Full Text
HIGH COURT OF DELHI
Date of Decision: 27.02.2019
IN THE MATTER OF M/S MAYUR SYNTEX LTD...... Petitioner
Through: Mr. Sumit Nagpal, Adv. for IDBI Bank Ltd.
Mr.Abhishek Puri and Mr. Yasharth Misra, Advs. for Ghaziabad Ispat Udyog, Advs. for the applicant in CA No. 1834/2011
Mr.Rajesh Raina, Adv. for UPSIDC with Mr.Ajay Deep Singh, Regional Manager, Suraj Pur, UPSIDC and Mr.C.P. Verma, Official form UPSIDC
Ms.Anam Ahmad, Adv. for Mr.Rishi Manchanda, Adv. for OL
Mr.B.L. Wali, Adv. for Kotak Mahindra Bank Ltd.
CA No. 1834/2011
JUDGMENT
1. This application is filed by the applicant-M/s.Ghaziabad Ispat Udyog Ltd. for initiation of contempt proceedings for committing contempt of the orders of this court dated 18.08.2010.
2. The background facts are that this court had directed auction of the assets of the respondent Company-M/s.Mayur Syntex Ltd. On 15.09.2005, M/s. Chaudhary & Sons (Forgoing) Pvt. Ltd was declared the highest bidder for a bid amount of Rs.7.01 crores for the entire assets of Mayur Syntex Ltd. being land measuring 1,30,000 sq. mtrs. approximately at 11, Sikandrabad 2019:DHC:1354 Industrial Area, District Bulandshehar, U.P. It is pleaded that on 26.09.2005 Chaudhary & Sons appointed the applicant-M/s. Ghaziabad Ispat Udyog Ltd. as their nominee for half of the land i.e. land measuring 65,000 sq. mtrs. approximately of the said property which previously belonged the respondent Company. The applicant and Chaudhury & Sons deposited their respective sale consideration with the Official Liquidator. The possession of the respective areas was handed over by the Official Liquidator vide letter dated 11.11.2005. Thereafter the applicant and Chaudhury & Sons filed an application before this court for directions to the Official Liquidator to execute a sale deed in respect of the plot in question. This court directed UPSIDC to file a reply.
UPSIDC in its reply stated that sub-division of the plot is permissible under the building bye-laws but the same is permissible on payment of certain charges. It also demanded requisite charges for execution of a sub-lease in favour of the applicant and Chaudhury & Sons respectively. It was brought to the notice of the court by the applicant that under sub-clause (vii) of Clause 6.03 of the office order issued by UPSIDC dated 04.12.1998 being Guidelines for approval and reconstitution of plots in industrial areas, in respect of BIRF cases, transfer levy is levied at the lowest rate.
3. This court on 18.08.2010 noted that the matter was referred to the court by BIFR under Section 20 of the SICA. The Official Liquidator was directed to issue sale certificates in favour of Chaudhury and Sons and the applicant. The court also directed UPSIDC to calculate the requisite charges in terms of the above clause.
4. The bone of contention between the parties here is as to whether, the applicant would be entitled to concessional charges which in the present case is nil for the transfer of plot of land in favour of the applicant as it is purportedly a BIFR Case. There is no dispute on the charges payable for bifurcation of the plot. Learned counsel for the applicant relies upon the judgment of this court dated 18.08.2010 which was upheld by the Division Bench on 10.03.2016. Against the order of the Division Bench, an SLP was filed in the Supreme Court which was also dismissed on 30.01.2017. Based on the above orders, learned counsel for the applicant submits that the rates applicable to BIFR cases will be applicable in respect of the case of the applicant as regards the registration of the lease deed. This aspect has been settled by the above noted judgments.
5. UPSIDC however has oblivious of the judgment of this court, the Division Bench of the Supreme Court refused to apply BIFR rates for transfer of the land. It is pleaded that it is only where a company is revived by BIFR these concessions rates are applicable. They cannot be applicable on sale of properties by a liquidator to auction purchase.
