TMI Blog2017 (12) TMI 1809X X X X Extracts X X X X X X X X Extracts X X X X ..... of the original lessee. The deed of lease describes the original lessee as a legal entity which would deem to include its successors and assigns unless repugnant to the context. Clause (vii) of the lease deed prohibits assignment without prior written consent of the first respondent. The description of the original lessee to include its assigns in the lease deed would necessarily exclude any assignee of the original lessee, when the original lessee has acted in breach of Clause (vii). A scheme of amalgamation or arrangement documents the compromise arrived at between the parties to the scheme inter vivos. A scheme may be between two or more companies. It may also be between a company and its shareholders or creditors. A proceeding for sanction of a scheme relating to a company under the Companies Act, 1956 is a proceeding in rem. A sanctioned scheme binds the company, its shareholders, creditors and all concerned in the affairs of the company - The transfer and vesting of the rights of the lessee in respect of the deed of lease in favour of the first petitioner is not binding upon the first respondent as the lessor. The first respondent by the impugned writing has demanded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt sanctioned by the High Court, is the same. Consequently, the decision of the first respondent, to impose such a condition for grant of permission to change the name of the lessee is arbitrary, without basis and should be set aside. The first petitioner is a product of a scheme of arrangement. The proceeding for granting a sanction of a scheme of arrangement is a proceeding in rem. As a landlord, the first respondent could have objected to the sanction of such scheme. It did not do so. It had allowed the sanction to be granted. It is no longer in a position to contend that, it will not abide the sanctioned scheme. The order of grant of sanction of the scheme of arrangement is binding upon the first respondent. The first respondent has to accept the same and to treat the first petitioner as a lessee of the first respondent. 3. Learned Advocate for the petitioners has relied upon All India Reporter 2004 Supreme Court 2206 (Bharat Petroleum Corporation Ltd. v. P. Kesavan Anr.), All India Reporter 1970 Supreme Court page 1041 (M/s. J.K. (Bombay) Private Ltd. v. M/s. New Kaiser-I-Hind Spinning and Weaving Co. Ltd. Ors.), 2004 Volume 3 Calcutta High Court Notes page 607 (Madhu I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se dated September 5, 2006 with G A Metals (P) Limited. The first respondent had granted 99 years lease in respect of a plot of land measuring about 11.06 acres situated at Barjora, District Bankura. 7. It appears that, G A Metals (P) Limited had set up an industrial unit on such land. The petitioners have claimed that G A Metals (P) Limited had two divisions, namely, a Steel Division located at Jamuria and other being a M.S. Ingot Division located at the subject plot of land. G A Metals (P) Limited was converted to a public limited company and a fresh certificate of incorporation was issued by the Registrar of Companies, West Bengal consequent upon the change of name on conversion to public limited company on July 13, 2009. G A Metals (P) Limited, therefore, became known as G A Metals (P) Limited It was renamed as Maan Steel Power Limited on August 4, 2009. A fresh certificate of incorporation consequent to change of name was issued by the Registrar of Companies on August 4, 2009. By a letter dated August 11, 2009 Maan Steel Power Limited requested the first respondent to accept Maan Steel Power Limited as the lessee in respect of the subject land. The first respondent di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions and covenants of this lease, communication of the said breach/defaults will be made to the LESSEE and copies of the same shall be endorsed to all the Financial Intuitions/Recognised Mutual Funds/Banks/Trustees and reasonable opportunity may be given to the lessee or Financial Intuitions/Recognised Mutual Funds/Banks/Trustees enforcing their rights as the Mortgagee as stated in clause (ii) above the LESSOR will recognize the assignee subject to the same terms and conditions contained in this lease deed if only the assignee shall agree to pay enhance land premium and annual rent, dues against original LESSEE and other charges, if due, at the prevailing time and finalize and execute amendment to the lease deed to the extent. 9. The deed of lease describes the original lessee as a legal entity which would deem to include its successors and assigns unless repugnant to the context. Clause (vii) of the lease deed prohibits assignment without prior written consent of the first respondent. The description of the original lessee to include its assigns in the lease deed would necessarily exclude any assignee of the original lessee, when the original lessee has acted in breach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heme sanctioned by the Court is an instrument within the meaning of Section 2(i) of the Bombay Stamp Act, 1958. Such a document is, therefore, required to be registered and stamp duty payable thereon. 11. A scheme of amalgamation or arrangement documents the compromise arrived at between the parties to the scheme inter vivos. A scheme may be between two or more companies. It may also be between a company and its shareholders or creditors. A proceeding for sanction of a scheme relating to a company under the Companies Act, 1956 is a proceeding in rem. A sanctioned scheme binds the company, its shareholders, creditors and all concerned in the affairs of the company. There is an exception to the scheme being binding on all concerned in the affairs of the company as noted in General Radio Appliances Co. Limited (supra) and Singer India Limited (supra). A sanctioned scheme does not override the Rent laws. A landlord of the company has been held not to be bound by the sanctioned scheme. General Radio Appliances Co. Limited (supra) and Singer India Limited (supra) have held that, the transferee company of a sanctioned scheme of amalgamation cannot claim that, the tenancy of the transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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