Court affirms right of notice challenge by assignee under Deed of Assignment

The court upheld the Maharashtra Industrial Development Corporation's right to issue the show-cause notice challenged by the Petitioner, an Asset Management Company claiming rights under a Deed of Assignment from Dewan Housing Finance Corporation Ltd. The court emphasized that the Petitioner, as an assignee, could only act within the confines of the original agreement and respond to the notice with permissible defenses. The challenge to the show-cause notice failed, resulting in the dismissal of the Writ Petition. The court acknowledged the Petitioner's ability to respond to the notice as the successor in interest of Dewan Housing Finance Corporation Ltd.

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Issues:
Challenge to show-cause notice regarding violation of lease conditions and cancellation of plot allotment.

Analysis:
The Petitioner, an Asset Management Company, claimed to have acquired the rights of Dewan Housing Finance Corporation Ltd. under a Deed of Assignment. The Maharashtra Industrial Development Corporation leased a parcel of land to M/s. Shree Vaishnav Casting Pvt. Ltd., with the condition to construct a factory building by a specific date. A tripartite agreement was executed between the Maharashtra Industrial Development Corporation, M/s. Shree Vaishnav Casting Pvt. Ltd., and Dewan Housing Finance Corporation Ltd., allowing the latter to sell the premises in case of default, subject to certain conditions. The Petitioner, as the assignee, took over the rights of Dewan Housing Finance Corporation Ltd. under the Assignment Agreement. However, the Assignment Agreement did not have the signatures of any officer of the Maharashtra Industrial Development Corporation, which was not a party to the agreement.

On receiving a notice from the Maharashtra Industrial Development Corporation regarding the violation of lease conditions, the Petitioner challenged the notice, arguing that they could sell the secured asset as per the Tripartite Agreement. The court noted that the right of the financial institution to sell the asset was subject to the conditions of the agreement, meaning that if the lessee defaulted, the lease could be revoked. The court emphasized that the Petitioner, as an assignee, could only step into the shoes of the company and respond to the notice with permissible defenses under the law.

The court concluded that the Maharashtra Industrial Development Corporation was entitled to issue the show-cause notice, which was challenged by the Petitioner. The challenge to the show-cause notice failed, and the Writ Petition was dismissed. However, the court observed that the Petitioner, as the assignee of Dewan Housing Finance Corporation Ltd., could respond to the show-cause notice as the successor in interest of the company.

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