IN A significant setback to Associated Journals Ltd (AJL), the Delhi High Court Thursday upheld an eviction order and asked the publisher of the Congress mouthpiece, National Herald, to vacate Herald House in the national capital.
A division bench of Chief Justice Rajendra Menon and Justice V K Rao concurred with a single-judge bench’s findings that “the dominant purpose” for which Herald House on Bahadur Shah Zafar Marg in central Delhi was leased out to AJL “no longer exists”.
“If all these factors are taken note of and a decision is taken by the respondents (Land and Development Officer, Union Ministry of Housing and Urban Affairs) to say that the dominant purpose for which the lease was granted has been violated and there has been misuse of the conditions of the lease, in the absence of mala fides or ulterior motive having been established, the writ court has rightly refused to interfere into the matter,” it said.
“We also see no reason to make any indulgence into a reasonable order passed by the writ court in the facts and circumstances of the present case,” the bench said in its 63-page order.
Referring to the acquisition of AJL’s share by Young Indian (YI), whose shareholders are Congress president Rahul Gandhi, Sonia Gandhi, Motilal Vora and Oscar Fernandes, the bench observed “if we see the transaction that has taken place in the present case with regard to how the transfer of shares between AJL and YI took place, we find that within a period of about three months, that is, between November 23, 2010 and February 26, 2011, YI was constituted.”
It said: “It took over the right to recover a loan of more than Rs 90 crore from All India Congress Committee for a consideration of Rs 50 lakh, thereafter replaced the original shareholders of YI by four new entities including Sh. Moti Lal Vohra, Chairman of AJL, and YI after acquiring 99% of shares in AJL, became the main shareholder with four of its shareholders acquiring the administrative right to administer property of more than Rs 400 crore.
“Even though Dr. (Abhishek Manu) Singhvi had argued that there is nothing wrong in such a transaction and it is legally permissible, but if we take note of the principles and the doctrine for which the theory of lifting of the corporate veil has received legal recognition, we have no hesitation in holding that the entire transaction of transferring the shares of AJL to YI was nothing but, as held by the writ court, a clandestine and surreptitious transfer of the lucrative interest in the premises to Young Indian,” the bench said.
On December 21, 2019, a single-judge bench had dismissed AJL’s petition challenging the Centre’s order to vacate its premises within two weeks — the deadline expired in the first week of January this year.
It had also rejected AJL’s request to stay the operation of the order and had said that if they do not vacate the premises in two weeks, authorities can initiate proceedings under the Public Premises (Eviction of Unauthorised Occupants) Act (PP Act) against Herald House. AJL appealed against the order, following which the Centre assured the bench that it would not initiate any action till pendency of their matter.
AJL had challenged the “legality, validity, and reasonableness” of a notice passed by the Land and Development Officer, Union Ministry of Housing and Urban Affairs on October 30, 2018, directing it to vacate Herald House by November 15. In its appeal, the AJL had contended that the order displayed “inexplicable haste” without even calling for a written reply/affidavit from the Centre.
The Centre, on the other hand, had argued that the lease for the premises was rightly determined after the ownership of the AJL was “clandestinely” transferred to Young India. It was thus stated that the motive behind the transfer was to assign the “lucrative interest” in Herald House to Young Indian.
The bench concluded that the AJL themselves have admitted “the position with regard to there being no press activity and admitted non-publication of the newspaper due to financial trouble for more than eight years. It was only when the breach proceedings took place that press was installed, licence obtained and publication commenced after September 24, 2017”.
As per the Perpetual Lease Deed of January 10, 1967, executed by AJL, the subject premises was to be used by them for construction of a building for the bonafide use of their press and for no other purpose.