COMA/569/2007 1/32 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD COMPANY APPLICATION No. 569 of 2007 In OFFICIAL LIQUDATOR REPORT No. 146 of 2007 In OFFICIAL LIQUDATOR REPORT No. 152 of 2006 WITH COMPANY APPLICATION No. 70 of 2008 In COMPANY PETITION No. 157 of 2000 WITH COMPANY APPLICATION No. 80 of 2008 In OFFICIAL LIQUDATOR REPORT No. 146 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE K.A.PUJ ==================================== 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 ? COMA/569/2007 2/32 JUDGMENT ==================================== ELECON ENGINEERING COMPANY LTD. - Applicant Versus O.L. OF VALLABH GLASS WORKS LTD. & 47 - Respondents ==================================== Appearance : 1. Company Application No.569 of 2007 MR NK PAHWA for Applicant. MS AMEE YAJNIK for Official Liquidator. None for Respondents. 2. Company Application No.70 of 2008 MR IH SYED for Applicants. MS AMEE YAJNIK for Official Liquidator. MR NK PAHWA for respondent No.2. MR MG NAGARKAR for respondent No.3. 3. Company Application No.80 of 2008 MR IH SYED for Applicants. MS AMEE YAJNIK for Official Liquidator. MR NK PAHWA for respondent No.2. MR MG NAGARKAR for respondent No.3. ==================================== CORAM : HONOURABLE MR.JUSTICE K.A.PUJ Date : 10/10/2008 COMMON CAV JUDGMENT 1. Since the subject matter of all these three Company Applications is more or less same and dispute between the parties centers round the particular parcel of land, all the three applications are heard together and are disposed off by this common judgment and order. 2. Company Application No.569 of 2007 is filed by Elecon COMA/569/2007 3/32 JUDGMENT Engineering Company Limited seeking direction to the Official Liquidator to remove the encroachment with the help of police on the land bearing Survey No.114 of village Mogri and Survey No.371/2 of village Karamsad, both Dist. Anand, in respect of which sale has been confirmed in favour of the applicant vide order dated 03.12.2007 passed by this Court in OLR No.146 of 2007. The applicant has also made an alternative prayer calling for the records and proceedings of Regular Civil Suit No. 432 of 2007 pending in the Court of learned Civil Judge (J.D.), Anand and disposing the same by making appropriate orders. 3. This Court issued notice on 24.12.2007 and a detailed order was passed on that day. The Court has observed that pursuant to the advertisement issued by the Sale Committee appointed by this Court for the sale of land bearing Survey No.114/paiki of village Mogri and land bearing Survey No.371/2 of village Karamsad, both situated in Dist. Anand, the applicant submitted its bid and since the applicant was successful bidder before COMA/569/2007 4/32 JUDGMENT the Sale Committee, the Official Liquidator filed OLR No. 146 of 2007 before this Court seeking confirmation of sale of land in favour of the applicant. While confirming the sale of land in question in favour of the applicant, this Court vide order dated 03.12.2007 directed the Official Liquidator to remove encroachment and unauthorized occupation on the land in question. The applicant has, therefore, sought the compliance of the said order. The applicant has also alternatively prayed for calling for the record and proceedings of Regular Civil Suit No. 432 of 2007 pending in the Court of learned Civil Judge (J.D.), Anand and disposing the same by making appropriate orders. By way of the interim relief, the applicant has prayed for stay of proceedings of Regular Civil Suit No. 432 of 2007. 4. The respondent Nos.2 to 48 in the present application who have filed Regular Civil Suit No. 432 of 2007 were parties in Company Application No.482 of 2007 and while disposing of the said Company Application on 18.10.2007, this Court has observed that those who COMA/569/2007 5/32 JUDGMENT have encroached over the property of the Company should not be allowed to be continued and they would be required to be evicted. However, if they were the workmen or ex-employees of the Company, at the most, their cases could be sympathetically considered only at the time when the disbursement was to be made towards the workmen dues. No material was produced before the Court to show that any of those persons were the workmen of the Company in liquidation or otherwise. 5. Subsequently, the Official Liquidator filed OLR No.146 of 2007 and sought confirmation of sale of Block-A, i.e. situated at Vithal Udyognagar, GIDC Estate, village Mogri and Karamsad, Anand admeasuring approximately 40,470/- Sq. Mts. at Survey No.114 and 371/2 in favour of the present applicant for Rs.6.50 Crores. So far as the order dated 28.11.2007 in OLR No.146 of 2007 is concerned, the Official Liquidator was directed to ascertain as to whether any encroachment on the land bearing Survey No.114 has been made and it was further directed that if any COMA/569/2007 6/32 JUDGMENT unauthorized occupants were there, they should be evicted with the assistance of police so that while confirming the sale in favour of the highest bidder, clear and vacant possession of the land could be given. OLR No.146 of 2007 was thereafter taken up for hearing on 03.12.2007. The Court has confirmed the sale in favour of the present applicant for Rs.7 Crores and while confirming the sale, the Court has directed the Official Liquidator to comply with the order dated 28.11.2007 forthwith. 