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2014 (4) TMI 1272 - HC - Indian LawsLiability to pay unearned increase - Initiation of action to determine the perpetual lease-deed executed in favour of Jindal Strips Limited - non-satisfaction of demand made - HELD THAT:- In the present facts it is obvious that no consideration whatsoever has passed. It is a case of reorganisation of business - the impugned order relies on Clause 2(d) of 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. There is no specific Clause of the Policy dealing with a case of de- merger. The facts of the present case are somewhat 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 reading of Clause 6(a) of the perpetual lease and the policy for unearned increase. Even in equity no such amount can be claimed by DDA - Appeal is allowed.
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