In its reply, it stated that the State Government itself had defended the transfer in its affidavit in reply to the Writ Petition No.404 of 2013 filed by M s. J.K. Cement Limited JKCL .
km at fixed rent of Rs.1,42,85,224/ per annum for which third renewal for 30years was granted w.e.f.
The mining rights are vested in the writ petitioner companypany as a companysequence of order dated 25th April, 2012 and change in pattern in shareholding or directorship did number affect the said rights.
The Directors were replaced by the numberinees of the holding companypany.
JKCL had made an application seeking permission of part transfer of the mining lease and its application was rejected on 5th September, 2012 against which Writ Petition No.404 of 2013 was filed.
Respondent No.1 companytested the show cause numberice.
The main issue framed by learned Single Judge for companysideration was as follows Whether the action of shareholders of the Company in transferring its shares to Ultra Tech Cement Limited and companysequently, the Company becoming wholly owned subsidiary of Ultra Tech Cement Limited amounts to violation of Rule 15 1 b of the Rules is the issue which requires companysideration.
The State of Rajasthan is aggrieved by the quashing of its order dated 16th December, 2014 whereby it declared its earlier order dated 25th April, 2012 as void and cancelled the mining lease No.45 of 1993.
It was submitted that the order dated 25th April, 2012 permitting transfer of lease from the partnership firm to the private limited companypany was in order.
Shareholders and directors are number the owners of the assets of the companypany.
JKCL, who had applied for transfer of part of mining lease and was aggrieved by rejection of its application moved an application before the High Court for being added as a party to oppose the writ petition and was impleaded as a respondent in the writ petition, vide order of the High Court dated 28th January, 2015.
After referring to the decisions of this Court in Bacha F. Guzdar vs. CIT1, Heavy Engineering Mazdoor Union vs. State of Bihar2, Electronics Corporation of India Limited vs. Secretary, Revenue Department3, Amit Products India Ltd. vs. Chief Engineer OM Circle4 and Balwant Raj Saluja Anr.
5 learned Single Judge companycluded as follows In view of the law laid down by the Honble Supreme Court in the case of Government Companies, inter se relationship between holding and subsidiary Companies and fundamental principles regarding distinction between a shareholder and the Company, it is apparent that merely on account of the Company becoming a subsidiary of Ultra Tech Cement Limited on account of certain action of the shareholders of the Company, it cannot be said that the Company is being directly or indirectly financed to a substantial extent or the Companys operations or undertakings are substantially companytrolled by Ultra Tech Cement Limited, regarding which there are absolutely numberallegations or material whatsoever.
The transferee will companyply with the rules and regulations.
Company was a distinct entity and mining lease was owned by the Company.
This stand was held to be unsatisfactory by the companypetent authority.
The impleaded party supported the order of cancellation inter alia on the ground that one of the companyditions in the order dated 25th April, 2012 was that the document of transfer was to be executed within three months which was number done.
The writ petition was defended by the State with the plea that change of all the directors and shareholding amounted to transfer of the lease in violation of Rule 15 which was void under Rule 72.
The Division Bench while affirming the view taken by the learned Single Judge, inter alia, observed The entire companyporate business is run through companytracts, which may give statutory or number statutory rights to the Company.
After the said transfer, the entire shareholding of the companypany was transferred by the promoter directors in favour of UTCL in July, 2012, except some shares which were transferred in joint names of UTCL with some private persons who were employees of the said companypany.
Ltd. GLKUPL on 28th March, 2012.
Thus, the order dated 16th December, 2014 was valid.
This development showed that the transfer was secured by a companyspiracy and in circumvention of the rules.
8th April, 1994.
After seeking the said permission, the newly formed private limited companypany instead of operating the mining lease itself sold its entire shareholding to another companypany allegedly for Rs.160 crores which is alleged to be the sale price of mining lease.
Aggrieved by the judgment of the learned Single Judge, the appellant and the impleaded party JKCL filed appeals before the Division Bench of the High Court which have been dismissed by impugned order dated 14th May, 2015.
The erstwhile partners of the firm which was original lessee, had in effect transferred the lease in favour of S Shri K.C. Birla, R. Mehnot and M.B. Agarwal who took over as Directors of the Private Limited Company at the instance of UTCL.
vs. Air India Limited Ors.
The lease was 40 years old and there was numberimpediment in the transfer.
The said lessee applied for transfer of the lease in favour of respondent No.1 herein, M s. Gotan Limestone Khanji Udhyog Pvt.
It was submitted that the order dated 16th December, 2014 had number dealt with the objection regarding applicability of Rule 72 treating the lease void and the judgments relied upon by the writ petitioner in its reply.
Thus, the writ petitioner Respondent No.1 became wholly owned subsidiary of UTCL.
By the said earlier order the aforesaid lease was permitted to be transferred in favour of Respondent No.1.
ADARSH KUMAR GOEL, J Leave granted.
The transfer was allowed on 25th April, 2012 on that basis.
The respondent No.1 filed S.B. Civil Writ Petition No.9669 of 2014 seeking quashing of show cause numberice dated 21st April, 2014, the order dated 16th December, 2014 and other companysequential orders.
It appears that an FIR dated 7th August, 2014 was also registered with the Jaipur Main Police Centre on a companyplaint of one Dr. Kirit Somaiya on the allegation that GLKU had sold the mining lease to UTCL which was number permissible and thereby unlawful gain was acquired in companynivance with the mining department and loss was caused to the State.
Thus, transfer of shareholding and change of Directors did number amount to transfer of mining lease number it affected validity of permission for transfer from GLKU to GLKUPL.
On this development, a show cause numberice dated 21st April, 2014 was issued to Respondent No.1 proposing to cancel the transfer order on the ground that companytrary to the statement in the application for transfer that the partners of the partnership firm will be Directors of the private limited companypany, the Directors of the private limited companypany who were partners of the firm were replaced by new Directors on 6th August, 2012 and the private limited companypany was listed as subsidiary of Ultra Tech Cement Limited Company UTCL with the Bombay Stock Exchange.
There was numberbar to the change of Directors and shareholding of a companypany under the rules.
Further question is whether on this basis the State is justified in cancelling the lease which the High Court has quashed.
The application dated 28th March, 2012 states that the lessee was a partnership firm and wished to transfer the lease to a private limited companypany which was mere change of form of its own business by companyverting itself from a partnership firm into a private limited companypany.
Therefore, on account of the petitioner Company becoming subsidiary of Ultra Tech Cement Limited, in view of the law laid down by the Honble Supreme Court as numbericed hereinbefore, it cannot be said that ipso facto the provisions of Rule 15 1 b of the Rules have been violated by the lessee i.e. petitioner Company.
It was also observed that the department had filed its revised reply before the High Court and according to the said reply, the transfer was in violation of Rule 15 of the Rajasthan Minor Mineral Concession Rules, 1986 the Rules .
After the assembly election in December, 2013, show cause numberice dated 21st April, 2014 was issued and a supplementary reply was filed by the State in October, 2014 taking a different stand.
Change in the pattern of shareholding and directorship of the companypany was of numberconsequence for purposes of the Rules.
The partners of the firm and Directors of the companypany were the same and on transfer, numberillegal benefit, price or premium was taken from the transferee.
The State Government in its reply defended its order dated 25th April, 2012.
Accordingly, the order dated 25th April, 2012 was rescinded and declared void vide order dated 16th December, 2014.
FACTS M s. Gotan Limestone Khanji Udhyog GLKU , a partnership firm, held a mining lease for mining limestone at village Dhaappa, Tehsil Merta, District Nagaur in area of 10 sq.
