9911796707
TMI Blog2024 (4) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... perties to the scheme of amalgamation. While passing the order dated 30th July 1986 approving amalgamation, the High Court directed that the properties in Parts I, II and III of Schedule II to the said order shall stand vested in the transferee company (M/s. Jaypee Rewa Cement Ltd). After the amalgamation, in September 1986, the name of M/s. Jaypee Rewa Cement Ltd was changed to M/s. Jaiprakash Industries Ltd. Subsequently, the name was changed to M/s. Jaiprakash Associates Ltd, which is the present appellant. Thus, in short, the appellant is a company created as a result of the amalgamation of the erstwhile M/s. Jaiprakash Associates Pvt Ltd and M/s. Jaypee Rewa Cement Ltd. In short, the present appellant is the transferee company. 2. An application was made by the appellant to the respondent-Delhi Development Authority (for short, 'DDA') for a grant of permission to mortgage the said plots in favour of the Industrial Finance Corporation of India. By the letter dated 14th March 1991, the respondent-DDA demanded an unearned increase value of Rs.2,13,59,511.20. Being aggrieved by the said demand, representations were made by the appellant which were not favourably considered by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd devolved on the appellant. He urged that the order sanctioning the scheme of amalgamation is an order in rem, which binds everyone. He pointed out that in the scheme of amalgamation, there was no element of sale consideration or consideration for transfer. The learned senior counsel submitted that in the scheme subject matter of this appeal, the transferor personality ceased to exist and merged with the transferee. The learned senior counsel relied upon a decision of the High Court of Delhi in the case of Delhi Development Authority v. Nalwa Sons Investment Ltd. & Anr (2020) 17 SCC 782. He also relied upon a decision of the Division Bench of the High Court of Delhi in the case of Vijaya C. Gursahaney v. Delhi Development Authority & Ors 1994 SCC Online Del 306 : 1994 II AD (Delhi) 770. 5. The learned senior counsel appearing for the respondent-DDA invited our attention to the order passed by the High Court of Judicature at Allahabad on 30th July 1986. He submitted that clause (1) of the order provides that the transferor company's properties, rights and powers in respect of the property described in the first, second and third parts of schedule II shall be transferred witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsferring the said plots. We have carefully perused the order dated 30th July 1986 of the High Court of Judicature at Allahabad sanctioning the scheme of amalgamation. In the said scheme, M/s. Jaiprakash Associates Private Ltd (the erstwhile company) was shown as the 'transferor company' and M/s. Jaypee Rewa Cement Ltd was shown as the 'transferee company'. Clauses (1) and (2) of the operative part of the order dated 30th July 1986 read thus: ".. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 1. That all the properties, rights and powers of the Transferor Company specified in the first, second and third parts of the Schedule II hereto and all other properties, rights and powers of the Transferor Company be transferred without further act or deed to the transferee company and accordingly the same shall pursuant to section 394(2) of the Companies Act, 1956 be transferred to and vest in the Transferee Company for all the estate and interest of the Transferor Company therein but subject, nevertheless to all charges now affecting the same; and 2. That all the liabilities and duties of the Transferor Company be transferred without further act or deed to the Tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re necessary, take the form of partnership firm or private limited company. (b) In case of conversion of partnership firm into private limited company comprising original partners as Directors/Subscribers/Shareholders. (c) In case of addition, deletion or substitution of partners in a firm or Directors and conversion of sole proprietorship firm or partnership concern into private limited company when change in constitution is limited, for approval by the DDA, within one year from the date of purchase of plot in auction. This will to apply in case of plot obtained by the party by way of allotment. (d) Change from private limited company to public limited company where a private limited company becomes a public limited company under Section 43-A of the Companies Act, 1956. 2. Where unearned increase is to be charged : (a) Addition of outsiders not falling within the family members shall be allowed through a conveyance deed on payment of 50% unearned increase on his proportionate shares. The unearned increase shall be calculated at the market rate prevalent on the date of receipt of the application in the office of the DDA. (b) Substitution of the original allottee/a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing 50% of the unearned increase. The decision of the appellant in this behalf is final and binding upon the original lessee (Respondent 1). The amount towards the unearned increase is computed on the basis of the difference between the premium paid and the market value of the commercial plot. In doing so, the fact that the transfer under consideration did not involve any consideration amount or the value paid by the transferee is below the market value, would not inhibit recovery of 50% of the prescribed unearned increase amount on actual or, in a given case, notional basis. This is the plain meaning of the stipulation. This position is reinforced from the contemporaneous instructions issued by the competent authority of the appellant about the manner in which the unearned increase should be charged and from whom such charges should be recovered. That can be discerned from the instructions dated 6-9-1988. 15. Indeed, the said instructions advert to the category of persons from whom no unearned increase should be charged, despite being a case of transfer of the property as mentioned in Clause 1 thereof. The Division Bench of the High Court has relied upon the category mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d increase is to be charged: (a)*** (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 it still exists as it was, 50% unearned increase will be chargeable in such cases." This clause plainly applies to the present case. The demand of unearned increase from the respondents is founded on that basis. The High Court misinterpreted the said clause and erroneously opined that it is not applicable to a case of demerger of a public limited company. 17. The principal clause is Clause 6(a) of the lease deed. The clause referred to in the instructions is equally significant. Indeed, the latter merely provides for the mechanism to recover the unearned increase from the original lessee. The fact that the same group of persons or Directors/promoters/ shareholders would be and are associated with the transferee company does not cease to be a case of transfer or exempted from payment of UEI, as envisaged in Clause 6(a) of the lease deed. Rather, Clause 2(d) of the policy, noted above, makes it expressly clear that unearned increase be charged irrespective of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer defined under Section 5 of the TPA. Section 5 of the TPA reads thus: "5. "Transfer of property" defined.- In the following sections "transfer of property" means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself, and one or more other living persons; and "to transfer property" is to perform such act. In this section "living person" includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals." 11. The relevant clause II(4)(a) in the perpetual leases subject matter of this appeal is very wide. It not only covers transfers but also parting with possession. Therefore, the transfer contemplated by the said clause is much wider than what is defined under Section 5. Importantly, Section 5 clarifies that nothing contained therein shall affect any law for the time being in force in relation to the transfer of property to or by companies. Therefore, Section 5 of the TPA will not be of any assistance to the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
