S. Ravindra Bhat, J. - (1.) In this appeal by special leave, an affirming judgment of the Calcutta High Court (dismissing the appeal, against an order allowing the respondent's application under Section 535 of the Companies Act, 1956 (hereafter "the Act") has been questioned.
(2.) The appellant (hereafter "SASF") is a trust, constituted as a special purpose vehicle (SPV) by the Central Government for acquiring by transfer, the stressed assets of the Industrial Development Bank of India (IDBI), to administer and manage the stressed assets and to recover amounts due, by framing schemes of restructuring, settlement etc. with borrowers. IDBI, through a deed of assignment, unconditionally transferred all loans and advances granted by it, to SASF, including the loans and securities in relation to the second respondent, the company in liquidation.
(3.) The facts are that Wellman Smith Owen Engineering Corporation, a company incorporated in the United Kingdom leased immovable property, which it took possession of, on a lease rent of Rs. 3600/- with effect from 1st April, 1962. The assets and business of Wellman were taken over, through an agreement dated 10th October, 1962 by Wellman Incandescent India Ltd (the second respondent, hereafter "Wellman"). Wellman entered into a fresh lease agreement with the Government of West Bengal, for a term of 99 years, in respect of one industrial property, i.e. Shed J-2 Howrah Industrial Estate, measuring 30612 square feet with effect from 1st September, 1968. A further lease was granted by the Government of West Bengal on 1st July, 1990 in respect of Shed J(i)/A measuring 260 square feet. On 6th May, 1992, Wellman borrowed Rs. 10 crores from the IDBI which entailed provision of security by way of hypothecation of movables and mortgage of the premises and properties leased to it, by the Government of West Bengal. A further advance of Rs.3 crores was obtained by Wellman towards working capital; this was again on the strength of equitable mortgage of the same immovable properties, including the said leased premises, through deposit of title deeds. The memorandum of entry in regard to this was carried out on 15th July, 1999. In the meanwhile, on 5th December 1994, the premises and properties in question along with several others, were assigned to the first respondent. Wellman's financial woes became acute; it approached the Board for Industrial Finance and Reconstruction (BIFR) under the Sick Industrial Companies (Special Provisions Act) 1985 ("SICA"). The proceedings attempting rehabilitation were to no avail; the BIFR on 24th September, 2002 held that reconstruction was not possible and concluded that the company had to be wound up. A reference was accordingly made to the Calcutta High Court, under Section 20 of SICA. In the liquidation proceedings, the High Court directed the appointment of an Official Liquidator, requiring him to take charge of the company's (Wellman's) assets.;