IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.8840 of 2006 ====================================================== 1. Ahmad Abdullah, son of Late Abdullah A. Karim 2. Farooque Nazim, son of Hafiz Salim 3. Md. Razur Rahman, son of Md. Mubarak Hussain 4. Asghar Khan, son of Late A. Rahim Khan 5. Kafil, son of Late Nemazi Mian 6. Zafrul Hoda Khan, son of Late Enamul Hoda Khan. All residents of Motipur, P.S. - Motipur, District - Muzaffarpur. ………Petitioners. Versus 1. The State of Bihar. 2. Secretary, Department of Cane Development, Government of Bihar, Patna. 3. Bihar State Sugar Corporation Ltd., Udyog Bhawan, IInd Floor, East Gandhi Maidan, Patna-800004 through its Managing Director. 4. Bihar State Sugar Corporation Ltd., Motipur Unit through its General Manager, Motipur, P.S. Motipur, District – Muzaffarpur. 5. General Manager, Bihar State Sugar Corporation Ltd., Motipur Unit through its General Manager, Motipur, P.S. Motipur, District – Muzaffarpur. ……………………………..………Respondents. ====================================================== with Civil Writ Jurisdiction Case No.427 of 2008 ====================================================== Motipur Sugar Factory Ltd., a company incorporated under the Companies Act, 1956, having its registered office at Motipur, district-Muzaffarpur, Bihar through its one of its share holders and former Director, Omer H.Ibrahim son of Late Ibrahim Oosman, resident of 2, Raj Mohan Street, Kolkata (West Bengal). .... .... Petitioner Versus 1. The State of Bihar through the Chief Secretary, Government of Bihar, Patna. 2. The Industrial Development Commissioner, Government of Bihar, Patna. 3. The Development Commissioner, Government of Bihar, Patna. 4. The Finance Commissioner, Government of Bihar, Patna. 5. The Commissioner, Land Reforms, Government of Bihar, Patna. 6. The Secretary cum Commissioner, Department of Sugarcane Industries, Government of Bihar, Patna. 7. The Cane Commissioner, Department of Sugarcane Industries, Government of Bihar, Patna. 8. The Bihar State Sugar Corporation Ltd., having its office at Udyog Bhawan, Opp. Gandhi Maidan, Patna through its Managing Director presently under the Charge of Cane Commissioner, Bihar, Patna. 9. General Manager, Bihar State Sugar Corporation Ltd., Unit Motipur, District Muzaffarpur. 10. M/s Indian Potash Limited, Pragati Tower, 3rd floor, 26, Rajendra Patna High Court CWJC No.427 of 2008 (22) dt.25-06-2012 2 Place, New Delhi-110008. 11. Union of India through the Secretary, Ministry of Industry (Department of Industrial Development), New Delhi. .... .... Respondents ====================================================== with Civil Writ Jurisdiction Case No.710 of 2011 ====================================================== 1. Haji Zakaria Oosman Kutchi Memon Wakf Estate, EC No. 12737 through its Authorized Mutawalli Gulam Sharafuddin Oosman S/o Late Oosman Abdul Rahim, resident of No. 2, Raj Mohan Stree, Kolkata 700073, West Bengal. 2. Oosmain Wakf Estate, EC No. 12738 through its Authorized Mutawalli Gulam Sharafuddin Oosman S/o Late Oosman Abdul Rahim, resident of No. 2, Raj Mohan Street, Kolkata 700073, West Bengal. 3. Haji Abdul Rahim Oosman Kutchi Memon Wakf Estate EC No. 12733 through its Authorized Mutawalli Gulam Sharafuddin Oosman S/o Late Oosman Abdul Rahim, resident of No. 2, Raj Mohan Street, Kolkata 700073, West Bengal. 4. Haji Abu Bakr Oosman Katchi Memon Wakf Estate EC No. 12700 through its Authorized Mutawalli Gulam Sharafuddin Oosman S/o Late Oosman Abdul Rahim, resident of No. 2, Raj Mohan Street, Kolkata 700073, West Bengal. 5. Rukia Bai Wakf Estate EC No. 12768 through its Authorized Mutawalli Gulam Sharfuddin Oosman S/o Late Oosman Abdul Rahim, resident of No. 2, Raj Mohan Street, Kolkata 700073, West Bengal. .... .... Petitioners Versus 1. The Secretary, Ministry of Industry (Department of Industrial Development), New Delhi. 2. The State of Bihar through the Chief Secretary, Government of Bihar, Patna. 3. The Industrial Development Commissioner, Government of Bihar, Patna. 4. The Secretary- cum- Commissioner, Department of Sugarcane Industries, Government of Bihar, Patna. 