SCA/725719/1997 1/5 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 7257 of 1997 For Approval and Signature: HONOURABLE MR.JUSTICE AKIL KURESHI ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= SIDDHI SALES CORPORATION - Petitioner(s) Versus GUJARAT INDUSTRIAL DEVELOP. CORPORATION - Respondent(s) ========================================================= Appearance : MR CL SONI for Petitioner(s) : 1, MS NITA U BHATT for Respondent(s) : 1, MR UDAY R BHATT for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE AKIL KURESHI Date : 08/12/2008 ORAL JUDGMENT Petitioner has challenged the action on the part of respondent Gujarat Industrial Development Corporation (GIDC for short) in insisting upon clearing all dues of water charges and revenue SCA/725719/1997 2/5 JUDGMENT charges of the previous owner of the plot before transferring the plot in the name of the petitioner. 2. Briefly stated, facts are that an industrial plot No.75/76 of GIDC, Porbandar was leased by GIDC in favour of Vimal Cement Products. Vimal Cement Products in turn mortgaged the property in favour of GSFC to secure certain loans. Since Vimal Cement Products was unable to repay the dues, the plot was auctioned by GSFC in exercise of powers under section 29 of the State Financial Corporations Act. The petitioner participated in the said auction on certain terms and conditions specified in letter dated 27.3.95. Condition No.6 thereof reads as follows:- “6. The outstanding dues of Government/GIDC against the Land/Shed and/or GEB and Municipal/Gram Panchayat Taxes and any other taxes, if any, against the property offered for sale, shall be borne by the purchaser.” Apparently since Vimal Cement Products had not cleared the dues for water charges and other land revenue payable to the GIDC, GIDC refused to transfer the plot in the name of the petitioner or to provide any amenities thereon. 3. On 20th July 1998 while admitting the petition, learned single Judge of this Court provided that the respondent will effect transfer of the property and supply water and make other amenities only if all SCA/725719/1997 3/5 JUDGMENT outstanding amounts in this behalf are cleared by the petitioner. The amount paid will be received subject to the result of the petition. 4. Learned advocate Shri Soni for the petitioner stated that even the disputed amounts were paid over by the petitioner and the petitioner was provided with the amenities by the Corporation. To show this, he produced on record a communication dated 14th December 1998 from the respondent to the petitioner. He, however, submitted that the disputed amounts were paid to the petitioner subject to outcome of the petition and the same should be refunded to the petitioner as GIDC has no authority to collect such charges. 5. It was contended that condition No.6 of the tender conditions permitted GIDC to collect only those charges attached to the land and none other. It was also submitted that the Apex Court in the case of Isha Marbles v. Bihar State Electricity Board, (1995) 2 SCC 648 has concluded this issue and the amount recovered by the GIDC should be refunded. 6. On the other hand, Shri Uday Bhatt appearing for the respondent opposed the petition contending that the land was given to Vimal Cement Products on lease. The said company was permitted to mortgage the property to GSFC subject to priority of charges of GIDC. Ultimately when GSFC auctioned the property, GIDC had a claim to recover its outstanding dues of SCA/725719/1997 4/5 JUDGMENT erstwhile owner. 7. To my mind, in face of the clear specification in condition No.6 noted above, which was part of the tender terms, the ratio laid down by the Apex Court in the case of Isha Marbles (supra) would not apply. In the case of Isha Marbles, the Apex Court held that the past dues of electricity charges of the erstwhile owner could not be recovered from the auction purchase since it was purely a matter of contract between the earlier owner and the electricity board. The auction notice also did not mention anything about the outstanding electricity dues. It was, therefore, held that such past dues of electricity could not be recovered from the bonafide purchaser. 8. In the present case, condition No.6 is sufficiently clear and makes the auction purchaser liable to pay past dues of GIDC against the land. Counsel for the petitioner, however, tried to submit that the dues of water charges cannot be described as those against the land. I see no reason why condition No.6 would not apply even to such dues since water was supplied by the GIDC to the erstwhile lease-holder of the land at certain charges which remained unpaid and was made part of the liability of the auction purchaser in terms of tender. 9. In the result, the petition is dismissed. Rule is discharged. SCA/725719/1997 5/5 JUDGMENT (Akil Kureshi, J.) (vjn)