Dabur India Limited vs Vishwa Properties Pvt. Ltd.
2011 Latest Caselaw 1006 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                  CO. APPLICATION NO. 1054/2008
                                IN
                  COMPANY PETITION NO. 181/2006

                                               Reserved On : 06.09.2010
                                       Date of pronouncement: 21-02-2011
In the matter of : -

Dabur India Limited                                   .........Petitioner
                                    Through Mr. Sudhir K. Makkar,
                                    Advocate for the petitioner

                                        And

Vishwa Properties Pvt. Ltd.                         .......Respondent

                                    Through Mr. Rajiv Bahl, Advocate for
                                    the Official Liquidator.

CORAM:
     HON'BLE MR. JUSTICE SUDERSHAN KUMAR MISRA
1.  Whether Reporters of local papers may be allowed to see the
    judgment? No
2.  To be referred to the Reporter or not? No
3.  Whether the judgment should be reported in the Digest? No

SUDERSHAN KUMAR MISRA, J.

1. This application has been filed by the petitioner under

Rule 9 of the Companies (Court) Rules, 1959 seeking a direction to

the respondent to effect necessary change in its records thereby

recording change of name of ownership in respect of Flat No. 201 to

207, Pragati Chambers, Plot No. A-5 & A-6, Community Centre,

Ranjeet Nagar, New Delhi, in favour of the petitioner.

2. In the year 2006, a Scheme of Amalgamation was made

between Balsara Hygiene Products Limited, Besta Cosmetic Limited,

Balsara Home Products Limited (hereinafter collectively referred to

as the transferor companies) and Dabur India Limited (hereinafter

referred to as the transferee company), the petitioner herein. In

respect of the transferor companies, the said Scheme was approved

by the Bombay High Court dated 8th September, 2006, and on

12.9.2006 in respect of the transferee company by this Court.

3. In terms of the aforesaid Scheme of Amalgamation, all

the properties and assets (moveable or immoveable) of the

transferor companies were proposed to be transferred to the

transferee company. Consequently, once the Scheme was

approved, the flats in question, which were owned by the transferor

companies, stood automatically transferred to the transferee

company, all that remains is that the name of the transferee

company after amalgamation has to be substituted for the

transferor company's name in the respondents record.

4. This matter has been on board for more than a year.

On 29th April, 2009, fresh notice was directed to be issued,

returnable on 17th September, 2009. On 17th September, 2009, an

opportunity was granted to counsel for the respondent to file a reply

within four weeks and the matter was adjourned to 5 th March, 2010.

On 5th March, 2010, the matter was re-notified on 27th July, 2010.

On 27th July, 2010, since there was no appearance on behalf of the

respondent and nor had any reply been filed, the matter was

adjourned to 28th July, 2010 in the interest of justice. On 28 th July,

2010, the matter was heard substantially, and at the request of

counsel for the respondent to enable him to seek instructions from

his client with a view to exploring the possibility of a settlement, it

was adjourned for 6th September, 2010. None appeared on

6.9.2010 when the matter was heard and judgment reserved.

5. The case of the petitioner is that when it approached the

respondent for taking the necessary steps for inserting its name in

place of the erstwhile, pre-amalgamated company in its records, the

respondent raised a demand for transfer charges at the rate of

Rs. 300/- per sq. ft.

6. Aggrieved by the said demand, the petitioner has

approached this court seeking a direction to the respondent to effect

the necessary change in its records to correctly reflect the name of

the current owner of those flats, who happens to be the applicant,

without insisting on any transfer charges.

7. During the course of hearing, counsel for the petitioner

relied on Section 392 of the Companies Act, 1956 to demonstrate

the power of this Court to issue appropriate orders, "in regard to any

matter" as provided in Section 392(1)(b), as are considered

necessary for the proper working of a Scheme, as well as to

"supervise" the carrying out of the arrangement/amalgamation. He

also relied on the judgment of the Supreme Court in the matter of

Hindustan Lever & Ors. Vs. State of Maharashtra & Ors., AIR

2004 SC 326. Paragraph 15 of the said case states, inter alia, as

under: -

"15. .............The recital in the scheme of amalgamation as well as the order of the High Court under Section 394 of the Companies Act, declares, that upon such order of High Court the undertaking of the transferor company shall stand transferred to the transferee company with all its movable, immovable and tangible assets to the transferee company without any further act or deed................"

8. The case of the builder, who is the respondent, rests on

Clause 24 of the Purchase Agreement executed between the

erstwhile, pre-amalgamated, companies and the respondent. It

states as follows:-

"24. Transfer - The buyer may assign his rights, under this Agreement in the shop/flat/godown but only after obtaining prior approval in writing of the promoter and other authorities, if required under the law, subject to Clause 22 ibid and also on payment administrative charges as fixed by the promoter."

