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TMI Blog2024 (5) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... ood terminated, per Section 201 - Moreover, OMDC, a subsidiary of BPMEL, is a separate juristic entity. The plea that the juristic entity should be ignored has not been raised or argued. The three leases, namely, Kolha-Roida, Thakurani and Dalki, had expired by effluxion of time in 1996, 2004 and 1994 respectively. At this distant point in time, when BPMEL has been non-operational and undergoing winding-up proceedings, we do not see any reason to even remotely consider the exercise of power under Section 457(1)(b) of the Companies Act, 1956 to sanction the Official Liquidator to carry on business of the company so far as necessary for winding up, or for that matter the Official Liquidator to appoint OMDC as agent to conduct business in the place of BPMEL. It is evident that entertaining any notion of lease renewal would be an exercise in futility, devoid of any practical or tangible benefit. The sheer magnitude of the liabilities involved renders the prospect of renewal implausible. Besides, the proposition advanced doesn t have any discernible plan or vision for the requisite financial, technical, and managerial support. BPMEL went into liquidation in 1996 and has been defunct for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court of Orissa at Cuttack, whereby Writ Petition No. 1852 of 2010 filed by the State of Odisha has been allowed setting aside the order of the revisional authority dated 02.02.2009. This judgment relates to one of the mining leases, namely, Kolha-Roida. TGP has also impugned the order dated 13.10.2023 by which its application for the review of the order dated 09.03.2023 was dismissed on the grounds of delay, and on the grounds of review not being made out. 5. The case has a long and chequered history. However, in view of the judgment that we are pronouncing, we shall only refer to the relevant facts. 6. Bird and Company Limited For short, Bird Co. was granted three mining leases, namely, Kolha- Roida, Thakurani and Dalki, for 30 years on 15.08.1926, 10.10.1924, and 10.10.1924 respectively, by the Raja of Keonjhar. The three leases were granted first renewal for a period of 20, 30, and 20 years with effect from 18.08.1956 to 18.08.1976, 01.10.1954 to 30.09.1984, and 01.10.1954 to 30.09.1974 respectively. The Kolha-Roida lease was thereafter renewed for the second time for 20 years from 15.08.1976 to 14.08.1996. The Thakurani lease was renewed for the second time from 01.10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to impose. 11. Vide a gazette notification dated 25.10.1980, the Government of India, in the exercise of power under Section 7 of the 1980 Act, transferred the undertaking of Bird and Co., along with right, title and interest, on or from the said date, to Bharat Process Mechanical Engineers Limited. For short, BPMEL. 12. OMDC, as a subsidiary of Bird and Co., had continued with the winning and mining activities. On 26.08.1983, BPMEL executed a power of attorney in favour of OMDC to do the mining and to comply with the applicable rules. 13. BPMEL subsequently became a subsidiary company of another government company Bharat Bhari Udyog Nigam Limited, which has since been renamed Braithwaite Burn and Jessop Construction Company Limited. 14. BPMEL became a sick company during the course of its business and was referred to the Board of Industrial and Financial Reconstruction For short, BIFR. under the Sick Industrial Companies (Special Provisions) Act, 1985. Vide order dated 27.07.2004, BPMEL was directed to be wound up since the attempts to revive it were unsuccessful. The High Court at Calcutta appointed an Official Liquidator vide order dated 27.02.2004. 15. UCO Bank had loaned and g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 14.08.1996, while that of Thakurani and Dalki ended on 30.09.2004 and 30.09.1994 respectively. 24. TGP contends that BPMEL had applied for renewal of Kolha-Roida lease on 14.07.1995 for 20 years. Vide order dated 16.11.2006, the application was rejected by the State of Odisha. BPMEL, which had already been directed to be wound up by the BIFR on 22.07.1996, did not file a revision. OMDC filed a revision application which was allowed by an order of remand passed by the revisional authority dated 02.02.2009. In effect, the order of rejection dated 16.11.2006 was set aside and the status quo was restored. Resultantly, the application filed by BPMEL was to be reconsidered. The order dated 02.02.2009 was challenged by the State of Odisha in Writ Petition No. 1852 of 2010, which was allowed by the High Court of Orissa at Cuttack, vide order dated 09.03.2023. TGP, as noted above, has filed an appeal challenging this order as well as the order dismissing the review petition. 