TMI Blog2019 (10) TMI 1526X X X X Extracts X X X X X X X X Extracts X X X X ..... haskar Prasad Gupta, Sr. Adv., Kunal Chatterjee, Maitrayee Banerjee, Supratik Sarkar, Sanjoy Kumar Ghosh, Rupali S. Ghosh and Avijit Bhattacharjee, Advs. JUDGMENT S. Ravindra Bhat, J. 1. In this appeal by special leave, an affirming judgment of the Calcutta High Court (dismissing the appeal, against an order allowing the Respondent's application Under Section 535 of the Companies Act, 1956 (hereafter the Act ) has been questioned. 2. The Appellant (hereafter SASF ) is a trust, constituted as a special purpose vehicle (SPV) by the Central Government for acquiring by transfer, the stressed assets of the Industrial Development Bank of India (IDBI), to administer and manage the stressed assets and to recover amounts due, by framing schemes of restructuring, settlement etc. with borrowers. IDBI, through a deed of assignment, unconditionally transferred all loans and advances granted by it, to SASF, including the loans and securities in relation to the second Respondent, the company in liquidation. 3. The facts are that Wellman Smith Owen Engineering Corporation, a company incorporated in the United Kingdom leased immovable property, which it took possession o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SIDC approached the Calcutta High Court for restoration of possession of its properties which had been taken over by the Official Liquidator, in the meanwhile. 5. The single judge by an elaborately reasoned judgment, upheld WBSIDC's argument that as lessor, it was entitled to possession in view of the lease condition, which automatically applied, because the original lessee had ceased to use the properties for the purpose originally contemplated, i.e. manufacturing activity. The single judge also took notice of provisions of the West Bengal Government Premises (Tenancy Regulation) Act, 1976. It was further held that no manufacturing process had been carried out in the demised premises for over six months. The appeal preferred by SASF was rejected by the Division Bench by the impugned judgment. 6. Ms. Jasmine Damkewala for SASF, relied on provisions of the lease to contend that the lessee could have validly mortgaged the property, as it did, to the erstwhile IDBI. She pointed out that the impugned judgment, if permitted to stand, would result in loss of public monies to the extent of substantial amounts, over Rs. 42 crores, which would not be in public interest. She also s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ani (supra) it was held by this Court as follows: 29. On 19-1-2002, the Board passed the orders terminating the lease in respect of both the plots. In this termination order, after giving the past history of events which have already been noted above and mentioning that the Company had failed to construct the factory building and implement the industrial projects on the main land within the extended period and to execute lease agreement in respect of additional land, thereafter it was also stated that pursuant to the earlier resumption order, a writ petition was filed and because of the stay orders passed therein the Board could not resume the land. This writ petition was dismissed on 14-9-1999 [Ralectronics Ltd. v. Karnataka Industrial Area Development Board, WP No. 11957 of 1993, order dated 14-9-1999 (KAR)]. Though the Board could act thereafter, however in the meantime the High Court of Karnataka had passed the order dated 10-4-2001 in Karnataka Industrial Areas Development Board v. Electromobiles (I) Ltd. [OSA No. 11 of 1999, order dated 10-4-2001 (KAR)] holding that when the allotment is on lease-cum-sale basis and possession is delivered to the allottee in pursuance of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. ***************** ***************** 41. In view of our elaborate discussion above, we do not find action of the Board to be illegal or blemished. The land was allotted to the Company for a specified project which the Company failed to establish. Let us examine the scheme of the KIAD Act at this point of time. The KIAD Act is enacted to make special provisions for securing the establishment of industrial areas in the State and generally to promote the establishment and orderly development of industries therein and for that purpose to establish an Industrial Areas Development Board, and for purposes connected with such matters. Chapter II deals with the declaration and alteration of industrial areas. Chapter III deals with establishment and constitution of the Board. Chapter IV deals with functions and powers of the Board and Chapter V deals with finance, accounts and audit of the Board. Chapter VI deals with application of the Public Premises Act and non-application of the Karnataka Rent Control Act, 1961 to the premises of the Board. Chapter VII deals with acquisition and disposal of land. Chapter VIII contains the supplementary and miscellaneous provisions. Section 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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