Sanchayita Lahkar

The High Court of Calcutta, Division Bench of Justice Madhuresh Prasad and Justice Supratim Bhattacharya, in an order dated December 8, 2025, dismissed an appeal and allowed a state industrial development corporation’s demand for transfer fees relating to industrial leasehold land at Kharagpur. The dispute arose after a successful resolution applicant sought transfer of the lease without paying transfer charges, contending that approval of the insolvency resolution plan entitled it to a clean transfer. The Court held that approval of a resolution plan does not extinguish liabilities that were not approved as waivers and were expressly kept open for determination by the competent authority at the time the plan was sanctioned.

The dispute arose from a demand raised by a state industrial development authority for payment of transfer fees in respect of approximately 315.42 acres of industrial leasehold land. The land had originally been sub-leased in 2009 for industrial purposes to a company that was later admitted into insolvency proceedings. A resolution applicant submitted a resolution plan for takeover of the corporate debtor, which included a clause seeking transfer of the leasehold land without payment of any transfer fee, penalty, or arrears.

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While approving the resolution plan, the adjudicating authority declined to approve the waiver of statutory and contractual charges and left the issue of exemption or waiver open for determination by the appropriate authority. Appeals against this decision were dismissed by the appellate authority and thereafter by the Supreme Court. Subsequently, the development authority issued notices demanding transfer fees calculated as a percentage of the prevailing market value of the land.

The resolution applicant challenged these notices by filing a writ petition seeking quashing of the demand and a declaration that no transfer fee was payable, contending that the resolution plan entitled it to a “clean slate” and that the demand was impermissible after plan approval.

The Division Bench recorded that the writ petition was founded on a misrepresentation of earlier proceedings. The Court observed that “the requirement of approaching the writ Court exercising extraordinary equitable discretionary jurisdiction under Article 226 of the Constitution of India, with clean hands cannot be over emphasized.” It stated that once wilful suppression or misrepresentation of material facts is established, “such party would not be entitled to any relief by the writ Court, and a writ petition is liable to be dismissed on this ground alone.”

The Court examined the resolution plan clause seeking waiver of transfer fees and noted that “this clause was not approved” by the adjudicating authority. It further recorded that the adjudicating authority had clearly held that “any exemption for payment would be dealt with by the respective authorities if applied for” and that it was “not inclined to approve the waiver as prayed for in the plan.”

Addressing the argument that change in shareholding did not amount to transfer, the Court observed that the present case involved “transfer of leasehold interest” as expressly contemplated in the resolution plan itself, distinguishing it from cases involving mere transfer of shares.

On the plea of a “clean slate” under Section 31 of the Insolvency and Bankruptcy Code, the Court stated that “there is no question of the demand for transfer fee to be considered frozen” since the resolution plan did not approve any waiver and the issue was expressly left open.

The Court further observed that the issue of transfer fee had “attained finality in the proceedings under IBC, up to the Apex Court” and was therefore not open to be re-agitated through writ proceedings.

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The Court recorded that “the present appeal is dismissed. Urgent photostat certified copy of this judgment, if applied for, be supplied to the parties, expeditiously after complying with all necessary legal formalities. Prayer for stay has been made. The same is considered and rejected.”

Advocates Representing the Parties

For the Petitioners: Mr. Ratnanko Banerji, Senior Advocate; Ms. Vaibhavi Pandey, Advocate; Ms. Akshita Bohra, Advocate

For the Respondents: Md. T.M. Siddique, Senior Advocate; Mr. T. Chakraborty, Advocate; Mr. S. Adak, Advocate; Mr. S. Sanyal, Advocate

Case Title: S.S. Natural Resources Pvt. Ltd. and Another vs West Bengal Industrial Development Corporation Limited and Another
Case Number: APO 49 of 2024 with WPO 2392 of 2022
Bench: Justice Madhuresh Prasad, Justice Supratim Bhattacharya