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2021 Supreme(Raj) 1716
RAJASTHAN HIGH COURT BENCH AT JAIPUR
Ashok Kumar Gaur, J.
Sand Plast (India) Ltd. - Appellant
Versus
Official Liquidator - Respondent
S.B. Company Application No. 7/2021 in S.B.Civil Company Petition No. 9/1997
Decided On : 12-08-2021
Mr.NPS Chawla, Adv, Mr.Animesh Gaba, Adv. (through Video Conferencing) & Mr.Kartikeya Sharma, Adv, for the Applicant; Mr.Ankit Sethi, Adv. (through Video Conferencing) & Mr.Ruvit Kumar, y. Official Liquidator, for the Respondent
A license deed automatically terminates upon the winding up of the licensee company, allowing the licensor to reclaim the property.
Headnote:
Companies - Liquidation - Companies Act, 1956 Sections 433(e), 456(2), 460(6) - The court interpreted the provisions regarding the automatic termination of a license upon winding up and the rights of a licensee versus the liquidator's authority over company assets.
Fact of the Case:
The DDA sought the release of land from the Official Liquidator, claiming the land was never owned by the company in liquidation, which had only a license to use it. The license was argued to have expired due to non-payment and the company's winding up.
Finding of the Court:
The court found that the license deed had expired and was automatically terminated upon the company's winding up. The DDA was entitled to the land, while the Official Liquidator could retain possession of the structures for a limited time.
Issues: Whether the DDA was entitled to the land after the company's winding up and the implications of the license deed's terms.
Ratio Decidendi: The court held that the license deed's terms clearly stated that it would terminate upon the company's winding up, thus the DDA had rightful claim to the land.
Result: The application was disposed of, directing the Official Liquidator to hand over the land to the DDA while retaining possession of the structures for three months.
JUDGMENT
The applicant-Delhi Development Authority (hereinafter referred as 'the DDA') has filed the present application under Section 460(6) of the Companies Act, 1956 read with Rule 9 of the Companies (Court) Rules, 1959 for seeking appropriate directions for reversal of attachment and release of land from the custody of the respondent-Official Liquidator - admeasuring 7.0 Acres situated near CNG Petrol Pump, Opposite Indraprastha Park, Gate No.4, Outer Ring Road, New Delhi.
2. The applicant has pleaded that the applicant is a body corporate, established by the Central Government under the provisions of the Delhi Development Act, 1957 for carrying out the functions of promotion and securing the development of Delhi.
3. The applicant has further pleaded that M/s.Sand Plast (hereinafter referred as 'the Company') was registered under the Companies Act, 1956, having its registered office at Jaipur and Head Office at New Delhi. The said Company was declared to be wound up in terms of Section 433(e) of the Companies Act, 1956 by the order of this Court dated 18.03.2020 passed in S.B.Civil Company Petition No.9/1997 and the respondent is Official Liquidator appointed by this Court vide order dated 18.03.2020 in winding up petition.
4. The applicant has further pleaded that they owned the land admeasuring 7.0 Acres situated near CNG Petrol Pump, Opposite Indraprastha Park, Gate No.4, Outer Ring Road, New Delhi (Indrapath Revenue Estate) and a license deed dated 02.11.2000 was executed between the Company and the applicant for the purpose of running of a fly-ash bricks plant by the said Company on the said land.
5. The applicant has pleaded that the license deed was executed for a term of 20 years and clause (10) of the said license deed specifically mentioned about the consequences on the license deed, in the event of Company being wound up and as such license was to be automatically terminated.
6. The applicant has further pleaded that supplementary license deed dated 09.01.2003 was also executed between the Company and the applicant which formed part of the license deed dated 02.11.2000 and all the terms and conditions of the license deed were to remain the same.
7. The applicant has further pleaded that license fee, as agreed between the parties, was not paid by the Company to the applicant and as such, the Company had violated the terms of license deed at the initial stage itself.
8. The applicant has pleaded that around October, 2020 when the officials of the applicant visited and inspected the land given out on license, they found security guards were deputed over the said land claiming to be discharging their duties under the authority of the respondent-Official Liquidator. The applicant, after making enquiry, came to know that winding up order dated 18.03.2020 was passed by this Court and the said land was under the charge and custody of the respondent-Official Liquidator in terms of Section 456(2) of the Companies Act, 1956.
9. The applicant has further pleaded that they served a notice on the respondent-Official Liquidator to withdraw and waive all the claims in relation to the said land and hand over possession of the said land within a stipulated time.
10. The applicant has pleaded that reply was received from the office of respondent-Official Liquidator and information was given about winding up order passed by this Court and further the respondent-Official Liquidator asked the applicant to file appropriate application before this Court to seek necessary directions.
11. Counsel appearing for the applicant Mr.NPS Chawla submitted that the land in question was never the property of Company and the Company was mere a licensee which never had any ownership, right or title over the said land.
12. Counsel for the applicant Mr.Chawla further submitted that license deed has already been terminated on account of default and breach by the Company and further after passing of winding up order by this Court, the Company had no right over the
