Posh Infrastructure Pvt. Ltd And Ors Vs Official Liquidator And Ors

1. By this Company Application, the applicant seeks an order and direction against the respondent no.2 i.e. the Regional Officer, MIDC to transfer the

immovable property being Plot No.B-16, MIDC, Taloja, Panvel Dist. Raigad admeasuring 4050 sq. meters in the name of the applicant being the

purchaser of the said property and payment on standard transfer charges and also seeks an order and direction to extend the time for building

completion by two years from the date of transfer of the said plot in the name of the applicant and for other reliefs. Some of the relevant facts for the

purpose of deciding this Company Application are as under :-

2. On 28th January, 1978 under a Partnership Deed, the firm namely M/s. Transpower Corporation was constituted. On 7th March, 1980 vide an

agreement executed between MIDC and the said M/s. Transpower Corporation, the said Plot bearing No. B-16 situated within Taloja Industrial Area

of MIDC, Taluka Panvel, Raigad District (hereinafter referred to as “the said plotâ€) was allotted to M/s. Transpower Corporation on the terms

and conditions set out therein. On 7th March, 1980, the MIDC handed over the possession of the said plot to the said M/s. Transpower Corporation.

On 4th May, 1980, the said M/s. Transpower Corporation was converted into a private limited company in the name “Transpower Engineering

Private Limitedâ€​.

3. On 31st December, 1980, the said partnership firm M/s. Transpower Corporation was dissolved. On 27th September, 1991, the said

M/s.Transpower Engineering Private Limited was converted into a limited company, being the company in liquidation, vide special resolution dated

27th September, 1991. Form No. 23 was also filed in that regard by Transpower Engineering Private Limited with the Registrar of Companies.

Sometime in the year 1998, M/s. Metal Tubes and Rolling Mills filed a winding up petition against the respondent company (in liquidation) in this Court.

By an order dated 22nd January, 2008, the respondent company was ordered to be wound up by this Court.

4. It is the case of the official liquidator that on 31st March, 2010 Shri Shantaram Hari Bhoir who is worker of the respondent company addressed a

letter to the official liquidator and informed that the said plot belonged to the respondent company in liquidation. Similar letter was also addressed by

the said Shri Shantaram Hari Bhoir on 23rd November, 2010 on behalf of himself and other workers of the respondent company.

5. On 20th December, 2010, the official liquidator convened a meeting of the creditors and workers. It was decided to take possession of the said plot.

The official liquidator accordingly addressed a letter dated 4th January, 2011 to all concerned informing that the possession of the said plot will be

taken on 29th January, 2011. On 29th January, 2011, the official liquidator took possession of the said plot. On 15th March, 2011, the official liquidator

received a letter addressed by Adv. C. N. Kumar on behalf of the workmen of the respondent company in liquidation giving details of the properties

belonging to the said company in liquidation including the said plot.

6. On 23rd January, 2012, the official liquidator invited claims from workers/creditors under Rule 148 of the Companies (Court) Rules, 1959. The last

date of filing of the claims was 10th February, 2012. The official liquidator received 285 claims. On 4th July, 2012, the official liquidator filed Official

Liquidator’s Report No. 261 of 2012 inter-alia praying for direction to permit the official liquidator to sell the said plot. On 21st June, 2012, this

Court directed the official liquidator to sell the said plot on “as is where is and whatever there is†basis and as per the terms and conditions of

sale. The official liquidator published a sale notice in two newspapers on 21st July, 2012 for inviting the bids in respect of the said plot. M/s. Attar

Buildcon Pvt. Ltd. submitted a bid for Rs.5,50,00,000/- to the official liquidator.

7. This Court by order dated 9th August, 2012 accepted the said offer made by the said M/s. Attar Buildcon Pvt. Ltd. in the sum of Rs.5,50,00,000/-.

This Court directed the official liquidator to execute the necessary documents in favour of the said M/s. Attar Buildcon Pvt. Ltd. and/ or their

nominees and handover the said property to M/s. Attar Buildcon Pvt. Ltd. The said M/s. Attar Buildcon Pvt. Ltd. deposited the entire payment of

Rs.5,50,00,000/- towards the sale price with the official liquidator. The official liquidator handed over the possession of the said plot of land along with

factory building to the said M/s. Attar Buildcon Pvt. Ltd. on 28th August, 2012.

8. On 6th February, 2014, the official liquidator executed Deed of Assignment which was duly registered in favour of the applicant on the said plot

being the nominee of M/s. Attar Buildcon Pvt. Ltd. The applicant addressed a letter to official liquidator on 24th March, 2015, seeking issuance of an

NOC in respect of the Water Dues for the said plot. It is the case of the official liquidator that it was in the record of the official liquidator that a

water bill was issued by the MIDC dated 11th March, 2015 in the name of Transpower Engineering Private Limited for an amount of Rs.4,78,508/-.

The said water connection however was disconnected.

9. On 25th June, 2014, the applicant addressed a letter to MIDC and informed about the execution of Deed of Assignment in favour of the applicant

and requested to transfer the said plot in the name of the applicant. The MIDC by its letter dated 13th August, 2014 requested the applicant to

produce various documents. The applicant by letter dated 3rd October, 2014 to MIDC submitted all the documents demanded by the MIDC and once

again requested the MIDC to transfer the said plot in the name of the applicant. The MIDC by letter dated 13th March, 2015 addressed to the official

liquidator confirmed that MIDC had received a request from the applicant for transfer of the said plot in favour of the applicant. The MIDC requested

the official liquidator to provide the documents on which basis the official liquidator had confirmed the ownership of the said plot in favour of the M/s.

Transpower Engineering Private Limited as the plot was leased out to M/s. Transpower Corporation vide Lease Deed dated 20th December, 1979.

There was no response from the official liquidator to the said letter addressed by the MIDC.

10. The MIDC by its letter dated 30th September, 2016 addressed to the applicant informed that the MIDC vide circular dated 23rd October, 2015

had issued guidelines to grant special extension in time limit as a last opportunity i.e. Amnesty Scheme 2015 for those industrial plot holders in whose

case the development period had expired on or before 31st August, 2013 and not had approached MIDC for grant of extension in building completion

certificate and requested the applicant to avail the said scheme.

11. It is the case of the applicant that applicant fulfilled all the obligations for transfer of the said plot in its name. The MIDC however did not transfer

the said plot on the ground that time limit as per that circular dated 23rd October, 2015 had expired on or before 31st August, 2013. The applicant had

not approached the MIDC for grant of extension in building completion certificate. The MIDC by circular dated 6th September, 2016 extended the

time limit for building completion certificate from 1st September, 2015 to 31st August, 2017. The applicant thus filed this Company Application on 31st

August, 2018 for various reliefs.

12. Mr. Kamat, learned counsel for the applicant invited my attention to various documents annexed to various affidavits filed by the parties and also

relied upon various judgments during the course of his argument. He also invited my attention to the contentions raised by the respondent no.2 MIDC

in the affidavit in reply and also the additional affidavit in reply filed by the respondent no.2 in this application and in the affidavit in reply filed by the

Official Liquidator in this application. It is submitted by the learned counsel that on 10th October, 1979, the respondent no.2 had allotted a plot no. B-16

to Transpower Corporation. The possession of the said plot was handed over to Transpower Corporation on 7th March, 1980. The order of allotment

was issued by the Area Manager of respondent no.2. He also relied upon the possession receipt dated 7th March, 1980 issued by the respondent no.2

in respect of plot no.B-16.

13. It is submitted by the learned counsel that the said plot no. B-16 was amalgamated with plot nos.B-25, 26 and 27 on 8th August, 1980 for the

proposed construction of a factory building. The respondent no.2 MIDC issued a letter dated 8th August, 1980 and communicated the grant of

permission for amalgamation of plot to the said Transpower Corporation which was a partnership firm. He submits that on 23rd February, 1981, the

Executive Engineer of the respondent no.2 approved the building plans for the proposed factory building for the plot nos. B-25, 26, 27 and also the said

plot bearing no. B-16. He invited my attention to a copy of the said approval dated 23rd February, 1981. He submits that on 27th May, 1981, CIDCO

had issued occupancy certificate for the plots B-25, 26 and 27 post amalgamation of the plots.

14. It is submitted that since the said plots bearing no. B-16 was amalgamated and occupation certificate was issued by CIDCO post amalgamation,

the said occupation certificate dated 27th May, 1981 would also apply for the whole plot including plot no. B-16. He submits that the conditions

imposed by the CIDCO for obtaining building completion certificate and occupation certificate for the entire amalgamated plot was satisfied. The

respondent no.2 was thus not entitled to charge any differential premium. He submits that the respondent no.2 did not communicate the order of

amalgamation to CIDCO who is the planning authority and thus the occupation certificate did not specifically mention the name of plot no.B-16.

15. It is submitted by the learned counsel that there was certain structure existing on the said plot bearing no.B-16. The said structure was ordered to

be demolished by this court by an order dated 9th August, 2012 in Company Application (L) No.483 of 2012. The respondent no.2 thus cannot be

allowed to allege that there was no construction on the said plot bearing no.B-16. He submits that in any event since the said plot bearing no. B-16

was a part of amalgamated plot, the respondent no.2 cannot be allowed to now contend that the predecessor in title of the applicant had failed to

obtain building completion certificate or to carry out construction within the time prescribed insofar plot no.B-16 is concerned.

16. Learned counsel invited my attention to the affidavit in reply filed by the respondent no.2 and would submit that the respondent no.2 has pleaded

ignorance as to how and when the plot no.16 became the property of the company in liquidation and how the said property was sold to the applicant.

He invited my attention to the letter dated 8th November, 1991 addressed by the respondent no.2 to the Transpower Engineering Private Limited

(predecessor of the company in liquidation) informing that it had taken note in the name of the Transpower Engineering Private Limited carrying on

business as the proprietor under the name and style of M/s. Transpower Corporation. He submits that it is thus clear that in the record of the

respondent no.2, the company now in liquidation was the owner/proprietor of Transpower Corporation.

17. Learned counsel for the applicant also invited my attention to the letter dated 29th January, 1992 addressed to the company in liquidation by the

respondent no.2 informing that it had noted the change in the name of the company in liquidation from Transpower Engineering Private Limited to

Transpower Engineering Limited. He submits that it is thus clear that as far back as in 1992, the company in liquidation was the lessee of the

amalgamated plot in the records of the respondent no.2. Learned counsel also placed reliance on a Tripartite Agreement dated 7th March, 1980

between the respondent no.2, Maharashtra State Financial Corporation and Transpower Corporation (predecessor of the company now in liquidation)

permitting the Transpower Corporation to create a mortgage on the plot bearing no.B-16.

18. It is submitted that the applicant is thus not required to pay any extension charges as claimed by the respondent no.2 nor is required to pay any

differential premium as claimed by the respondent no.2. The applicant is only required to pay standard transfer charges as per the circulars of

respondent no.2. It is submitted by the learned counsel that this company application has been filed by the applicant under section 446 of the

Companies Act, 1956 for seeking various directions. He relied upon section

 446 and also section 456 of the Companies Act, 1956 and would submit that on an order of winding up, the assets of the company in liquidation

vests in the Company Court through the Official Liquidator. He also placed reliance on section 446 (2) of the Companies Act, 1956 and would submit

that any question of law and fact which relates to or arises in the course of winding up of the company in liquidation, can be decided by the court

ordering winding up of the company.

19. It is submitted that the Company Court has been clothed with the power to decide any question whatsoever whether of fact or of law which arises

during the course of winding up. He submits that the Company Court thus has jurisdiction to issue necessary directions to one and all in respect of

matters interlinked with the disposal of the property of the company in liquidation by the Official Liquidator with the sanction of the Company Court.

He submits that since the issue pertains to the sale of asset of company in liquidation raised in this company application, the Company Court has

necessary jurisdiction to pass orders pertaining to the reliefs sought in the company application. In support of this submission, learned counsel placed

reliance on the judgment of this court in case of M/s.Transpower Engineering Limited (In liquidation) in Official Liquidator Report No.466 of 2016 in

Company Petition No.606 of 1998 delivered on 26th July, 2018 and more particularly paragraphs 1, 14 to 23 of the said judgment.

