- (1.) THIS Letters Patent appeal has been filed by the Union of India against the order passed by Hon'ble Justice Amitava Lala dated 6th of January, 2005 in C. R. No. 10289 (W) of 1983.
(2.) WE may briefly notice the relevant facts. The respondent No. 1, Hall and, Anderson Ltd. , a Company registered under the Companies Act and having its registered office at 33a, Chowringhee Road, Calcutta-16, claims to be the absolute owner of the land and building known as Hall and Anderson building situate at the aforesaid address. The site area is approximately 5 bighas, 11 cottahs, 5 chittaks and 14 sq. ft. The property is situated in the heart of the sophisticated commercial place in the city of Calcutta (Kolkata ). The respondent No. 1 was incorporated as a Company under the Companies Act, 1913 on 8th of November, 1946. The Company carried on multifarious business activities. Some of the objects of the Company, as set out in the Memorandum of Association and which have been set out in para-2 of the paper book are quoted as under: " (1) To carry on in India and elsewhere the business of drapers and furnishing the general warehousemen in all its branches. (2) To carry on all or any of the business of silk, mailers, silk weavers, cotton spinners, cloth manufacturers furriers, haberdashersy, bosiers, manufacturers, soap and article required for ornament, Aecreation, or amusement gold and silver swiths book solders, dealers in musical instruments, manufacturers of and dealers in bicycles, tricycles, and motor carriages and also refreshment contractors, restaurant keepers, hotel, boarding and loading house keepers, letters of furnished or unfurnished houses, flats or appurtenants, with or without servants, or other accessories or conveniences, liscensed victuallers, wine and spirit merchants, tobacconists, and dealersimmineral, serated and other liquers, framers, diarymen, market gardeners, nurseymen and florists. (3) To purchase take on lease or tenancy or in exchange, hire take options over or otherwise acquire for any estate or interest whatsoever, and to hold, develop, work cultivate, deal with and turn to account concessions, grants, decrees licences, privileges, claims, options, leages, property, real or personal or right or power of any kind which may appear to be necessary or convenient for any business of the company and to purchase, charter, hire, build of otherwise acquire vehicles of any or every sort of description for use on or under land or water or in the air and to employ the same in the carriage of merchandise of all kinds or passengers and to, carry on the business of owner's of trucks. Trams, lorries, motor cars and ship-owners and lightermen and owners of air craft in all or any of their respective branches. (4) To sell, exchange, mortgage, let on lease royalty or tribute, grant licences, easements options and other rights over and in any other manner deal with or dispose of the undertaking, property assets, rights and effects of the company or any part thereof for such consideration as may be thought fit and in particular for stocks, shares whether fully or partly paid up or securities of any other company. " (Quoted verbatim as they appear in Para-2 of the paper book)
(3.) EVER since its inception, respondent No. 1 claims to be carrying on business of selling various goods and/or articles from a departmental store operating in the said building under the name and style of "hall and Anderson". By a Deed of Conveyance dated 12th June, 1950 respondent No. 1 purchased textile mills situated at Globe Mills Passage, Delisle Road, renamed as Shankarrao Narman Path, Pandurang Budhkar Marg, Lower Paral in Bombay from another Company known as "madhusudan Mills Ltd. (hereinafter referred to as the said mills ). After acquiring the aforesaid mills, respondent No. 1 commenced the additional business of manufacturing and selling cotton textiles. The nomenclature of the Company was changed to Shree Madhusudan Mills Ltd. with effect from 21st July, 1959 instead of Hall and Anderson Ltd. However, the business of respondent No. 1 Company other than the textile business was never stopped. The registered office of the textile mills was situated in a very small area of 345 sq. ft. in the Hall and Anderson building. It is clearly stated in the petition that departmental stores business of respondent No. 1 continued in substance till 1976. However, there was a progressive deduction in the extent of the said business over the years. In view of the progressive deduction of the departmental stores business and having regard to the relevant business considerations prevailing, respondent No. 1 decided to develop the said building as an income yielding asset. The Company, therefore, started business of leasing out various portions of the Hall and Anderson building to different business organizations. The business was referred to as the property business. Details of the existing occupants of the said building and the capacity in which the said occupants are occupying therein different portions have been given in a schedule marked "annexure C". It is made clear in the petition that the property business and the textile mills business are completely separate business activities. The running of the property business is not connected with the textile business in any manner. The accounts of the property business are maintained separately and independently of the textile mills business. The staff engaged in the property business is not connected with the working of the textile mills. It is also stated in the petition that for the purpose of carrying on the said property business respondent No. 1 maintains and operates separate bank accounts. Details of the Bank Accounts are also given. It is also the case of the respondent No. 1 that up to the year 1970, the Profit and Loss Accounts of the two businesses were prepared and published separately. Although amalgamated Profit and Loss Accounts are being prepared and published after the year 1970, yet even in such Profit and Loss Accounts income from the Calcutta property is shown separately. Respondent No. 1 maintains Electricity Register, Rent Register, Municipal Taxes Register and Register of Fixtures and Furniture at the office of respondent No. 1 at 31 Chowringhee Road, Calcutta, all of which relate exclusively to the property business of respondent No. 1. For the purpose of preparation of the amalgamated Profit and Loss Account detailed statements of Accounts relating to the mills are sent from the mills of respondent No. 1 to Calcutta. It may be noticed here that the Company was renamed as M/s. Hall and Anderson from M/s. Madhusudan Mills Ltd. from 11. 02. 1999. The Textile Undertakings (Taking Over of Management) Ordinance, 1983 came into force on and from 18th of October, 1983. The Ordinance was converted into the Textile Undertakings (Taking Over of Management) Act, 1983. Subsequently, the Nationalisation Act of Textile Undertaking came into force known as the Textile Undertakings (Nationalisation) Act, 1995 which came into effect from 1st of April, 1994.;