Kerala High Court
Palakkad Rubbers Pvt. Ltd vs General Manager on 6 October, 2021
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN
WEDNESDAY, THE 6TH DAY OF OCTOBER 2021 / 14TH ASWINA, 1943
WP(C) NO. 16033 OF 2021
PETITIONER:
PALAKKAD RUBBERS PVT. LTD.
REPRESENTED BY ITS MANAGING DIRECTOR, NOUSHAD VETTICKAL, S/O.
PAREED KANNU, NEW INDUSTRIAL DEVELOPMENT AREA, KANJIKKODE,
PALAKKAD, PIN - 678621, RESIDING AT PULIMOOTTIL HOUSE, ANAKKAL
P.O, KANJIRAPPALLY - 686508, KOTTAYAM DISTRICT.
BY ADV S.SUJIN
RESPONDENTS:
1 GENERAL MANAGER
DISTRICT INDUSTRIES CENTRE, PALAKKAD - 678001.
2 DIRECTORATE OF INDUSTRIES & COMMERCE
THIRUVANANTHAPURAM - 695001.
3 SECRETARY
INDUSTRIES (F DEPARTMENT) GOVERNMENT OF KERALA, GOVERNMENT
SECRETARIAT, THIRUVANANTHAPURAM - PIN - 695001.
4 THE STATE OF KERALA
REPRESENTED BY ITS CHIEF SECRETARY, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM - PIN - 695001.
OTHER PRESENT:
SRI ASHWIN SETHUMADHAVAN- SR. GP
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.10.2021,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) NO. 16033 OF 2021
2
JUDGMENT
The petitioner is stated to be a Company, registered under
the provisions of the Companies Act, 1956 and they say that they
had been allotted a plot in the Industrial Development Park,
Kanjikode (hereinafter referred to as 'the Park' for short) by the 1 st
respondent - General Manager, as is evident from Exts.P2 and P3.
2. The petitioner says that they have, in fact, paid the
entire price of the land as was required under Ext.P1, as early as
on 26.08.2008 and therefore, that they became eligible for being
granted a Purchase Certificate in terms of the applicable Rules.
They say that subsequently, they have been holding the property
and conducting their business thereon; but that on account of
paucity of funds, when they approached a Bank for raising
additional capital by mortgaging it, they were informed that they
should get the concurrence of the 1st respondent - General
Manager for such purpose.
3. The petitioner says that even though, as per the terms
of the grant of the land to them, the creation of a mortgage over it
is not prohibited, they approached the 1 st respondent - General
WP(C) NO. 16033 OF 2021
Manager with an apposite request, but that it has been rejected
through Ext.P9, merely saying that they must first convince him
that there is no change in the shareholding pattern and further
that unless they are able to convince that the changes in their
directorships and shareholding are as permitted, they will have to
pay the balance of the market value of the property, in excess of
the amounts remitted by them through Ext.P3.
4. The petitioner contends that Ext.P9 is grossly improper
and goes contrary to the Government Land (Allotment and
Assignment for Industrial Purpose) Rules, 2020, which govern the
field; and consequently, prays that it be set aside and the 1 st
respondent - General Manager be directed to give them necessary
permission to execute a mortgage of the property in favour of the
Financial Institution/Bank.
5. I have heard Sri.N.N.Suganapalan, learned Senior
Counsel, instructed by Sri.S.Sujin, learned counsel appearing for
the respondents and Sri.Ashwin Sethumadhavan, learned Senior
Government Pleader, appearing on behalf of the official
respondents.
WP(C) NO. 16033 OF 2021
6. The learned Senior Government Pleader submitted that
even as per the aforesaid Rules, any change in the constitution of
the Company will require the prior permission of the competent
Authority and that if this is done without such permission, then it
will be treated as a transfer of the property itself, which will entail
the payment of the additional value, based on its present market
price.
7. When I hear the learned Senior Government Pleader as
afore and examine Ext.P9, it is clear that the 1 st respondent has
only said that he requires the details of all past and present
Directors of the Company, so as to enable him to verify whether
any transfer of the property has been made by the petitioner.
Thereafter, the said Authority records that the market price of the
property is a particular figure and that the petitioner - Company
will have to pay the balance of what they have paid through
Ext.P3, if they want any permission to mortgage it.
8. It is thus indubitable that the General Manager has not
taken a final decision as to whether the shareholding of the
Company has been altered solely for the purpose of transfer of the
property or whether it is a routine aspect, which is normally done
WP(C) NO. 16033 OF 2021
in the case of every Corporate entity.
9. Without even ascertaining whether there has been a
change of ownership of the Company - so as to mean a complete
change of the shareholding - the General Manager has issued
Ext.P9, asking the Company to remit the balance of the market
price.
10. To add to this, the 1st respondent has not adverted to
the contention of the petitioner that as per the relevant Rules
applicable to the grant of the property to them, even a transfer of
the same is not prohibited.
11. I therefore, cannot find favour with Ext.P9 in any
manner whatsoever, and the 1 st respondent - General Manager will
certainly have to hear the petitioner and decide whether their
attempt is to transfer the property or if the changes effected to
their directorships is as permitted under the Companies Act, as a
routine measure. The said Authority will also, of course, have to
consider the impact of the applicable Rules and conclude if there is
any inhibition for the petitioner in dealing with the property in any
manner that they chose.
Resultantly, I set aside Ext.P9 and direct the General
WP(C) NO. 16033 OF 2021
Manager to reconsider the matter, resulting in an appropriate
order thereon, without any further delay.
In order to obtain an expeditious disposal of the afore
directions, I direct the authorized officers of the petitioner to mark
appearance before the 1st respondent at 11.00 am on 26.10.2021,
with all the documents and shareholding pattern in their
possession; in which event, the said Authority will either hear them
on that day or fix another convenient date for hearing and issue an
appropriate proceeding on the request of the petitioner for
permission/concurrence to mortgage the property in question.
The afore exercise shall be completed by the General
Manager within a period of three weeks from 26.10.2021 and the
resultant order shall be communicated to the petitioner without
any further delay thereafter.
This writ petition is thus ordered.
sd/-
DEVAN RAMACHANDRAN
JUDGE
rp
WP(C) NO. 16033 OF 2021
APPENDIX OF WP(C) 16033/2021
PETITIONER EXHIBITS
Exhibit P1 TRUE COPY OF THE PROCEEDINGS OF THE 1ST RESPONDENT
DATED 12.07.2014.
Exhibit P2 TRUE COPY OF THE AGREEMENT DATED 30.08.1994
EXECUTED BY SRI. SHALIMAR.
Exhibit P3 TRUE COPY OF THE PROCEEDINGS OF THE 1ST RESPONDENT
DATED 26.08.2008.
Exhibit P4 TRUE COPY OF GO(MS) NO.60/2013/ID DATED 10.06.2013.
Exhibit P5 TRUE COPY OF GO(MS) NO.110/2013/ID DATED
13.09.2013.
Exhibit P6 TRUE COPY OF THE JUDGMENT IN WP.NO.35931/2017 DATED
11.07.2018.
Exhibit P7 TRUE COPY OF THE JUDGMENT IN WP.NO.2406/2019 DATED
25.01.2019.
Exhibit P8 TRUE COPY OF THE ORDER OF THE GOVERNMENT DATED
13.11.2019.
Exhibit P9 TRUE COPY OF THE PROCEEDINGS OF THE 1ST RESPONDENT
DATED 30.01.2020.