5. The Bihar State Sugar Corporation Ltd., having its office at Udyog Bhawan, Opp. Gandhi Maidan, Patna through its Managing Director - present under the charge of Cane Commissioner, Bihar, Patna. 6. The General Manager, Bihar State Sugar Corporation Ltd. Unit Motipur, District- Muzaffarpur. 7. Indian Potash Limited, through the Regional Manager, resident at Flat No.C-104, Block-C, Aradhana Enclave, Khajpura, P.S. Shastri Nagar, Bailey Road, Patna. .... .... Respondents ====================================================== Patna High Court CWJC No.427 of 2008 (22) dt.25-06-2012 3 For the petitioners (CWJC No.8840/2006) : Mr. Raghib Ahsan, Sr. Advocate with M/s Khalid Ahsan and Shabbir Alam, Advocates. For the petitioner (CWJC No.427/2008) : Mr. Y.V. Giri, Sr. Advocate with M/s Raju Giri, Ashish Giri and Vikash Ratan Bharti, Advocates. For the petitioners (CWJC No.710/2011) : Mr. Umesh Kumar Singh, Sr. Advocate with Mr. Khatim Reza, Advocate. For the State : Mr.Lalit Kishore, AAG-1 with Mr. Pritish Kumar, A.C. to G.P. 12. For the Corporation : Mr. Gyan Shankar, Advocate. For Indian Potash Ltd. : M/s Dhruba Mukherjee and Abbas Haider, Advocates. P R E S E N T : HON’BLE MR. JUSTICE S.N. HUSSAIN O R D E R 22 25.06.2012 All the aforesaid three writ petitions have been heard together and are being decided by this common order as the subject matters of both the writ petitions are the same, namely Motipur Sugar Factory Limited and the reliefs claimed by them are also similar in nature. The writ petitioners of CWJC No.8840 of 2006 are the affected employees of the Motipur Sugar Factory, whereas writ petitioner of CWJC No.427 of 2008 is the Motipur Sugar Factory Limited itself, and the petitioners of CWJC No.710 of 2011 are the five wakf estates, which claim to Patna High Court CWJC No.427 of 2008 (22) dt.25-06-2012 4 be the share holders of the aforesaid company and hence their interest is common and the points involved and the facts raised are also similar. 2. An interlocutory application bearing I.A. No.2771 of 2011 was filed in CWJC No.427 of 2008 by one Dr. Kumar Praveen for being impleaded as party respondent to the said writ petition and for grant of relief in his favour, namely directing the respondents to make payment of remuneration against acquisition to the intervener applicant claiming to be the Power of Attorney Holder of one Saiyed Amjad Hussain (successor of Late Nanhi Begum). It is claimed by the intervener that on 20.04.1898 one Thomas Barkali executed a lease in favour of Mostt. Nanhi Begum whose heirs had been raising claim from 1898 to 2005 and finally intervener had filed Title Suit No.553 of 2009 in Muzaffarpur Civil Court, which has not been taken up as yet. There is nothing to show that on the basis of the alleged deed of lease dated 20.04.1898 Mostt. Nanhi Begum or her heir had ever raised any such dispute with respect to the right and possession of Motipur Sugar Factory Limited or its co- sharers (petitioners of both the writ petitions) and it was only in the year 2009 that one Saiyed Amjad Hussain along with intervener filed Title Suit No.553 of 2009 for declaration of title Patna High Court CWJC No.427 of 2008 (22) dt.25-06-2012 5 of plaintiff no.1 and non-title of the defendants and for restoration of possession of plaintiff no.1. The documents annexed to the interlocutory application are all of the subsequent period of 2010 and 2011 which prima facie do not appear to prove any right, title or possession of Mostt. Nanhi Begum or her heirs, including Saiyed Amjad Hussain. Moreover, this matter has to be considered by the title suit and unless an order/judgment is passed by the trial court on the basis of pleadings of the parties and materials produced by them, no authenticity can be legally attributed to the claim of the intervener by any court or authority. Accordingly, the aforesaid interlocutory application bearing I.A. No.2771 of 2011 is rejected. 3. CWJC No.8840 of 2006 was filed by the employees of the Motipur Sugar Factory Ltd. for the following relief:- (i) For quashing the decision taken by the Bihar State Sugar Corporation as contained in public notice dated 03.06.2006 issued by the General Manager of the Motipur Unit of the Corporation inviting applications to settle the agriculture land of the undertaking in favour of strangers. 