TMI Blog2019 (2) TMI 1735X X X X Extracts X X X X X X X X Extracts X X X X ..... ings recorded for determining the lease and approved by the learned writ Court is a perverse and incorrect finding. The fact of lack of printing press alleged and the finding recorded is a proper finding based on the facts and circumstances of the present case and merely because after the actions were initiated by inspection and issuance of show cause notice on 26th September, 2016 and 10th October, 2016 if some publication activity both in the form of digital or printing is carried out that would not debar or prevent the respondents from determining the lease finding the same to have been breached continuously at least for a period of 8 years and accordingly, we see no reason to uphold the first objection raised RE-ENTRY CLAUSE - HELD THAT:- Except for contending that the paper publication has commenced and the breach with regard to printing activity has been rectified by publication of the newspaper in the form of a web edition and by printing in the Noida press, other breaches with regard to misuse of the land and unauthorized constructions having been taken place is not rectified and if the allegations of transfer of 100% shares of the appellant company to Young India h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted voluminous documents and replies to these notices which made allegations of unauthorized construction, unauthorized permission to Akash Gift Gallery, clandestine transfer for ulterior motive etc. and the petitioners had in fact admitted the position with regard to there being no press activity and admitted non-publication of the newspaper due to financial trouble for more than eight years. It was only when the breach proceedings took place that press was installed, licence obtained and publication commenced after 24th September, 2017. The appellant also do not deny the fact about there being unauthorized occupation by Akash Gift Gallery, pendency of eviction proceeding. If all these factors are taken note of and a decision is taken by the respondents to say that the dominant purpose for which the lease was granted has been violated and there has been misuse of the conditions of the lease, in the absence of mala fides or ulterior motive having been established, the writ court has rightly refused to interfere into the matter - there are no reason to make any indulgence into a reasonable order passed by the writ court in the facts and circumstances of the present case. Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struction of a 5 storeyed building to enable the appellant company to establish its press and office for publication of the newspaper. It is said that vide letter dated 19th February, 1964, the appellant company expressed its desire for subletting certain portion of the building which according to the appellant was in excess of their requirements for newspaper publication and, therefore, after paying an additional premium of ₹ 4,46,536/- sanction for subletting was granted and a perpetual lease in this regard was also executed on 10th January, 1967. Various other terms and conditions were also incorporated which would be referred to as and when required in the subsequent parts of this judgment. 4. It is further the case of the appellant that Clause III(7) of the perpetual lease dated 10th January, 1967 stipulate the manner in which different floors of the building were to be used and it was agreed to between the parties that the premises shall be used in the following manner:- (i) Basement and anyone floor of the building shall be used for the purpose of housing the members and the first floor of the building for the press and offices of the lessee for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premises on 14th September, 2016. Further, records indicate that certain communications were made for production of certain documents, like, certified copy of sanction plan, completion plan of the local bodies etc. and finally records indicate that inspections were carried out in the premises in question on 26th September, 2016 and a breach notice was issued on 10th October, 2016 pointing out certain breaches. In the meanwhile on 26th September, 2016 vide AnnexureP/12, Sh.Motilal Vora is said to have made a communication to the departmental authorities in response to the notice issued on 15th September, 2016 wherein he communicated that the basement and fourth floor of the building are being used for press and offices of the lessee and he was pleased to inform that the appellant has taken steps to resume newspaper publication and with this objective in mind, a Editor-in-Chief has been appointed in August, 2016 and preparations are in full swing to resume publication of the newspaper in the financial year 2016-17. 