2010 Supreme(Raj) 1546
RAJASTHAN HIGH COURT AT JAIPUR BENCH
Ajay Rastogi, J.
Official Liquidator - M/s. Rathi Alloys and Steel Ltd. - Appellant
Versus
Rajasthan State Industrial Development and Investment Corporation Limited - Respondent
Company Application No. 54 of 2004.
Decided On : 14-05-2010
Advocates:
For the Applicant-OL:BK Sharma, Advocate.
For the Respondent-RIICO:N.R. Choudhary, Advocate.
Headnote:
Companies Act, 1956 – S. 446 Respondent leased out certain plots to company in liquidation in 1988 and 1992 for setting industry – Since the company failed to comply with time bound conditions of lease, the lease was cancelled after issuing notice in 1995 and 1996 – The proceedings for taking possession started before Estate officer – On 25.8.2001, winding up order was passed against the company – The official liquidator took possession of plots in question and wrote to Estate officer that as per – S. 446 of companies Act, 1956, he cannot start the proceedings in respect of plots in question without prior permission of company – The official liquidator filed petition against the respondent for cancellation of lease – It was held that, time was essence of lease agreement – The proceedings for taking possession of plots started in 1996 was within competence of RIICO and the winding up order was passed in 2001 – A number of opportunities of hearing were given to company by RIICO before cancellation – Further, the company had never challenged said cancellation orders passed much before winding up order – The Official Liquidator was directed to hand over possession of plots in question to RIICO as per law – Hence, the application was dismissed.
JUDGMENT
1. - Instant company application has been filed Under section 446 (2)(a), (b) and (d) of Companies Act, 1956 ("Co. Act") read with R.9 of Companies (Court) Rules, 1959 ("Co. Court Rules") assailing three orders dated 26/04/1995 (Ann.A/5, A/6, and A/7) whereby respondent-RIICO cancelled the allotments of plots NO.A-463, A-464, A-465 as well as agricultural land admeasuring 62 bighas and 11 biswas situated at Matsya Industrial Area, Alwar, made to M/s. Rathi Alloys and Steel Ltd. under lease agreements dated 03/07/91 (Ann.A/1) and dated 22/04/88 (Ann.A/2) and dated 07/07/1992 (Ann.A/3) because the lessee-Company failed to comply with conditions of lease deeds executed between the parties.
2. M/s. Rathi Alloys and Steel Ltd. ("Lessee-Co.") was allotted industrial plots No. A-463, A-464 and A-465 as well as agricultural land admeasuring 62 bighas and 11 biswas situated at Matsya Industrial Area, Alwar ("for short, "industrial plots") for setting up an industry under lease agreements dated 03/07/1991 (A-463), dated 22/04/88 (A-464 and 465) vide letters of allotment dated 18/06/93 and dated 07/07/92 ((Ann.A/3 and A/4).
3. However, vide order dated 24/08/2001 in Company Petition NO.36/2000; the Company Court passed winding up order of M/s. Rathi Alloys and Steel Ltd. (Co.- lessee to industrial plots in dispute) and the applicant Official Liquidator attached to the Court was appointed as provisional Liquidator to the Company and was further directed to take steps for taking possession of the Company in liquidation - pursuant to which, the applicant took possession of various assets including industrial plots in dispute (supra).
4. While allotting industrial plots (supra), it was specifically stipulated under terms and conditions of lease agreements executed between the parties that the lessee Company is required to start production within one year or extended period expiring on 13/06/92 for plot No. A-463 (condition NO.4 of lease deed executed on 03/07/91); and to start construction over plot Nos. A-464 and A-465 within six months of execution of lease or extended period expiring on 21/10/1988 under Cl.2(d) of lease deed executed on 22/04/88; and as regards plot of land (62 bighas and 11 biswas) allotted vide letter dated 18/06/93 - possession whereof was handed over on 16/07/93, under condition NO.3 of allotment, the lessee company was required to start construction within 12 months of possession or extended period expiring on 15/07/94.
5. Since the lessee Co. in liquidation failed to comply with terms and conditions (supra) of the lease deed viz. despite possession of industrial plots (supra) having been handed over, the lessee Company failed to start production and construction within the periods stipulated under the lease deeds (supra), as such after notices being served; opportunity being afforded, and having taken note of material on record, respondent-RIICO cancelled allotments of industrial plots (supra) vide orders impugned (Ann.A/5 to A/7) - as a consequence whereof, respondent-RIICO ordered to reverse back possession of industrial plots (supra) and forfeited amount paid so far; and eviction proceedings in respect of industrial plots (supra) in dispute treating the lessee company as trespasser were initiated in the year 1996 before the Estate Officer (Court) RIICO Alwar, so as to take over possession whereof.
6. However, the lessee Company never questioned the cancellation impugned before any court of law. Before proceedings could be culminated, Winding up order was passed by this Court on 24/08/2001 in Company Petition NO.36/2000 - pursuant to which the applicant (OL) took over the possession of industrial plots in dispute. It appears that applicant (OL) sent letters dated 19/02/2004 and 01/03/2004 to the Estate Officer that no further proceedings could be initiated against the lessee Company (in liquidation) without seeking prior permission of the Company Court as provided Under section 446 of Co. Act. At this stage, C
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