Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 1966 KARNATAKA INDUSTRIAL AREA DEVELOPMENT C ACT Lease-cum-sale agreement |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | KARNATAKA INDUSTRIAL AREA DEVELOPMENT ACT, 1966: Lease-cum-sale agreement - Allotment of plots to company for setting up factory/industry - Industry not set up - Company in liquidation - Agreement terminated by Board - Held: Right to purchase the plots in question after the expiry of the lease period could accrue in favour of the Company only on fulfilling the covenants stipulated in clause 2(P) - On Company's failure to do so, Lease Agreement gave right to the Board to determine lease and resume the land - It is, thus, in the nature of Lease-cum-Sale Agreement, which started with lease - and could culminate into sale - Lease came to be determined by Board because of the breach of covenants of lease agreement - Therefore, it cannot be accepted that Company had become the owner of the plots in question. Validity of termination notice - Held: Company had committed clear breach in not completing the project and setting up the factory within the time given on the Lease Agreement or the time as extended by the Board - In such circumstances, the Lease Agreement gave a definite right to the Board to terminate the lease - Board was within its right to terminate the lease as provided in Lease Agreement. Requirement of prior permission of Company Court before terminating the lease - Notice of cancellation of lease given after the winding up order - Held: Serving of cancellation notice simplicitor would not come within the mischief of s.537 of Companies Act, as that by itself does not amount to attachment, distress or execution etc - No doubt, after the commencement of the winding up, possession of the land could not be taken without the leave of the Court - Therefore, no prior permission was required by the Board for cancelling the lease - Companies Act, 1956 - s.537. COMPANIES ACT, 1956: s.536 - Company in liquidation - Resumption of plots allotted to company, on its failure to set up Factory/industry - Application for permission by Board - Held: Termination notice by the Board is valid - Likewise, order of Company Judge permitting the Board to take possession of land in question is legal and justified. LOCUS STANDI: Company in liquidation - Cancellation of lease-cum-sale agreement in respect of two plots allotted to Company, for its failure to set up factory/industry - Order of Company Judge to OL to hand over possession of plots to Board - Challenged by one of the shareholder/Promoter of Company - Held: Appellant is very much concerned with the outcome of the proceedings in as much as, if the ownership of the land in question vests with the Company, it may reduce his personal liability, as he has given guarantees to the financial institutions for the loan advances to the Company. |
Judge | Hon'ble Mr. Justice Arjan Kumar Sikri |
Neutral Citation | 2014 INSC 185 |
Petitioner | Phatu Rochiram Mulchandani |
Respondent | Karnataka Industrial Areas Development Board & Ors. |
SCR | [2014] 3 S.C.R. 710 |
Judgement Date | 2014-03-12 |
Case Number | 3803 |
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