20. Insofar as the premium demanded by the respondent no.2 for the first transfer from the partnership firm to the company in liquidation is

concerned, learned counsel for the applicant submits that applicant is not liable to pay any such premium to the respondent no.2. He submits that the

basis of such demand made by the respondent no.2 is that the respondent no.2 did not have in its records the name of the company in liquidation as the

allottee/lessee of the said plot. It is the case of the MIDC that there is a transfer from the partnership firm to the company in liquidation attracting

differential premium. It is submitted that on amalgamation of these four plots, there became one plot. He relied upon the document at page 135 of the

further affidavit and would submit that it is clear that the amalgamation of the plot was sanctioned by the respondent no.2 subject to the conditions

mentioned therein. He also relied upon page 136 of the further affidavit and would submit that it is also clear that the MIDC had granted approval on

23rd February, 1981. He also relied upon the document at page 132 and would submit that the said document would also clearly indicate that all four

plots were treated as one plot in the plan.

21. It is submitted by the learned counsel that the contention of the respondent no.2 that it was not aware of the transfer of the said plot from the

partnership firm to the company in liquidation is ex-facie false. He invited my attention to the documents at pages 150 and 151 of the further affidavit

filed by the applicant dated 22nd July, 2019 and would submit that those documents would clearly indicate that the respondent no.2 had infact written a

letter to the company in liquidation that they have made a note of change of the name of the company in liquidation from the partnership firm into the

company in liquidation in its record. He submits that though those letters do not mention plot no.B-16, the same need not be mentioned as the

amalgamation of the said plot had already taken place as far back as in the year 1981 whereas those letters were issued by the respondent no.2 only

in the month of November 1991 and January 1992. He submits that the name of the company in liquidation in respect of the said plot already stands as

allottee/lessee in the records of respondent no.2.

22. In his alternate arguments, it is submitted by the learned counsel that the purported first transfer took place prior to the leasehold rights of plot

being assigned by the Official Liquidator to the applicant. The liability of the differential premium for the period prior to the assignment in favour of the

applicant thus could not be demanded from the applicant. If the respondent no.2 is entitled to recover any such premium in respect of the said plot, the

respondent no.2 can lodge its claim with the Official Liquidator who can on adjudication pay the respondent no.2 as per the provisions of sections

529A and 530 of the Companies Act, 1956.

23. Insofar as differential premium demanded by the respondent no.2 on the second transfer i.e. from the company in liquidation to the applicant

herein is concerned, it is submitted by the learned counsel for the applicant that the reference to the two circulars issued by the respondent no.2 i.e. on

12th May, 1998 and 12th December, 2011 would be necessary. He invited my attention to those circulars and would submit that those circulars would

clearly indicate that the sale by a Company Court of any asset of the company in liquidation is not a voluntary transfer. The circulars issued by the

respondent no.2 are very wide in nature. All involuntary transfers which are made pursuant to the orders of the competent court thus shall be

permitted on payment of standard transfer charges and not differential premium as demanded by the MIDC.

24. It s submitted by the learned counsel that the sale conducted by the Official Liquidator pursuant to an order passed by the Company Court cannot

be compared with the sale conducted in BIFR proceedings. In BIFR proceedings, endeavours are made to restructure a company. The Official

Liquidator on the other hand is an official appointed to liquidate the assets of the company in liquidation so as to pay and distribute the same amongst

the creditors in accordance with law. Such transfers effected pursuant to a Company Court are compulsory in nature and are not done voluntarily.

25. Learned counsel for the applicant submits that even otherwise the said circular dated 12th December, 2011 issued by the MIDC clearly indicates

that the sale conducted by the Official Liquidator cannot be treated as a sale between a willing buyer and a willing seller. It was a compulsory act

where the Company Court was disposing off the assets by selling the same. Such a sale is a formal sale or an involuntary sale which does not attract

payment of differential premium. In support of this submission, Mr.Kamat, learned counsel for the applicant placed reliance on the judgment of this

court in case of M/s.Transpower Engineering Limited (In liquidation) in Official Liquidator’s Report No.466 of 2016 in Company Petition No.606

of 1998 delivered on 26th July, 2018 and in particular 31 and 36 to 41 and would submit that since the sale in the present case of the leasehold rights in

favour of the applicant was conducted by the Company Court, the said sale of the leasehold rights would be categorized as a formal oral involuntary

sale not attracting differential premium. The applicant is thus liable to pay only the standard transfer charges and not differential premium for transfer

of the plot in the name of the applicant.

26. Insofar as extension charges demanded by the respondent no.2 is concerned, it is submitted by the learned counsel for the applicant that the

respondent no.2 has demanded the extension charges on the ground that the company in liquidation or its predecessor in title i.e. the said partnership

firm was not able to complete construction on the said plot and to obtain building completion certificate in accordance with the terms and conditions of

the said allotment. He submits that in any event since the extension charges demanded by the respondent no.2 pertains to an act of company in

liquidation or its predecessor in title prior to the purchase of the said property by the applicant, the respondent no.2 can always lodge its claim before

the Official Liquidator who on adjudication can make payment as per the provisions of the Companies Act, 1956.

27. It is submitted by the learned counsel that on 26th May, 1981, CIDCO, i.e. the planning authority at the relevant case had already issued an

occupation certificate for plot nos. B-25, B-26 and B-27 which were amalgamated with plot no.B-16. The said occupation certificate for plot nos.B-

25, B-26 and B-27 would also be applicable for plot no.B-16. The predecessor of the company in liquidation thus had already complied with the

conditions of MIDC for completing construction. No demand thus can be made by the respondent no.2 towards extension charges. Respondent no.2

was not the planning authority and became a planning authority much later around 1998. 28. It is submitted that the respondent no.2 has not shown a

separate requirement that under the General Development Control Regulations of CIDCO where in addition to an occupation certificate, a building

completion certificate was mandatory. He submits that the entire purpose under which the said respondent no.2 was incorporated was to ensure that

the plot allotted by the respondent no.2 was not kept idle and that an industry is established and kept running. He submits that since in this case the

building was constructed on the amalgamated plot and occupation certificate was granted, the construction on the amalgamated plot was complete and

the permission by CIDCO, the then planning authority to occupy and carry on the business from the said structure was permitted by issuance of

occupation certificate.

29. It is submitted by the learned counsel that unless it is shown that CIDCO separately issues building completing certificate after further compliance

as required under their General Development Control Regulations, the respondent no.2 cannot claim its entitlement for extension charges. He submits

that without prejudice to the said submission, respondent no.2 at the highest can lodge its claim with the Official Liquidator and claim such extension

charges in accordance with law. His client is a bonafide purchaser for value without notice and thus cannot be asked to pay such charges on the plot

in question. The auction took place and until the company application was preferred, the respondent no.2 had not indicated any claim pertaining to

extension charges. The respondent no.2 did not oppose the auction or to challenge the said auction conducted by the Company Court till date.

30. It is submitted by the learned counsel for the applicant that though the agreement between MIDC and the said partnership firm was

nomenclatured as an agreement to lease, for all practical purposes, the same was a lease and not a licence. He submits that the exclusive possession

of the said plot bearing no.B-16 was handed over to the company in liquidation and/or its predecessor in title. The said plot was allowed to be

amalgamated with the other plots. The company in liquidation and/or its predecessor in title were not given a mere right to use but were allowed

possession, enjoyment of property and construction on the said plot. The company in liquidation and/ or its predecessor in title were allowed to raise

finance by mortgaging a the rights allotted to them. Learned counsel placed reliance on the agreement dated 7th March, 1993 entered into between

the respondent no.2 and the said partnership firm annexed at page 152 of the company application. He submits that it was thus clear that an interest

was allowed to be created for raising finance by permitting to create mortgage of the said plot. He submits that nomenclature of an agreement is

irrelevant and what is relevant is reading the document in whole along with surrounding circumstances, intention of parties and conduct of the parties.

31. It is submitted that in this case, the conduct and intention of the parties would clearly indicate that the agreement to lease did not merely create a

licence as sought to be argued but has created substantial rights in favour of the said partnership firm and thereafter in favour of the company in

liquidation. He submits that the said agreement to lease though styled as an agreement to lease, is infact assignment of lease. What was remained to

be done was only a ministerial act of executing a formal lease deed. In this case, on completion of construction on the plot and obtaining of the

occupation certificate, the essential conditions of the lease deeds were fully satisfied. Learned counsel for the applicant placed reliance on the

judgment of Supreme Court in case of Smt.Rajbir Kaur and Another vs. M/s. S.Chokesiri and Company (1989) 2 SCC 1 9and in particular paragraphs

19 to 22, 24 to 26, 28 and 32 to 34 in support of the submission that merely because an agreement has a clause that no tenancy is to be created will not

itself preclude the instrument from creating a lease. The court has to see intention of parties and the surrounding circumstances including the conduct.

32. Learned counsel for the applicant placed reliance on the judgment of Delhi High Court in case of Municipal Corporation of Delhi vs. Pradip Oil

Corporation and Another, 100(2002) Delhi Law Times 442 (Full Bench) and in particular paragraphs 37, 38, 40 to 44 and 50 in support of the

submission that the substance of the document must be preferred to the form. The real test is the intention of the parties i.e. as to whether they

intended to create a lease or a licence. If the document creates an interest in the property, it is a lease but if only permits another to use of the

property, or which the legal possession continues with the owner, it is a licence. If a party gets an exclusive use of the property under such document,

he is considered to be a tenant but the circumstances may be established which negative the intention to create a lease. He submits that mere reading

of the clauses of the agreement is not sufficient. The context has to be read and understood in the context followed by the intention of the parties

along with the conduct of the parties.

33. Mr.Shah, learned counsel for the Official Liquidator on the other hand submits that the company in liquidation was ordered to be wound up by an

order dated 22nd January, 2008 passed by this court in Company Petition No.606 of 1998. There are four secured creditors of the company in

liquidation. The Official Liquidator had already taken possession of the three assets of the said company in liquidation including the plot nos. B-16 and

B-17 situated at Taloja, MIDC, Taluka Panvel, District Raigad. The possession of the plot nos. B-16 and B-17 has been taken by the Official

Liquidator on 29th January, 2011. It is submitted that the Official Liquidator has sold the said plot no.B-16 pursuant to an order dated 9th August, 2012

passed by this court to Attar Buildcorn Private Limited for Rs.5,50,00,000/-. As regards plot no.B-17 situated at Taloja, MIDC, Taluka Panvel, District

Raigad is concerned, it was understood from the records of the MIDC that the said plot does not belong to the company in liquidation.

34. It is submitted that pursuant to the orders passed by the Company Court on 13th January,2012, the Official Liquidator had invited claims from the

workers/creditors of the company under Rule 148 of the Company (Court) Rules, 1959 by giving advertisement in the newspapers Free Press Journal

(English) and in Navshakti (Marathi) published from Mumbai and in Lokmat (Marathi) published from Nagpur on 23rd January,2012. The last date of

filing the claims with the Official Liquidator was on 10th February, 2012. Pursuant to the said advertisement issued by the Official Liquidator, Official

Liquidator received 285 claims against the company in liquidation. The respondent no.2 did not make any claim to the Official Liquidator in respect of

the plot in question.

35. It is submitted by the learned counsel that out of 285 claims, the Official Liquidator has already admitted large number of claims so far. The

Official Liquidator has already declared the dividend to the workers in the sum of Rs.7,02,53,995/- so far. This court has also condoned delay of five

workers in filing their claim with the Official Liquidator. The Official Liquidator has admitted claims in respect of two of the workers in the sum of

Rs.5,30,542/- and Rs.5,40,350/- out of those five additional claims so far. It is submitted that pursuant to the request made by the respondent no.2, the

Official Liquidator has provided various documents to the respondent no.2. He submits that pursuant to the order dated 9th August, 2012 passed by

this Court in Official Liquidator’s Report No.261 of 2012, the Official Liquidator has already sold the said plot bearing no.B-16 to M/s.Attar

Buildcorn Private Limited for Rs.5,50,00,000/- who has nominated M/s.Posh Infrastructure Private Limited, the applicant herein.

