and the purchaser are equally responsible for not discharging their respective duties in this sale/assignment of lease. Hence, they should bear in equal measure the compensation that is payable to Adityapur for giving ex-post facto permission. The Applicant has demanded different amounts as compensation at different points of time. By their letter dated 16th April, 2008 they wanted ₹ 53,78,472/-; in the Judge's Summons they claim ₹ 71,58,792/-. In their letter dated 23rd July, 2007 they demanded ₹ 93,53,844/-. Therefore, the lowest claim of ₹ 53,78,472/- is a true estimate of the land cost claimed for giving such permission, as all these claims were made almost contemporaneously. Therefore, a just and proper order wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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