Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Companies Act 1956 Sick Industrial Companies s. 535 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Act(s) Referred | Companies Act, 1956 (1 of 1956) |
Case(s) Referred | Referred Case 0 |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Companies Act, 1956 – s. 535 – Sick Industrial Companies (Special Provisions Act) 1985 – s. 20 – Second respondent, a company was allotted Industrial premises by the State on lease – The company secured advances from IDBI through equitable mortgages of the leasehold property – Then the company went into liquidation – Pursuant thereto, the High Court appointed a official liquidator – IDBI, through a deed of assignment, unconditionally transferred all loans and advances granted by it, to Stressed Assets Stabilization Fund (SASF), including the loans and securities in relation to the second respondent, the company in liquidation – On the other hand, the premises and properties in question were assigned to the first respondent-WBSIDC by the State – WBSIDC sought possession of the properties and filed application for the same before the High Court – Single Judge of the High Court held that WBSIDC was entitled to possession in view of the lease conditions, which automatically applied, because the original lessee (second respondent) had ceased to use the properties for the purpose originally contemplated i.e. manufacturing activity – Since the conditions of lease had not been complied with, as far as cessation of industrial or manufacturing activity went, the leasehold rights were terminated and as a result, properties were held to be excluded from the winding up process – Appeal preferred by SASF was rejected by the Division Bench of the High Court – On appeal, held: The observations made in Phatu Rochiram Mulchandani v. Karnataka Industrial Areas Development Board (2015) 5 SCC 244:[2014] 3 SCR 710 apply to the facts of this case – The WBSIDC acted within the bounds of law – The finding that since the exercise by the lessor (WBSIDC) of its right to determine the lease attained finality, the mortgagee (represented by the appellant) could not claim rights superior to that of the lessee, is in consonance with settled law – The reasoning and conclusion of the High Court requires no interference. |
Judge | Hon'ble Mr. Justice S. Ravindra Bhat |
Neutral Citation | 2019 INSC 1170 |
Petitioner | Stressed Assets Stabilization Fund |
Respondent | West Bengal Small Ind. Development Corporation Ltd. And Anr. |
SCR | [2019] 13 S.C.R. 1083 |
Judgement Date | 2019-10-21 |
Case Number | 4139 |
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