6. Be that as it may, after the breach notice was issued as indicated hereinabove on 10th October, 2016, the appellant is said to have replied to the same on 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018 a show cause notice was issued to the appellant vide Annexure-P/19 and in this notice various factors with regard to the breaches which was found by the inspecting team on 9th April, 2018 were pointed out and in this notice it was indicated that the Committee observed that no printing press was functioning anywhere in the premises, no paper stocks were found anywhere and various other factors noted by the inspecting team were communicated to the appellant. The appellant is said to have replied to this notice on 16th July, 2018 vide Annexure-P/20 and communicated that because of financial crisis which was beyond the appellant‟s control and court decreed VRS, press operation had to be temporarily suspended. The intention was to revive the newspaper and all efforts are being made to revive publication of the newspaper. It was said that the three-member Committee did not visit the area in the basement where the printing press was installed where stocks of paper were also available. It was also communicated in this reply that another press has been installed near the basement now and application for license has been submitted to the competent authority. The fourth floor is be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to be interfered with. 12. Dr.A.M.Singhvi pointed out that primarily the reason for determination of the lease and the order for re-entry, as is evident from the order passed on 30th October, 2018 are:- i) No pr (Eviction of Unauthorized Occupants) Act, 1971. 13. With regard to the first reason enumerated by the learned writ Court, that is, holding that there is no press activity in the demised premises, Dr.Singhvi argued that this finding is totally perverse, contrary to the material and evidence available on record and not at all tenable. He argued that in the first show cause notice issued on 10th October, 2016, based on the inspection conducted on 26th September, 2016, there was no whisper or any allegation made to the effect, no printing/press activity being operational in the premises in question. He referred to the show cause notice dated 10th October, 2016, the reply thereof submitted by the appellant on 19th November, 2016 and emphasized that in the show cause notice such an allegation was never levelled and in fact the allegations levelled pointing out the breach were entirely different, namely, misuse of the premises to the ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g commenced on 14th November, 2016, on 12th August, 2017 the digital version of Qaumi Awaaz in Urdu commenced and digital version of NavJivan in Hindi with effect from 28th August, 2017. The weekly newspaper National Herald on Sunday also resumed publication on 24th September, 2017, it was said that it was printed from a press in Noida. Further pointing out instances of 8 similar allottees or lessees being given land on the same street for the purpose of newspaper publication also not actually printing the newspaper in the premises but printing them either in Noida or Shalimar Bagh, it was argued that the newspaper published by the appellant every Sunday was printed from a press in Noida and, therefore, the contention that there is no printing activity in the premises in question is totally perverse and an uncalled for finding. It was argued that merely by getting the printing work done at Noida, the terms and conditions of the lease is not violated, as in the demised premises various newspaper publications related work are being carried out by the editorial staff, reporters etc. 15. He emphasized that when the impugned order was passed on 30th October, 2018 by the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity and approved by the learned writ Court is unsustainable, perverse and a misconceived finding. 17. The learned Senior Counsel then invited our attention to the second ground that weighed with the learned writ Court for holding there to be breach of the terms and conditions of lease, that is, total silence with regard to the extent of circulation of the newspaper published by the appellant company and there being no material to show that any circulation or data are available to indicate the extent of circulation. He took us through various reports available on record to canvass his contention that there are documents to show circulation figures of the newspaper. He referred to the certificates available on record in this regard issued by the Audit Bureau of Circulation‟s communication dated 7th September, 2018 to indicate that these documents were available and the fact about circulation were brought to the notice of the authorities concerned and in total disregard to these documents action has been taken by holding that there is no circulation or no record or material to show circulation. It was argued that even these documents are totally ignored and given a go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pattern of the appellant company, if evaluated in the backdrop of a well settled doctrine of contra proferentem, would not change the right to ownership of the property by the appellant company and the finding recorded by the authorities and the learned Single Judge to say that change in the shareholding results in change of ownership of the company, according to Dr.Singhvi, is a perverse and illegal finding. He argued by placing heavy reliance on the judgment of Bacha F. Guzdar (supra) to canvass the legal proposition, that