The incorporation of a partnership firm as a private limited company does not amount to an assignment or transfer of the leasehold property if the partnership firm was the lessee of the property.

Pratap Kumar Ray, J.

1. HEARD the learned advocate appearing for the parties.

2. SUBJECT matter of lis is on central point as to whether the State Government who is lessor of concerned land could make lessee, a partnership firm, liable for alleged breach of Clause 2(8) of the Indenture of Lease dated 17th July, 2002, alleging that Lessee assigned or transferred the demised land or any part of the demised land without previous permission of the Government in writing due to its action of reconstitution of partnership firm by taking new five partners and thereafter registration of the said firm to a incorporated Company under Part IX of the Companies Act, 1956 wherein a provision under section 575 lead an effect of vesting of all property movable and immovable belonging to or vested to the partnership firm on the date of registration to the incorporated Company due to language of said provision that all property will pass to and vest in the Company incorporated under the Companies Act and for such alleged breach whether State Government is legally entitled to issue the letter dated 21st January, 2009 impugned in the writ application asking the incorporated Company to pay penalty @ Rs.3 lacs per katha in addition to permission fee of Rs.3 lacs per katha, total Rs.6 lacs per katha, to regularise said alleged transfer of leasehold property to the Company incorporated by way of post- facto regularisation in terms of regularisation notification dated 6th May, 2008 issued by the Principal Secretary to the Government of West Bengal, Urban Development Department and the question whether the State Government unilaterally can change the terms and conditions of lease deed asking penalty and permission fee in the manner aforesaid on the alleged breach of terms of agreement though in the event of prove of alleged breach, State Government Lessor was legally entitled under the said Indenture of Lease to exercise right of preemption only by determining the lease which admittedly has not been done by the State Government in terms of clause 4 of the Indenture of Lease.

The issue has been answered by the learned Trial Judge in the writ application W.P. No.416 of 2009 by the order dated 11th September, 2009 in favour of the writ petitioner, the incorporated Company, by setting aside the impugned decision that is the said letter and passed an order directing State respondents to mutate name of said Company in all records, concerning the leasehold plot, as lessee without asking to pay any charge or fee other than the fee payable just for mutating the records within the period specified in the said order.

3. ASSAILING the said order dated 11th September, 2009 passed in the writ application, the State of West Bengal and one Principal Secretary of Urban Development Department, Government of West Bengal as appellants, have preferred this appeal.

4. IT was the case made out by the writ petitioner in the writ application that a partnership firm in the name of "E. P. Associates" was established by partnership agreement dated 1st April, 1993 in between two partners Sukanta Bhattacharjee and Soma Bhattacharjee to run the business of manufacturing of environmental pollution control equipment, sound intensify doctor, PVC corrugated sheets etc. in co-partnership. By registered Deed of Lease dated 17th July, 2002, State Government as lessor, granted lease to the said partnership firm, a plot of land, measuring more or less 9 Kathas, at Salt Lake City, Kolkata to run the said business by partnership firm. On 7h March, this partnership firm constituted with two members, was re-constituted by adding new five partners and it became a partnership firm of seven partners. On 29th June, 2007 this partnership firm being unincorporated Company, under provisions of laws under Part IX of the Companies Act, applied for registration as private limited Company in the name and style M/s. Electro Infotech Pvt. Ltd. The Registrar of Company issued registration number followi