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SC: Possession of plot for limited purpose does not create any interest or right

Liquidator barred from selling plot

The Supreme Court has ruled that possession of a plot given to a company for a limited purpose would not create any interest or right in its favour. The Andhra Pradesh High Court view to the contrary was set aside in the appeal, APII Corporation Ltd vs Team-Asia Lakhi Semiconductors Ltd. Government-owned APII Corporation allotted plots for setting up industries to different persons on certain conditions. Team-Asia got a plot for which an amount had to be paid to the corporation. It was given possession for a limited purpose and allowed possession. The company could not pay the amount within the prescribed time and therefore the part amount already paid was forfeited. The company later went into liquidation and the official liquidator wanted to take back possession of the plot and sell it. The government corporation moved the company court against it, but its petition was dismissed. It appealed to the Supreme Court. While quashing the high court order, the Supreme Court stated that the plot in question did not belong to the company in liquidation and the official liquidator had no right to deal with it or dispose of it. The corporation can deal with the plot according to its own policy, the judgment said.

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