is, a shareholder has got no interest in the property of the company even though he has a right to participate in the profits of the company and to the dividends decided by the company, the interest of the shareholders either individually or collectively does not amount to anything more than a right to profit of the company. A company is a juristic person distinct from the shareholders. It is the company which owns the property and not the shareholders. Referring to the law laid down by the Supreme Court in the case of Bacha F. Guzdar (supra), the learned Senior Counsel argued that there is nothing in the Indian Law to warrant the assumption that a shareholder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as-85 and 86 of the said judgment, Hon‟ble Supreme Court has clearly held that for challenging such an order, the remedy available under the PP Act is not applicable and by holding to the contrary the learned writ Court has committed an error. In support of the aforesaid contentions, he invites our attention to the following judgments to say that there was no alternate remedy available and the writ petition was maintainable. The judgments are:- (i) Dwarkadas Marfatia vs. Board of Trustees, (1989) 3 SCC 293 (ii) Whirlpool Corporation vs. Registrar of Trademarks, Mumbai Ors., (1998) 8 SCC 1, (iii) ABL International Ltd. vs. Export Credit Guarantee Corporation of India, (2004) 3 SCC 55; and (iv) Noble Resources Ltd. vs. State of Orissa, (2006) 10 SCC 236 22. It was his contention that the learned writ Court by placing reliance on a judgment of the Supreme Court in the case of Ashoka Marketing Ltd. Anr. vs. Punjab National Bank Ors., (1990) 4 SCC 406 has held that the judgment in the case of Express Newspaper Ltd. (supra) will not apply. This, according to Dr. Singhvi, is an incorrect and improper finding and he further argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the so-called maximum shares of the appellant company is a company incorporated and having the benefit of Section 25 of the Companies Act and, therefore, the issue of the said company acquiring ownership or transfer of lease to said company is of no consequence and all these factors could not be considered for holding there to be transfer of the premises in question to a different entity. He argued that the authorities concerned while determining the lease on 30th October, 2018 and the learned writ Court while dismissing the writ petition on 21st December, 2018, misdirected itself, did not consider relevant facts and material and in a perverse manner, without application of mind, has proceeded to dismiss the writ petition which is unsustainable. 24. Apart from making oral submissions, the same has been reiterated again in the form of a written submissions submitted by Dr.Abhishek Manu Singhvi wherein following submissions have been made. 25. It is emphasized by Dr.Singhvi that certain facts stated in the list of dates and brief note submitted by the learned Solicitor General with regard to observations made by the Inspecting Committee on 13th September, 2018 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of shares without any malafide or ulterior motive. The theory of lifting of the corporate veil have been applied in the cases relied upon by Mr.Tushar Mehta based on the peculiar facts of those cases and, therefore, they cannot be applied in the present case. 28. As far as the grounds of malafide or ulterior political motive in taking the impugned action is concerned, Dr.Singhvi relied upon the activities of 8 newspaper publishers functioning in the same area who were also not carrying out any printing activity in the area but are getting their newspapers printed in premises or establishments situated in Noida and other places and commercial activities being carried out by them in the premises. It is said that by singling out the appellants for taking action, the malafide intention and ulterior motive of the respondents are clearly made out. The learned Senior Counsel, therefore, submitted that the glaring discrimination and political motive in only singling out the appellants is writ large and, therefore, the grounds of malafide should have been upheld by the writ Court. SUBMISSIONS OF LEARNED SOLICITOR GENERAL 29. Refuting each and every contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... breach of the covenant. . (13) The lessee shall not be entitled to sub divide the demised premises or transfer by sale, mortgage, gift or otherwise, the said premises or buildings erected thereon or any part thereof without obtaining the prior approval in writing of the lessor or such officers or body as the lessor may authorize in this behalf and all transferees shall be bound by all the covenants and conditions herein contained and be answerable in all respect therefor. 