36. It is submitted that the Official Liquidator has already executed a sale deed dated 7th February,2014 in respect of the said plot bearing no.B-16 in

favour of M/s.Posh Infrastructure Private Limited. He submits that the Transpower Corporation, a partnership firm was converted into

M/s.Transpower Engineering Private Limited and was later converted to M/s.Transpower Engineering Limited. He relied upon a copy of Form 8

registered with the Registrar of Companies, Maharashtra showing that M/s. Transpower Corporation was converted to Transpower Engineering

Private Limited. He submits that the said plot no.B-16 thus belonged to the said company in liquidation. He also relied upon the extract of the

Memorandum of Association of the company in liquidation which showed the conversion of the partnership firm into the Transpower Engineering

Private Limited.

37. Learned counsel for the Official Liquidator placed reliance on clause 13 of the terms and conditions of sale and would submit that the purchaser

has to pay taxes, charges, fees and outgoings in respect of the immoveable and moveable assets from the date of confirmation of sale in their favour.

Any earlier taxes, charges, fees and outgoings will be paid out of the sale proceeds in accordance with the provisions of the Companies Act, 1956

read with Companies (Court) Rules, 1959. He submits that the applicant has to pay all charges in respect of the transfer. He submits that the

respondent no.2 has not raised any demand on the official liquidator or on the applicant in respect of the transfer charges/ extension

charges/differential premium alleged to be payable on behalf of the company in liquidation. He submits that the respondent no.2 has also not

challenged the order passed by this Court on 9th August, 2012 allowing the sale of the said plot bearing no. B-16 in favour of M/s. Attar Buildcon

Private Limited for the sum of Rs.5.50 crores. The respondent no.2 also did not raise any issue from the year 1980 till the date of filing of this

company application in respect of the said property and more particularly the issue that the property was not on lease in favour of the company in

liquidation.

38. It is submitted by the learned counsel that the official liquidator was informed by Mr. Santaram H. Bhoir a worker of the company in liquidation by

letters dated 31st March, 2010 and 23rd November, 2010 that the said plot bearing no. B-16 belong to the company in liquidation. The official liquidator

accordingly convened a meeting with the creditors and workers on 20th December, 2010 and decided to take possession of the properties, details

whereof were provided by the said Mr. Bhoir through the official liquidator. On 4th January, 2011, the official liquidator addressed a letter to all

concerned informing them that possession of the said plot bearing no. B-16 would be taken on 29th January, 2011 and accordingly took possession

thereof on the said date fixed in the said letter. It is submitted that respondent no.2 has already recognized the company in liquidation as its lessee in

the respect of the said plot bearing no. B-16. The applicant had addressed a letter on 24th March, 2015 to the official liquidator seeking issuance of an

NOC in respect of the water dues for the said plot.

39. It is submitted that the official liquidator found in its record a water bill issued by MIDC dated 11th March, 2015 in the name of Transpower

Engineering Private Limited for an amount of Rs.4,78,508/-. The meter status for the said plot shows as disconnected. He submits that the respondent

no.2 thus has already noted the change of constitution of the partnership firm into a private limited company. The local authority otherwise would not

have issued a water bill in the name of the Transpower Engineering Private Limited. He submits that the said order dated 19th August, 2012 thus

passed by this Court thereby directing the official liquidator to sell the said plot bearing no. B-16 is final and binding on respondent no.2 also.

Respondent no.2 thus cannot be allowed to agitate its alleged claim in absence of any challenge to the said order dated 19th August, 2012.

40. Learned counsel submits that the official liquidator has complied with its duty under Section 456 of the Companies Act, 1956 by taking possession

and charge of the said property. The official liquidator had intimated the respondent no.2 in respect of the order of winding up passed by this Court

and requested to demarcate the said property. He submits that the respondent no.2 had infact agreed to demarcate the said property and had

submitted a plan showing the plot with demarcation on the basis of the surveyor’s report. The name of the allottee of the said property in the said

report was shown as the partners of M/s. Transpower Corporation. He submits that even at that stage of demarcation in the year 2012, the

respondent no.2 did not raise any issue contending that the said property being a licence in favour of the company in liquidation and not a lease as

sought to be now contended before this Court at this belated stage. The official liquidator has already sold the lease hold rights in the said property for

valuable consideration to the successful bidder and has already executed the requisite documents in favour of the applicant who was nominated by the

said successful bidder in respect of the suit property. The claim thus now made by the MIDC is an after thought.

41. It is submitted by the learned counsel for the official liquidator that the said partnership firm was converted into a private limited company on 4th

May, 1980. The said firm as an entity stood dissolved on 31st December, 1980. Subsequently, the private limited company was converted into a limited

company vide special resolution dated 27th September, 1991. Form 23 was also filed in that regard with the Registrar of Companies. There has been

vesting of properties firstly in the name of the private limited company and thereafter in the name of the limited company. There was no conveyance

of the property executable in favour of the limited company. He submits that all the properties of the firm vest in the limited company on the firm being

created as a company under the provisions of the Companies Act, 1956 but that vesting is not a consequent or incidental to a transfer but would

amount to a statutory vesting of properties in the company as per the provisions of the Companies Act, 1956. From 4th May, 1980 the said firm stood

replaced by the cloak of a private limited company i.e. Transpower Engineering Private Limited and from 27th September, 1991, the private limited

company was converted into a limited company being the company in liquidation.

42. Learned counsel for the official liquidator placed reliance on the judgment of this Court in case of Commissioner of Income Tax, Mumbai v/ s.

Texspin Engineering and Manufacturing Works, Mumbai, 2003 (5) Mah. Gen. 507 in which this Court had dealt with an issue in respect of levy of

capital gain tax under Section 45(1) and 45(4) of the Income Tax Act, viz-a-viz its applicability to a conversion under Part IX of the Companies Act,

1956. He relied upon paragraphs 5 and 6 of the said judgment and would submit that once there is a vesting of asset from a firm to a private limited

company and where the constitution of the firm itself had not changed, the properties are considered to be vested in the company, as they exist. This

ipso facto does not amount to a transfer of asset. The contention of the respondent no.2 that transfer charges are leviable on the basis that there was

a transfer of an asset from a firm to a private limited company is ex-facie erroneous.

43. Learned counsel for the official liquidator placed reliance on the circular dated 12th May, 1998 issued by MIDC annexed at page 97 of the

affidavit in rejoinder filed by the applicant. He submits that based on the condition no.3 set out in the said circular, the transfer in this case would be a

formal transfer i.e. transfer from promoter of the proposed private limited company to private limited company promoted by him. He also placed

reliance on the judgment of the Division Bench of this Court in Writ Petition No. 4191 of 2015 delivered on 5th February, 2020 and more particularly

on paragraphs 29 to 41 holding that the said circular dated 12th May, 1998 does not mention that formal transfer can only be between the original

allottee and transferee. He submits that the Division Bench of this Court interpreted the said circular and held that a transfer from a promoter of a

proposed private limited company to a private limited company incorporated by the same promoter simply amounts to a transfer and such transfer

would fall within the fourth category of a formal transfer.

44. Learned counsel for the official liquidator placed reliance on the Memorandum of Association of the private limited company and would submit

that even the said Memorandum of Association would make it clear that the object of the company in liquidation was to continue the business carried

on by the erstwhile partners in the firm M/s. Transpower Corporation. The private limited company was formed by the partners of the firm and thus

this case also would squarely fall within the fourth category of the said circular. He submits that the demand thus made by the respondent no.2 for

30% differential premium will not be attracted in view of the fact that the said transfer was a formal transfer in terms of the fourth category of the

said circular.

45. It is submitted by the learned counsel that in any event since the respondent no.2 seeks to apply the said circular dated 12th May, 1998 with

retrospective effect to the company in liquidation, the demand made by the respondent no.2 at this stage is also barred by law of limitation. This

submission is made by the learned counsel without prejudice to the submission that no such differential premium is liable to be paid. He submits that

the respondent no.2 now seeks to levy transfer charges with retrospective effect from the year 1980 on the basis of the said circular. He submits that

under the old guidelines, such transfers were considered as formal transfers. The respondent no.2 was fully aware about the change in the constitution

of the firm to that of the private limited company. The MIDC had provided the said water bill to the applicant when the applicant had requested for an

NOC in respect of the water dues for the said property in the month of March 2015. It is thus clear that the MIDC had verified its record and

thereafter had issued the water bill.

46. Learned counsel for the official liquidator placed reliance on the judgment of Supreme Court in case of Andhra Pradesh Power Co-ordination

Committee v/s. Lanco Kindapalli Power Limited and Ors., (2016) 3 SCC 468 in the context of the dues to be recovered by statutory authorities. It is

held by the Supreme Court in the said judgment that the test to be applied in absence of a period of limitation for recovery prescribed under the statue

is whether the claims, if legally not found to be recoverable in a civil suit, or in any other regular proceedings, on account of limitation, than such claims

cannot be entertained. The Supreme Court laid down those principles on the touchstone of Article 14 of the Constitution of India, in order to avoid

injustice and discrimination. It is held by the Supreme Court that if the nature of a statue is to enable speedy recovery of dues, than it would be ironic

to permit the creditor to recover dues beyond the period of limitation.

47. It is submitted by the learned counsel that it is trite law that any statutory body is required to raise demand within the prescribed period of limitation

from the date of cause of action and thus respondent no.2 having failed to raise any demand till date is now estopped from demanding any amount

either from the applicant or the official liquidator on the ground of the claims being barred by law of limitation. He submits that in any event it is not

even the case of the respondent no.2 that they have raised a demand on the applicant or the official liquidator. Since, more than 40 years have passed

from the date of the conversion of the firm into the private limited company in 1980 and more than 29 years from the date of conversion from private

limited company to limited company in 1991, the claims of respondent no.2 are hopelessly barred by law of limitation.

48. Without prejudice to the aforesaid submissions, learned counsel for the official liquidator submits that if this Court is of the view that respondent

no.2 may have a claim against the company in liquidation, namely transfer charges, differential premium and extension charges, than this Court may

consider directing MIDC to lodge its claim with the official liquidator and in that even the official liquidator shall decide and adjudicate the claim in

accordance with law and on its own merits.

49. Mr. Chawan, learned counsel appearing for the respondent no.2 on the other hand invited my attention to various averments made by the

respondent no.2 in the affidavits filed in this company application, documents forming part of compilation of the documents filed before this court by

his client including various circulars issued by the MIDC from time to time. After completion of his arguments, he also filed written arguments for

consideration of this court. It is submitted by the learned counsel that in the records of the respondent no.2, there is only an agreement to lease dated

17th March, 1980 in favour of the Transpower Corporation, a partnership firm who had been described as a licencee in the said agreement to lease.

He relied upon clauses 1, 2, 3(a), 3(d), 3(l) and 5 to 8 of the said document.

50. It is submitted that the said agreement clearly provided that only after the construction of the factory building within the specified time and

obtaining building completion certificate from Executive Engineer of respondent no.2, a lease for 95 years would be executed. He submits that the

extension of benefit of concession/waiver/restriction on transfer charges as well as extension charges in respect of the said plot can not be granted to

the auction purchaser of the plot in possession of the company in liquidation who was only a licencee of the said plot. He submits that the applicant

had no transferable interest in the said plot and such concession would not be just and legal, as it would deprive the respondent no.2 of the funds which

would have been utilized for creating/augmenting industrial infrastructure in the State of Maharashtra. He submits that if the prayers in the company

application are granted, it would result in utilization of public funds for the benefit of private entity.

51. It is submitted by the learned counsel that Maharashtra Industrial Development Act, 1961 is a special Act enacted by the State Legislature and is

a complete code in respect of various issues and aspects about lands and their disposal in notified industrial areas of MIDC. The said Act had

received the assent of the Hon’ble President of India under Article 254 (2) of the Constitution of India on 20th February, 1962. The respondent

no.2 has more than 250 industrial areas and estates throughout the State of Maharashtra. He submits that in respect of the Taloja industrial area of the

respondent no.2, the lands have been acquired under the said MID Act, 1961. The said area is a notified industrial area under section 2(g) of the said

MID Act. The respondent no.2 has been established by the State Government in exercise of powers under section 3 of the MID Act.

52. Section 15 of the MID Act empowers the respondent no.2 to acquire and hold the properties both moveable and immoveable as well as to lease,

sale and exchange or otherwise transfer any property held by it on such conditions as may be deemed proper by the MIDC. Section 43-1A of the said

MID Act cast an obligation on the MIDC to deal with the lands which are developed by or under the control and supervision of the Corporation in

accordance with the regulations made in that behalf. Learned counsel placed reliance on sections 64 and 67 of the said MID Act and would submit

that section 64 empowers MIDC to frame the regulations in consultation with the State Government in respect of various matters enumerated therein.

