OJA/12020/2008 1/12 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD O.J.APPEAL NO. 120 of 2008 In COMPANY APPLICATION NO. 531 OF 2007 In COMPANY PETITION NO. 263 OF 1998 With CIVIL APPLICATION NO.167 OF 2008 In O.J. APPEAL No.120 OF 2008 In COMPANY APPLICATION NO.531 OF 2007 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA HONOURABLE MR.JUSTICE BANKIM.N.MEHTA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? No. 2 To be referred to the Reporter or not ? No. 3 Whether their Lordships wish to see the fair copy of the judgment ? No. 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 ? No. 5 Whether it is to be circulated to the civil judge ? No. ========================================================= PARSHWANATH CEMENT CO. LTD. - Appellant(s) Versus NILESH SAVJIBHAI PATEL & 4 - Opponent(s) ========================================================= Appearance : MR PAVAN S GODIAWALA for Appellant(s) : 1, RULE UNSERVED for Opponent(s) : 1, MR.J S.SADHWANI for Opponent(s) : 1, OFFICIAL LIQUIDATOR for Opponent(s) : 2, MR JS YADAV for Opponent(s) : 2, GOVERNMENT PLEADER for Opponent(s) : 3, MR JR SHAH for Opponent(s) : 4, OJA/12020/2008 2/12 JUDGMENT MR RA MISHRA for Opponent(s) : 5, ========================================================= CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MR.JUSTICE BANKIM.N.MEHTA Date : 15/10/2008 CAV JUDGMENT (Per : HONOURABLE MR.JUSTICE BANKIM.N.MEHTA) 1. Appellant original respondent No.2 Parshwanath Cement Co. Ltd. has preferred this O.J. Appeal and challenged order dated 22-4- 2008 passed by Company Court in Company Application No. 531 of 2008 in Company Petition No.263 of 1998, whereby Company Court directed Official Liquidator to act as per the report submitted by DILR and execute the sale deed in favour of the present respondent No. 1 original applicant - Nilesh Savjibhai Patel for 17098 sq. mtrs. and to take back, if any, part of land being in excess land of 10117 sq. mtrs. 2. Respondent No. 1 – Nilesh Savjibhai Patel took out Judges Summons and prayed as under : “A. This Hon'ble Court may be pleased to direct the District Inspector of Land OJA/12020/2008 3/12 JUDGMENT Records(DILR), Rajkot to carry out the measurement of the entire land of S. No.255 and all structures standing thereon and divide two parts i.e. first part of 10117 sq. mtrs. of M/s. Parshwanath Cement Co. Ltd. and second part of 17098 sq. mtrs. sold to Mr. Nilesh Patel B. This Hon'ble Court may be pleased to direct the O.L. to take over the vacant and peaceful possession of 17098 sq. mtrs. Of land from M/s. Parshwanath Cement Co. Pvt. Ltd. and divide/identify/earmark the said land after removing any encroachment carried out by M/s. Parshwanath Cement Co. Ltd.” 3. The Company Court after hearing the parities held as under : “The record produced before the Court does not indicate that after it is purchased, respondent No. 2 has made any further construction. If the factory is sold then land appurtenant thereto as per the statutory requirement should also be protected to the extent possible. This does not, however, mean that the respondent No. 2 should be permitted to retain land more than OJA/12020/2008 4/12 JUDGMENT the land sold to them i.e. 10117 sq. mtrs. The offer of the respondent No. 2 to purchase the said land at whatever price does not seem to be acceptable as the applicant has purchased the land of 17098 sq. mtrs., and he has planned out his affairs accordingly. The Court would not compel the applicant to part with any portion of the said land. The Court has made several attempts to persuade the parties and to decide the whole issue amongst themselves. The Court, therefore, cannot accept the plea of the respondent No.2 to allow them to retain the excess land or the land more than the land sold to them i.e. l0117 sq. mtrs. Hence, such excess land whether it belongs to the State Government or to the applicant the same will have to be returned to the Government or to the applicant, as the case may be. The Court, therefore, directs the Official Liquidator to act as per the report submitted by the DILR and execute the sale deed in favour of the present applicant for 17098 sq. mtrs. While doing so, if any part of the land being excess of 10117 sq. mtrs. Land is required to be taken back from the respondent No. 2, the same should immediately be taken back from the OJA/12020/2008 5/12 JUDGMENT respondent No.2.” 