30. From the aforesaid, it is clear that the purpose for which the permission and the lease was granted is to have a press in the basement or any floor of the building and the other floors could be used for commercial purpose other than restaurant, cinema halls, hotels, etc. except canteen. Even though initially the appellants were to use the basement and the first floor for press and its office but subsequently on a request made by the Chairman of the company Sh.Motilal Vora on 13th April, 2011 certain modifications were made and the basement and any one floor was permitted to be used for press and office and the remaining four floors for letting out to other commercial concerns a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no publication of the newspaper and the printing press was non-functional during the period 2008-2016. It was only after the first notice for inspection was issued in September, 2016 that the respondents to pre-empt any action being taken by the authorities, restarted the printing activity as is evident from the reply submitted by Sh.Motilal Vora on 26th September, 2016. He argued that once when the inspection took place in September, 2016, there was breach of the terms and conditions of the license inasmuch as no printing activity was being carried out and when the entire action continued after this inspection and issuance of show cause notice on 10th October, 2016 by issuance of the second, third and fourth show cause notice, opportunity of hearing and culmination on 31st October, 2018 by passing of the impugned order, the action taken has to be considered as a continuing action based on various inspections and the show cause notices issued. Sh.Tushar Mehta argued that the contentions of the appellants that in the first two show cause notices issued, there was no mention of press activity being discontinued and, therefore, it could not form the basis for holding that there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny was also shown as 5-A, Bahadur Shah Zafar Marg, namely, the premises in question. He argued that on 23rd October, 2010 when Young India was founded, 5-A, Bahadur Shah Zafar Marg was the premises in possession of the appellant but surprisingly it also constitutes the registered address of another company, namely, Young India Ltd.‟. Young India‟ had an authorized share capital of 5,000 shares of ₹ 100/- each valued at ₹ 5 lakhs and the paid up share capital was 1,100 shares of ₹ 100/- each valued at ₹ 1,10,000/-. At the time of incorporation, Young India had two shareholders, namely, Sh.Sam Pitroda and Sh.Suman Dubey, both having 550 shares each of the face value ₹ 100/- each. It is argued that All India Congress Committee ( AICC‟) claimed to have lent a sum of ₹ 90.21 crores to AJL and as on 15th December, 2010, it was said that AICC was entitled to receive this amount from the appellant company. On 13th December, 2010, Sh.Rahul Gandhi was inducted into Young India as its member and immediately after three days, on 16th December, 2010 AJL made a book entry in its accounts by substituting Young India in place of AICC as the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice was issued by the Income Tax Department to Young India and thereafter, notices to the individual shareholders of Young India with regard to re-opening of assessment of tax. Sh.Tushar Mehta argued that this Court should take note of these transactions, apply the principle of lifting of the corporate veil‟ and then considered the question of as to who is the actual beneficiary of all these transactions, whether the premises in question still continues to be in the ownership of AJL and what is the effect of all these transactions. He argued that even though the judgments in the case of Bacha F. Guzdar (supra), Vodafone International Holdings (Supra), etc. lays down the legal proposition as canvassed by Dr.Singhvi but if the transaction as detailed by him hereinabove, the short period within which the entire transaction took place, the nature of transaction and the theory of lifting of the corporate veil is applied, this Court would find that technically the entire lease-right to enjoy the property stands transferred and it is because of this reason that the learned writ Court emphasized that the manner in which the transfers took place to say that the modus operandi emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support of his contention with regard to the dominant purpose theory, he referred to the following judgments:- i) Allensbury Engines Pvt. Ltd. vs. Ramkrishna Dalmia Ors., (1973) 1 SCC 7 ii) Boddu Narayanamma vs. Venkatrama Aluminium Co. Ors., (1999) 7 SCC 589 iii) Precision Steel Engineering Works Anr. vs. Prem Deva Niranjan, (2003) 2 SCC 236 iv) Waller and Son Ltd. vs. Thomas, (1920) 1 KB 541 v) Feyereisel vs. Turnidge, 1949 F. 614 vi) T. Dakshinamoorthy vs. Thulja Bai Anr., CMP No.4955/1950, Madras High Court 37. With regard to the non-grant of time for rectification, the same has been addressed by the respondents primarily in their written arguments and with regard to the fact of not mentioning anything about no press activity in the first three show cause notices, it is the case of the respondents that even after the first show cause notice was issued to the appellants after inspection on 26th September, 2016 in the reply submitted by Sh.Motilal Vora on 26th September, 2016 certain facts are stated to indicate that the press activity would start in the year 2016-17. This, according to the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se and if after the breach was pointed out and when action