25. As far as the lease of Thakurani is concerned, TGP claims that the renewal application was filed on 27.09.2003 and is pending. It is unclear who had filed the said application. Though TGP claims that the applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Development and Regulation) Amendment Act, 2015 (IO of 2015), namely, the 12th January, 2015, shall be deemed to have been granted for a period of fifty years. (2) The State Government, upon an application made to it in this behalf by the Government company or corporation at least three months prior to the expiry of the mining lease, shall, extend the period of the mining lease for further periods of twenty years at a time: Provided that the State government may condone the delay in making of such application. (3) Subject to sub-rule (1), all applications made by a Government company or corporation for renewal of mining leases and which were pending as on the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 (10 of 2015) shall be deemed to be applications for extension of the period of the mining lease and shall be disposed of in accordance with the provisions of sub-rule (2). (4) If an application for extension of a mining lease made within the time referred to in sub-rule (2), including any application for extension of mining lease submitted before the commencement of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment declaring that the subject leases have lapsed. For the same, reliance is placed on the judgment of this Court in Common Cause v. Union of India (2016) 11 SCC 455 . Thus, the submission is that, though the leases have been non-operational for nearly three decades, they have not lapsed. Rule 23 of the 2016 Rules permits the transfer of a mining lease or composite licence. The conditions of the said lease are satisfied as OMDC and BPMEL had filed affidavits required as per the Mineral Concession Rules, 1960 from BPMEL to OMDC. Relying on Section 446(2)(d) of the Companies Act, 1956, which is applicable to winding up proceedings not transferred under the Companies Act, 2013, it is submitted that the court can entertain and dispose of any question whether of law or fact that relates to or arises in the course of winding up of the company. In terms of Section 457(1)(b) and 457(2)(5)(2) of the Companies Act, 1956, the liquidator on sanction by the Court can carry on the business of the company so far as may be necessary for the beneficial winding up of the company. The liquidator has the power to appoint an agent to do business if the liquidator is unable to do business himself. Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors. of the Indian Contract Act, 1872. Moreover, OMDC, a subsidiary of BPMEL, is a separate juristic entity. The plea that the juristic entity should be ignored has not been raised or argued. 32. It is also an accepted and admitted position that pursuant to several decisions of this Court, penalties of approximately Rs.800,00,00,000/- (Rs. 800 crores) has been levied on OMDC in respect of the mines. OMDC s straitened circumstances do not permit it to pay the penalty. Unless it can raise the amount from third parties, it would be impossible for OMDC to continue the mining activities. Furthermore, TGP cannot compel OMDC, a separate juristic entity, to undertake the said exercise. BPMEL is not in a position to pay any amount. In these circumstances, the question of renewal of the three leases does not arise. 33. BPMEL was directed to be wound up by the BIFR in 1996 as the rehabilitation scheme was not financially viable. It took nearly eight years before the Official Liquidator was appointed in 2004. Notably, BPMEL has been non-operational for the last thirty years. However, as recorded above, the final winding-up order is still to be passed. The three leases, namely, Kolha-Roida, Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to bring this dispute to an end. Prolonging it any further, sans a feasible resolution in sight, would be otiose. 38. Thus, we allow the appeal filed by the State of Odisha and set aside the judgment dated 03.03.2020 passed by the High Court at Calcutta upholding the order of the Company Judge. The direction to constitute a High Powered Committee is set aside. The question of renewal of lease, would not be examined by the Company Court. For the same reasons, we dismiss the appeal filed by TGP against the order dated 09.03.2023 of the High Court of Orissa at Cuttack, whereby Writ Petition No. 1852 of 2010 filed by the State of Odisha was allowed setting aside the order passed by the revisional authority dated 02.02.2009. Put simply, the order of the State of Odisha rejecting the request for renewal of Kolha-Roida lease is upheld. We clarify that applications filed for renewal of Thakurani and Dalki leases will be treated as rejected or dismissed. 39. The proceedings will continue before the Company Court of the High Court at Calcutta in accordance with the law. The workmen and TGP will be entitled to raise all pleas and contentions as are available in terms of the Companies Act, 195 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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