6. Subsequent to the order dated 03.12.2007, the respondents No.2 to 48 have filed Regular Civil Suit No. 432 of 2007. The respondents No.2 to 48 have not disclosed anything with regard to the earlier proceedings initiated by them before the Court. The Official Liquidator was also not joined as party in the suit. The Court was, therefore, of the view that filing of suit was nothing but an abuse of process of law and without disclosing the true and correct facts before the Civil Court, injunction was sought for. The Court has also observed that if the property belongs to the COMA/569/2007 7/32 JUDGMENT Company in liquidation and in respect thereof any proceedings are to be initiated, prior permission of this Court to proceed with the said suit is required to be obtained. Even otherwise, the proceedings in which respondents No.2 to 48 were parties earlier before this Court, necessary disclosure to that effect should have been made by them. Since the same has not been done, this Court was of the view that the proceedings pending before the Civil Court were required to be stayed till further orders. Accordingly, further proceedings of Regular Civil Suit No. 432 of 2007 pending before the Civil Judge (J.D.), Anand were stayed. The Court has also directed the Official Liquidator to comply with the order dated 28.11.2007 as well as 03.12.2007 and made it very clear that if there were any obstacles, the Official Liquidator should take the help of police. The Official Liquidator was also directed to file compliance report on or before 28.12.2007. 7. The Official Liquidator has filed his report dated 08.01.2008 wherein it is stated that almost all COMA/569/2007 8/32 JUDGMENT encroachers have been removed with the assistance of Police. However, some of them have staked their claim of ownership over the portion of the land. He also annexed letter dated 28.12.2007 received from the legal heirs of late Shri Dahyabhai Thakore and relevant extracts from the Property Card register. The Official Liquidator has, therefore, written letter to the Secured Creditor, Village Panchayat and Deputy Collector of City Survey. Despite this Court's order, police authorities were not rendering any assistance for removal of the encroachment and hence, this Court vide its order 24.01.2008 directed the DSP, Anand and PSI, Vallabh Vidhyanagar Police Station to assist the Official Liquidator and see that encroachment should be removed. On 06.02.2008, this Court has passed further order and observed that if the orders passed by the Court earlier were not complied with in true spirit, the PSI, Vallabh Vidyanagar was directed to remain personally present before the Court on 11th February, 2008. 8. It is at this stage, the applicants of Company COMA/569/2007 9/32 JUDGMENT Application No.70 of 2008 filed the said Company Application seeking direction to the Official Liquidator not to dispossess or alienate the applicants from their own property bearing City Survey No. 1694 admeasuring about 786.80 Sq. Mts. situated at village Mogri, Tal. & Dist. Anand as the applicants being the legal owners of the said property. The applicants have also prayed for the direction to the Official Liquidator not to sell of, dispose of or create any rights whatsoever in favour of any third person on the said property as the said property was not of the ownership of the Company in liquidation. The Court has passed an order on 11.02.2008 directing PSI, Anand to see to it that till any further order is passed by the Court, no unauthorized person should be allowed to enter into the premises which was sold to M/s. Elecon Engineering Company Limited. The said Company was also permitted to deploy its own Security Guards to protect the property in question. 9. On 18.02.2008, Company Application No.80 of 2008 was filed by Shri Manibhai Desaibhai Thakore and COMA/569/2007 10/32 JUDGMENT others making more or less similar prayers as were made by the applicants of Company Application No.70 of 2008. The Court has, therefore, passed an order on 18.02.2008 to hear Company Application Nos.70 and 80 of 2008 and Company Application No.569 of 2007 together. The Court has also directed City Survey Officer as well as GIDC to file their reply in respect of the controversy raised in these applications. 10.On 05.03.2008, GIDC through its Regional Manger has filed an affidavit and along with the said affidavit, consent award passed under Section 11 (2) of the Land Acquisition Act, 1894 dated 22.12.1972 was placed on record. In the concluding part of the consent award, it is stated that the opponent – purchaser has been allotted an area admeasuring Acre 0.2 Gunthas out of Plot No.4 of Survey No.113 and 114 of village Mogri in exchange of equal area of Acre 0.2 Gunthas out of notified area of Acre 1.19 Gunthas of Survey No.345 of village Karamsad. 