W.B. Small Industries Development ... vs Official Liquidator
2025 Latest Caselaw 1436 Cal/2

Calcutta High Court

W.B. Small Industries Development ... vs Official Liquidator on 18 March, 2025

Author: Debangsu Basak

Bench: Debangsu Basak

OD-1

                       IN THE HIGH COURT AT CALCUTTA
                        CIVIL APPELLATE JURISDICTION
                                ORIGINAL SIDE


                                      IA No.ACO/6/2025
                                             In
                                        APO/385/2001

        W.B. SMALL INDUSTRIES DEVELOPMENT CORPORATION LIMITED
                                            -Versus-
                 OFFICIAL LIQUIDATOR, HIGH COURT, CALCUTTA.


Present :
The Hon'ble Justice Debangsu Basak
            -And-
The Hon'ble Justice Smita Das De


For the Applicant               : Mr. Jishnu Saha, Sr. Adv.
                                  Mr. Biswaroop Bhattacharya, Adv.
                                  Ms. Manju Bhuteria, Sr. Adv.
                                  Mr. Chayan Gupta, Adv.
                                  Mr. Zeeshan Haque, Adv.
                                  Mr. Shoham Sanyal, Adv.
                                  Ms. Ananya Das, Adv.
                                  Mr. Akshay Jain Sukhani, Adv.
                                  Ms. Arundhati Barman, Adv.

For the Official Liquidator :    Mr. Ranajit Chowdhury, Adv.
                                 Mr. Sudipto Chowdhury, Adv.
                                 Mr. Purnendu Modak, Adv.

For WBSIDCL                 :    Mr. Debabrata Banerjee, Adv.
                                 Mr. Mahendra Prasad Gupta, Adv.
                                 Mr. Hemanta Kumar Das, Adv.


HEARD ON                    : 18.03.2025
DELIVERED ON                : 18.03.2025

DEBANGSU BASAK, J.:-
   1.

ACO/6/2025 is an application for restoration.

2. We informed the learned counsel appearing for the respective parties that we would

be deciding the merits of the parent application rather than being held up on the

restoration application itself, on the previous occasion. Learned counsel for the

respective parties agreed that the main matter be disposed of on merits. In such

circumstances and in view of the averments made in the application for restoration,

ACO/6/2025 is allowed. The delay in making and filing such application is

condoned. The order dated November 21, 2024 passed in IA-ACO/4/2013 is

recalled and such application is restored to its original file and number.

3. IA-ACO/4/2013 is an application for recalling and/or setting aside the order dated

December 4, 2012 passed in APO/385/2001 and for fresh hearing of

APO/385/2001 on merits.

4. Learned senior advocate appearing for the applicant submits that, applicant is a

purchaser of assets and properties of Quality Pharmaceuticals Ltd. (now in

liquidation). He submits that, the company prior to its liquidation enjoyed a lease

for 75 years from West Bengal Small Industries Development Corporation Limited

(WBSIDCL) by virtue of a registered deed of lease dated May 24, 1991in respect of

two plots of land at the Kasba Industrial Estate. The company (in liquidation)

suffered an order of winding up on October 12, 1999. Therefore, as on the date of

the order of winding up unexpired period of lease in favour of the company (in

liquidation) subsisted which the official liquidator could put up for sale and transfer

in favour of the intending purchaser.

5. Leaned senior advocate appearing for the applicant draws the attention of the Court

to the sale notice dated May 15, 2001 and also to the order confirming the sale dated

August 17, 2001. He submits that, application for disclaimer filed by WBSIDCL was

also disposed of by the order confirming sale dated August 17, 2001. He points out

that possession of the immovable property of the company (in liquidation) was

made over by the official liquidator to the applicant on September 21, 2001.

6. Learned senior advocate appearing for the applicant submits that, by an order dated

October 1, 2001 the company Court directed the unexpired period of the lease to be

transferred in favour of the applicant. He submits that, no appeal was carried

against such order of WBSIDCL. However, an appeal filed by CESC Ltd. against such

order was dismissed. He contends that, the such order is now binding on WBSIDCL.