Section 67 is a non-obstante clause which states that the provisions of the said MID Act shall have effect notwithstanding anything inconsistent

therewith contained in any other law.

53. Learned counsel strongly placed reliance on the judgment of Supreme Court in case of Shri Ramtanu Co-operative Housing Society Limited and

Another vs.State of Maharashtra, 1970 (3) SCC 323 and in particulars paragraphs 3, 4, 5, 9, 11, 15 and 21. He submits that in exercise of powers

under section 64 of MID Act, 1961, the MIDC has framed MIDC Disposal of Land Regulations, 1975 which regulations are statutory in nature and

deal with the terms and conditions for disposal of lands. He relied upon regulation 1(c), 4.4, 4.5, 6, 13 and 18 thereof in support of his submission. He

submits that the said regulations applied to all the lands transferred to or placed at the disposal of the MIDC by the State Government and lands

purchased or otherwise acquired or held by the MIDC. He relied upon the definitions of the ‘building completion certificate’ and ‘building

regulations’ and submits that the MIDC is empowered to dispose of the plots of land by public auction or by entertaining individual applications.

The said plots can be allotted on rental basis or on premium lease basis or partly on rental basis and partly on premium basis. The plot in question had

been allotted on the basis of the application received from the partners of the erstwhile Transpower Corporation.

54. It is submitted by the learned counsel that only after payment of premium or security deposit as the case may be, the allottee shall execute an

agreement to lease in Form C provided in the said regulations in accordance with regulation 13. He submits that under regulation 18, on production of

‘Building Completion Certificate’ the allottee shall be entitled to execution of a lease in their favour in Form ‘D’ appended to the said

regulation. Only after building completion certificate is obtained by the allottee, a lease would be executed in favour of the allottee under regulation 18.

It is submitted that in this case, as far as plot no.B-16 is concerned, an agreement to lease dated 7th March, 1980 was executed between partners of

Transpower Corporation and the MIDC. The said partners were referred to as the licencees. Clause 1 of the said agreement itself provided that the

licencee shall have licence and authority only to enter upon the piece of plot for the purpose of building and executing works on the said plot.

55. Learned counsel relied upon clause 2 of the said agreement and would submit that the said agreement was not to be construed as a demise in law

of the said plot of land or any part thereof to the licencee of any legal interest. The said agreement provided that construction of building and obtaining

building completion certificate has to be completed within a period of two years. Under clause 3 of the said agreement, the licencee was required to

observe and perform various stipulations and more particularly that such licencee will not directly or indirectly transfer, assign, sale, encumber or part

with his/their/its interest under or the benefit of the said agreement or any part thereof in any manner whatsoever without the previous consent in

writing of the Chief Executive Officer and it shall be open to the Chief Executive Officer to refuse such consent or grant the same subject to such

conditions including the condition for payment of additional premium as he may in his absolute discretion think fit. He submits that in view of the said

clause, the licencee could not have directly or indirectly transfer, assign or sell or part with its interest under or the benefit of the said agreement or

any part thereof in any manner without a previous consent of MIDC.

56. Learned counsel placed reliance on clause 7 of the said agreement and would submit that the licencee was entitled to the execution of lease deed

for a period of 95 years only after the Executive Engineer would have certified that the factory building and the work had been erected in accordance

with the terms of the said agreement and if the licencee would have observed all the stipulations and the conditions mentioned in the said agreement

and not otherwise. He submit that since the said agreement to lease dated 7th March, 1980 was only a licence as contemplated under regulation 13 of

the MIDC Disposal of Land Regulations, 1975 and since the said Transpower Corporation did not construct a factory building on the said plot bearing

no.B-16 and did not submit any building completion certificate, no lease contemplated under clauses 7 and 8 read with regulation 18 was executed.

The said Transpower Corporation continued to be the licencee of plot no.B-16.

57. It is submitted that the company in liquidation was in possession of plot no.B-16 only as a licencee as the said company joined the said Transpower

Corporation as a partner. He submits that the said plot thus could have never become the property of the company in liquidation and thus the Official

Liquidator could not have auctioned the said licence in respect of plot no.B-16. In support of his submission that such an agreement to lease can never

be termed as lease, he relied upon the judgment of Supreme Court in case of ICICI vs. State of Maharashtra (1999) 5 SCC 70 8and in particular

paragraphs 1 to 4, 6 and 8. He also placed reliance on the judgment of this court in case of State of Maharashtra vs. Jasubhai Business Services

Private Limited, 2019 SCC OnLine Bom 4414 and in particular paragraphs 4, 5, 8, 16 to 19, 25 and 32.

58. It is submitted by the learned counsel that since the MIDC being a statutory corporation governed by the provisions of the said MID Act and the

Land Disposal Regulations in respect of allotment of plots in MIDC Industrial Area, the said allotment has to be strictly in accordance with the

procedure and the format prescribed under the said MIDC Disposal of Land Regulations, 1975. Any deviation made by the licencee would not be

binding on the MIDC and would not create any rights in favour of such allottee.

59. It is submitted that the issuance of the building completion certificate by the authority is not an empty formality but it ensures that the

construction/structure made by the allottee is legal, lawful and in accordance with sanction plan and in conformity with the law. He placed reliance on

the judgment of this court in case of M/s.Emtex Industries (India) Limited and Another vs. Maharashtra Industrial Development Corporation and

Another, 2004(4) All M.R. 185 and in particular paragraphs 29 and 30. He submits that any action of the allottee or the officials of MIDC contrary to

the regulation would not create any right in favour of the company in liquidation or convert the agreement to lease dated 7th March, 1980 into a lease

as contemplated under regulation 18 read with clauses 7 and 8 of the said agreement to lease. He submits that the regulations framed by the MIDC

are in exercise of statutory power provided under the provisions of MID Act and are in the nature of subordinate legislation and became part of the

said statute. Any action thus contrary to such regulations would render such action as bad in law and would not create any right in favour of any

person.

60. Learned counsel placed reliance on the judgment of Supreme Court in case of Pepsu Road Transport Corporation, Patiala vs.Mangal Singh and

Others, (2011) 11 SCC 702 and in particular paragraphs 27 and 29. He submits that the reliance placed by the applicant and the learned counsel for

the Official Liquidator on the water bills issued to the company in liquidation or letter in respect of extension charges issued to the applicant or

permission to mortgage or execution of tripartite agreement dated 7th March, 1980 amongst MIDC, applicant and Maharashtra State Financial

Corporation in respect of the loan would not convert the agreement to lease entered into in accordance with regulation 13 unless there is compliance

of regulation 18 read with clauses 7 and 8 of the said agreement to lease and a separate lease has been executed. He distinguished the judgment of

Supreme Court in case of Smt.Rajbir Kaur and Another (supra) and judgment of Delhi High Court in case of Municipal Corporation of Delhi (supra)

relied upon by the learned counsel for the applicant and would submit that none of these judgments would assist the case of the applicant for the

aforesaid reasons.

61. Learned counsel for the respondent no.2 submits that the company in liquidation in this case was incorporated on 4th May, 1980. He relied upon

the provisions of the Memorandum of Association of the company in liquidation and would submit that the main object of company was to enter into

partnership in the business carried out by the firm Transpower Corporation. There is thus no conversion of partnership firm into company as sought to

be canvassed by the Official Liquidator in the affidavit in reply filed by him. He submits that in another proceeding of the said company in liquidation,

the liquidator had taken a stand that the company in liquidation was incorporated with the object of joining as a partner in Transpower Corporation.

The said stand taken by the Official Liquidator is recorded by this court in its order dated 10th October, 2018 in Company Application No.577 of 2016

in Company Petition No.606 of 1998 filed by Transpower Corporation vs. The Official Liquidator of Transpower Engineering Limited and Others. He

distinguished the judgment of this court in case of Commissioner of Income Tax, Mumbai vs. Texspin Engineering and Manufacturing Works Mumbai,

2003 (5) MLJ 507 (supra) on the aforesaid ground and would submit that the said judgment would not assist the case of the Official Liquidator.

62. It is submitted by the learned counsel that the said order dated 10th October, 2018 passed by this court would also clearly indicate that the said

partnership firm Transpower Corporation was dissolved on 31st December, 1980 which fact was not communicated to MIDC. The said company in

liquidation continued in occupation of plot no.B-16 without paying transfer charges or without getting lease of the said property. The correspondence

between the parties i.e. between MIDC and the Transpower Corporation revealed that in the year 1980 MIDC by letter dated 9th April, 1980 had

called upon the partners of Transpower Corporation to submit building plans in respect of plot no.B-16 on or before 7th September,1980 and to

complete the construction on or before 7th March, 1982. He submits that on 3rd October, 1986, the MIDC had once again called upon the

Transpower Corporation to obtain building completion certificate as the allottee had started occupying the premises without obtaining building

completion certificate.

63. Learned counsel for the respondent no.2 relied upon the letter dated 20th October, 1986 addressed by the said Transpower Corporation to the

MIDC thereby submitting that they wanted to construct a small shed on plot no.B-16 but due to shortage of funds could not construct the said

structure. The MIDC vide letter dated 27th February, 1987 replied that since they had voluntarily submitted to the condition for construction, they

should construct on the said premises. He submits that even as per the admission of the said licencee, there is no construction on the said plot no.B-16

as per the plans and therefore there was no question of any building completion certificate and consequently lease in respect of the said plot which

continued to be a licence in the hands of the company in liquidation.

64. Learned counsel for the respondent no.2 placed reliance on the judgment of the Supreme Court in case of M/s.Parasram Harnand Rao vs.

M/s.Shantiprasad Narinder Kumar Jain and Another, (1980) 3 SCC 565 and in particular paragraphs 2 and 6. He submits that the Official Liquidator

merely steps into the shoes of the company in liquidation and thus sale by the Official Liquidator under the orders of court is on behalf of the company

in liquidation. Such a sale by the Official Liquidator thus would be a voluntary sale. He submits that in this case only an agreement to lease dated 7th

March, 1980 between the MIDC and the partners of Transpower Corporation was executed. The said agreement was purely a licence with a

provision for execution of lease deed in future upon completion of the factory building within the stipulated time and after submitting the building

completion certificate issued by the Executive Engineer of MIDC in accordance with provisions of MIDC Disposal of Land Regulations, 1975.

65. It is submitted by the learned counsel that the official liquidator had thus when stepped into the shoes of the company in liquidation, was only as a

licencee of the said plot bearing no.B-16. The Official Liquidator thus could not have validly and legally transferred the licence in respect of the said

plot granted in favour of Transpower Corporation by conducting an auction. He submits that the Official Liquidator has misrepresented the nature or

character of the document viz. agreement to sale and agreement to lease before the Company Court. The Company Court relied upon the said

representation and directed the auction of the alleged leasehold rights of the company in liquidation. Such representation goes to the root of the matter

and vitiates the entire action. He submits that the respondent ought to have brought this fact to the notice of the Company Court in a parallel

proceedings initiated by the auction purchaser.

66. It is submitted that the Company Court will have to consider whether the Official Liquidator could have validly transferred the licence by

misrepresenting the character of such licence as lease to the Company Court. It is submitted that since the licence is auctioned by the liquidator by

misrepresentation and without the permission of the MIDC the entire auction stood vitiated. The auction purchaser does not get any rights under the

said auction. He submits that the Official Liquidator after taking possession of the plot ought to have considered the true nature of agreement to lease.

67. It is submitted that the applicant also has not conducted the due diligence about the nature of the said title document while acquiring the rights

under the auction on ‘as is where is basis and whatever there is basis’. The applicant also ought to have ascertained whether the agreement to

lease dated 7th March, 1980 was a lease or licence. The bear reading of the said agreement itself would have made it clear that it is only a licence

and not lease. He submits that the auction purchaser thus would not get any rights to the said plot no. B-16 without the consent of MIDC. He

distinguished the judgment of this Court in case of Milind Agnihotri (supra) relied upon by the learned counsel for the applicant on this ground and

would submit that the said judgment would not assist the case of the applicant. The said judgment deals with inter-se dispute between the creditors as

to who had better right over the property which was sold to the auction purchaser. There is was no dispute about the title or the nature of the property

raised by the owner of the said property.

