The High Court of Calcutta, while dismissing a writ petition filed by the petitioner seeking a declaration that the petitioners are not liable to pay any transfer fee as demanded in the notices dated April 26, 2022, held that change in shareholding of a company does not amount to transfer of its leasehold interest on the plot in question which will call for payment of permission fees.

Brief Facts:

RIL (Corporate Debtor) is engaged in the business of manufacturing steel, thermo-mechanically treated bars, and steel wires. By virtue of an indenture of sub-lease executed, 315 acres of land in Kharagpur was sub-leased in favor of Ramsarup Loh Udyog Limited. By an order passed on January 8, 2018, by the learned National Company Law Tribunal, the corporate debtor was admitted into insolvency, and the corporate Insolvency Resolution Process (CIRP) was commenced. The Resolution Plan submitted by a consortium of petitioners was approved by the Committee of Creditors (CoC) in its 24th meeting held in March 2019 by a voting share of 74.41%. The first respondent was one of the Financial Creditors of RIL which was part of the CoC which had approved the resolution plan.

Contentions of the Petitioner:

The learned counsel appearing on behalf of the Petitioner submitted that the resolution plan submitted by the petitioners attained finality and was approved by the learned NCLT, learned NCLAT, and the Hon’ble Supreme Court and the petitioners, being the successful resolution applicants under the resolution plan, acquired the corporate debtor and all its assets on a “going concern” basis.

Contentions of the Respondent:

The learned counsel appearing on behalf of the Respondent submitted that the petitioners have not come before this Court with clean hands and have sought to mislead the Court by distorting facts for which the writ petition is liable to be dismissed. He argued that the petitioners failed to obtain orders in their favor from all the aforesaid judicial forums and misinterpreted the orders passed by them with a view to obtaining an order in their favor in the writ petition.

Observations of the court:

The court noted that the petitioners made an attempt to obtain an order in their favor by misleading the Court and misconstruing the contents of the orders passed by the NCLT, NCLAT, and the Hon’ble Supreme Court deliberately.

The court observed that if the applicant makes a false statement or suppresses material fact or attempts to mislead the Court, the Court may dismiss the action on that ground alone and may refuse to enter into the merits of the case. Change in shareholding of a company does not amount to transfer of its leasehold interest on the plot in question which will call for payment of permission fees. Unless there is an express transfer or assignment of a lease in favor of some other party, it cannot be ordinarily said that there is an assignment or transfer of the lease merely because there is a transfer of shareholding. In the case at hand, clause 15.15.5 of the Resolution Plan was not approved at all, thereby authorizing the WBIDC to raise the demand impugned.

The decision of the Court:

The Calcutta High Court, dismissing the petition, held that the notices impugned issued by the WBIDC are in conformity with the terms of the Resolution Plan and there is no illegality or irregularity in the notices which calls for interference by this Court.

Case Title: S S Natural Resources Pvt. Ltd. & Anr. v. West Bengal Industrial Corporation Ltd & Anr.

Coram: Hon’ble Mr. Justice Suvra Ghosh

Case No.: W.P.O. 2392 of 2022

Advocate for the Petitioner: Mr. Ratnanko Banerji

Advocate for the Respondent:  Mr. T.M. Siddiqui

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