was being taken for breach, a mere formal rectification of a small part of the breach in the facts and circumstances of the case will not bring the case within the purview of Clause XIII (6). It is argued by him that the appellants could take advantage of Clause XIII (6)(b) only if the breach was for a short period and rectified immediately on being pointed out. In this case, the breach was not only continued for a long period of time and even the rectification done, in the facts and circumstances, is only a farce or an act on the part of the respondents to preempt action for breach. Even the certificates issued by the Audit Bureau of Circulation on 7th September, 2018 available at pages-677-679 of the paperbook would show that they pertain to the circulation figures for January June, 2018 and not prior to that and these certificates further reveal that between the period January June, 2017 and July December, 2017, the appellants were not even members of the Audit Bureau of Circulation. It is argued by learned counsel for the respondents that these certificates do not help the appellants in overcoming the impediment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im at the time of hearing are contained in paras-2 to 5 of the order passed in W.P.(C) No.8482/2018 and merely if judicial notice is taken of these facts by this Court based on the facts recorded by a co-ordinate Bench of this Court, in the absence of categorical or specific denial of the same by the appellants or contending that these are false or incorrect fact, there is nothing in law which debars the respondents from canvassing these aspects of the matter only for the purpose of applying the principle of lifting of the corporate veil to understand the modus operandi about transfer and the reason which weighed with the respondent to say that there is transfer of the property to a third person to attract the provisions of Clause III(13) of the lease and to bring the transfer within the ambit of a prohibited transfer. 41. Sh.Tushar Mehta further invited our attention to the perpetual lease agreement and argued that the lessee is not entitled to transfer by sale, mortgage, gift or otherwise, the premises or the building erected thereupon without prior approval in writing and a similar clause in the a lease agreement was considered by a co-ordinate Bench of this Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the petition was not maintainable and the impugned order could be challenged in a statutory proceedings under the PP Act. 43. Sh.Tushar Mehta invited our attention to the judgment in the case of Ashoka Marketing Ltd. (Supra) and the observations made in para-34 thereof and submitted that the scheme of the PP Act and the Rules have been considered in paras-33 and 34 by the Hon'ble Supreme Court to contend that the law laid down in the case of Ashoka Marketing Ltd. (Supra) clearly provides that the PP Act can be invoked in the present case. 44. Accordingly, Sh.Tushar Mehta argued that in the facts and circumstances of the present case, the order passed by the learned writ Court which is based on due appreciation of the evidence and material that came on record, does not call for any reconsideration now. Concurrent findings both on questions of fact and law having been recorded by the departmental authorities while passing the order dated 30th October, 2018 and by the learned writ Court in the impugned order does not call for any interference now at this stage in these appeals. Letters patent appeals are nothing but exercise of powers akin to one available to this Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricated, untrue etc. They only say that certain facts have been stated without filing a counter affidavit. If the facts so stated, cognizance of which have been taken by the writ Court, are based on materials available in proceedings held before the L DO and by a co-ordinate Bench of this Court in a writ petition, we see no reason as to why we cannot take cognizance or judicial notice of these facts and proceed to consider them for deciding the lis in question, particularly, when there is no specific or categorical denial of them even orally before us at the time of hearing. Accordingly, we are not impressed by the submissions by Dr.Singhvi to say that as no counter affidavit has been filed, therefore, most of the facts stated by Sh.Tushar Mehta should not be taken into consideration. 47. Having held so, we may now proceed to address each issue canvassed before us in seriatim as have been narrated hereinabove. NO PRESS ACTIVITY 48. The first objection of the appellants were to the finding recorded by the learned writ Court in the impugned order passed on 22nd December, 2018 pertaining to there being no press activity in the premises in question, that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by the appellants and, in fact, an admission by them that no printing activity was being carried out in the premises at that point of time. That apart, when we go through the four show cause notices available on record issued on 10th October, 2016, 5th April, 2018, 18th June, 2018 and 24th September, 2018 and the reply filed thereto, we find that various breaches were pointed out in all these show cause notices and they were replied to by the appellant company and the cumulative admitted position that can be made out from the reading of these documents are as under. 