IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF OCTOBER, 2017 BEFORE THE HON’BLE MR. JUSTICE A.S. BOPANNA WRIT PETITION NO.2264/2016 (GM-KIADB) BETWEEN:
M/S. KIRLOSKAR AAF LIMITED (FORMERLY KNOWN AS M/S KIRLOSKAR SNYDER GENERAL LIMITED) A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 HAIVNG ITS REGISTERED OFFICE AT NO.143-C4 BOMMASANDRA INDUSTRIAL AREA HOSUR ROAD BANGALORE – 560 099 REPRESENTED BY ITS VICE PRESIDENT MR.V.T.JAIRAJ …PETITIONER (BY SRI.DHANANJAY JOSHI, ADV.) AND:
KARNATAKA INDUSTRIAL AREA DEVELOPMENT BOARD A GOVERNMENT OF KARNATAKA UNDERTAKING HAVING ITS OFFICE AT NO.49 4TH & 5TH FLOORS KHANIJA BHAVAN RACE COURSE ROAD BANGALORE – 560 001 REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER AND EXECUTIVE MEMBER …RESPONDENT (BY SRI.B.V. SABARAD, ADV.) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH AND/OR SET ASIDE THE RESPONDENT’S DEMAND SET OUT IN ITS LETTER DATED 11.12.2015 [ANNEXURE – A] AND DIRECT THE RESPONDENT TO EXECUTE A SALE DEED IN RESPECT OF THE SCHEDULE PROPERTY IN FAVOUR OF THE PETITIONER AT THE SAME RATE AS CHARGED BY THE RESPONDENT IN RESPECT OF OTHER SIMILAR SITES WITHIN THE BOMMASANDRA INDUSTRIAL AREA AND ETC.
THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER The petitioner-Company is before this Court seeking that the letter dated 11.12.2015 at Annexure-A be set aside and a mandamus be issued to the respondent to execute the sale deed in favour of the petitioner.
2. The petitioner claims that it was formerly known as M/s. Kirloskar Snyder General Limited, a company incorporated under the provisions of the Companies Act. While it was existing in that manner, the respondent had allotted a Plot bearing No.143-C4 (Part) at Bommasandra Industrial Area, Hebbagodi Hobli, Attibele Taluk, Anekal Disitrict. The possession of the plot was handed over to the petitioner through the Possession Certificate dated 18.11.1992 and an agreement as at Annexure-C was also entered into between the petitioner and the respondent.
3. The petitioner contends that subsequent thereto, since a need had arisen to change the name of the company, the procedure as contemplated under the Companies Act was followed and the company which was known as M/s. Kirloskar Snyder General Limited was changed as M/s. Kirloskar AAF Limited. It is contended that, in view of the change made in accordance with law, all rights that were being enjoyed by M/s Kirloskar Snyder General Limited was to be enjoyed thereafter by the M/s. Kirloskar AAF Limited.
4. In that light, it is further contended that, though the allotment of plot was made by the respondent-Board in favour of M/s. Kirloskar Snyder General Limited, completion of the transaction by way of execution of the sale deed was to be made in favour of M/s. Kirloskar AAF Limited. It is in that light, the petitioner had approached the respondent-Board seeking that the sale deed be accordingly executed in favour of M/s. Kirloskar AAF Limited 5. The respondent-Board however considered such request to be a transfer of leasehold rights and had through the communication dated 28.02.2015 called upon the petitioner to remit the sum of Rs.7,05,83,861/ towards the difference in land cost to complete the sale transaction. The petitioner therefore claiming to be aggrieved is before this Court in this petition assailing the said communication as also the subsequent communication dated 02.05.2015 and contended that a direction be issued to the respondent-Board to execute the sale deed without insisting upon payment of the amount as demanded in the said communication, as according to the petitioner, the same does not amount to transfer of leasehold right but, the transaction would be the execution of the sale deed in the name of the company which has only changed its name in accordance with law.
6. The respondent-Board has filed the objection statement. Detailed reference is made to the shareholding pattern which existed during the plot being allotted in favour of the company known as M/s. Kirloskar Snyder General Limited and with regard to the change in the shareholding pattern subsequent to the company being known as M/s. Kirloskar AAF Limited. In that light, it is contended that there is substantial change in the constitution and when the same is evident from the documents, the petitioner cannot contend that the change is only with regard to the name of the company and therefore, seek for execution of the sale deed.
7. The petitioner has filed a detailed rejoinder to the objection statement enclosing a Certificate issued by the Company Secretary with regard to the shareholding pattern and would contend that the Snyder General Corporation still continues to hold 50% of the shares in the company known as M/s. Kirloskar AAF Limited. It is in that light contended by the petitioner that, though at the first instance, the respondent had not taken a contention with regard to the shareholding pattern and had only raised objections to the change in the name, the contention as presently urged in the objection statement would not be justified.
8. In the light of the rival contentions urged in the pleadings of the parties, I have heard the learned counsel for the petitioner as also the learned counsel for the respondent and perused the petition papers 9. Firstly, insofar as the change of name as claimed by the petitioner, the Certificate of Incorporation consequent on the change of name as issued by the Competent Authority is at Annexure-D to the petition. The said document, no doubt would indicate that the change of name is from M/s. Kirloskar Snyder General Limited to M/s. Kirloskar AAF Limited. Though, that aspect of the matter is noticed from the said document, keeping in view the nature of objection raised by the respondent and the rejoinder that is sought to be put forth by the petitioner herein, the issue relating to the actual shareholding pattern are all factual matters which are to be ascertained with the examination of the same by the competent Company Secretary/Auditors, in the background of the Certificate relied upon by the petitioner in this petition.
10. If that be so, the respondent-Board will have to examine the documents as maintained by the petitioner with regard to the shareholding pattern, notwithstanding the change of the name and arrive at a conclusion as to whether there is a change in the very composition of the company, so as to arrive at a conclusion that the company now known as M/s. Kirloskar AAF Limited except for sharing the common first name, there is a change in the composition of the shareholding pattern and is therefore a different entity.
11. In that light, these are aspects regarding which a factual determination is required to be made by the respondent-Board, before arriving at a conclusion whether the demand as put forth by the respondent-
Board through the impugned communication is justified. Needless to mention, in such determination, if the respondent-Board arrives at a conclusion based on the documents that there is change in the composition and the present request of the petitioner would amount to transfer of leasehold right to a new entity and in that view, the terms of the lease has been altered, the communication as issued would stand justified and a reaffirmation with appropriate reason to be assigned by the Board will have to be issued to the petitioner. On the other hand, if the respondent, while examining these aspects of the matter, arrives at a conclusion that contention being put forth by the petitioner is justified, in such event, appropriate orders to withdraw the demand would be made in accordance with law. However, if the decision to be taken by the respondent goes contrary to the case of the petitioner and would affect their right, it is only in that circumstance, an examination of such decision taken by the respondent would arise by way of judicial review and therefore, all contentions in that regard are left open to be examined at that stage, based on the decision that would be taken by the respondent in accordance with law.
12. Accordingly, in terms of the above observation, liberty is granted to the petitioner to file a representation along with all supporting documents to substantiate their claim with regard to there being no change in composition of the shareholding of the company. If such representation along with supporting documents are filed, the respondent-Board will examine the same with the assistance of the experts in the field and take a decision as expeditiously as possible but, not later than two months from the date on which the representation is filed.
The petition is accordingly disposed of.
Sd/- JUDGE ST