68. Insofar as the reliance placed by the applicant on the letter dated 8th August, 1980 from MIDC allegedly sanctioning the amalgamation of plot nos.

B-25, B-26, B-27 and B-16 is concerned, it is submitted by the learned counsel that the said sanction letter dated 8th August, 180 itself had imposed

two conditions i.e. 1) that this permission is exclusively for the purpose of construction of factory building and 2) that for all other purposes including

payment of annual rent all the plots will be treated as separate one. He submits that the said sanction letter was only for construction purpose and for

all other purpose the plots are treated as separate including the nature of document namely lease or licence. He submits that at the relevant time in

respect of plot no. B-16, there was only a licence to enter upon the plot and to construct a factory building.

69. The sanctioning of plans by communication dated 23rd February, 1981 would also not alter the nature of the said licence in respect of plot no. B-16

because only after construction as per the sanction plans and obtaining the building completion certificate, a lease in respect of the said plot bearing no.

B-16 could have been executed. He relied upon clause 21 of the said sanction letter dated 23rd February, 1981 and would submit that even the said

clause clearly obliges the allottee to obtain building completion certificate from the executive engineer before occupying the building. He submits that

the said occupation certificate dated 27th May, 1981 issued by CIDCO in respect of plot no. B-25, B-26 and B-27 only would not alter the

requirement of the building completion certificate for plot no. B-16 under the agreement to lease dated 7th March, 1980 read with the Regulation 18 of

the MIDC Disposal of Land Regulation, 1975.

70. Learned counsel for the respondent no.2 submits that without prejudice to all the submissions recorded aforesaid made by the respondent no.2,

considering the peculiar facts and circumstances of the present case and without treating this as a precedent, respondent no.2 had extended an offer

to the applicant described in paragraph 17 of the additional affidavit dated July 2019 filed by the area manager of MIDC. He submits that in the said

without prejudice offer, it was clearly provided that the MIDC may consider recognizing the applicant as licencee in respect of the said plot no. B-16,

if the differential premium is paid to MIDC in respect of the said transfer in favour of the applicant and if the applicant obtains extension of time for

completing factory premises by paying extension charges to MIDC. It is submitted that after the said payment is made, MIDC would issue necessary

transfer order and grant fresh extension to the applicant for completing the building on the said plot. Only after the factory building is constructed in

accordance with the sanction plan and building completion certificate is obtained by the applicant, the lease can be executed in favour of the applicant.

He submits that during the course of the arguments the applicant has refused to accept the said without prejudice offer made by the respondent no.2

considering the facts and circumstances of this case.

71. Learned counsel for respondent no.2 placed reliance on Section 15 of the MID Act and would submit that the said provision prescribes the powers

of the MIDC. Under the said provision, the MIDC may lease, sale, exchange or otherwise transfer any property held by it on such conditions as it

may deem proper. He also placed reliance on Section 64 of the MID Act and would submit that the regulations framed by MIDC by exercising

powers under Section 64 i.e. MIDC Disposal of Land Regulations, 1975 are statutory in nature and deal with the terms and conditions for disposal of

lands. He relied upon Regulation 29 and would submit that in exercise of the said power under Section 15A read with Regulation 29, the MIDC has

issued various circulars from time to time taking into consideration the requirement of industrial areas, the policy of State Government and the aims

and object of the MIDC i.e. for securing the orderly establishment in industrial areas and industrial estates of industries in the State of Maharashtra

and to assist generally in the organisation thereof.

72. It is submitted that the MIDC has issued 5 circulars which deal with transfer charges as well as extension charges, dated 12th May, 1998, 14th

August, 1998, 12th December, 2011, 10th June, 2013 and 29th April, 2014. He submits that in this case the agreement to lease has been executed

between the parties on 7th March, 1980. He relied upon clause 1 and clause 3(a) and (d) and would submit that those clauses cast obligation on the

licencee i.e. the Transpower Corporation to complete factory building in accordance with the sanctioned plans within two years and to obtain building

completion certificate to that effect. Clause 3(l) prohibits any direct or indirect transfer, assignment, sale of the interest or benefit under the agreement

without prior permission of MIDC. Clause 5(b)(i) empowers MIDC to enter upon the plot for failure to observe any of the terms and conditions of the

agreement to lease and also empowers it to terminate the same.

73. Learned counsel placed reliance on clause 5(b)(ii) and would submit that the said clause provides that MIDC may permit the licencee occupation

of the demised premises on payment of such additional premium as may be decided by MIDC. Clause 7 deals with grant of lease after completion of

factory building and obtaining building completion certificate from executive engineer, MIDC. He submits that for any transfer prior permission of

MIDC is required and if the licencee fail to construct factory building and wants to continue on the premises/plot than the licencee has to pay the

extension charges to MIDC. The agreement to lease between the parties read with the Regulations of 1975 are binding on the allottee and now on the

official liquidator having stepped in the shoes of the company in liquidation. The official liquidator thus could not have any better rights under the said

agreement to lease than the allottee itself. The official liquidator is bound by the terms and conditions of the agreement to lease read with the

Regulations 1975. The entire action of the official liquidator of auctioning the licence premises is thus vitiated. He relied upon the clause 8 of the

circular dated 10th June, 2013 and would submit that the said clause specifically provides that where the period of development of plot had expired

than transfer should not be permitted without payment of extension charges for development of plot.

74. It is submitted by the learned counsel that since Transpower corporation has failed to construct the building by 7th March, 1982 and to obtain the

building completion certificate within the time prescribed, if the applicant wants to retain the plot, applicant will have to pay extension charges as

required under clause 4(b)(ii) of the agreement to lease dated 7th March, 1980. The official liquidator ought to have obtained the extension by paying

extension charges before conducting an auction on the said plot. The payment of extension charges is thus binding on the official liquidator and the

applicant. Extension of time for development of the plot is possible only upon actual payment either by the liquidator or by the applicant which is pre-

requisite for getting extension. The applicant or the official liquidator cannot ask the MIDC to waive off the extension charges when the applicant as

well as the official liquidator are merely licencees having no better title in the property except as provided in the agreement to lease dated 7th March,

1980. 75. It is submitted by the learned counsel that merely because official liquidator has been appointed of the assets of the company in liquidation, it

cannot be a fetter on the liability to pay extension charges under the agreement to lease as failure to pay the extension charges brings the agreement

to lease to an end. The liquidator or the applicant cannot request this Court to re-write the contract between the MIDC and the said Transpower

Corporation to waive off or restrict the extension charges. This Court has no power under Section 446(2) or Section 457 of the Companies Act, 1956

to re-write the contract.

76. It is submitted by the learned counsel for the MIDC that extension charges are the charges for retaining the plot which otherwise would have gone

back to the MIDC on determination of agreement to lease for failure to complete the construction within the stipulated time. The extension charges is

a pre-requisite for holding over the plot on behalf of the company in liquidation as liquidator has merely stepped into the shoes of the company in

liquidation. The transfer of licence by liquidator would not convert it to lease at the hands of the applicant. The applicant will have to pay the extension

charges to retain the plot as admittedly there is no building completion certificate and consequential lease between MIDC and the allottee.

77. It is submitted by the learned counsel that the judgment of this Court delivered on 26th July, 2018 in the matter of M/s. Metal Tubes and Rolling

Mills would not assist the case of the applicant or the liquidator. He submits that in the said matter there was a lease between MIDC and the company

in liquidation. The official liquidator had auctioned the lease hold rights of the plot. However in this case, it is only a licence and not a lease. The

licence would not create any property rights in the allottee which could be transferred in an auction. No permission of MIDC was admittedly obtained

before auctioning the rights under the agreement to lease. There is the fundamental difference between the matter in hand and the facts before this

Court in the matter of M/s. Metal Tubes and Rolling Mills.

78. It is submitted by the learned counsel for the MIDC that MID Act, 1961 had received assent of the Hon’ble President of India on 28th

February, 1962 under Article 254(2) of the Constitution of India. Section 67 of the MID Act is a non-obstante clause which states the provisions of the

MID Act shall have effect notwithstanding anything inconsistent therewith contained in any other law. The lands in MIDC industrial area under MID

Act, 1961 which is a complete code notwithstanding inconsistency with Transfer of Property Act if any, the transfer of property excluding agricultural

land falls under entry 6 of the concurrent list. The provisions of MID Act and Regulations framed under the said Act would thus prevail and the

agreement to lease dated 7th March, 1980 can only be converted to lease in accordance with the provisions of MIDC Disposal of Land Regulations,

1975. Learned counsel submits that the Company Applicant thus filed by the applicant deserves to be dismissed with exemplary cost.

79. Mr. Kamat, learned counsel for the applicant in rejoinder reiterated the submissions made by him in his initial arguments. He distinguished the

judgment of Supreme Court in case of Shri Ramtanu Co-operative Housing Society Limited (supra) relied upon Mr. Chawan, learned counsel for the

respondent no.2 on the ground that the said judgment was dealing with the challenge to the constitutional validity of the MID Act. The principle applied

in this case was doctrine of pith and substance. It was nobody’s case that the legislature whilst enacting MID Act has trenched upon a different

entry in the concurrent list. He submits that in any event, the presidential assent under Article 254 of the Constitution of India, is of no assistance as it

has no application qua the Companies Act, 1956 which is in list I and in the concurrent list. The said judgment thus would not assist the case of the

respondent no.2 and is distinguishable in the facts of this case.

80. Learned counsel for the applicant distinguished the judgment of this Court in case of M/s. Emtex Industries (India) Limited and Another (supra) on

the ground that in the said judgment there was a challenge to a demand notice issued by MIDC. There is no such demand notice issued by MIDC in

this case either on the official liquidator or anybody else. The said judgment was dealing with the case where the petitioner claimed that MIDC was

refusing to accept the building completion certificate issued by the area manager of MIDC and that MIDC was illegally demanding penal rate for

water charges. The division bench was not dealing with the case where occupation certificate was issued and that penal charges were being levied

because building completion certificate was not obtained. He submits that the said judgment would not assist the case of the respondent no.2 at all.

81. It is submitted that in any event the said judgment was delivered at a time when MIDC was the planning authority and therefore MIDC could have

issued a building completion certificate on satisfaction of the condition as per their rules and regulations. The same need not be the case with the

CIDCO which has its own GDCR. He also relied upon paragraph 31 of the said judgment and would submit that the said paragraph makes it very

clear that the building completion certificate was not granted on account of unauthorized construction at the behest of the petitioner. However, that is

not the case in the present case. In this case the construction was completed and occupation certificate was granted.

82. Learned counsel for the applicant distinguished the judgment of Supreme Court in case of ICICI vs. State of Maharashtra (supra) relied upon by

the learned counsel for the respondent no.2 on the ground that in the said judgment provisions of Bombay Stamp Act dealing with the definition of

lease was considered which definition is totally different. In context of Stamp Act, the Government is concerned with the collection of the Stamp

Duty. The collector has to look only at the nomenclature of the document without getting into the aspect of intention of the parties and the conduct of

the parties. In this case, the possession was handed over to the licencee in the said judgment only for the purpose of erecting the building for housing

of the officers and no other purpose until grant of the lease.

83. Learned counsel also relied upon paragraph 8 of the said judgment and would submit that the possession and control of the property in the facts of

that case was that of the owner. In the present case, the exclusive possession was of the company in liquidation. MIDC had permitted amalgamation

of the plot. The other three plots bearing nos. B-25, B-26 and B-27 were leasehold plots in respect of which lease deeds were already executed. No

landlord would permit amalgamation of a licenced plot with the leased plot. MIDC had also permitted creation of mortgage of the plot no. B-16

admittedly which would also show that the intention was to treat the agreement of lease as a lease itself and not the licence. The said judgment is thus

clearly distinguishable in the facts of this case.

84. Learned counsel for the applicant distinguished the judgment of this Court in case of State of Maharashtra vs. Jasubhai Business Services Private

Limited (supra) relied upon by the learned counsel for the respondent no.2 on the ground that the said judgment is not at all relevant for this case. He

invited my attention to paragraphs 8, 9, 24 and 28 of the said judgment and would submit that the definition of the lease for the purpose of Stamp Act

is different. In case of licence there is no transfer of interest in favour of the licencee. No permission could have been accorded for mortgaging the

said plot since it was only a licence. There is a distinction between a lease under the Bombay Stamp Act and otherwise.