Attention of the Court rendering the order dated December 4, 2012 was not drawn

to the order dated October 1, 2001.

7. Learned senior advocate appearing for the applicant submits that, Small Industrial

Development Bank of India preferred an appeal against the order dated August 17,

2001 confirming the sale in favour of the applicant which was dismissed on April 3,

2003.

8. Learned senior advocate appearing for the applicant submits that, WBSIDCL

preferred an appeal directed against the order dated August 17, 2001 refusing to

grant relief of disclaimer. Such appeal was disposed of by an order dated December

4, 2012 recalling of which the applicant seeks.

9. Relying upon (1999) 4 SCC 396 (Budhia Swain & Ors. vs. Gopinath Deb & Ors.)

learned senior advocate appearing for the applicant submits that, the applicant is

entitled to apply for recalling of the order dated December 4, 2012 since at least two

of the scenario noted in such decision stood satisfied.

10. Learned senior advocate appearing for the applicant submits, that orders dated

October 1, 2001 and April 4, 2003 were not drawn to the attention of the Court

passing the order dated December 4, 2012. No notice of termination of the lease

was served upon the official liquidator. The notice of termination dated January 19,

2000 was not in accordance with law. Eventualities contemplated under Section

111 of the Transfer of Property Act did not occur for the lease to expire by efflux of

time. Since there was no notice under Section 106 of the Transfer of Property Act,

there was no valid termination of the lease. Consequently, the Division Bench

rendering the order dated December 4, 2012 erred in allowing the disclaimer and

not taking into consideration such material facts.

11. Learned senior advocate appearing for the applicant submits that, the so called

restrictive clause in the deed of lease cannot prevent the official liquidator from

transferring the unexpired period of lease in favour of the applicant. In support of

such contention, he relies upon (1982) 1 CompLJ 100 (Cal) (Kailash Financiers

(Calcutta) Pvt. Ltd. & Ors.) and (1958-59) 63 CWN 29 (Krishna Das Nandy vs.

Bidhan Chandra Roy).

12. In response to the query of the Court as to whether the ratio enunciated in (1986)

4 SCC 656 (General Radio & Appliances Co. Ltd. & Ors. vs. M. A. Khader)

followed in (2004) 7 SCC 1 (Singer (India) Ltd. vs. Chander Mohan Chadha &

Ors.) would apply or not, learned senior advocate for the applicant submits that fact

scenario are different.

13. Learned advocate appearing for the official liquidator draws the attention of the

Court to the averments made in the recalling application and at paragraphs 17 and

18. He contends, the applicant is not maintainable in view of the conduct of the

applicant.

14. Learned advocate appearing for the WBSIDCL submits that, the present application

is not maintainable. He submits that, initially an application for recalling of the

order dated December 4, 2012 was filed by the applicant which was disposed of by

an order dated April 4, 2013 permitting the applicant to make a representation to

WBSIDCL. The applicant made such representation which was dismissed.

Thereafter, the applicant filed a review petition with regard to the order dated

December 4, 2012 which was dismissed on May 8, 2013. Thereafter the applicant

preferred a Special Leave Petition (SLP) which was disposed of on August 2, 2013.

He draws the attention of the Court to the order of the Hon'ble Supreme Court dated

August 2, 2013 and contends that, Special Leave Petition was allowed to be

withdrawn with liberty to approach the High Court for such redress as may

otherwise be open to it in law. He submits that the present application is not a

redress which is available to the applicant in law.

15. We are concerned with the affairs of the Quality Pharmaceuticals Private Limited (in

liquidation).

16. A petition for winding-up of Quality Pharmaceuticals Private Limited (in

liquidation) being CP No.533 of1997 was presented before the Company Court. An

order of winding-up dated October 12, 1999 was passed in respect of the company

(in liquidation).

