TaxTMI 
TaxTMI 
2004 (10) TMI 338
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.... Industrial Estate, Gumidipoondi; Plot No. 67 in the Industrial Estate was allotted in favour of one Minjur Shell Castings Private Ltd.; since it defaulted in the payment, the respondent took possession and later on the property was auctioned; the offer given by M/s. Chendur Forge Exports Ltd., was accepted by the respondent; on 4-6-1993, the respondent entered into a long-term lease of 99 years with M/s. Chendur Forge Exports Ltd., by a further deed of sale, dated 28-7-1993, the respondent sold the leasehold rights to M/s. Chendur Forge Exports Ltd. together with the partially constructed factory building and it was put in possession of the land on 27-1-1993. According to clause 24 of the deed, a condition is imposed that the lessee shall ....
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....tioner. By letter dated 13-3-1996, the factum of amalgamation was communicated to the respondent. After receiving the communication, the respondent has sent a letter, dated 7-5-1996, stating that in view of the retrospective amalgamation, the leasehold rights of the plot allotted to M/s. Chendur Forge Exports Ltd. should be now transferred in the name of the petitioner, subject to payment of current land cost. Accordingly, a sum of Rs. 13,00,750 was demanded by the respondent as difference in the land cost (difference in the price paid earlier by M/s. Chendur Forge Exports Ltd., and the current land cost). 3. According to the petitioner, there was no transfer of assets on winding- up of M/s. Chendur Forge Exports Ltd. since that company ....
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....nit in the complex "is merged with another company, the current land cost will be collected and the new incumbent will be asked to pay the difference in land cost, after adjusting the plot deposit paid by the original promoters". M/s. Chendur Forge Exports Ltd., a major shareholder, was holding 52.56 per cent of shares before merger and the same now become 28 per cent after merger. The respondent by letter dated 21-4-1997 informed the company that as per the norms, the petitioner's request for change of name in the records could not be considered by SIPCOT; the balance land cost has to be paid. The petitioner is new incumbent as per the Office Order of SIPCOT. The contention of the petitioner that there is no transfer, is not correct. The t....
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....ted that there is a change in ownership of the company and, therefore, it amounts to a transfer of the property and as per the lease deed when there is a change or transfer of ownership, the difference in cost of the land on the date of such transfer is payable and hence the impugned order is legal and enforceable and the writ petition has no merits. 7. Admittedly, the land was allotted on lease by the SIPCOT to M/s. Chendur Forge Exports Ltd.; the lease agreement between SIPCOT and M/s. Chendur Forge Exports Ltd. contains certain covenant running with the land : "Clause No. 24 : The party of the second part shall not directly or indirectly transfer, assign, sell, encumber or part with its interest, either in part or in whole, in a....
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....its interest, either in part or in whole of the land without the previous approval of SIPCOT. By amalgamating M/s. Chendur Forge Exports Ltd. with the petitioner-company, the interest in the property has been indirectly "transferred or assigned" in whole. Under those circum-stances, it shall be open to SIPCOT to impose any condition as it considers necessary. The condition that was found necessary by SIPCOT is that the petitioner must pay the difference in cost. 9. The contention of the petitioner is that the amalgamation of the two companies (by Court's order) has merged the assets of the two companies and, hence, there is no 'transfer' of any right in the land in favour of the petitioner-company. A recent decision of the Supreme Court ....