4. In the said writ petition bearing CWJC No.8840 of 2006 the petitioners had filed I.A. No.49 of 2012 for adding a Patna High Court CWJC No.427 of 2008 (22) dt.25-06-2012 6 few more reliefs to the writ petition. The said application was allowed by this Court on 15.02.2012 and the reliefs so added are as follows:- (ii) To quash the letter of intent dated 30.08.2010 for Long Term Lease of sugar unit, Motipur, in favour of M/s Indian Potash Limited issued by the Principal Secretary to the Government of Bihar, in the Department of Sugarcane Industry, whereby the bid submitted by M/s Indian Potash Ltd., for a price of Rs.56,20,00000.00 (Fifty Six Crores Twenty Lacs) was accepted and Motipur unit was offered to it for developing industries based on sugarcane, and land measuring 66 acres along with farm land measuring 200 acres were also offered for a long term period of 60 years, further renewable for 30 years, as also all the assets of the unit on outright ownership basis. (iii) To quash the Deed of Lease dated 12th January 2011, executed by Bihar State Sugar Corporation Ltd.,(BSSCL), a body promoted by the State of Bihar, (G.O.B.), being a State Government Undertaking, having its office at C/o Principal Secretary, New Secretariat, Vikas Bhawan, 2nd Floor, Bailey Road, acting through its Managing Director, in favour of M/s Indian Potash Limited, whereby and whereunder the lands and assets of Motipur Sugar Factory unit have been leased out for a period of 60 years, renewable for a further period of 30 years. (iv) To add Principal Secretary, to the Government of Bihar, in the Department of Sugarcane Industry, Government of Bihar, and M/s Indian Potash Limited, having its Registered Office at 727, Annasalai, Chennai, through its Regional Manager, Mr. Zafar Maqbool, son of Late Maqbool Ahmed, resident of Flat No.C-104, Block-C, Aradhana Enclave, Khajpura, P.S. Patna High Court CWJC No.427 of 2008 (22) dt.25-06-2012 7 Shastri Nagar, Bailey Road, Patna as respondent nos.6 and 7 respectively. (v) To restrain the respondents from settling the excess land available with Motipur unit as per advertisement issued in the Times of India dated 24.09.2011. 5. CWJC No.427 of 2008 was filed by Motipur Sugar Factory Limited for the following reliefs:- (i) To issue an appropriate writ/order/direction in the nature of Mandamus restraining the respondents from acting upon the tender document issued pursuant to the prequalification notice as contained in Annexure-11 & 12. (ii) To issue an appropriate writ/order/direction in the nature of Mandamus restraining the respondents to transfer/lease or hand over the possession and lease rights/ownership of the Motipur Sugar Factory situated in the district of Muzaffarpur, which in fact belonged to the petitioner prior to its being taken over by the Government under the provisions of the Bihar Sugar Undertaking (Acquisition) Act, 1985 to any other person, other than the petitioner company. (iii) To issue an appropriate writ/orders/directions in the nature of Mandamus commanding the respondents to make over the industrial unit to the petitioner company after discharging all its current liabilities in full, which includes staff wages and salaries, provident fund, superannuation and gratuity dues as well as all cane price and other material cost and incidental arrears, electricity dues etc. incurred by them. (iv) To stay all proceedings taken by the respondents in connection with leasing Patna High Court CWJC No.427 of 2008 (22) dt.25-06-2012 8 out/disposal/handing over of the aforesaid units to any other person other than the petitioner till the disposal of the present writ petition. (v) To issue an appropriate writ/orders/directions, restraining the respondents from settling/leasing out, the agricultural lands of the sugar factory with any person and if already settled to cancel the lease/settlement and recover full possession thereof. (vi) To issue an appropriate writ/orders/directions in the nature of Mandamus commanding the respondents to remove any encroachment made on the agricultural lands/factory premises