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2020 (8) TMI 584 - HC - Companies LawTransfer of immovable property - payment of standard transfer charges - direction to extend the time for building completion by two years from the date of transfer of the said plot in the name of the applicant. Whether this Court is empowered to grant reliefs as prayed by the applicant under Section 446(2) of the Companies Act, 1956 or not? - HELD THAT - A perusal of the record indicates that on 28th January 1978 Transpower Corporation, a Partnership Firm was constituted. On 7th March, 1980 a plot bearing No.B-16 was allotted by MIDC vide agreement executed between MIDC and said Transpower Corporation. On 7th March, 1982 MIDC handed over possession of the said plot to the said Transpower Corporation. On 04th May, 1980, Transpower Corporation was converted into Private Limited Company under the name of Transpower Engineering Pvt. Ltd. On 27th November, 1991, the said Transpower Engineering was converted into a Limited Company which company came to be wound up subsequently (hereinafter referred to as the Company in Liquidation). The Form No.23 was filed with the Registrar of Companies in that regard. After construing Section 456(1) of the Companies Act, 1956, this Court held that power of Company Court is vast. The leasehold rights of the company are an asset of the company which is capable of sale through the process of liquidation. The Official Liquidator has power to take possession even MIDC property given on lease and to sell the subsisting leasehold rights during the the Court of winding up. Under Section 457(1)(c) of the Companies Act, 1956, the Official Liquidator in winding up by the Court shall have power with the sanction of Court to sell the immovable property by public auction or private contract with power to transfer the whole thereof to any person or body corporate, or to sell the same in parcels. This Court is of the view that the issue as to whether MIDC is entitled to recover any premium on the transfer of the property sold by sanction of the Company Court in respect of assets of the company in liquidation is an issue incidental and arise in the course of the winding up of the company and thus, can be tried by the Company Court under Section 446(2) of the Companies Act, 1956. Whether any of the transfer of the said property of the said plot was a formal transfer or non-formal transfer or whether such transfer was voluntarily or involuntarily? - HELD THAT - A perusal of the record indicates that the said partnership Transpower Corporation was converted into Transpower Engineering Pvt. Ltd. On 4th May, 1980 and the said Private Limited Company was subsequently converted into a Limited Company on 27th September, 1991 which is now in liquidation. A copy of the Form No.8 was also filed with the Registrar of Companies, Maharashtra, Mumbai which is also placed on record. There is thus no substance in this submission made by the learned Counsel for MIDC - There is no substance in the submission of learned Counsel for the MIDC that MIDC was not aware of conversion of said Transpower Corporation in Transpower Engineering Pvt. Ltd. and thereafter by the Transpower Engineering Pvt. Ltd. to Transpower Engineering Limited. On perusal of the letter dated 29th January, 1992 annexed at page 151 of the pleadings, it is clear that on the basis of fresh incorporation certificate, the MIDC had noted the change in its records, in name of Transpower Engineering Ltd. MIDC informed that further correspondence would be in the name of Transpower Engineering Limited. - the factum of change in the name of M/s. Transpower Engineering Pvt. Ltd. to M/s. Transpower Engineering Limited on the basis of fresh Certificate of incorporation is not disputed by the MIDC. The amalgamation of Plot No.B-16 had taken place with the Plot Nos.B-25, B-26 and B-27 in the year 1981. Since this Court is of the view that the demand made by the MIDC in this proceeding towards differential premium for the first transfer between Transpower Corporation and Transpower Engineering Pvt. Ltd. itself barred by law of limitation, the MIDC would not be thus entitled to recover even standard transfer charges in respect of transfer of plot in favour of Transpower Engineering Pvt. Ltd. Whether MIDC is entitled to recover differential premium on the transfer of the said land by Transpower Engineering Pvt. Ltd. to Transpower Engineering Ltd. or not or can recover only standard transfer charges? - HELD THAT - This court is of the view that such transfer of the leasehold rights of the company in liquidation in favour of the successful bidder pursuant to an order passed by the Company Court would not be a voluntary transfer but would be an involuntary transfer and would attract the payment of standard transfer charges only. It is not in dispute that this Court has already permitted the execution of the deed of assignment in favour of the Applicant in respect of said leasehold right as a nominee of the successful bidder. The Applicant has already paid the entire consideration amount to the Official Liquidator and is already put in physical possession thereof. The Official Liquidator has also settled the claims of various creditors or has distributed dividend out of the said sale proceeds. Whether MIDC can raise demand for payment of extension charges for allegedly not carrying out development of the said plot by Transpower Corporation or thereafter by Transpower Engineering Pvt. Ltd. within the time prescribed or not? - HELD THAT - The Applicant itself seeks direction against Respondent No.2 to extend the time for completing