The Delhi High Court on Thursday dismissed the plea of AJL, publisher of Congress mouthpiece National Herald, challenging the Centre's order to vacate its premises and said there has been "misuse" of lease conditions.
The high court held that the entire transaction of transferring shares of Associated Journals Ltd (AJL) to Young Indian (YI) company, in which Congress chief Rahul Gandhi and his mother Sonia Gandhi are majority shareholders, was a "clandestine and surreptitious transfer of the lucrative interest in the premises" to YI.
A bench of Chief Justice Rajendra Menon and Justice V K Rao upheld the single judge's December order which had dismissed AJL's plea against the Centre's eviction order and had directed it to vacate in two weeks the Herald House in the ITO area in the heart of the capital.
"If all these factors are taken note of and a decision is taken by the respondents (Centre) 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.
"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.
It said no ground is made out for making any indulgence into the matter and "we dismiss the appeal".
AJL had appealed against the single judge's December 21, 2018 order, after which eviction proceedings under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, were be initiated.
It had challenged the Centre's October 30, 2018 order ending its 56-year-old lease and asking it to vacate the premises on the ground that no printing or publishing activity was going on and the building was being used only for commercial purposes.
The Centre and Land and Development Office (L&DO) had said in their order that no press has been functioning in the premises for at least past 10 years and it was being used only for commercial purposes in violation of the lease deed.
AJL had denied the allegations in the petition filed in the high court.
The division bench of the high court Thursday agreed with the Centre's submission, represented by Solicitor General Tushar Mehta, that the breach had been continuing from 2008 till commencement of the digital publication of the newspaper on November 14, 2016.
It said if there has been violation of the terms and conditions of the lease deed for more than eight years, "we have no hesitation in holding that the breach of there being no printing activity or paper publication for a long period is established".
Taking note of the manner in which shares were transferred between AJL and YI the court noted that YI was constituted within a period of about three years, that is, between November 23, 2010 and February 16, 2011.
"It (YI) took over the right to recover a loan of more than 90 crores from All India Congress Committee for a consideration of Rs 50 lakhs, thereafter replaced the original shareholders of YI by four new entities including Moti Lal Vohra, Chairman of AJL, and Young India after acquiring 99 per cent of shares in AJL, became the main shareholder with four of its shareholders acquiring the administrative right to administer property of more than 400 crores," it noted.
The bench said even though senior advocate Abhishek Mani Singhvi, representing AJL, had argued that there was nothing wrong in the transaction and was legally permissible, "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 Young India was nothing but, as held by the writ court, a clandestine and surreptitious transfer of the lucrative interest in the premises to Young India".
It said the "so-called innocent or legal and permissible transaction" as canvassed before it was not so simple or straight forward and it only indicated the "dishonest and fraudulent design" behind it.
The court said there was no merits in the AJL's objection that no formal notice was issued to the Centre by the single judge or the division bench.
The single judge had said that by transfer of AJL's 99 per cent shares to YI, the beneficial interest of AJL's property worth Rs 413.40 crore stands "clandestinely" transferred to YI.
It had said AJL has been "hijacked" by YI, in which the Gandhis are shareholders.
The L&DO had ended the lease - entered into with AJL on August 2, 1962 and made perpetual on January 10, 1967 - asking the company to hand over the possession by November 15, 2018.
In its plea, AJL had also said the digital versions of English newspaper National Herald, Hindi's Navjivan and Urdu's Qaumi Awaz have commenced from 2016-17.
The weekly newspaper 'National Herald on Sunday' resumed on September 24, 2017, and the place of publication was the ITO premises, AJL said, adding the Hindi weekly newspaper Sunday Navjivan was being published since October last year from the same premises.
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