17. Prior to the order of winding-up, the company (in liquidation) enjoyed a lease in

respect of two plots at Kasba Industrial Estate by virtue of a registered deed of lease

dated May 24, 1991. The lease is for 75 years. Lease deed contains a restrictive

covenant, which is as follows:

"j) Not to assign, or transfer of the lease hold interest absolutely except to the Registered Small Scale Unit and to any financial or Government Institution for obtaining financial assistance with prior written permission of this Corporation."

18. On the company (in liquidation) suffering the order of winding-up, the Official

Liquidator put up the assets of the company (in liquidation) for sale by a notice

dated May 15, 2001. Sale of the assets were on "as is where is and whatever there

is" basis. The applicant before us participated in such sale and was declared as the

highest bidder in respect thereof by order dated August 17, 2001.

19. In the interregnum between the order of winding up and the sale of the assets of the

company (in liquidation), WBSIDCL as the lessor issued a notice terminating the

lease dated January 19, 2000. Notice was issued to the Director of the company (in

liquidation) at a point of time when the company was in liquidation. In any event,

WBSIDCL applied for disclaimer of the lease under Section 535 of the Companies

Act, 1956. Such disclaimer application was also disposed of by the order confirming

sale dated August 17, 2001 without passing any order of disclaimer in favour of

WBSIDCL.

20. Two appeals, apparently were directed against the order dated 17th August, 2001 -

one by SIDBI, which was dismissed by an order dated April 4, 2023 and the other by

WBSIDCL which was disposed of by order dated December 4, 2012. By the order

dated December 4, 2012, prayer for disclaimer made by the WBSIDCL was allowed.

21. Between the period of the order confirming sale dated August 17, 2001 and

disclaimer being allowed on December 4, 2012, two noticeable incidents took place.

One was on September 21, 2001 when possession of the assets of the company (in

liquidation) were made over to the applicant and the other on October 1, 2001,

when, the company Court directed grant of different reliefs to the applicant as

purchaser of the assets of the company (in liquidation) including transfer of the

leasehold interest to the applicant.

22. CESC Ltd. preferred appeal against the order dated October 1, 2001 as a point rather

than transfer of lease hold interest which was dismissed.

23. The applicant before us applied for recalling of the order dated December 4, 2012

which was dismissed as withdrawn on May 2, 2013. The applicant before us made a

representation to WBSIDCL which was rejected. Thereafter, the applicant applied

for review of the order dated December 4, 2012 which was dismissed on May 8,

2013. The Special Leave Petition directed against the order dated May 8, 2013 was

dismissed as withdrawn with liberty to approach the High Court for such redress as

made otherwise be open to the applicant, in law.

24. Records do not demonstrate that notice of the Division Bench allowing the

disclaimer application on December 4, 2012 was drawn to the order dated October

1, 2001 of the Company Court. Official Liquidator was present in both the

proceedings. In any event the order dated December 4, 2012 being by a Division

Bench and later in point of time than the order dated October 1, 2001 of the

Company Court, order directing disclaimer would prevail.

25. There is also nothing on record to suggest that the applicant drew the attention of

the Division Bench passing the order dated December 4, 2012 as to the order dated

October 1, 2001 when the applicant applied for recalling and review of the same.

26. As noted above, learned senior advocate appearing for the applicant emphasized on

the fact that the present application is not one of review but for recalling the order

dated December 4, 2012. Application for recalling was made once earlier and

withdrawn.

27. On the power of a Court to recall an earlier order, Budhia Swain (supra) is of the

following view:

"8. In our opinion a tribunal or a court may recall an order earlier made by it if

i) the proceedings culminating into an order suffer from the inherent lack of jurisdiction and such lack of jurisdiction is patent,

ii) there exists fraud or collusion in obtaining the judgment,

iii) there has been a mistake of the court prejudicing a party, or

iv) a judgment was rendered in ignorance of the fact that a necessary party had not been served at all or had died and the estate was not represented.

The power to recall a judgment will not be exercised when the ground for reopening the proceedings or vacating the judgment was available to be pleaded in the original action but was not done or where a proper remedy in some other proceeding such as by way of appeal or revision was available but was not availed. The right to seek vacation of a judgment may be lost by waiver, estoppels or acquiescence."