50. When the premises was inspected on 26th September, 2016, no press activity was being carried out in the area. Press activity and publication of the newspaper was suspended right from the year 2008 and all the employees were granted VRS. After the communication dated 26th September, 2016 was made by Sh.Motilal Vohar digital publication of the English Versions of the newspaper, National Herald commenced from 4th November, 2016. 51. Digital version of Urdu edition Qaumi Awaz commenced on 12th August, 2017. Digital version of Navjivan, that is, Hindi version commenced on 28th August, 2017 and the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken not based only on the show cause notice dated 10th June, 2016, the impugned action is taken based on four show cause notices issued, all the replies and documents submitted by the appellants and after taking note of the totality of the facts and circumstances that came on record based on a combined analysis and scrutiny of all the four show cause notices and their replies, the breach has been recorded. The breach had been continuing right from the year 2008 till commencement of the digital publications on 14th November, 2016 and, therefore, if action is taken by holding that there has been violation of the terms and conditions of the lease deed for a period of more than 8 years and that only to retain the building and to pre-empt the respondents from taking any action, the socalled digital publications and weekly publications were commenced after inspection conducted on 26th September, 2016 is taken note of, we have no hesitation in holding that the breach of there being no printing activity or paper publication for a long period is established and this would mean and comes within the purview of breach of the terms and conditions of the license. The principles of law canvassed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding a conclusive finding to the effect that no press has been functioning in the said premises for 8 or 10 years and is being used only for commercial purpose which violates a clause of the lease agreement, we see no reason to hold that the findings recorded for determining the lease and approved by the learned writ Court is a perverse and incorrect finding. The fact of lack of printing press alleged and the finding recorded is a proper finding based on the facts and circumstances of the present case and merely because after the actions were initiated by inspection and issuance of show cause notice on 26th September, 2016 and 10th October, 2016 if some publication activity both in the form of digital or printing is carried out that would not debar or prevent the respondents from determining the lease finding the same to have been breached continuously at least for a period of 8 years and accordingly, we see no reason to uphold the first objection raised on various grounds as are discussed hereinabove. RE-ENTRY CLAUSE 55. As far as the contention of the appellant to the effect that once the defects having been rectified and, therefore, the appellants are entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dwell into this aspect of the matter in any further detail. REGARDING TRANSFER OF SHARE/PROPERTY 57. The next issue which was vehemently canvassed before us on behalf of the appellant was with regard to the transfer of shareholding from AJL to Young India. It is the case of the appellant that mere transfer of shareholding cannot be a ground for holding that to be change of ownership or transfer of the lease. Placing reliance on the judgment of Bacha F. Guzdar (supra) detailed submissions were made by Dr. Singhvi to emphasize that a shareholder only acquires a right to participate in the profit of the company. He gets no interest in the property of the company and even if the shareholders of the company do have some voice in administering the affairs of the company, but their interest is limited to sharing the profits of the company and the company, a juristic person, which is distinct from the shareholders still owns the property. It is argued that in the backdrop of this legal position even if some of the shares of the company have been transferred that would not mean that the ownership of the leased premises also get transferred to Young India Ltd. It was emp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciated Law Journals for the period 2002 to 2011 was transferred to Young India. Three days thereafter, on 21st December, 2010, a Board Meeting of AJL called for an EGM which was subsequently held on 24th December, 2010 and on the said date a loan of ₹ 1 crore was received by Young India from another company M/s Dotex and thereafter on 28th December, 2010 i.e. within a week a formal deed of assignment was executed by AICC assigning the loan of ₹ 90 crores in favour of Young India. Immediately thereafter on 21st January, 2011, an EGM of Associated Law Journal was held approving fresh issue of 9.021 crores shares to Young India and on 22nd January, 2011 i.e. on the