4. Being aggrieved by the said decision, the appellant original respondent No. 2 has filed the present appeal. 5. We have heard Mr. Mihir Joshi, learned Sr. Counsel for the appellant, Mr. J.S. Sadhwani learned Advocate for respondent No. 1. 6. Mr. Joshi submitted that total land bearing Survey No.255 admeasuring 22715 sq. mtrs. was owned by the company in liquidation. The appellant has obtained possession of the properties in question. That the appellant has not made any work of extension and there is no encroachment as no actual measurement was undertaken by DILR. Therefore, the impugned order is required to be quashed and set aside. He has, without prejudice to the rights and contentions of the appellant, shown willingness to purchase the excess land at appropriate price. 7. Learned advocate Mr. Sadhwani appearing for respondent No.1 submitted that conduct of the appellant is mala fide as only 10117 sq. mtrs. of land with plant and machinery was sold to OJA/12020/2008 6/12 JUDGMENT them. That the appellant misled the Official Liquidator and covered the adjoining land of 17098 sq. mtrs. which was sold to respondent No.2 and had also encroached upon 881 sq. mtrs. Government land by placing raw material and it was revealed only after survey was conducted by DILR. Therefore company court was justified in passing the impugned order. Therefore, the appeal deserves to be dismissed with costs. 8. Respondent No. 2 – Nilesh Savjibhai Patel was permitted by the Court to participate in auction for land bearing Survey No. 255 situated at village belonging to M/s. Sardar Cement Ltd. (in liquidation). Total area of land bearing S.No. 255 was 27215 sq. mtrs., out of which land admeasuring 10117 sq. mtrs. was sold earlier to the appellant in the year 2003 by the Official Liquidator. Thereafter, remaining part of land admeasuring 17098 sq. was sold to respondent No. 2. There was no boundary line separating two parts of land bearing S.No.255. It was alleged that the appellant made encroachment upon the land sold to respondent No. 2. The respondent No. 2 moved Company Application No. 458 of 2007 wherein the Court permitted respondent No. 2 to approach Official Liquidator for getting the land measured OJA/12020/2008 7/12 JUDGMENT through DILR. Therefore, respondent No. 2 approached Official Liquidator to get measurement done through DILR. Prior to that, respondent No. 2 carried out private measurement and found that there was encroachment to the extent of 945 sq. mtrs. Thereafter, when survey was carried out by DILR, the appellant refused to permit measurement of the land in question. The DIRL was of the view that it would not be feasible to measure one part only and the entire land of Survey No. 255 will have to be measured for dividing the land into two parts. Therefore, respondent No. 2 took out the Judges Summons and sought for directions as mentioned hereinabove. 9. The Company Court issued notice and directed Official Liquidator to carry out measurement of Survey No. 255 consisting of the land sold earlier to respondent No. 2 with the help of DILR and demarcate the land admeasuring 10117 sq. mtrs. sold to the appellant as well as land admeasuring 17098 sq. mtrs. sold to respondent No.2. 10. Pursuant to the order passed by the Company Court measurement was carried out and Official Liquidator filed his report along with the OJA/12020/2008 8/12 JUDGMENT report of DILR. It was revealed that the appellant had encroached upon the land sold to respondent No. 2. The Court further observed that appellant has nowhere stated that they are in possession of the land admeasuring 10117 sq. mtrs. only. The Court also observed as under: “The controversy between the parties are in relation to the measurement of the land sold to the respondent No. 2 initially and after taking back the possession of the part of the land, the said part sold to the applicant. Broadly speaking there is no such dispute about the fact that the land admeasuring about 10117 sq. mtrs. is sold to the respondent No. 2 and land admeasuring about 17098 sq. mtrs. is sold to the applicant. The dispute is about 2596 sq. mtrs. of