85. It is submitted by the learned counsel that loan was obtained by the company in liquidation with permission of MIDC. This admitted fact itself

would clearly indicate that rights were created in the said plot of land by the MIDC in favour of the company in liquidation. The financial institution

who had given loan to the company in liquidation had also allowed the leasehold rights to be sold. It is submitted by the learned counsel that the

circulars relied upon by the respondent no.2 would assist the case of the applicant and not the respondent no.2. The applicant has already paid the

entire consideration amount. The learned counsel for the respondent no.2 has not dealt with the issue of limitation raised by the official liquidator in his

argument across the bar or even in the written arguments.

86. Mr. Shah, learned counsel for the official liquidator in rejoinder submits that if this Court comes to the conclusion that the MIDC is entitled to

recover any amount on transfer of the said plot in question to the applicant under an order passed by this Court, MIDC be directed to lodged its claim

before the official liquidator which claim would be considered on its own merits.

REASONS AND CONCLUSIONS

87. The applicant has prayed for an order and direction against the MIDC for transfer of immovable property in prayer clause (a) in the name of the

applicant on payment of standard transfer charges and seeks extension of time for building completion by two years from the date of transfer of Plot

No.B-16 in the name of the applicant. The applicant has also prayed for an order and direction to supply water on Plot No.B-16 on payment of water

charges from the date of confirmation of sale.

88. This Court shall first consider whether this Court is empowered to grant reliefs as prayed by the applicant under Section 446(2) of the Companies

Act, 1956 or not. A perusal of the record indicates that on 28th January 1978 Transpower Corporation, a Partnership Firm was constituted. On 7th

March, 1980 a plot bearing No.B-16 was allotted by MIDC vide agreement executed between MIDC and said Transpower Corporation. On 7th

March, 1982 MIDC handed over possession of the said plot to the said Transpower Corporation. On 04th May, 1980, Transpower Corporation was

converted into Private Limited Company under the name of Transpower Engineering Pvt. Ltd. On 27th November, 1991, the said Transpower

Engineering was converted into a Limited Company which company came to be wound up subsequently (hereinafter referred to as the Company in

Liquidation). The Form No.23 was filed with the Registrar of Companies in that regard.

89. It is not in dispute that M/s. Metal Tubes and Rolling Mills had filed a Company Petition against the said company seeking winding up of the said

company in the year 1998. The said company was ordered to be wound up by this Court by an order dated 22nd January, 2008. On 29th January,

2011, the Official Liquidator took possession of the said Plot bearing No.B-16. The Official Liquidator was informed about the said plot by some of the

workers of the said company in liquidation in the month of November/December 2010.

90. On 13rd January, 2012, the Official Liquidator invited claims against the said company in liquidation under Rule 148 of the Companies (Court)

Rules 1959 pursuant to which the Official Liquidator received 285 claims. The Official Liquidator thereafter filed a report (OLR 261/12) for seeking

possession to sell the said plot. The Official Liquidator published a sale notice for the said plot in the newspapers and also displayed the said notice on

the board of this Court, Ministry of Corporate Affairs and the Official Liquidator.

91. On 9th August, 2012, this Court passed an order allowing the said OLR 261/12 permitting the Official Liquidator to sell the said plot to Attar

Buildcon Pvt. Ltd. On 25th June, 2014, the Official Liquidator handed over the possession of the said plot to the said successful bidder. The Official

Liquidator has already executed and registered a Deed of Assignment in favour of the applicant, on 6th February, 2014 in respect of said plot being

the nominee of the said successful bidder Attar Buildcon Pvt. Ltd.

92. It is not in dispute that till date the MIDC has not raised any demand for payment of any differential premium or any other charges arising out of

the transfer of the said plot in favour of the Transpower Engineering Pvt. Ltd. or Transpower Engineering Limited or either Attar Buildcon Pvt. Ltd.

or even the applicant from Official Liquidator.

93. It is not in dispute that the Official Liquidator had sold the rights in the said plot in favour of the company in liquidation pursuant to an order dated

9th August, 2012 passed by the Company Court under the provisions of the Companies Act, 1956 and handed over possession of the said plot to the

successful bidder and thereafter executed a Deed of Assignment on 13th August, 2014 in name of the applicant being nominee of the said successful

bidder.

94. In case of M/s. Metal Tubes and Rolling Mills in the same Company Petition No.606 of 1998 in Official Liquidator Report No.466 of 2016, this

court has considered the powers of Company Court under Section 446(2)(d) of the Companies Act, 1956 and several other issues which are raised by

the MIDC in its affidavit and reply, written arguments and across the bar. This Court in the said Judgment has construed Section 446(2)(d) of the

Companies Act and has held that the powers under Section 446 bestowed on this Court are so wide that the Court has power “to decide any other

question whatsoeverâ€, “whether of law or fact†“which may relate to or arise in course of the winding up of the companyâ€. The expression

“any other question whatsoever†as well as the expression “which may relate to or arise in the course of winding of the company†are words

of wide import, clothes the company Court with the power to decide any question whatsoever that may arise whether of law or fact, which may relate

to or arise in course of the winding up of the company. It is held that the power as given under Section 446(2)(1)(d) therefore could include the power

to grant a declaration as prayed for in the said Official Liquidator Report.

95. After construing Section 456(1) of the Companies Act, 1956, this Court held that power of Company Court is vast. The leasehold rights of the

company are an asset of the company which is capable of sale through the process of liquidation. The Official Liquidator has power to take

possession even MIDC property given on lease and to sell the subsisting leasehold rights during the the Court of winding up. Under Section 457(1)(c)

of the Companies Act, 1956, the Official Liquidator in winding up by the Court shall have power with the sanction of Court to sell the immovable

property by public auction or private contract with power to transfer the whole thereof to any person or body corporate, or to sell the same in parcels.

This Court considered the Judgment of this Court in case of Maharashtra Industrial Development Corporation & Ors. Vs Mahendra G.Wadhwani

dated 23rd November, 1995, MANU/MH/0086/1995 in which it was held that the Company Court has jurisdiction to issue necessary directions to one

and all in respect of matter interlinked with the disposal of the property of the company under liquidation by the official liquidator with the sanction of

Court.

96. It is held by this Court that the issue as to whether MIDC is entitled to any of the charges viz, differential premium or extension charges and

whether transfer is normal transfer or non-formal transfer certainly relates to and arises in the course of the winding up of the company. Though the

property has been leased to the company in liquidation, the leasehold rights of the property belonged to the company and therefore, it is in the custody

of the company in liquidation, who had in fact taken possession. Under Section 457, the Official Liquidator in the winding up by the Court has power

of course with the sanction of the Court to sell the leasehold rights. Since this relates to an asset of the company viz. the leasehold rights, is certainly

relates to and arises in the course of the winding up of the company. This Court has jurisdiction to decide the prayers sought in the Liquidator’s

Report and thus, the Official Liquidator is not required to go to Civil Court or file Writ Petition under Article 226 of the Constitution of India.

97. This Court is of the view that the issue as to whether MIDC is entitled to recover any premium on the transfer of the property sold by sanction of

the Company Court in respect of assets of the company in liquidation is an issue incidental and arise in the course of the winding up of the company

and thus, can be tried by the Company Court under Section 446(2) of the Companies Act, 1956. The principles laid down by this Court in this company

petition in the judgment dated 26th July, 2018 squarely applies to the facts of this case. This Court does not propose to take any different view in the

matter on this issue.

98. This Court shall now decide the issue whether the MIDC is entitled to recover the differential premium in respect of the said property sold

pursuant an order passed by the Company Court for the first transfer of the partnership firm i.e. M/s. Transpower Corporation in favour of the

Company in Liquidation as claimed or otherwise, the differential premium for the second transfer i.e. from company in liquidation to the applicant as

demanded during the course of the argument or is entitled to recover only standard transfer charges or not? Learned Counsel for the applicant, for the

Official Liquidator and for MIDC made several submissions on this issue before this Court and relied upon whether provisions of the Companies Act,

1956, MID Act and various regulations framed by MIDC under the said MID Act and also various judgments delivered by the Supreme Court and this

Court in support of their rival contentions.

99. It was vehemently contended by Mr. Chawan, learned counsel for the MIDC that according to the records of MIDC, there is an agreement of

lease dated 17th March, 1980 in favour of the M/s. Transpower Corporation, a partnership firm who had been described as licencee in the said

agreement to lease. The MIDC could have executed a lease deed for 95 years only after the construction of the factory building within specified time

and obtaining Building Completion Certificate by the licencee from the Executive Engineer of MIDC under various clauses of the said Agreement to

Lease. It is also vehemently urged by the learned Counsel for the MIDC that the MIDC being a statutory Corporation is governed by the MID Act

and land disposal regulations in respect of the allotment of plot in MIDC Industrial Area and thus, the said allotment has to be strictly in accordance

with the procedure and the format provided under the MIDC Disposal of Land Regulations Act, 1975.

100. A perusal of the Agreement to Lease dated 7th March, 1980 between MIDC and the partners of M/s. Transpower Corporation indicates that the

MIDC had accorded necessary permission to create mortgage of the licencee/ licencee’s rights in aforesaid land in favour of the lender subject to

the terms and conditions contained therein. It was further provided that the lender or the Financial Institution or either of them may sell the

licencee’s rights in all over the said plot of land to realize the amount subject to certain payment of premium to the MIDC. Pursuant to the said

order, possession of the said plot No.B-16 was handed over to Transpower Corporation by MIDC.

101. The mortgage was created in respect of the said plot by the said Transpower Corporation. A perusal of clauses (a), (c) and (d) and clauses 1 to

1(3), 3(b) and 3(d) clearly indicates that the interest is allowed to be created for raising finance by the MIDC in favour of the said Transpower

Corporation by creating mortgage on the said plot and gave power to the lender to sell the said plot for recovering its dues. The said Transpower

Corporation was also given possession of the plot by the MIDC even for the purpose of carrying out construction thereon. Supreme Court in case of

Smt.Rajbir Kaur and Another (supra) has held that the question whether a transaction is a lease or a licence “turns on the operative intention of the

parties†and there is no single, simple litmus test to distinguish one from the other. The twin principles test by which a lease is distinguishable from a

licence are (i) the right to exclusive possession involving the transfer of an interest in the property and (ii) the rent stipulated by way of consideration

for the grant.

102. Delhi High Court in case of Municipal Corporation of Delhi (supra) has held that (a) to ascertain whether a document creates a licencee or lease,

the substance of the document must be preferred to the form, (b) that real test is the intention of the parties whether they intended to create a lease or

a licence, (c) if the document creates an interest in the property, it is a lease but if only permits another to use of the property, of which the legal

possession continues with the owner, it is a licence (d) if under the document a party gets exclusive possession of the property, prima facie, he is

considered to be a tenant, but the circumstances may be established which negative the intention to create a lease.

103. The lender who was mortgagee in respect of the said plot also construed the said mortgage transaction by accepting the leasehold rights of the

said Transpower Corporation in the said plot as and by way of security. This Court also while granting permission to sell the rights of the Company in

Liquidation by order dated 21st June, 2012 also considered the rights in favour of the company in liquidation of the said plot as the leasehold rights. The

MIDC has not challenged the said order passed by the Company Court directing the Official Liquidator to sell the leasehold rights in the said plot till

date though the said order was passed as far back as on 21st June, 2012. The principle of law laid down by Supreme Court in case of Smt.Rajbir Kaur

and another (supra) and Delhi High Court in case of Municipal Corporation of Delhi (supra) apply to the facts of this case. I am respectfully bound by

the principles of law laid down by the Supreme Court in Smt.Rajbir Kaur and another (supra). I am in agreement with the views expressed by the

Delhi High Court in case of Municipal Corporation of Delhi (supra). This Court is thus, of the view that the intention of the parties in the Agreement

dated 7th March, 1980 was that tenancy was created in favour of Transpower Corporation in the said land with right to create mortgage for availing

finance thereon.

104. The next question that arises for consideration of this Court is whether any of the transfer of the said property of the said plot was a formal

transfer or non-formal transfer or whether such transfer was voluntarily or involuntarily. This Court shall also consider whether the MIDC is entitled

to recover any differential premium under any of the circular issued by MIDC from the applicant or from the Official liquidator or recover only

standard transfer charges.

