The Calcutta High Court has clarified that where a resolution plan expressly contemplates transfer of leasehold rights and the NCLT (adjudicating authority) has declined to approve waiver of transfer fees, then challenging such order at a later stage by misrepresenting submissions made before the NCLT, NCLAT and the Supreme Court, would be barred by the principle of “clean slate” under Section 31 of the Insolvency and Bankruptcy Code (IBC), 2016.
The Court therefore upheld the demand for transfer fee raised by West Bengal Industrial Development Corporation (WBIDC) in respect of leasehold industrial land, and affirmed the order of the Single Judge declining to interfere with WBIDC’s demand for transfer fee.
The Division Bench comprising Justice Madhuresh Prasad and Justice Supratim Bhattacharya observed that once it is found that a party has approached the extraordinary discretionary equitable writ jurisdiction by resorting to wilful and deliberate suppression and misrepresentation of material facts, such a party would not be entitled to any relief, and a writ petition is liable to be dismissed on this ground alone.
The Bench referred to the decisions of K.D. Sharma v. Steel Authority of India Limited [(2008) 12 SCC 481], Madras Bar Association v. Union of India [(2015) 8 SCC 583] and Vijay Syal v. State of Punjab [(2003) 9 SCC 401], to reiterate that the petitioner would not be entitled to any relief under the extraordinary discretionary equitable writ jurisdiction under Article 226 of the Constitution.
On merits, the Bench rejected the argument that a change in shareholding pursuant to a resolution plan does not amount to a transfer of leasehold rights, by pointing out that the resolution plan submitted by the petitioner is in a clear & unambiguous clause that provides for the transfer of the lease in respect of the leasehold lands in Kharagpur in favour of the resolution applicants.
Rejecting the reliance on the principle of “clean slate” based on Section 31 of the IBC, the Bench clarified that since waiver of transfer fee was expressly not approved by the NCLT and was left open for consideration by WBIDC, the demand could not be said to be frozen or extinguished by approval of the resolution plan.
Briefly, the dispute arose after approval of a resolution plan for Ramsarup Industries Limited, under which the appellants sought transfer of leasehold industrial land at Kharagpur without payment of any transfer fee, relying on a clause of the resolution plan. While the resolution plan was approved, the NCLT expressly refused to approve the waiver of statutory dues and transfer fee, leaving such issues open to determination by the appropriate authorities.
When the appeal before the NCLAT was dismissed, the WBIDC raised the demand for the transfer fee for the Kharagpur land. The issue was carried by the petitioner in an appeal before the Apex Court, but it was subsequently dismissed. Thereafter, the petition was filed claiming substantial relief in the form of a declaration by the writ court that the petitioners are not liable to pay any transfer fee in terms of the notices.
Appearances:
Senior Advocate Ratnanko Banerji, along with Advocates Vaibhavi Pandey and Akshita Bohra, for the Respondent
Senior Advocate T.M. Siddique, along with Advocates T. Chakraborty, S. Adak, and S. Sanyal, for the Respondent