28. In the facts and circumstances of the present case, it cannot be said that the Court

passing the order dated December 4, 2012 lacked jurisdiction which is patent. In

fact, the Court was hearing an appeal passed by the Company Court with all

requisite jurisdiction as an Appeal Court of the Company Court. The Company is in

liquidation. No fraud or collusion in obtaining the order dated December 4, 2012 is

established before us. Alleged non-noticing of two orders dated October 1, 2001

and April 4, 2003 does not prompt us to hold that there was any fraud or collusion

in obtaining the order dated December 4, 2012. No particulars of fraud stands

pleaded and/or established. Applicant approached the Division Bench passing the

order dated December 4, 2012 twice earlier than the present attempt when such

allegations were not raised. It cannot be said that there was a mistake of the Court

passing the order dated December 4, 2012 prejudicing any party or that such order

was rendered in ignorance of a fact that a necessary party was not served or was

dead and the estate of the deceased party was not represented.

29. The applicant was well aware of the order dated December 4, 2012. It applied

initially for recalling which it withdrew. It applied for review which failed. The

Special Leave Petition carried against the order rejecting the review also failed.

30. It would be axiomatic to set out a portion of the order rejecting the review passed

on May 8, 2013, which is as follows:

"Being aggrieved, the review applicant/purchaser came before us with an application for recall on the ground, they were not served. When the application was moved learned Senior Counsel appearing for the applicant prayed for an accommodation so that they could approach the government company for renewal of the lease. Meetings were held. The company, in deference to the desire of this court, informed us in writing through their Advocate-on-Record, they would declare the establishment as vacant and invite offer from the intending bidders to occupy the said unit. At the same time they assured us, special preference would be given to the purchaser. The applicant was not satisfied. They withdrew the application for recall. They have now come up with an application for review coupled with an application for condonation of delay. The application is delayed by 105 days. Causes shown being sufficient delay is condoned. Review application is taken on record and is heard.

Mr. Jishnu Saha, learned Counsel appearing for the applicant would contend, once the learned Judge sold the unit as a going concern and directed the Official Liquidator to assign the unexpired period of lease it was incumbent upon the government company to extend all support. He is, however, unable to assign any plausible reason as to why he would not pay for last 11 years any lease rent or any amount on account of occupation charges. He is also unable to show any attempt being made by the purchaser to show their bona fide on this score. He is now before us to raise the issue on merits that could have been raised at the hearing of the appeal. Pertinent to note, the ground of non-service is conspicuously absent in the Memorandum of Review. The grounds mentioned in the Memorandum of Review could be argued at the time of hearing of the appeal. The applicant advisedly did not do so. If they feel aggrieved, they have their remedy in law. "

31. Essentially, the applicant before us is inviting us to sit in appeal over the order dated

December 4, 2012 passed by a Division Bench and arrive at a contrary finding on the

self same set of facts between the same parties. In so doing, reliance is placed on

two authorities, namely, Kailash Financiers (Calcutta) Private Limited (supra)

and Krishna Das Nandy (supra). As a Co-ordinate Bench, we are not required to

sit in appeal over a decision rendered by the Co-ordinate Bench between the same

parties.

32. Moreover, General Radio & Appliances Co. Ltd. (supra) and Singer (India)

Limited (supra) are of the view that, an involuntary transfer would still attract the

mischiefs of restrictions on transfer of tenancy under the tenancy laws.

33. There is a restrictive clause in the registered lease deed which prevents assignment

absolutely. Exceptions for assignment of the unexpired period of lease is not

appearing from the factual matrix herein.

34. In such circumstances, we find no merit in the present application.

35. Accordingly, ACO/4/2013 is dismissed without any order as to costs. Connected

applications, if any, stand disposed of.

(DEBANGSU BASAK, J.)

36. I agree.

(SMITA DAS DE, J.)

A/s./S.Pal.