A statutory body retains no right to resume possession of leased land post-winding up without permission from the Company Court, despite lease cancellation being legally permissible.

ORDER :

Vivek Rusia, J.

The appellant / Kerala Industrial Infrastructure Development Corporation (KINFRA) has filed this company appeal under Section 483 of the COMPANIES ACT , 1956 being aggrieved by the interim order dated 19.06.2019 passed on I.A. No.255/2019 filed in Company Petition No.9 of 2011 by which the appellant has been directed to hand over the possession of 40 acres of lease land to Official Liquidator and also to keep the amount of Rs.41.40 crore in a separate interest-bearing account.

FACTS OF THE CASE

2. The appellant is a statutory body incorporated under the provisions of the Kerala Industrial Infrastructure Development Act, 1993 (in short 'the KIID Act'). The function of the appellant is to establish industries in the industrial area after identifying the appropriate industrial sites. The appellant is competent to acquire the land and transfer the same by way of lease, sale, exchange or otherwise to the industries.

2.1. A lease deed dated 27.10.2006 was executed between the appellant and M/s Zoom Developers Private Limited (which is in liquidation before this Court, hence, hereinafter referred to as ‘ the company in liquidation ’) for a period of 90 years for design, development & construction, operation and maintenance of International Exhibition and Trade Centre for international standards and quality. The appellant gave 18 months to the company in liquidation to complete the development activities and commencement of commercial operation. The company in liquidation did not comply with the timelines, despite several correspondence, meetings, warnings, assurance etc.

2.2. A show-cause notice dated 24.09.2010 was issued by the appellant contemplating termination of the lease on account of non- fulfillment of the terms and conditions. A reply to the show-cause notice was filed by the company in liquidation. Thereafter, a second show-cause notice was issued on 06.01.2011. The reply filed by the company in liquidation was not found satisfactory, therefore, vide notice dated 07.06.2012, the lease was terminated.

2.3. Being aggrieved by the aforesaid termination, the company in liquidation approached the High Court of Kerala by way of W.P. (C) No.16725 of 2012. The writ petition was disposed of by directing the petitioner therein to prefer an appeal before the Government of Kerala under Section 23 of the KIID Act.

2.4. During the pendency of the appeal, the Government of Kerala agreed to grant additional time for completion of the work, for which a supplementary agreement dated 03.04.2014 was executed. Despite the grant of extension of time, the company in liquidation did not complete the work. Accordingly, notices dated 14.11.2014 and 16.02.2015 were issued calling upon the company in liquidation to surrender the land. Again W.P. (C) No.7333 of 2015 was filed before the Kerala High Court which was disposed of vide order dated 17.03.2015.

2.5. The appellant received a notice dated 28.05.2015 from the Directorate of Enforcement intimating that the offence under the provision of the Prevention of Money Laundering Act, 2002 (in short 'the PML Act') has been registered against the company in liquidation. The appellant was also served with the copy of provisional attachment order No.02/2015-16 (INSZO) dated 28.07.2015 with the finding that the payments paid to the appellant were diverted from Exchange Earners' Foreign Currency Account and those amounts were used to acquire properties in the name of M/s Zoom Reality Projects Private Limited. Thereafter, the appellant issued a show-cause notice dated 01.08.2015 under Sectio