9. The contention of the petitioner is that even if it is

assumed for the sake of argument that the said clause is properly

invoked by the respondent under the circumstances, it is liable to

pay only, "administrative charges", and not the transfer charges at

the rate of Rs. 300/- per sq. ft., as demanded by the respondent.

He submits that, even in terms of Clause 24 of the aforesaid

Purchase Agreement, it was not the intention of the parties that

further profits should accrue to the promoters when a transfer is

made. The charges that are levied, have been specified to be,

"administrative" in nature. Consequently, it is obvious that the

charge of Rs. 300/- per square feet, in any case, is unjustifiable.

10. The decision of the Supreme Court in Hindustan Lever

& Ors. (supra) leaves no doubt that upon sanction of the scheme of

amalgamation, all assets of the transferor company, that is of the

erstwhile companies, Balsara Hygienic Products Ltd.; Besta

Cosmetics Pvt. Ltd; and Balsara Home Products Pvt. Ltd., stood

automatically transferred to the amalgamated company, and at that

moment, they all vested in the amalgamated company. This

position of law is absolute and does not admit to any exception or

conditionality.

11. If any rights have accrued as a consequence of the

amalgamation, to the amalgamated company, in any property, then,

having succeeded to these rights, the amalgamated company can

always sue for its dues or for enforcement of those rights. In this

case, what the amalgamated company seeks is a recording of the

facts of its ownership of a property, which was earlier shown in the

name of a pre-amalgamated company. It is not as if the owner,

whose name is on the buyers agreement, is seeking the

respondent's approval in terms of Clause 24 of the Purchase

Agreement for assigning its rights in the property to the petitioner.

It is merely the right of the post amalgamated company which

ultimately emerged, to be shown as the owner of the premises,

which is being asserted here.

12. Although the respondent has not bothered to appear and

has not even filed a reply; however, looking at the communication

of 14th June, 2008, which has been annexed, it is treating this

request of the amalgamated company, that the name be changed,

from that of the pre-amalgamated company to the applicant

company post amalgamation, as a request for approval for a

transfer. It claims this charge on the basis of the power under the

aforesaid clause 24 of the Purchase Agreement which permit it to

levy an, "administrative charge", for granting its approval permitting

the recorded owner to assign his rights to someone else. In this

case, it has demanded this charge @ ` 300 per sq. ft.

13. Regardless of whether the order of amalgamation does

or does not operate as a transfer or sale of the property in question

from the transferor companies at the pre-amalgamation stage, to

the transferee company upon the passing of the order of

amalgamation by the Court; the fact remains that even Clause 24 of

the Agreement, which is being invoked by the respondent,

specifically restricts the right of the respondent to charge only

administrative charges upon the assignment of its rights by the

owner to somebody else. Transfer charges of the nature entitling

the respondent to further income, upon the acquisition of ownership

rights in the property by a new person, are clearly not

contemplated; and de hors the original flat buyers agreement

between the respondent and pre-amalgamated company which had

originally purchased the flats, such a right cannot be said to vest in

to the original seller i.e. the respondent herein. To my mind, under

the contract, at the highest, the only right that can be legally

asserted is a right to claim administrative charges and nothing

more. Clause 24 has to be construed reasonably. Respondent

cannot demand an amount entirely disproportionate and alien to its

obvious intent.

14. It follows therefore that even if this clause were

applicable to the current circumstances, the entitlement of the

respondent could only be to "administrative charges".

Administrative charges are always restricted to charges which are

commensurate with the necessary paper work and correspondence

that may have to be carried out by the respondent in its own recors

to reflect the changed name of the owner. It is unthinkable for the

respondent to realize administrative charges @ Rs. 300/- per sq. ft.

Such a charge cannot, by any stretch of the imagination fall within

the purview of, "administrative", charges. In this view of the matter

also, the impugned demand of transfer charges @ ` 300 per sq. ft. is

unsustainable and deserves to be quashed. At the same time,

counsel for the applicant has expressed his client's willingness to

pay any reasonable charge without going into the question whether

the amalgamation in question amounts to a transfer or not.

15. Consequently, and for all these reasons, the impugned

demand dated 14th June, 2008, raised by the respondent calling

upon the petitioner/applicant to pay the administrative charges in

terms of the aforesaid Clause 24 of the agreement is quashed. The

respondent is directed to update the said records by reflecting the

name of the applicant as the owner of Flat Nos. 201 to 207 of the

property in question. It would, however, be open to the respondent

to levy a reasonable administrative charge in terms of the said

clause not exceeding ` 1000 for this purpose. All necessary steps

are to be taken by the respondent in this behalf within three weeks

of the communication of this order to it by the petitioners.

16. The application stands disposed of.

SUDERSHAN KUMAR MISRA, J.

FEBRUARY 21, 2011 sl