of the petitioner company. (vii) To issue an appropriate writ/orders/directions in the nature of Mandamus commanding the respondents not to reserve any of the traditional villages of the petitioner company as it existed in the pre-take over period in favour of any other sugar factory. (viii) To any other relief or reliefs for which the petitioner is found entitled in the facts and circumstances of the case. 6. In the said writ petition bearing CWJC No.427 of 2008 the petitioner had filed I.A. No.9096 of 2010 for adding two more reliefs to the writ petition. The said application was allowed by this Court on 11.10.2010 and the reliefs so added are as follows:- (ix) To issue an appropriate writ/order/direction in the nature of certiorari for quashing Letter No.1498 dated 30.08.2010 issued by Principal Secretary, Department of Sugarcane Industries, Government of Bihar Patna High Court CWJC No.427 of 2008 (22) dt.25-06-2012 9 by which the Motipur Unit has been offered to M/s Indian Potash Ltd. on ownership basis on as is where is basis, for a long term lease of 60 years. (x) To issue an appropriate writ/order/direction restraining the respondent-State of Bihar from entering into Transfer Agreement with M/s Indian Potash Limited and also to restrain the State of Bihar from handing over the Motipur Unit to M/s Indian Potash Limited. 7. In the said writ petition bearing CWJC No.427 of 2008 the petitioner had also filed I.A. No.1934 of 2011 for adding another relief to the writ petition. The said application was also allowed by this Court on 01.12.2011 and the relief so added is as follows:- (xi) To issue an appropriate writ/order/direction in the nature of Certiorari for quashing lease deed dated 12.01.2011 between Bihar State Sugar Corporation Ltd. (BSSCL) and M/s Indian Potash Ltd. and the Asset Transfer Agreement dated 12.01.2011 between Bihar State Sugar Corporation Ltd. (BSSCL) and M/s Indian Potash Ltd. 8. On the other hand, CWJC No.710 of 2011 has been filed by five wakf estates claiming to be the share holders of Motipur Sugar Factory Limited, for the following reliefs:- (i) A direction to the respondents not to act in any manner prejudicial to the interest of the company Motipur Sugar Factory Limited or its share holders by leasing out or transferring the right/ownership of the assets/properties movable and immovable Patna High Court CWJC No.427 of 2008 (22) dt.25-06-2012 10 acquired by the Government of Bihar under the provisions of the Bihar Sugar Undertaking (Acquisition) Act, 1985 to any other person or persons, body corporate or any other authority or institution except the company or its share holders, who had vested right in the assets/properties of the company presently in occupation/possession of the Bihar State Sugar Corporation Limited. (ii) A further direction to the respondents to determine the amount of compensation under section 7 of the Act to which the petitioners had the ultimate right to receive being the share holders in proportion to the shares held by them. (iii) In case for one reason or the other company is not found eligible or is unable to pursue the remedy then to issue mandamus directing the respondents to appoint prescribed authority under the Act in place of the prescribed authority earlier appointed and give effect to the judgment and order of this Court in case of United Bank of India vs. Member, Board of Revenue and others passed on 01.07.2004 in CWJC No.10661 of 1999 and direct the prescribed authority to determine the amount of compensation with interest at the market rate prevailing from time to time, excluding the current liabilities or such liability accrued or incurred by the respondents during the period when the management of the company with its undertaking were taken over pursuant to the provisions of section 18AA of the Industrial Development and Regulation Act, 1951. (iv) To stay further transfer agreement in terms of letter no.1498 dated 30.08.2010 with M/s Indian Potash Limited issued by Principal Secretary, Department of Sugarcane Industry, Patna till such final determination and payment of compensation as prayed for Patna High Court CWJC No.427 of 2008 (22) dt.25-06-2012 11 in this writ petition and for other ancillary reliefs. 