Summary
Court-sanctioned amalgamation transferred the leased plots and attracted the perpetual leases’ broad restriction on transfer or parting with possession and corresponding unearned-increase obligation. The parties’ own amalgamation application was voluntary in substance, and the clause did not exclude involuntary transfers in any event. Section 5 TPA did not narrow that contractual language. The appeal was dismissed and DDA permitted to withdraw the deposited demand of Rs.2,13,59,511.20 with accrued interest.
Issues
- Whether amalgamation triggered the lease condition governing transfer and unearned increase.
- Whether the absence of consideration or Section 5 TPA defeated the demand.
- What disposition followed for the deposited demand and interest.
Provisions considered
- Clause II(4)(a) and provisos, Perpetual lease deedsThe prohibition extended to sale, transfer, assignment or otherwise parting with possession; consent could carry payment of fifty percent of the unearned increase in plot value. (¶¶ 6, 7, 8, 9, 11)
- Section 394(2) and sanctioned amalgamation scheme, Companies Act, 1956The scheme order expressly transferred and vested the scheduled plots in the transferee company, attracting the lease obligations. (¶¶ 1, 4, 7, 8, 9)
- Section 5, Transfer of Property Act, 1882The broad lease clause was not confined to the statutory definition, which itself preserves laws governing corporate property transfers. (¶¶ 10, 11)
Held
- The amalgamation order expressly vested the scheduled leased plots in the transferee. That was a transfer within the wide lease condition; its court-sanctioned form did not avoid the consent and unearned-increase obligations. The parties had themselves sought amalgamation, and the clause did not exclude involuntary transfers even otherwise. (¶¶ 6, 7, 8, 9)
- Nalwa Sons concerned demerger under an equivalent lease clause, and its transfer and unearned-increase reasoning applied equally to merger here. A transfer without monetary consideration does not on that account eliminate the contractual levy based on the increase in plot value. (¶ 9)
- Section 5 TPA did not assist the lessee: the contractual clause extended beyond transfers to any parting with possession, and the statutory definition preserved special corporate-transfer law. The demand was therefore not invalid on the proposed narrow definition. (¶¶ 10, 11, 12)
- The appeal was dismissed without costs. DDA could withdraw the Rs.2,13,59,511.20 principal deposited under the interim order together with accrued interest. (¶¶ 12, 13)
Result
Appeal dismissed without costs; DDA demand upheld. DDA may withdraw the deposited Rs.2,13,59,511.20 principal with accrued interest.