a building by two years from the date of transfer in the plot No.B-16 in the name of Applicant. The Applicant is thus liable to pay such extension charges as contemplated in various circulars issued by MIDC. It is not the case of the Applicant that the Applicant is not liable to pay any extension charges to the Respondent No.2. This Court accordingly directed the Official Liquidator to consider the payment of extension charges while adjudicating the affidavit of proof of debt and decide the quantum of extension charges, if any, payable and for that period whether up to the date of winding up or any earlier period or it is continuing. - MIDC is therefore at liberty to file its affidavit of proof of debt for claiming quantum of extension charges as well as for payment of standard transfer charges for transfer of leasehold rights by the company in liquidation in favour of the successful bidder/its nominee as it deems fit with the Official Liquidator within four weeks from today. Payment of differential premium now demanded by MIDC on the transfer of the leasehold right from the company in liquidation to the successful bidder or its nominee - HELD THAT - This Court is already of the view that the MIDC would be entitled to demand only standard transfer charges and not differential premium @ 30%. Such quantification in respect of standard transfer charges to be decided by the Official Liquidator subject to the issue of limitation. The Official Liquidator is directed to decide both these claims i.e. for payment of extension charges and standard transfer charges within a period of 12 weeks from the date of Respondent No.2 filing an affidavit of proof of debt if found within the period of limitation or if there is any delay in filing, within 3 months from the date of condonation of delay, if any, by this Court. Application disposed off.
Issues Involved:
1. Transfer of immovable property and payment of standard transfer charges. 2. Extension of time for building completion. 3. Recovery of differential premium and other charges by MIDC. 4. Jurisdiction of the Company Court under Section 446(2) of the Companies Act, 1956. 5. Nature of the agreement between Transpower Corporation and MIDC (lease vs. license). 6. Limitation period for MIDC's claims. Detailed Analysis: 1. Transfer of Immovable Property and Payment of Standard Transfer Charges: The applicant sought an order to transfer the immovable property (Plot No.B-16) in their name and pay standard transfer charges. The Court held that the transfer of leasehold rights from the company in liquidation to the applicant was an involuntary transfer and only standard transfer charges were applicable. The MIDC was directed to file an affidavit of proof of debt for claiming standard transfer charges, which the Official Liquidator would adjudicate. 2. Extension of Time for Building Completion: The applicant requested an extension of time for building completion by two years from the date of transfer. The Court granted this extension, subject to the payment of extension charges as decided by the Official Liquidator. The MIDC was directed to file a claim for extension charges, which would be adjudicated by the Official Liquidator. 3. Recovery of Differential Premium and Other Charges by MIDC: The MIDC claimed differential premium for the transfer from the partnership firm to the company in liquidation and from the company in liquidation to the applicant. The Court held that the claim for differential premium for the first transfer was barred by limitation, as more than 40 years had passed since the conversion of the partnership firm into a private limited company and more than 29 years since the conversion into a limited company. The Court also held that the transfer of leasehold rights by the Official Liquidator was an involuntary transfer, attracting only standard transfer charges and not differential premium. 4. Jurisdiction of the Company Court under Section 446(2) of the Companies Act, 1956: The Court held that it had jurisdiction under Section 446(2) to decide any question arising in the course of winding up, including the issue of transfer charges and extension charges. The powers under Section 446(2) are wide enough to include the power to grant declarations and issue necessary directions related to the disposal of the property of the company in liquidation. 5. Nature of the Agreement Between Transpower Corporation and MIDC (Lease vs. License): The Court analyzed whether the agreement between Transpower Corporation and MIDC was a lease or a license. It concluded that the agreement created a lease, as it allowed the creation of mortgage and possession of the plot for construction purposes. The intention of the parties, as evidenced by subsequent conduct and correspondence, indicated the creation of leasehold rights. 6. Limitation Period for MIDC's Claims: The Court held that MIDC's claim for differential premium for the first transfer was barred by limitation, as no claim was made within the statutory period. The Court applied the principle that if a claim is not legally recoverable in a civil suit due to limitation, it cannot be entertained. Conclusion: The Court granted the applicant's request for the transfer of the property and extension of time for building completion, subject to the payment of standard transfer charges and extension charges as adjudicated by the Official Liquidator. The MIDC's claim for differential premium was rejected as time-barred, and the Court affirmed its jurisdiction to decide these matters under Section 446(2) of the Companies Act, 1956.
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