105. A perusal of the record indicates that the said partnership Transpower Corporation was converted into Transpower Engineering Pvt. Ltd. On 4th

May, 1980 and the said Private Limited Company was subsequently converted into a Limited Company on 27th September, 1991 which is now in

liquidation. A copy of the Form No.8 was also filed with the Registrar of Companies, Maharashtra, Mumbai which is also placed on record. There is

thus no substance in this submission made by the learned Counsel for MIDC. The MIDC was fully aware of conversion of the partnership firm

Transpower Corporation into the Transpower Engineering Pvt. Ltd. and thereafter, by Transpower Engineering Pvt.Ltd. in favour of Transpower

Engineering Limited i.e. the Company (in liquidation). In the further, affidavit dated 23rd July, 2019 filed by the applicant, the applicant has annexed

the copy of the letter dated 4th November, 1991 which is not disputed by the MIDC. The said letter indicates that the said letter was addressed to the

said M/s. Transpower Engineering Pvt. Ltd. informing that the MIDC had taken a note about the change in the name of Transpower Engineering Pvt.

Ltd. There is no substance in the submission of learned Counsel for the MIDC that MIDC was not aware of conversion of said Transpower

Corporation in Transpower Engineering Pvt. Ltd. and thereafter by the Transpower Engineering Pvt. Ltd. to Transpower Engineering Limited.

106. On perusal of the letter dated 29th January, 1992 annexed at page 151 of the pleadings, it is clear that on the basis of fresh incorporation

certificate, the MIDC had noted the change in its records, in name of Transpower Engineering Ltd. MIDC informed that further correspondence

would be in the name of Transpower Engineering Limited. Though both these letters had not referred to Plot No.B-16, MIDC did not dispute before

this Court that plot No.B-16 was amalgamated with plot Nos.B-25, B-26 and B-27. Be that as it may, the factum of change in the name of M/s.

Transpower Engineering Pvt. Ltd. to M/s. Transpower Engineering Limited on the basis of fresh Certificate of incorporation is not disputed by the

MIDC. The amalgamation of Plot No.B-16 had taken place with the Plot Nos.B-25, B-26 and B-27 in the year 1981.

107. Though the factum of change from Transpower Corporation to M/s. Transpower Engineering Pvt. Ltd. and thereafter, in the name of M/s.

Transpower Engineering Ltd. was to the knowledge of MIDC as far back atleast on 29th January, 1992, no claim of any nature whatsoever was

made by the MIDC against Transpower Corporation or thereafter against the M/s. Transpower Engineering Pvt. Ltd. or M/s. Transpower

Engineering Ltd. till date or against the Official Liquidator after an order of winding up is passed on the 22nd January, 2008 by this Court till date.

108. A perusal of the record further indicates that by letter dated 24th March, 2015 the applicant had made a request to the Official Liquidator for

seeking issuance of NOC in respect of the water dues for the said plot. The Official Liquidator in his record found a water bill issued by MIDC in the

name of M/s. Transpower Engineering Pvt. Ltd. in respect of the said Plot No. B-16 for the month of February 2015. The MIDC vide its letter dated

23rd August, 2014 in response to the application made by the applicant for transfer of the said plot in its favour demanded various documents including

the request letter of Official Liquidator for transfer of plot in favour of the applicant through this Court, certified Copy of Deed of Assignment

executed by the Official Liquidator and transferee copy of the order passed by this Court dated 24th December, 2018 allowing to execute the said

Deed in favour of the applicant and no dues certificate from the Dy. Engineer, SPA & WS, Sub-Division, MIDC Taloja.

109. In case of Andhra Pradesh Power Coordination Committee (supra) , the Supreme Court has held that the test to be applied in absence of a

period of limitation for recovery prescribed under the statute is whether the claims, if legally not found to be recoverable in a civil suit, or in any other

regular proceedings, on account of limitation, than such claims cannot be entertained. Such principles are laid down in order to avoid injustice and

discrimination to a party. In view of the provisions of MID Act or the Regulations framed by MID under the provisions of the said Act, no period of

limitation is prescribed for recovery of differential premium or any other payment from the lease holder of any of its plot. The test to be applied by the

Courts thus is that whether such dues if any, could be recovered in a Civil Court in the recovery proceeding or any other proceedings or not. Mr.

Chawan, learned Counsel for the MIDC did not deal with this crucial aspect of the issue of limitation raised by the learned Counsel for the Official

Liquidator.

110. Insofar as the recovery of differential premium from the first transfer is concerned, more than 40 years have been passed from the date of

conversion of the firm i.e. Transpower Corporation into M/s. Transpower Engineering Pvt. Ltd. and more than 29 years from the date of conversion

from the Transpower Engineering Pvt. Ltd. to the Transpower Engineering Ltd. The respondent No.2 was fully aware of such transfer at least more

than 40 years from the date of conversion of partnership into the Private Limited Company i.e. in the year 1980 and for more than 29 years from the

conversion of Private Limited Company into a Limited Company in 1981. The claim if any, of the MIDC for differential premium on the first transfer

is thus ex-facie, barred by law of limitation.

111. There is no dispute about the proposition of law raised by Mr. Chawan learned Counsel for MIDC that MIDC is a Statutory Authority constituted

under the provisions of MID Act, 1961 or that the provision of MIDC for disposal of Rent Regulation Act, 1975 are statutory in nature and deal with

the terms and conditions of the disposal of a lands of MIDC. Such statutory powers vested in MIDC however does not empower the MIDC to

recover time barred claims towards differential premium or any other payment form licencee or transferee of any plot given on lease or licence.

112. There is no merit in the submission of Mr. Chawan, learned Counsel for the MIDC that the Transpower Corporation was only a licensee in

respect of said plot of land and no lease was created in its favour by MIDC by agreement dated 17th September, 1980. A perusal of various

agreements which have to be read with the subsequent correspondence exchanged between the parties and their conduct required to ascertain the

intention of the parties as to whether any interest was created in the said plot in favour of said Transpower Corporation by MIDC or not clearly

indicates the creation of lease in favour of the Transpower Corporation. Insofar as the reliance placed by the learned Counsel for the MIDC on the

Judgment of Supreme Court in the case of Shri Ramtanu Co-operative Housing Society Ltd. (supra) is concerned, a perusal of the said Judgment

clearly indicates that the Supreme Court has considered the challenge to the constitutional validity of the MID Act in the said Judgment. It was not the

case of the MIDC that the legislature whilst enacting the MID Act had trenched upon the different entries in the concurrent list.

113. Mr. Kamat, learned Counsel for the applicant is right in his submission that the presidential assent of the Article 254 of the Constitution of India is

of no assistance to MIDC as it has no application qua the Companies Act which is in list-I and not in the concurrent list. The Judgment of Supreme

Court in Shri Ramtanu Co-operative Housing Society Ltd. (supra) is clearly distinguishable in the facts of this case. Insofar as the Judgment of

Division Bench of this Court in case of M/s. Emtex Industries (India) Ltd. & Anr. (supra) relied upon by the learned Counsel for the MIDC is

concerned, this Court in the said Judgment had considered the situation where there was a challenge to the demand notice issued by the MIDC. The

Petitioner before this Court in the said matter had challenged a demand notice issued by MIDC. MIDC was refusing to accept the building completion

certificate issued by Area Manager of MIDC and that MIDC was illegally demanding penal rent for water charges. The Division Bench of this Court

in the said Judgment was not dealing with the case where the occupation certificate was issued and the penal charges were levied because building

completion certificate was not obtained. The said Judgment of this Court in the case M/s. Emtex Industries (India) Ltd. & Anr. (supra) would thus not

assist the case of the MIDC and is clearly distinguishable in the facts of this case.

114. Insofar as the Judgment in the case of ICICI (supra) relied upon by the learned Counsel for the MIDC is concerned, the Supreme Court was

dealing with the definition of lease under the provision of Bombay Stamp Act. In the said Judgment the definition of lease was considered in the

context of Stamp Act for the purpose of collection of stamp duty. The Supreme Court accordingly held that the Collector has to look at the

nomenclature of the document without getting into the intention of the parties and the conduct of the parties. In this case the possession of the

property was handed over by MIDC to Transpower Corporation. The exclusive possession of the said plot was with the Transpower Corporation and

thereafter with the Transpower Engineering Private Ltd and thereafter with Transpower Engineering Ltd. The Judgment of Supreme Court in the

case of ICICI (supra) is clearly distinguishable in the facts of this case and does not assist the case of Respondent No.2. Similarly the Judgment in the

case of State of Maharashtra & Ors. Vs. Jasubhai Business Services Pvt. Ltd. & Anr. (supra) is also clearly distinguishable in the facts of this case

and would not assist the case of respondent no.2 on the ground that definition of “lease†for the purpose of Stamp Act is different. Mr. Kamat,

learned Counsel for the applicant is right in his submission that if only a license would have been created in favour of the Transpower Corporation in

respect of suit plot, the MIDC would not have accorded permission for mortgage of the said plot in favour of the said Transpower Corporation.

115. A perusal of the letter dated 8th November, 1991 from MIDC to Transpower Engineering Pvt. Ltd. indicates that MIDC had taken a note in the

name of M/s. Transpower Engineering Pvt. Ltd. carrying out the business under the name and style of M/s. Transpower Corporation. Though there

was a reference to Plot Nos. B-25, B-26 and B-27 in the said letter, fact remains that it was to the knowledge of MIDC that M/s. Transpower

Engineering Pvt. Ltd. was carrying on business as a Proprietor under the name and style of M/s. Transpower Corporation. It is the case of MIDC

itself that the said Transpower Corporation was subsequently dissolved in the year 1980. Similarly letter dated 29th January, 1992 from MIDC to M/s.

Transpower Engineering Pvt. Ltd. also clearly indicates that the MIDC has taken cognizance of a fresh certificate of incorporation and noted in its

record the change from the name of M/s. Transpower Engineering Pvt. Ltd. to M/s. Transpower Engineering Ltd. and accordingly informed M/s.

Transpower Engineering Ltd. that further correspondence would be made in the name of M/s. Transpower Engineering Ltd. It is not in dispute that

the said M/s. Transpower Engineering Ltd. was subsequently ordered to be wound up by this Court in Company Petition filed by M/s. Metal Tubes

and Rolling Mills (in Company Petition No. 606 of 1998).

116. Mr. Chawan, learned counsel for the MIDC strongly placed reliance on communication dated 8th August, 1988 and Occupancy Certificate dated

27th August, 1981 granted by CIDCO and would submit that in the said communication dated 8th August, 1988 about amalgamation, it was clearly

clarified that the said amalgamation was only for the purpose of construction of factory building and all other purposes of the plots would be treated as

separate. The said Occupancy Certificate was only in respect of Plot B-25, B-26 and B-27 by CIDCO. Learned Counsel vehemently contended that

on the basis of building completion certificate issued by Executive Engineer of MIDC, the MIDC has executed a lease deed dated 20th December,

1979 in respect of Plot Nos. B-25, B-26 & B-27. No such lease deed was executed in respect of plot No. B-16 by MIDC either in favour of

Transpower Corporation or Transpower Engineering Pvt. Ltd. or in the name of Transpower Engineering Ltd. This Court is of the view that since the

interest in the said plot was already created by MIDC in favour of M/s. Transpower Corporation by agreement dated 7th March, 1980 execution of

lease deed was merely the ministerial act required to be carried out in favour of the said M/s. Transpower Corporation and MIDC or thereafter

between Transpower Engineering Pvt. Ltd. and MIDC.

117. There is no substance in the submission of Mr.Chawan, learned Counsel for Respondent No.2 that the said M/s. Transpower Corporation was

only a licensee and thus even if the rights of Transpower Corporation as licensee would be considered as transferred in favour of M/s. Transpower

Engineering Pvt. Ltd. or thereafter in favour of M/s. Transpower Engineering Ltd., the Official Liquidator could not auction the said alleged license

treating as property of the company in liquidation without consent of MIDC and without getting lease deed of the said plot in favour of the Official

Liquidator. There is also no merit in the said submission that the said plot was not the property of company in liquidation and was only a licence. The

fact remains that the MIDC has not challenged the transfer of the said plot firstly by M/s. Transpower Corporation in the name of M/s. Transpower

Engineering Pvt. Ltd. and thereafter in the name of M/s. Transpower Engineering Ltd. though it had taken cognizance of said changes as far back as

in the year 1991-92.