11.Similarly, in Company Application No.80 of 2008, the COMA/569/2007 11/32 JUDGMENT Regional Manager has filed affidavit and consent award was placed on record. In concluding part of this award, it is stated that Shri Desaibhai Mathurbhai, the person interested has been given Plot No.3 out of Survey No. 114 of villgae Mogri by GIDC. This plot is admeasuring about Acre 0.2 Gunthas and Shri Desaibhai Mathurbhai has agreed to deduct an amount of Rs.470/- only out of the total amount of compensation payable to him for the exchange. Thus, the applicants of these two applications have got 4 Gunthas of land by virtue of the consent award, which, at the most comes to about 400 Sq. Mts. However, in the record of rights, it is mentioned as 786 Sq. Mts. The Court, therefore, asked the learned advocate appearing for the applicants of Company Application Nos.70 & 80 of 2008 to file affidavit explaining discrepancy of measurement of land. 12.Mr. I. H. Syed, learned advocate appearing for the applicants of Company Application Nos.70 & 80 of 2008 submitted that the applicants are the legal owners of the property bearing City Survey No.114, COMA/569/2007 12/32 JUDGMENT Sub-plot Nos.3 & 4 admeasuring about 4 Gunthas situated at Mouje Mogri, Dist. Anand. This property does not belong to the Company in liquidation and hence, the Official Liquidator has no right whatsoever, much less, legal, contractual or statutory, over the said property. 13.So far as Company Application No.80 of 2008 is concerned, the applicants are the sons and legal heirs of late Shri Desaibhai Mathurbhai Thakore. By a letter dated 07.01.1972 issued by the Officer on Special Duty (Land Acquisition) addressed to late Shri Desaibhai Mathurbhai Thakore, it was conveyed that if he was interested, he might be given possession of the land and the price of the land would be deducted from the compensation due from the said Officer on Special Duty (Land Acquisition). In view of the said letter, possession of 2 Gunthas of land marked as Plot No.3 from land bearing Survey No.113 and 114 was given to Shri Desaibhai Mathurbhai Thakore on 12.01.1972 by way of possession note. COMA/569/2007 13/32 JUDGMENT 14.Mr. Syed has further submitted that Shri Desaibhai Mathurbhai Thakore was earlier the owner of Survey No.371/2/B situated at Karamsad and the said land was acquired under the Land Acquisition Act by the State Government for developing the industrial area at Mogri, Karamsad and Anand by Notification dated 18.01.1969. By a Govt. order dated 23.09.1986, Survey No.371/2/B was acquired under the Land Acquisition Act by the respondent authority. In the very same Govt. order, it was clearly mentioned in paragraph 8 that by Entry No.7247 in 7/12 extracts, the name of Shri Desaibhai Mathurbhai Thakore was deleted and the same was also entered in Form No.6 whereas Shri Desaibhai Mathurbhai Thakore was given Survey Nos.113 & 114, sub-plot No.3 admeasuring 2 Gunthas by way of settlement in respect to the compensation for acquiring Survey No.371/2/B situated at Karamsad. The aforesaid transactions between Shri Desaibhai Mathurbhai Thakore and the respondent authorities in respect to the Survey No.371/2/B situated at Karamsad came to be confirmed by letter dated 03.05.1974 and also all COMA/569/2007 14/32 JUDGMENT the dues and compensation came to be settled by the said letter. 15.Mr. Syed has further submitted that the applicants of Company Application No.70 of 2008 are the legal heirs of late Shri Dahyabhai Visabhai Thakore. The said Shri Dahyabhai was in possession of Revenue Survey No.345 situated at Mouje Karamsad, Tal. Anand, Dist. Kheda by Entry No.7306 of 7/12 extract and in Form No.6 of the Revenue Survey No.345. This land was sought to be acquired for establishment of industrial township by GIDC. However, the said Shri Dahyabhai and others raised a dispute against the said acquisition by GIDC and had filed Special Civil Application No.385 of 1969 before this Court. One Misc. Civil Application No.446 of 1971 was filed in the said Special Civil Application No.385 of 1969, which clearly revealed that 2 Gunthas of land in Survey No.114 was allotted to the said Shri Dahyabhai on 20.11.1977. Thereafter, consent award pertaining to Revenue Survey No.345 was declared on 22.12.1972, under which the said Shri Dahyabhai had accepted Rs.235/- per Gunthas for COMA/569/2007 15/32 JUDGMENT acquisition of land bearing Revenue Survey No.345 by GIDC. He has also agreed for settlement of Plot No.4 admeasuring 2 Gunthas land of Survey No.113 + 114 of village Mogri in exchange of land bearing Survey No.345. The possession of Plot No.4 of Survey No. 113 + 114 was given by Surveyor Mr. V. B. Parvani under the possession note dated 20.11.1977. By Govt. order dated 25.10.2001, Plot No.4 of Survey No.113 + 114 came to be recorded as City Survey No.1694. The applicants had claimed their right over the land bearing Survey No.1694 admeasuring about 786.38 Sq. Mts. which is admittedly in excess of 2 Gunthas, on the ground of adverse possession. 