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IN THE HIGH COURT OF DELHI AT NEW DELHI
Talwant Singh, J.
Frigorifico Allana Private Limited - Appellant
Versus
East Delhi Municipal Corporation - Respondent
O.M.P. (I) (Comm) No. 60 of 2021, 61 of 2021; I.A. No. 2366 of 2021, 2367 of 2021, 2368 of 2021, 2375 of 2021, 2376 of 2021, 2377 of 2021
Decided On : 16-02-2021
Transfer of Assets - Lease Agreement - Clause 10.2 - Ghazipur Slaughter House - 10.2(b), 10.2(vi), 10.2(b) - The court discussed the lease agreement and its clauses, particularly 10.2(b), 10.2(vi), and 10.2(b), and their implications on the transfer of assets from the petitioner to the respondent. The court highlighted the timelines and the transfer date, emphasizing the need for proper intimation and the completion of the divestment process within the specified period.
Fact of the Case:
The petitioner, a meat industry operator, challenged the office order directing the handover of the Slaughter House to a new lessee, citing the need for a formal transfer of assets and a reasonable time frame for the same.
Finding of the Court:
The court found that the petitioner was aware of the tendering process and had participated in it. It noted that the last extension granted to the petitioner was only until the tender was finalized, and the financial bid of the petitioner was rejected. The court extended the date for completion of the divestment process to 4th March, 2021.
Issues: The issues revolved around the interpretation of the lease agreement clauses, the awareness of the tendering process, and the timeline for the transfer of assets.
Ratio Decidendi: The court held that the petitioner was aware of the tendering process and the rejection of its financial bid, thus precluding any claim of ignorance. It emphasized the need for proper intimation of the transfer date and extended the completion date for the divestment process.
Final Decision: The petitions were partly allowed, and the date for completion of the divestment process was extended to 4th March, 2021. The rest of the prayers of the petitioner were rejected.
JUDGMENT
Talwant Singh, J. - The present matter has been taken up for hearing in physical Court.
2. Both these petitions have been taken up together for adjudication as the office order assailed in both these petitions is the same; which is office order dated 2nd February, 2021 by which the respondent, East Delhi Municipal Corporation (EDMC), directed for handing over/taking over of Ghazipur Slaughter House and other related facilities from the petitioner w.e.f. 18th February, 2021. The impugned office order is reproduced here under:
"No. 23/DVS/EDMC/2021 |
To, The General Manager (North) M/S Frigorifico Allana Pvt Ltd A 15, Site-IV, Industrial Area, Sahibabad, District: Ghaziabad (U.P) PIN 201010 Ph No: 0120-2895411, 2896159, Fax No. 0120-2895147 |
OFFICE ORDER |
Sub:- Regarding handing over/taking over of Ghazipur Slaughter House, Carass ulitization cum rendering plant including live stock markets and other facilities to M/s Qureshi International DS-Max-Fresh N Frozen Consortium through Dr. Kuldip Singh, Dy. Dir (VS)/Incharge Ghazipur Slaughter House/Plant Manager on behalf of the Commissioner, EDMC |
Sir, |
The Ghazipur Slaughter House was leased out to M/S Frigorifico Allana Pvt. Ltd. (M/s FAPL) w.e.f. 04.08.2009 by erstwhile MCD through tender process for 10 years. The carcass utilization cum rendering plant was also leased out to M/s FAPL from 13.08.2010 for a period of 5 years initially and further extended from 13.08.2015 upto 03.08.2019 to be coterminous w.e.f. leasing out of Ghazipur Slaughter House (upto 03.08.2019). The first extension of Ghazipur Slaughter House and carass utilization cum rendering plant given to M/s FAPL w.e.f. 04.08.2019 to 03.02.2020. The second extension was given to FAPL w.e.f. 04.02.2020 to 03.05.2020 and the third and last extension was given to M/s FAPL w.e.f. 04.05.2020 to 03.05.2022 or till finalization of tender whichever is earlier. |
As you aware the tender was opened on 03.09.2020 and financial bids were opened on 17.12.2020 at 04:00 PM and tender was finalized. The EDMC have signed the lease agreement on 19.01.2021 between Dr. Kuldip Singh Dy. Director (VS)/Incharge Ghazipur Slaughter House/ Plant Manager on behalf of the Commissioner, EDMC and Ms. Yousuf Mujahed (leading member of consortium) Managing Director on behalf of new lessee M/s Qureshi International DS-Max-Fresh N Frozen Consortium. Therefore, your extension of lease agreement for operation and maintenance of Ghazipur Slaughter House and carcass utilization cum rendering plant and other facilities have been ended over on 19.01.2021. Since the fresh agreement between EDMC and new lessee has been signed. |
As per article 10.2 (b) of lease agreement between M/s FAPL and erstwhile MCD dated 04.08.2009 the transfer date i.e., 20.01.2021 has been decided. So that M/s FAPL cannot legally operate the plant after 20.01.2021 (transfer date). Now the EDMC has the right to take the possession of the project and project facilities immediately from M/s FAPL after the transfer date i.e., 20.01.2021. |
Article 10.2 (b) is as under: |
"(b) The Divestment of all rights, title and interest in the project and project facilities shall be deemed to be complete on the transfer date but no later than 30 (thirty) days thereafter, by when all the requirements of clause (I) to (XII) above shall be fulfilled. The plant Manager shall on such date issues a compliance certificate, with a copy thereof endorsed to the MCD, which shall have the effect of consulting evidence of divestment by the Licensee of all of its rights, title and interest in the project and the vesting thereof in the MCD or its nominee, as the case may be pursuant thereto." |
1. Dr. Kuldip Singh, Dy. Dir (VS)/Incharge Ghazipur Slaughter House/Plant is requested to facilitate/provide two rooms to new lessee M/s Qureshi International DS-Max-Fresh N Frozen Consortium inside the premises/campus to be utilized by their officers and staff for preliminary working and planning a |
The main legal point established in the judgment is the need for proper intimation of the transfer date and the extension of the completion date for the divestment process.
The court ruled that a retrospective transfer date in a lease agreement is invalid, confirming the necessity for timely notices regarding lease terminations and transfers.
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Renewal of catering unit licenses is not automatic and is subject to fulfilling specified conditions as per the Catering Policy, 2010.
The judgment establishes that rejection of a proposal must be justified and in compliance with legal principles, and violation of natural justice can lead to the reversal of such decisions.
Non-compliance with contractual obligations and lack of activities on the allotted plots justified the termination of the Agreements by MIDC.
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