6. I may first see the orders passed by this court. On 18.08.2010, this court in CA Nos. 1428/2008 and 693/2008 had passed the following order:- “Co.Appln.Nos.1428/2008 & 693/2008 Co.Appln.No.l428/08 has been moved by M/s Choudhary & Sons (Forging) Pvt. Ltd., i.e. the auction purchaser, praying that the Official Liquidator be directed to execute a sale deed in respect of Plot No.IIA, Site-l, B.S. Road, Industrial Area, Secundrabad, District Bulandshahar, U. P. in its favour. Similarly, Co.Appln.No.693/2008 has been filed by M/s Ghaziabad' Ispat Udyog Ltd., who is stated to be the nominee of the auction purchaser, praying that the Official Liquidator be directed to execute a sale deed in respect of Plot No.IIB, Site-l, B.S. Road, Industrial Area, Secundrabad, District Bulandshahar, U. P. in its favour. It is question can only execute the lease deed in favour of the applicant in C.A. Nos.693/2008 and 1428/2008, being Ghaziabad Ispat Udyog Limited and Chaudhary & Sons(Forging) Pvt. Ltd. after the plot in question is sub divided, as per the rules, on payment of the requisite charges before which the same has to be transferred in the name of the auction purchaser. Counsel for the applicant states that his clients have no objection to the payment of the sub-division charges that are leviable for this purpose, in terms of the applicable policy/rules & regulations of the UPSIDC. At the same time, he has also brought to the notice of this Court that sub-clause (vii) of Clause 6.03, which forms a part of the office order of the UPSIDC, dated 04.12.1998, setting down guidelines for approving as well as reconstitution of plots in the industrial area of the corporation. Therefore said Clause (vii) states that "in respect of BIFR cases, transfer levy at the lowest rate would be charged, if required." Admittedly, the instant matter was referred to this Court by the BIFR under Section 20 of the SICA. Counsel for the applicant states that his clients are willing to pay the charges for transfer of the plot by the UPSIDC from the erstwhile owner M/s Mayur Syntex Ltd. to the auction purchaser, i.e. Choudhary & Sons(Forging) Pvt. Ltd, and thereafter for the sub-division of the same into desired two plots. The first one remaining with Chaudhary & Sons(Forging) Pvt. Ltd and other one going to Ghaziabad Ispat Udyog Ltd. Looking to the fact that on 15.09.2005, while accepting the bid of Chaudhary & Sons(Forging) Pvt. Limited, this court had granted two weeks' time to give the names of 2nd and 3rd nominees and that on 26.09.2005 itself, Chaudhay & Sons(Forging) Pvt. Ltd. had nominated Ghaziabad Ispat Udyog Ltd. for 50% of the land that had been sold and thereafter the possession of the auctioned property was also handed over by the Official Liquidator on 11.11.2005 to the aforesaid Chaudhary & Sons(Forging) Pvt. Ltd. and Ghaziabad Ispat Udyog Ltd., it would be appropriate if all the necessary transfer charges, subdivision charges etc. are charged in terms of the rates applicable at that time itself, inter-alia, for the reason that the matter with regard to the confirmation of the sale and also the execution of the requisite sale deed in favour of the auction purchaser has been pending in this Court. In view of the above, the Official Liquidator may issue the relevant sale certificate in favour of Chaudhary & Sons(Forging) Pvt.Ltd. after completing the necessary formalities, if any, and thereafter the UPSIDC shall process and complete the execution of the lease deed in favour of Chaudhary and Sons(Forging) Pvt. Ltd, and the sub-division of the plot and the execution of the further sale deed in favour of Ghaziabad Ispat Udyog Ltd. for half of the said property. All the requisite charges that are required to be deposited by the applicants, in terms of the above orders, shall be calculated by the UPSIDC and information thereon be given to the applicants within three weeks from today. The charges, as pointed out, will thereafter be deposited within another two weeks. All other remaining steps shall be completed within another four weeks thereafter by the UPSIDC. Both the applications are disposed of in the above terms.”