9. It transpires that I.A. No.762 of 2008 was filed by the petitioner of CWJC No.427 of 2008 for staying the tender settlement process initiated by the respondent authorities by virtue of prequalification notices issued in October-November 2007 (Annexure-11 & 12) in so far it related to the petitioner company and also for restraining the respondents from settling/leasing out the agricultural land of the factory with any person/company during the pendency of the writ petition. The said interlocutory application was dismissed by a Bench of this Court vide order dated 05.02.2008 on the ground that the matter required deeper consideration, which was not possible at that stage. 10. Against the said interim order petitioner filed L.P.A. No.158 of 2008, but the Division Bench after hearing the appeal on 26.02.2008 not only dismissed the Letters Patent Appeal but also dismissed the writ petition bearing CWJC No.427 of 2008 as a whole although the said writ petition was pending before a learned Single Judge of this Court. In view of the said order of the division bench passed in L.P.A. No.158 of 2008, the learned single judge also passed a formal order of Patna High Court CWJC No.427 of 2008 (22) dt.25-06-2012 12 dismissal of CWJC No.427 of 2008 along with its analogous case CWJC No.4277 of 2006 (S.K.G. Consolidated Ltd. Vs. The State of Bihar and others) on 22.04.2008. 11. The petitioner challenged the order of the Division Bench vide Civil Appeal No.7082 of 2010, which was heard and disposed of on 26.08.2010 by the Apex Court holding that the Division Bench of the High Court ought not have dismissed the writ petition and hence that part of order of the Division Bench dismissing CWJC No.427 of 2008 was set aside and the said writ petition was remitted to the Single Judge of this Court for deciding the writ petition afresh on merit without being influenced by any observation made by the Division Bench of this High Court. After receipt of the said order, steps were taken by this court for hearing the writ petition. 12. The claim of the petitioners was that Motipur Sugar Factory Limited was established in the year 1932 after purchase of the land in question from the owner I.B. Fraser by a registered document in the year 1932, whereafter the company was registered in the year 1933 under the Companies Act, 1913 and had its registered office at Motipur in the district of Muzaffarpur and thereafter it throughout functioned as an existing company over 1500 Bighas of land at Motipur within the Patna High Court CWJC No.427 of 2008 (22) dt.25-06-2012 13 meaning of the Companies Act, 1956 and it remained engaged in production of sugar till 1980 without any interference from the authorities. 13. It was further claimed that 33.72% of the shareholding of Motipur Sugar Factory Limited (petitioner of CWJC No.427 of 2008) were dedicated to five different wakf estates (petitioners of CWJC No.710 of 2011) which were duly registered with the Bengal Wakf Board. The dedicators of the said wakf were the co-sharers of the company and the shares bequeathed to them came to about 843 sharers out of total of 2500 shares i.e. 33.72% of the total shares of the company. Their details are as follows:- (i) Haji Zakaria Oosman Kutchi Memon Wakf Estate (E.C. No.12737) was created on 12.09.1950 by Haji Zakaria and bequeathed 100 shares of Motipur Sugar Factory Ltd. for religious and charitable purposes. (ii) Oosmania Wakf Estate (E.C. No.12738) was created on 27.06.1940 by Haji Abdul Rahim Oosman bequeathed 250 shares. (iii) Haji Abdul Rahim Oosman Kutchi Memon Wakf Estate (E.C. No.12733) was created on 01.02.1952 by Haji Adam Haji Abdul Rahim and Oosman Haji Abdul Rahim had jointly bequeathed 100 shares. (iv) Haji Abu Bakar Oosman Kutchi Memon Wakf Estate (E.C. No.12700) was created on 29.11.1948 by Haji Abdul Rahim Oosman and Haji Ibrahim Oosman bequeathed 300 shares. Patna High Court CWJC No.427 of 2008 (22) dt.25-06-2012 14 (v) Rukia Bai Wakf (E.C. No.12768) was created on 29.03.1949 by Rukia Bai bequeathed 93 shares by the said company. 