next day the second Managing Committee of Young India was held in which Smt. Sonia Gandhi, Mr. Motilal Vohra and Mr. Oscar Fernandes were appointed as Directors and the 550 shares of the existing shareholders of Young India - Suman Dubey and Sam Pitroda were transferred to Smt.Sonia Gandhi and Mr.Oscar Fernandes and on the same day fresh allotment of Young India shares were made in the following manner: (a) 1,900 shares having paid up value of ₹ 1,90,000/- to Shri Rahul Gandhi, (b) 1,350 shares with a paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uires a right to participate in the profit of the company but he does not acquire any right or interest in the assets of the company. It has been held that by investing money in the purchase of shares the shareholder does not get any right to property of the company though he acquires a right in the profits if and when the company decides to divide it. Even though the shareholder of the company have the sole determining voice in administering the affairs of the company and are entitled to as provided in the Articles of Association to declare the dividends and distribute the profits of the company but their right individually or collectively is nothing more than participating in the profits of the company, it is held that the company is a juristic person and is distinct from the shareholders. In fact, it is the company which owns the property and not the shareholder. The judgment further goes to say that there is nothing in the Indian Law to warrant the assumption that the shareholder who by his share buys any interest in the property of the company which is a juristic person entirely different from the shareholder. This in fact is the law laid down by the Constitution Bench of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of Bacha F. Guzdar (supra) relied upon by Dr.Singhvi is referred to and finally the consideration to be made is culled out in para 19 of the judgment in the following manner: 19. As already stated, the question for consideration is whether in the given fact situation the transfer of entire shareholding and change of all the Directors of a newly formed company to which lease rights were transferred by a declaration that it was mere change of form of partnership business without any transfer for consideration being involved can be taken as unauthorised transfer of lease which could be declared void. 63. Thereafter, the learned Court proceeds to discuss various issues and takes note of the fact that the transaction in fact technically does not sell the lease right but only shares are transferred and in para 24, it has been held that the principle of lifting of corporate veil as an exception to the distinct corporate personality of a company and its member is recognized not only to unravel tax evasion but also to protect public interest which is of paramount importance and to prevent a corporate entity in attempting to evade legal obligation. It has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... athubhai Shah v. Union of India, (1976) 4 SCC 108; Geomin Minerals Mktg. (P) Ltd. v. State of Orissa, (2013) 7 SCC 571. Ed.: See also Thressiamma Jacob v. Deptt. of Mining Geology, (2013) 9 SCC 725 : (2013) 4 SCC (Civ) 559.] Cases of Arun Kumar Agrawal v. Union of India [Arun Kumar Agrawal v. Union of India, (2013) 7 SCC 1] (Vedanta case), Balco Employees' Union v. Union of India [Balco Employees' Union v. Union of India, (2002) 2 SCC 333] (Balco case) and Vodafone International Holdings BV v. Union of India[Vodafone International Holdings BV v. Union of India, (2012) 6 SCC 613 : (2012) 3 SCC (Civ) 867] cited by the learned counsel for the respondent have no application to the present case once real transaction is found to be different from the apparent transactions. In fact, the principle of law laid down in Vodafone case [Vodafone International Holdings BV v. Union of India, (2012) 6 SCC 613 : (2012) 3 SCC (Civ) 867] that the court can look to the real transaction goes against the respondent. 64. Finally in para 31, it is held by the Hon‟ble Supreme Court that while discerning the true nature of the entire transaction, the Court is not to merely see t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders acquiring the administrative right to administer property of more than 400 Crores. Even though Dr.Singhvi had argued that there is nothing wrong in such a transaction and it is legally permissible, but if we take note of the principles and the doctrine for which the theory of lifting of the corporate veil has received legal recognition, we have no hesitation in holding that the entire transaction of transferring the shares of AJL to Young India was nothing but, as held by the learned writ Court, a clandestine and surreptitious transfer of the lucrative interest in the premises to Young India. In fact, the contention of Dr.Singhvi has to be rejected and rightly so was rejected by the Single Judge even though without applying the principle of lifting of the corporate veil. In case the theory of lifting of the corporate veil, as discussed hereinabove, is applied and the transaction viewed by analyzing as to what was the purpose for such a transaction, the so called