The main legal point established in the judgment is that the Unit acquired through auction purchase was free from encumbrances, and any liability attached to the property could not be passed on to the petitioner. The court emphasized the obligation of the respondents to consider the transfer of lease hold rights in favor of the petitioner in accordance with the relevant legal provisions and guidelines.

JUDGMENT :

1. The facts those stem out from the instant petition would reveal that the respondent 2 while acting through the respondent no. 3 issued/published a notice in a newspaper on 18.10.2015 therein offering for sale by auction of a Small Scale Industrial Unit, namely, M/s Mubarak Pharmaceuticals set up at Industrial Estate Khonmoh, Srinagar (hereinafter referred to as “the Unit”). The said notice is stated to have been followed by another notice dated 10.11.2015 in order to maximize the sale price of the Unit.

2. The petitioner herein is stated to have responded to the Notice/s (supra) and made an offer for purchase of the Unit for a price of Rs. 38,25,607/- vide letter dated 17.11.2015 along with an amount of Rs. 76,513/- being 2% of the requisite bid amount by way of a CDR. The bid amount offered by the petitioner is stated to have been enhanced during the negotiations to the tune of Rupees Forty Lacs and duly accepted by the respondent 2 as sale consideration for the Unit vide communication dated 30.11.2015.

3. It is being stated that the petitioner deposited the bid amount of Rupees Forty Lacs for purchase of the Unit in question under and in terms of Section 29 of the Jammu and Kashmir State Financial Corporation Act, 1951 (for short, Act of 1951) vesting all rights in/to the property unto the petitioner, whereupon the respondent 3 is stated to have called upon the respondent no. 8 to transfer the lease hold rights of the Unit in favour of the petitioner.

4. It is being next stated that consequent upon the vesting of the ownership rights in the petitioner of the Unit, the possession thereof came to be handed over to the petitioner on 04.05.2016 itself on the premise of “AS IS WHERE IS BASIS” as stipulated in the auction notice (supra).

5. It is being next stated that despite a request made by respondent 3 to respondent 8 for transfer of lease hold rights in favour of the petitioner qua the Unit, the respondent 8 did not effect the said transfer as was required to be effected in terms of Section 29 of the Act of 1951.

6. It is being further stated that the Unit had been purchased by the petitioner with the aim and objective of setting up of economically viable Industrial Unit for manufacturing, marketing/trading and distribution of mineral and aerated water, packaged drinking water and other non-alcoholic drinks and fruit juices for which a project report by the experts in the field had been got drawn.

7. It is being next stated that the petitioner continued to request the respondents 3, 6 and 8 in particular to transfer the lease hold rights in his favour of the Unit which the said respondents failed without any lawful reason and in this regard, even addressed a communication dated 19.12.2018 to the respondent 8 followed by an application in the prescribed format dated 14.06.2019 under Trade Marks Act, 1999, but in vain.

8. It is being further stated that the petitioner simultaneously submitted an application before the respondent 7 for provisional registration of the activity of the Unit besides approaching respondent 6 for transfer of the lease hold rights of the Unit in question who, however, addressed a communication No. SIDCO/ES/Kh/86/41/2867-70 dated 10.01.2020 to the respondent 7 herein seeking therein an NOC as also issuance of provisional registration for the Unit under the name and style of M/s Spring Hills Food Industries so that formal order of transfer of lease hold rights is issued. The letter dated 10.01.2020 as also response thereof made by the respondent 7 vide communication No. DIC/Dev-2020/280-MF/2304-07 dated 11.03.2020 are being impugned in the instant petition, seeking their quashment by the petitioner besides praying other reliefs in the instant petition.

9. The petitioner has maintained the petition inter alia on the grounds that the Unit came to be purchased by him through an auction under Section 29 of the Act of 1951 and as such, the same vested unto the petitioner entitling him to have the lease