High Court orders status quo on 119.6-acre NGEF land

The High Court of Karnataka on Wednesday directed the state government, represented by Karnataka State Industrial Investment & Development Corporation Ltd (KSIIDC), and NGEF Ltd represented by the Official Liquidator, to maintain a status quo on 119.665 acres of NGEF land located on Old Madras Road.

Hearing an OSA (original side appeal) filed by the German company, EHG Elektro Holding GMBH, a division bench comprising Chief Justice S K Mukherjee and Justice P S Dinesh Kumar passed an order to maintain status quo with regard to the nature and character of the property to be maintained. The German company sought directions to set aside the single bench order which had allowed the government's plea of using NGEF land for public infrastructure projects by recalling the winding-up order.

The appellants contended that the single bench has gone beyond the scope of the application by the state government by issuing directions and guidelines with regard to the usable land of NGEF, and has directed formulation of a scheme which is not permissible under law. The appellants said the company holds 9.72% share in NGEF and the single bench order would affect and cause severe loss and injury to the company.

Further, the appellants have said that the single bench has failed to notice that exercising the power vested under Section 466 of the Companies Act, 1956 (power of tribunal to stay winding up) cannot be exercised in isolation.

They said that the state government was not seeking to review the business of NGEF but only wanted to utilise the land for implementation of public infrastructure projects.

KSIIDC has also filed a caveat requesting the court not to pass any orders without hearing them. The bench, ordering notice to KSIIDC and NGEF limited, adjourned the next hearing to August 22.