14. It was also stated that on 13.12.1974 the Bihar State Sugar Corporation Limited (hereinafter referred to as „the Corporation‟ for the sake of brevity) was established to manage and operate those sugar undertakings, which were in financial difficulty or were non-operational. Immediately thereafter Bihar Sugar Undertaking (Acquisition) Act, 1976 was legislated to provide for acquisition and transfer of certain sugar undertakings in the State of Bihar and for matters connected therewith or incidental thereto in the interest of general people. The Ministry of Industry (Department of Industrial Development), Central Government issued its order dated 03.11.1980 in the Gazette of India, Extraordinary (Annexure-18) by which exercising the powers conferred by clause (a) of sub-section (1) of Section 18AA of the Industries (Development and Regulation) Act, 1951 it authorized the Bihar State Sugar Corporation Limited, Patna to take over the management of the whole of the said industrial undertaking, namely M/s Motipur Sugar Factory Limited, Motipur in the district of Muzaffarpur, Bihar on the following terms and conditions, namely:- (i) The authorized person shall comply with all Patna High Court CWJC No.427 of 2008 (22) dt.25-06-2012 15 directions issued from time to time by the Central Government; (ii) The authorized person shall hold office for a period of two years from the date of publication in the official gazette of this order; (iii) The Central Government may terminate the appointment of the authorized person earlier if it considers necessary to do so. However, the said order was directed to have effect for a period of two years commencing from the date of its publication in the official gazette. 15. Learned counsel for the petitioners submitted that the said order was issued by the Central Government on the assumption that the persons in-charge of the said industrial undertaking had, by diversion of funds, brought about a situation which was likely to affect the production of sugar produce in the said industrial undertaking and that immediate action was necessary to prevent such a situation, but there was no material at all nor any such material has been produced by the authorities in the instant case that the management of the petitioner undertaking had ever diverted the fund of the factory and in furtherance thereof no opportunity of prior hearing was provided to the owners of the factory in complete violation of principles of natural justice. Patna High Court CWJC No.427 of 2008 (22) dt.25-06-2012 16 16. Learned counsel for the petitioners averred that although the order of the Central Government was of 03.11.1980 but its actual publication took place on 18.11.1980 as confirmed by the Controller of Publication, New Delhi but on paper the person authorized took over control and physical possession of Motipur Sugar Factory Limited on 03.11.1980. However, the said order being only for two years it was extended from time to time upto 30.06.1986 and in the meantime the State of Bihar promulgated the Bihar State Sugar Undertaking (Acquisition) Act, 1985 on 16.12.1985 repealing its earlier Bihar Sugar Undertaking (Acquisition) Ordinance, 1985 and the Bihar State Undertaking (Acquisition) Act, 1976 with certain savings. 17. Learned counsel for the petitioners asserted that according to section 3 of the Bihar Sugar Undertaking (Acquisition) Act, 1985 the Governor of Bihar appointed Sri K.R. Paul the Secretary, Department of Industry as the prescribed authority by Notification No.S.O. 1264 dated 20.10.1986 and thereafter fresh advertisement was issued on 23.04.1987 by the said prescribed authority inviting applications for compensation within one month of publication of advertisement in press. In response thereto claim on behalf of the Motipur Sugar Factory Limited was filed on 20.05.1987 within the period prescribed Patna High Court CWJC No.427 of 2008 (22) dt.25-06-2012 17 claiming Rs.15 crores as compensation under sections 7 and 8 of the said Act of 1985 but till date neither any compensation case has been decided nor compensation as claimed has been determined by the authority concerned. 18. It was argued by learned counsel for the petitioners that after acquisition, the condition of the