Court dismisses appeal by S.S. Natural Resources Pvt Ltd, emphasizing the necessity of approaching the judiciary with clean hands.
In a significant ruling, the Calcutta High Court has upheld the demand for a transfer fee by the West Bengal Industrial Development Corporation Limited (WBIDC) against S.S. Natural Resources Pvt Ltd, the resolution applicant in the insolvency case of Ramsarup Industries Limited. The Division Bench, comprising Justices Madhuresh Prasad and Supratim Bhattacharya, dismissed the appeal filed by S.S. Natural Resources Pvt Ltd, reinforcing that a party must approach the court with clean hands for equitable relief under Article 226 of the Constitution of India.
The dispute arose when WBIDC demanded a transfer fee of Rs. 6.45 crore for the leasehold land, which was part of the resolution plan submitted by S.S. Natural Resources Pvt Ltd during Ramsarup Industries Limited's insolvency proceedings. The petitioner argued that the transfer fee demand was unjustified, claiming that such fees should have been waived under the resolution plan.
The resolution plan, approved by the National Company Law Tribunal (NCLT) in 2019, did not endorse the waiver clause proposed by the petitioner. The NCLT's decision was upheld by the National Company Law Appellate Tribunal (NCLAT) and subsequently by the Supreme Court, which dismissed the petitioner’s appeal without raising any substantial question of law.
The High Court, in its judgment, noted that the petitioner misrepresented facts and submissions made during the proceedings before NCLT, NCLAT, and the Supreme Court, presenting them as observations by these tribunals. Such misrepresentation, the court held, disqualifies the petitioner from seeking relief under writ jurisdiction.
Furthermore, the court found no merit in the petitioner’s argument that the change in shareholding did not amount to a transfer of lease, thus negating the applicability of the transfer fee. The resolution plan explicitly contemplated the transfer of leasehold rights, and the demand for the transfer fee was left to be determined by the appropriate authorities, as noted by the NCLT.
The court also dismissed the petitioner’s argument that the Government's Land Allotment Policy dated December 26, 2012, could not apply retrospectively to the lease deed executed in 2009. The policy, applicable to lands owned or held by state government agencies, was deemed relevant to the lease transfer approved in 2019.
Ultimately, the court affirmed that the petitioner’s claim was barred by the principle of issue estoppel, as the matter had reached finality in the insolvency proceedings up to the Supreme Court. The judgment underscores the importance of transparency and honesty in judicial proceedings, particularly in the exercise of discretionary equitable jurisdiction.
Bottom Line:
A writ petition is liable to be dismissed if the petitioner approaches the court with deliberate suppression or misrepresentation of material and relevant facts.
Statutory Provision(s): Article 226 of the Constitution of India, Insolvency and Bankruptcy Code, 2016 (Section 31)