innocent or legal and permissible transaction as canvassed before us, in our considered view, is not so simple or straight forward as put before us, but it only indicates the dishonest and fraudulent design behind such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the PP Act will not apply and further that the order determining the lease by the Land and Development Authorities cannot be challenged before the Estate Officer as he is not a judicial authority and certain observations made by the Supreme Court in the Express Newspaper Pvt. Ltd. (supra) have been relied upon in this regard. However, the entire judgment in the case of Express Newspaper Pvt. Ltd. (supra) was considered by a Constitution Bench of the Supreme Court in the case of Ashoka Marketing (supra) and in para 30, 32, 34 and 36, the Constitution Bench lays down the following principle: 30. The definition of the expression unauthorised occupation‟ contained in Section 2(g) of the Public Premises Act is in two parts. In the first part the said expression has been defined to mean the occupation by any person of the public premises without authority for such occupation. It implies occupation by a person who has entered into occupation of any public premises without lawful authority as well as occupation which was permissive at the inception but has ceased to be so. The second part of the definition is inclusive in nature and it expressly covers continuance in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and lessee fall outside the purview of the Public Premises Act. On the other hand the said observations show that the learned Judge has held that the provisions of the Public Premises Act could not be invoked in the facts of that case. (emphasis supplied) xxx xxx xxx 34. Rule 5(2) of the Public Premises (Eviction of Unauthorised Occupants) Rules, 1971, requires the Estate Officer to record the summary of evidence tendered before him. Moreover Section 9 confers a right of appeal against an order of the Estate Officer and the said appeal has to be heard either by the District Judge of the district in which the public premises are situate or such other judicial officer in that district of not less than ten years' standing as the District Judge may designate in that behalf. It shows that the final order that is passed is by a judicial officer in the rank of a District Judge. (emphasis supplied). 68. If we consider the Constitution Bench judgment of the Supreme Court in the case of Ashoka Marketing (supra) as is reproduced hereinabove, it is clear that it is because of the peculiar facts and circumstances in the case of Express Newspaper Pvt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dressed. We may, however, clarify that the question of jurisdiction of the Estate Officer to decide whether there was any breach of the grant/lease, whether there was valid and justified determination was not raised before us during the course of arguments and is not being determined and decided. We have specifically mentioned this aspect in the judgment as we find that the appellant in the grounds of appeal has referred to the decision of the Supreme Court in Annamalai Club v. Government of Tamil Nadu, (1997) 3 SCC 169. 10. Another contention raised by the appellant was that the building constructed on the land is not public premises under Section 2(c) of the Public Premises (Eviction for Unauthorised Occupants) Act, 1971 because building was never given on lease and has been constructed by the lessee. In this connection, learned Counsel for the respondent No. 1 had drawn our attention to Clause 15 in the perpetual lease deed, which stipulates that the lessee on determination of the lease shall peacefully yield up the said land and the buildings thereon to the lessor. In view of the said clause, it cannot be said that the building constructed on the land cannot be regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenge. If the case in hand is analyzed in the backdrop of the jurisdictional power available to this Court under Article 226 of the Constitution, we find that in this case the finding with regard to no press activity being carried out in the premises for about ten years, misuse of land and 100% transfer of share to another company are all subject matters of four notices issued to the petitioner. The petitioner submitted voluminous documents and replies to these notices which made allegations of unauthorized construction, unauthorized permission to Akash Gift Gallery, clandestine transfer for ulterior motive etc. and the petitioners had in fact admitted the position with regard to there being no press activity and admitted non-publication of the newspaper due to financial trouble for more than eight years. It was only when the breach proceedings took place that press was installed, licence obtained and publication commenced after 24th September, 2017. The appellant also do not deny the fact about there being unauthorized occupation by Akash Gift Gallery, pendency of eviction proceeding. If all these factors are taken note of and a decision is taken by the respondents to say tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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