7. Against the above order, UPSIDC filed an appeal being Co. appeal No. 34-35/2011. On 10.03.2016, the Division Bench dismissed the appeal stating as follows:- “4.....The lessor in it objection to the applications contended that under its policies, normal transfer and sub-division charges were payable and that such amounts were recoverable as on the date the application, complete in all particulars, was furnished to it. The UPSIDC also contended that the concessional transfer/subdivision charges could not be claimed as a matter of right since under its policies, if auction had been conducted pursuant to orders of BIFR, then alone such concessional charges can be recovered and not otherwise.....” “5. It is contended by learned senior counsel for the appellant that the impugned order is erroneous. It is firstly submitted that the learned Single Judge wrongly assumed that the present case is a BIFR one and, therefore, covered by the UPSIDC policy. Learned counsel relied upon Chapter 6(Transfer, Reconstitution of Industrial Plots) policy of the UPSIDC, to say that if auction is conducted by BIFR then alone would the concessional rates be applicable. The relevant portion of the policy is as follows: "BIFR CASES:- If in order to save or rehabilitate the unit as per orders of BIFR new shareholders are inducted/shares are transferred to infuse funds it is allowed without any transfer levy provided the plot is retained with the allottee company. However, if it is decided by the BIFR to dispose-off the plot through auction, the auction purchaser shall be recognized only after payment of transfer levy at the rate applicable in cases of normal transfer provided BIFR has not directed otherwise (See Auction cases 6.07 (VIII). "
6. It is contended that the question of granting any concession to the transfer and sub-division in this case does not arise. Learned senior counsel highlighted that the application, complete in all its particulars was furnished to the UPSIDC pursuant to its letter of 30.11.2010 — i.e. only some time in 2011. It is submitted that having regard to this fact, the Company Court could not have directed that the transfer charges and other amounts towards subdivision ought to be recovered from the date 11.11.2005. After the entire amount was paid, possession was handed over to the auction purchaser by the OL.
7. Learned counsel emphasized that in this case, the successful bidders unilaterally sub-divided the property which is impermissible under the UPSIDC policy.”
8. The Division Bench further held as follows:- “9. In this case, the endeavour of the learned senior counsel is that it is only in the event the BIFR directs auction of property that the UPSIDC would consider and grant concessional charges. This Court is of the opinion that this narrow and constrained interpretation sought to be advanced, cannot be accepted. Concededly, the company underwent a long BIFR procedure in which all auction stood rehabilitated and were considered. The BIFR thereafter was of the opinion that since rehabilitation was not possible, the company ought to be wound-up. In the present case, the auction sale conducted by the OL — and subsequently confirmed by the Court is meant to augment the company under liquidation and facilitate discharge of its liability towards creditors. Even the UPSIDC appears to be a creditor which is awaiting payment of its dues. Having regard to this circumstance, the Court is of the opinion that the impugned order, to the extent it states that the UPSIDC policy towards concessional transfer charges/sub-division charges, being recoverable in the present case is not erroneous. (emphasis added)
10. As far as the second aspect is concerned, it is noticeable from the factual narrative itself that the bid was finalized and the entire amounts payable on 11.11.2005. The bidders had moved an application in 2006 which is pending; subsequently, they moved two further applications. All these were considered and disposed of on 18.08.2010. Till then, the position as to the status and rights of auction purchasers and the other party who were to share plot were inchoate. In other words, it was not possible for them to approach the UPSIDC or any other authority, claiming to be the rightful owner. In other words, the pendency of the application, which was ultimately accepted meant that the sale was confirmed as on 11.11.2005. The learned Single Judge gave effect to that factual reality in stating that the transfer charges as determined by him (applicable in BIFR cases) would be recovered by the UPSIDC as on 11.11.2005. This Court further notices that without the confirmation order, the auction purchaser or any other successful bidder's application claiming ownership would have been itself suspect.”