land which is said to have been encroached upon by the respondent No. 2 and this land is comprising of the land partly belonged to the applicant and partly belonged to the State Government. Right from the beginning, the conduct of the respondent No. 2 remains doubtful. The Court had an occasion to deal with this issue at great length in its earlier order whereby the Court was OJA/12020/2008 9/12 JUDGMENT constrained to heavily bounce upon the office of the Official Liquidator and was at pains to point out that the respondent No. 2 and the Official Liquidator in collusion with each other have executed the sale deed for the entire piece of land bearing Survey No.255 admeasuring about 27215 sq. mtrs., despite the fact that the land sold was only to the extent of 10117 sq. mtrs. Even after taking back the land admeasuring about 17098 sq. mtrs. and after it is sold to the present applicant, the dispute was not resolved. The actual measurement was not taken place. The land was continued to be in possession of the respondent No. 2 for about 3 to 4 yeas, during which period the respondent No.2 had also placed its material on the said land. The report of the DILR made it abundantly clear that the respondent No. 2 is in possession of the excess land which is not sold to the respondent No. 2.” 11. In fact the appellant is not able to show how the sale deed mentions entire Survey No.255 as having been sold to the appellant. The collusion between the appellant and the then Official Liquidator becomes apparent when the following parts of sale deed are considered. OJA/12020/2008 10/12 JUDGMENT (a) “Factory premises Rev. Survey No.255 of N.H. No.8 B Opp. 66 KVA Sub-Station, Shapar, Tal. Kotda Dist. Rajkot, Sq. mts. with shed land 10117 and Open Land 17097 sq. mts. Total Sq. Mts. 27214”. (b) “The vendor doth hereby grant convey and hereby assure and release unto the purchaser doth hereby confirms the said grant of non agricultural land being Revenue Survey No.255 of N.H. No.8 B, Near 66 KVA Sub Station, Shapar, Tal. Kotda Dist. Rajkot and to the purchaser or thereabouts more particularly described in the Schedule hereunder”. (c) “Portion of pieces or parcels of non agricultural land situated lying and being at Rev. Survey No.255 of N.H. No.8 B Opp. 66 KVA Sub Station, Shapar, Tal. Kotda Dist. Rajkot and bounded as follows : Revenue Survey No.255 : Or or towards North : By porson of Survey Plot No.254. Or or towards South : By porson of Govt. OJA/12020/2008 11/12 JUDGMENT Travers & Cart Road Or or towards East : By porson of Govt. Travers Or or towards West : By porson of Govt. Travers of Rivers. Both the appellant and the then Official Liquidator knew that only 10117 sq. mtrs. of land of Survey No.255 was permitted by the Company Court to be sold and not the entire area of the survey number, yet in the preamble conveyance and description of the boundaries of the property entire Survey No.255 is referred to. 12. In view of above,it becomes abundantly clear that the appellant retained the land more than the land sold to them. Therefore it is crystal clear that the appellant encroached upon the land and hence cannot be permitted to retain the excess land. Learned counsel for the appellant has failed to point out legal infirmity in the impugned order. The contention based on equity also does not merit acceptance in light of the facts which have come on record. Therefore, Company Court was justified in passing the impugned order. OJA/12020/2008 12/12 JUDGMENT 13. As regards the offer made by the appellant to purchase the land as the offer is not acceptable to respondent No. 2 the Court cannot compel him to accept the offer. Therefore, the appellant is required to return the excess land occupied by them. 14. In view of the above, the appeal fails and stands dismissed, with no order as to costs. Interim relief stands vacated. Civil Application No. 167 of 2008 15. In light of the order made in the appeal today, this Civil Application having rendered infructuous is rejected as such. 16. At this stage learned advocate for the appellant requests to stay the operation of this order for a period of three weeks. Considering the facts which have come on record, the request is rejected. (D.A. Mehta, J.) (Bankim N. Mehta, J.) /JVSatwara/