JAIPRAKASH INDUSTRIES LTD Vs. DELHI DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) The Hon'ble President of India executed four separate perpetual lease deeds on 12/8/1983 in favour of M/s. Jaiprakash Associates Pvt Ltd in respect of the plots more particularly described in Schedule-I to the lease deeds (for short, 'the said plots'). In July 1986, a joint application was made by M/s. Jaiprakash Associates Pvt Ltd and M/s. Jaypee Rewa Cement Ltd before the High Court of Judicature at Allahabad, praying for amalgamation of M/s. Jaiprakash Associates Pvt Ltd with M/s. Jaypee Rewa Cement Ltd. By the order dtd. 30/7/1986, the High Court sanctioned the scheme of amalgamation. The said plots were included in the Schedule of the properties to the scheme of amalgamation. While passing the order dtd. 30/7/1986 approving amalgamation, the High Court directed that the properties in Parts I, II and III of Schedule II to the said order shall stand vested in the transferee company (M/s. Jaypee Rewa Cement Ltd). After the amalgamation, in September 1986, the name of M/s. Jaypee Rewa Cement Ltd was changed to M/s. Jaiprakash Industries Ltd. Subsequently, the name was changed to M/s. Jaiprakash Associates Ltd, which is the present appellant. Thus, in short, the appellant is a company created as a result of the amalgamation of the erstwhile M/s. Jaiprakash Associates Pvt Ltd and M/s. Jaypee Rewa Cement Ltd. In short, the present appellant is the transferee company.

(2.) An application was made by the appellant to the respondent-Delhi Development Authority (for short, 'DDA') for a grant of permission to mortgage the said plots in favour of the Industrial Finance Corporation of India. By the letter dtd. 14/3/1991, the respondent-DDA demanded an unearned increase value of Rs.2,13,59,511.20. Being aggrieved by the said demand, representations were made by the appellant which were not favourably considered by the respondent-DDA. Therefore, the appellant filed a writ petition before a learned Single Judge of the High Court of Delhi. By the order dtd. 30/1/2003, the learned Single Judge dismissed the said petition filed by the appellant by relying upon a decision a Division Bench of the same High Court in the case of Indian Shaving Products Limited v. Delhi Development Authority and Anr. 2001 SCC Online Del 1123: 2002 1 AD (Del) 175 Being aggrieved by the decision of the learned Single Judge, the appellant preferred an appeal before a Division Bench of the High Court of Delhi. By the impugned judgment, the said appeal had also been dismissed.

(3.) The learned senior counsel appearing for the appellant invited our attention to clause II(4)(a) of the lease deed, which puts an embargo on the lessee not to sell, transfer, assign or otherwise part with the possession of the whole or any part of the said plots except with the previous consent in writing from the lessor. The proviso to the said clause entitled the lessor to impose a condition while granting consent, of payment of a portion of the unearned increase in the value (i.e. the difference between the premium paid and the market value). He submitted that the amalgamation of the lessee with another company under the orders of the Company Court will not amount to the sale, transfer or assignment of the said plots. His submission is that in the case of Indian Shaving Products Limited1, the High Court had dealt with a completely different set of factual and legal nuances. In the said case, the submission of the petitioner was that Sec. 32 of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short, 'SICA') would have an overriding effect over the terms and conditions of the lease deed. He submitted that the merger or amalgamation was taken up in the said case for rehabilitation of a sick company and that it was a distressed company merger. Therefore, the said decision will have no application to the facts of this case.