9. Against the above order of the Division Bench dated 10.03.2016 an SLP was filed being SLP No. 23820-21/2016 which was dismissed by the Supreme Court on 30.01.2017.
10. It is noteworthy that in the Special Leave Petition that was filed same grounds were taken i.e. that the applicant is not entitled to concessional rates applicable for BIFR. One of the proposed questions of law framed in the SLP was as follows:-
11. As the above petition was dismissed, it is clear that what is being argued today in court by UPSIDC was also urged before the Supreme Court in the above stated SLP, which was dismissed.
12. A perusal of the orders of the Division Bench and of the Supreme Court make it manifestly clear that there is a categorical direction issued to UPSIDC to apply BIFR rates for the transfer of the plot in favour of the applicant. It appears that for some strange reason, UPSIDC continues to harp on its stand which it reiterated before the Division Bench of this court and also before the Supreme Court which stand was specifically rejected.
13. I may note that this court heard this mater on several dates. On 29.05.2018, I had asked UPSIDC to file fresh calculations as the calculations filed by UPSIDC appeared to be nothing but repetition of old calculations. Fresh calculations were perused on 16.11.2018 and UPSDIC was directed to file its response to the averments in rejoinder filed by the applicant to the reply of UPSIDC. It was also directed to file an affidavit clearly spelling out the transfer charges payable where the sales are taken up by the BIFR as on 2005.
14. A copy of the fresh calculations dated 23.11.2018/03.12.2018 have been handed over in court. In para 3, UPSDIC states as follows:- “3. It is humbly submitted that as per the policy of the UPSIDC, the applicant is liable to pay the transfer levy @ 15% of the premium as per the policy as on 2005 as his case was not that of the revival of the industry but that of outright sale by auction. It is submitted that the benefit of the zero transfer levy is only given in the cases of sale either by UPFC or revival under BIFR.
15. Levy of charges for the plot in favour of Chaudhury & Sons is calculated as follows:--
16. Further, sub division charges payable for transfer of half of the plot to the applicant is calculated as follows:- “Transfer charges are levied @ 05% of the premium rate applicable on 11.11.2005. Transfer Levy for first 1000 Sq. Mtr. Rs. 600 x 05% x 1009 Sq. Mtrs = Rs. 30,000.00/- Transfer Levy for next 64,5275.50 Sq. Mtrs Rs. 550 x 05% x 64,275.50 Sq. Mtrs = Rs. 17,67,576.25/- Total transfer levy payable = Rs. 17,97,576.25/-”
17. It is quite clear from a perusal of the affidavit that UPSIDC is again repeating the same contentions all over again and seeking to charge the same levy as it was asking for earlier. The present demand now being raised by UPSDIC is in complete violation of the orders and directions passed by the Coordinate Bench of this court dated 18.08.2010 which has been upheld by the Division Bench and by the Supreme Court.
UPSIDC cannot be permitted to raise the same contentions again and again after they have been rejected in earlier proceedings.
18. I accordingly direct UPSIDC to forthwith within four weeks from today carry out the necessary transfer of the land in favour of the applicant on payment of necessary charges/sub division charges. The transfer levy will be payable as applicable for BIFR cases. I may note that at the relevant time, the transfer levy charges are said to be nil. Accordingly, no transfer levy would be charged.
19. This application stands disposed of.
20. At this stage, learned counsel for UPSIDC states that there was no direction for grant of concessional charges for transfer of the plot in favour of the applicant pursuant to the transfer in favour of Chaudhury & Sons and bifurcation of the plot.
21. I may only note that this court had accepted the auction bid by order dated 15.09.2005 where the plea of the highest bidder, namely, Chaudhury & Sons to give names of 2-3 nominees was allowed by this court. The entire process has been carried out on approval of this court. Possession was given to the applicant of his land by the OL. I see no merit in the said plea. The affidavit of compliance may be filed within four weeks from today. List on 18.07.2019.