118. There is no dispute about the proposition of law canvassed by Shri Chawan, learned Counsel for the MIDC that the Official Liquidator stepped

into the shoes of the company in liquidation and thus the Official Liquidator cannot claim any right, title or interest superior to the right, title or interest

of the company in liquidation in respect of land in question or any other asset of the said company. However, since the MIDC has not challenged the

transfer of the said plot till date and also has not challenged the order passed by the Company Court permitting the Official Liquidator to sell the right,

title or interest of the company in liquidation by a public auction and the said sale having been confirmed by the Company Court, this application cannot

go into the validity and legality of the order passed by the Company Court granting permission in favour of the Official Liquidator to sell the right, title

or interest of the company in liquidation in the said plot in these proceedings.

119. This Court in case of M/s.Transpower Engineering Limited (In liquidation) in Official Liquidator Report No.466 of 2016 in Company Petition

No.606 of 1998 filed by M/s. Metal Tubes and Rolling Mills in its Judgment dated 26th July, 1980 also construed various circulars issued by MIDC

permitting the MIDC to demand differential premium and other charges whilst disposing of the plots of MIDC in favour of third party. This Court also

considered the right of MIDC to recover premium from the transfer on certain categories of transfer under circulars dated 12th May, 1998 and 12th

December, 2011. This Court adverted to an unreported Judgment of Division Bench of this Court in the case of M/s. Colour Tech Coating (I) Ltd. Vs.

Maharashtra Industrial Development Corporation & Ors. in Writ Petition No. 2288 of 2014 delivered on 4th February, 2015 on the issue whether the

transfer of the land which was subject matter of the said proceeding was a voluntary transfer or was an involuntary transfer. The said Judgment of

Division Bench was pressed in service by the learned Counsel for the MIDC in support of his contention that the transfer in question in the matter

was involuntary and thus the MIDC was entitled to collect 30% differential premium for the transfer.

120. A learned Single Judge of this Court in the said Judgment dated 26th July, 1980 in Official Liquidator’s Report No. 466 of 2016 distinguished

the said Judgment of Division Bench of this Court in the case of M/s. Colour Tech Coating (I) Ltd. Vs. Maharashtra Industrial Development

Corporation & Ors. (supra) and held that the said Judgment was not applicable to the facts and circumstances of the case. The Division Bench of this

Court in the said Judgment had considered the sale of the property put to auction in execution of a recovery certificate issued by Debt Recovery

Tribunal on the Application filed by a secured creditor. The Debt Recovery Tribunal had directed that the sale proceeds of the said property would go

to the mortgagor or the creditor of the company.

121. In the facts of this case the original Petitioner had filed Company Petition inter alia praying for winding up of the company in liquidation. The sale

proceeds of the leasehold rights in the said plot would not go to the Petitioner exclusively but would be distributed to all the creditors of the company in

liquidation in accordance with the provisions of Companies Act, 1956. The Judgment of the Division Bench of this Court in M/s. Colour Tech Coating

(I) Ltd. Vs. Maharashtra Industrial Development Corporation & Ors. (supra) thus would not assist the case of MIDC. After distinguishing the

Judgment of Division Bench in the case of M/s. Colour Tech Coating (I) Ltd. Vs. Maharashtra Industrial Development Corporation & Ors. (supra)

this Court held that such sale or transfer of the property by liquidator pursuant to an order of Company Court is certainly an involuntary transfer. After

interpreting the said circular dated 12th May, 1998 this Court held that on all involuntary transfers pursuant to any order of Competent Court, MIDC

shall be permitted to recover standard transfer charges and not differential premium.

122. Mr. Chawan, learned Counsel for the MIDC could not explain before this Court in the said matter as well as in this matter as to how such

transfer of the said plot in favour of the successful bidder pursuant to an order passed by Company Court in the process of recovering and realising

the asset of company in liquidation for the benefit of all the creditors including workman could be called as voluntary transfer attracting the payment of

differential premium under any of the circular issued by MIDC. Be that as it may in the facts of this case since this court is of the opinion that the

transfer of the leasehold rights in the said plot in the name of M/s. Transpower Engineering Pvt. Ltd. by M/s. Transpower Corporation in whose

favour the initial agreement was entered into by virtue of the said M/s. Transpower Engineering Pvt. Ltd. taking over M/s. Transpower Corporation

as its proprietor being already barred by law of limitation, no recovery can be made by MIDC in respect of first transfer towards differential premium

or under any other head.

123. A Division Bench of this Court in an unreported Judgment in the case of Tarapur Industries Pvt. Ltd. & Anr. Vs. Maharashtra Industrial

Development Corporation & Ors. delivered on 5th February, 2020 in Writ Petition No. 4191 of 2015 considered the situation where promoter of the

proposed private company had proposed to transfer the land to a private limited company. The MIDC had demanded 30% differential premium on

such transfer to the promoter of the private limited company who was the original lessee. This Court construed Clause 5 of the Circular dated 12th

May, 1998 and held that the transfer by a promoter of a private limited company in favour of private limited company would simply be a transfer from

the promoter of a company incorporated by the promoter and would fall in the 4th category i.e. “formal transfers†and therefore MIDC could not

claim 30% differential premium. In the facts of this case also the partners of M/s. Transpower Corporation had promoted the said Transpower

Engineering Pvt. Ltd.

124. The Memorandum of Association of the said Transpower Engineering Pvt. Ltd. clearly indicated that the said company was incorporated to enter

into partnership business carried out by the partners of Transpower Corporation under the partnership deed dated 28th January, 1972. Similar were the

objects stated in the Memorandum of Association of Transpower Engineering Ltd. The Judgment of Division Bench of this Court in case of Tarapur

Industries Pvt. Ltd. & Anr. Vs. Maharashtra Industrial Development Corporation & Ors. (supra) would apply to the facts of this Court. I am

respectively bound by the said Judgment. However, since this Court is of the view that the demand made by the MIDC in this proceeding towards

differential premium for the first transfer between Transpower Corporation and Transpower Engineering Pvt. Ltd. itself barred by law of limitation,

the MIDC would not be thus entitled to recover even standard transfer charges in respect of transfer of plot in favour of Transpower Engineering Pvt.

Ltd.

125. The next question arises for consideration of this court is whether MIDC is entitled to recover differential premium on the transfer of the said

land by Transpower Engineering Pvt. Ltd. to Transpower Engineering Ltd. or not or can recover only standard transfer charges. It is not in dispute

that the leasehold rights of the said company in liquidation in the said plot were directed to be sold by the company. The MIDC has not challenged the

said order passed by this Court till date. Pursuant to the said order the Official Liquidator after following the requisite procedure has already effected

sale of the leasehold rights of the company in liquidation which was an asset of the said company. The Official Liquidator has also invited claims from

the creditors of the same company in liquidation by issuing a requisite notice. The Official Liquidator had received various claims from several of the

creditors of the company in liquidation, MIDC however did not choose to make any claim with the Official Liquidator towards differential premium or

any other charges arising out of transfer of leasehold rights in favour of Transpower Engineering Ltd.

126. This court is of the view that such transfer of the leasehold rights of the company in liquidation in favour of the successful bidder pursuant to an

order passed by the Company Court would not be a voluntary transfer but would be an involuntary transfer and would attract the payment of standard

transfer charges only. It is not in dispute that this Court has already permitted the execution of the deed of assignment in favour of the Applicant in

respect of said leasehold right as a nominee of the successful bidder. The Applicant has already paid the entire consideration amount to the Official

Liquidator and is already put in physical possession thereof. The Official Liquidator has also settled the claims of various creditors or has distributed

dividend out of the said sale proceeds.

127. Next question arises for consideration of this Court is whether MIDC can raise demand for payment of extension charges for allegedly not

carrying out development of the said plot by Transpower Corporation or thereafter by Transpower Engineering Pvt. Ltd. within the time prescribed or

not. In this regard learned Counsel for both the parties invited attention of this Court to various correspondence entered into between the parties. On

one hand it was the case of the applicant that the Occupancy Certificate for Plot No. B-16 which was already allowed to be amalgamated with other

three plots was issued. The applicant also relied upon the Occupation Certificate granted by the authority in respect of those three plots in support of

contention that the requisite construction was already carried out on the amalgamated plot including Plot No. B-16. Per contra, learned Counsel for the

Respondent No.2 invited the attention of this Court to various letters addressed by Transpower Corporation seeking extension of time to carry out

construction on the said plot expressing its inability to complete the construction within the time prescribed on ground of financial difficulty.

128. I am inclined to accept the submission of Mr. Chawan, learned Counsel for the MIDC that the predecessor-in-title of the Applicant expressed its

inability by letter dated 20th October, 1986 to construct a small shed of 50 square meters for model assembly work on the said plot due to shortage of

cement and due to shortage of funds. In the said letter it was also contended by said Transpower Corporation that they wanted to construct the said

shed on the said plot but could continue without any such shed as their requirement was only for open plot and not built up area for the said purpose.

The MIDC vide its letter dated 27th February, 1987 had made it clear that the said Transpower Corporation will have to use the space for the purpose

for which the space has been given and the conditions agreed upon by the said Transpower Corporation.

129. A perusal of the prayer Clause (b) of the Company Application also indicates that the Applicant itself seeks direction against Respondent No.2 to

extend the time for completing a building by two years from the date of transfer in the plot No.B-16 in the name of Applicant. The Applicant is thus

liable to pay such extension charges as contemplated in various circulars issued by MIDC. It is not the case of the Applicant that the Applicant is not

liable to pay any extension charges to the Respondent No.2. This Court in the Official Liquidator’s Report No. 466 of 2016 in Company Petition

No. 606 of 1998 has held that the MIDC has to lodge its claim with the Official Liquidator insofar as the claim of extension charges. This Court

accordingly directed the Official Liquidator to consider the payment of extension charges while adjudicating the affidavit of proof of debt and decide

the quantum of extension charges, if any, payable and for that period whether up to the date of winding up or any earlier period or it is continuing.

130. MIDC is therefore at liberty to file its affidavit of proof of debt for claiming quantum of extension charges as well as for payment of standard

transfer charges for transfer of leasehold rights by the company in liquidation in favour of the successful bidder/its nominee as it deems fit with the

Official Liquidator within four weeks from today. The Official Liquidator shall decide such claim for payment of extension charges and standard

transfer charges in accordance with law and on its own merit including issue of limitation, if any. The observations made by this Court in this Judgment

in respect of payment of extension charges are prima facie. If there is any delay on the part of MIDC in filing affidavit of proof of debt for claiming

extension charges or standard transfer charges till date or till the date of making such application, MIDC would be at liberty to file an application for

condonation of delay in filing of proof of debt for claiming such charges. If any such application is filed, this Court may consider such application for

condonation of delay on its own merit.

131. Insofar as the payment of differential premium now demanded by MIDC on the transfer of the leasehold right from the company in liquidation to

the successful bidder or its nominee is concerned, this Court is already of the view that the MIDC would be entitled to demand only standard transfer

charges and not differential premium @ 30%. Such quantification in respect of standard transfer charges to be decided by the Official Liquidator

subject to the issue of limitation. The Official Liquidator is directed to decide both these claims i.e. for payment of extension charges and standard

transfer charges within a period of 12 weeks from the date of Respondent No.2 filing an affidavit of proof of debt if found within the period of

limitation or if there is any delay in filing, within 3 months from the date of condonation of delay, if any, by this Court.

132. I, therefore, pass the following order:

(i) Company Application No. 545 of 2018 is made absolute in terms of prayer clauses (a) & (c).

(ii) Quantification of standard transfer charges payable on transfer of Plot No.B-16 on transfer of the leasehold rights in Plot No.B-16 from

Transpower Engineering Ltd. (in liquidation) and extension charges shall be decided by the Official Liquidator within the time prescribed in para 131

aforesaid. Such payment of standard transfer charges and extension charges shall be paid by the Applicant within 4 weeks from the date of such

adjudication by the Official Liquidator.

(iii) Insofar as prayer clause (b) is concerned, Respondent No.2 is directed to extend the time for completing the building by two years from the date

of transfer of plot No.B-16 in the name of the Applicant in the record of Respondent No.2 on payment of extension charges as may be decided by the

Official Liquidator.

(iv) Company Application No. 545 of 2018 is disposed of in the aforesaid terms.

(v) Parties as well as Official Liquidator shall act on the authenticated copy of this order.