TaxTMI 
TaxTMI 
2019 (10) TMI 1526
X X X X Extracts X X X X
X X X X Extracts X X X X
....issing the appeal, against an order allowing the Respondent's application Under Section 535 of the Companies Act, 1956 (hereafter "the Act") has been questioned. 2. The Appellant (hereafter "SASF") is a trust, constituted as a special purpose vehicle (SPV) by the Central Government for acquiring by transfer, the stressed assets of the Industrial Development Bank of India (IDBI), to administer and manage the stressed assets and to recover amounts due, by framing schemes of restructuring, settlement etc. with borrowers. IDBI, through a deed of assignment, unconditionally transferred all loans and advances granted by it, to SASF, including the loans and securities in relation to the second Respondent, the company in liquidation. 3. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l woes became acute; it approached the Board for Industrial Finance and Reconstruction (BIFR) under the Sick Industrial Companies (Special Provisions Act) 1985 ("SICA"). The proceedings attempting rehabilitation were to no avail; the BIFR on 24th September, 2002 held that reconstruction was not possible and concluded that the company had to be wound up. A reference was accordingly made to the Calcutta High Court, Under Section 20 of SICA. In the liquidation proceedings, the High Court directed the appointment of an Official Liquidator, requiring him to take charge of the company's (Wellman's) assets. 4. The first Respondent (hereafter "WBSIDC") to whom the West Bengal state had assigned the rights of lease, in the meanwhile, dete....
X X X X Extracts X X X X
X X X X Extracts X X X X
....She also submitted that since the lease was for a substantial period of 90 years, the so-called violation should not have resulted in the inference of a drastic result, i.e. forfeiture of valuable property. 7. Mr. Bhaskar Gupta, learned senior Counsel for WBSIDC, highlighted that the reasoning of the High Court is unexceptionable. He emphasized that the lease forfeiture was never challenged by the lessee, through the official liquidator. Instead, the Appellant SASF, which was only a mortgagee (of the leasehold rights) was seeking to question WBSIDC's right to forfeit the lease; when the lessor had no grievance in that regard. Clearly, a mortgagee could not have rights superior to the mortgagor. 8. Learned Counsel relied on the dec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he mortgagee (represented by the Appellant) could not claim rights superior to that of the lessee, is in consonance with settled law. In Phatu Rochiram Mulchandani (supra) it was held by this Court as follows: 29. On 19-1-2002, the Board passed the orders terminating the lease in respect of both the plots. In this termination order, after giving the past history of events which have already been noted above and mentioning that the Company had failed to construct the factory building and implement the industrial projects on the main land within the extended period and to execute lease agreement in respect of additional land, thereafter it was also stated that pursuant to the earlier resumption order, a writ petition was filed and be....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... We are, therefore, of the opinion that the Board was very well within its right to terminate the lease as provided in the lease agreement. ***************** ***************** 38. It is clear from the above that prior permission of the Court is required in respect of any attachment, distress or execution put in force or for sale of the properties or effects of the Company. We are of the opinion that the serving of cancellation notice simpliciter would not come within the mischief of this Section as that by itself does not amount to attachment, distress or execution, etc. No doubt, after the commencement of the winding up, possession of the land could not be taken without the leave of the Court. Precisely for this reason the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eas. Chapter III deals with establishment and constitution of the Board. Chapter IV deals with functions and powers of the Board and Chapter V deals with finance, accounts and audit of the Board. Chapter VI deals with application of the Public Premises Act and non-application of the Karnataka Rent Control Act, 1961 to the premises of the Board. Chapter VII deals with acquisition and disposal of land. Chapter VIII contains the supplementary and miscellaneous provisions. Section 13 in Chapter IV defines the functions of the Board as generally to promote and assist in the rapid and orderly establishment, growth and development of industries in industrial areas; and in particular, to develop industrial areas declared by the State Government and....