16.Mr. Syed has further submitted that this Court vide order dated 28.11.2007 directed the Official Liquidator to ascertain the land bearing Survey No.114 of village Mogri. The property bearing Survey Nos.113 & 114 of village Mogri is divided into Survey Nos.1693 & 1694 way back in the year 1989. The Official Liquidator is supposed to ascertain the correct position of the property and thereafter to file his report before this COMA/569/2007 16/32 JUDGMENT Court. As per the submission of Mr. Syed, the Official Liquidator has suppressed material facts while filing OLR No. 146 of 2007 that Survey Nos.113 & 114, Sub- plot Nos.3 & 4 admeasuring about 4 Gunthas belong to the applicants of Company Application Nos.70 & 80 of 2008 and while ascertaining about the said plots, the Official Liquidator has not even intimated the applicants about the same. He has, therefore, submitted that the Official Liquidator has misled the Court by filing incorrect report which tantamount to fraud with the Court. The Official Liquidator has kept this Court in dark and suppressed the material facts and filed his report. 17.Mr. Syed has further submitted that by not placing the correct facts before the Court and because of the order passed by the Court on the basis of those incorrect facts, the applicants and their family members have been dispossessed from the said Survey Nos.113 & 114, Sub-plot Nos.3 & 4 admeasuring about 4 Gunthas and the houses of the applicants have been demolished. There were in all 17 pakka houses in COMA/569/2007 17/32 JUDGMENT which legal heirs of the applicants were staying and they were demolished on 30.01.2008. He has further submitted that the action on the part of the respondent authorities is absolutely illegal. He has, therefore, submitted that the applicants should be allotted the land in question and the appropriate amount of compensation should be awarded for unauthorisedly demolishing their houses on the said land. 18.Mr. M.G. Nagarkar, learned advocate appearing for the respondent No.3 i.e. GIDC has submitted that the Officer on Special Duty (Land Acquisition), Ahmedabad passed consent award on 09.07.1974 under Section 11 (2) of the Land Acquisition Act in respect of land bearing Survey Nos.371/2/B/Part admeasuring about 8 Gunthas situated at village Karamsad, Tal. Anand, Dist. Kheda. The land was acquired for public purpose, namely, for establishment of industrial township, by GIDC along with lands of other villages. Notification under Section 4 of the Land Acquisition Act was published on 26.07.1963 and Notification under Section 6 of Land Acquisition Act was published on COMA/569/2007 18/32 JUDGMENT 26.10.1964. Since the notification came to be challenged before this Court and came to be quashed, fresh amended notification under Section 6 of the Land Acquisition Act was published on 18.01.1969. He has further submitted that the ownership of the said land was of Shri Desaibhai Mathurbhai Thakore and Dahyabhai Thakore and they gave their consent for the land in question. From the said consent award, it is clear that they have been allotted Plot Nos.3 & 4 respectively out of Survey No.114 of village Mogri by GIDC admeasuring about 2 Gunthas each. He has further submitted that Shri Desaibhai Mathurbhai Thakore and Dahyabhai Visabhai Thakore gave applications on 07.01.1972 requesting to allot them some land for erecting hut and, therefore, as reflected in the award, the applicants were allotted Plot Nos.3 & 4 admeasuring about 4 Gunthas of land at Survey Nos.113 – 114 of village Mogri and possession receipts were executed in their favour. Mr. Nagarkar has further submitted that the record of City Survey available with the GIDC reveals that the applicants' names were not reflected in respect of Survey Nos.113 COMA/569/2007 19/32 JUDGMENT – 114 of village Mogri which is later on described as Survey No.1694 of village Mogri. Shree Vallabh Glass Works Ltd. went into liquidation and, therefore, Company Petition No.157 of 2000 was filed before this Court and the assets of the said Company including the land admeasuring approximately 40,417/- Sq. Mts. of Survey No.114 & 371/2 were put to auction on 23.12.2004 and the advertisement of sale was also published in the newspaper on 06.12.2004. The said land of Survey No.114 & 371/2/B was purchased in auction by the respondent No.2 i.e. Elecon Engineering Company Limited on AS IS WHERE IS BASIS. 19.Mr. Nagarkar further submitted by inviting the Court's attention to the affidavit filed by the Regional Manager of GIDC, as well as the map attached therewith that pursuant to the order passed by this Court on 05.03.2008, the Corporation has allotted the work of survey and measurement of land with regard to the land in question i.e. the land initially allotted by the State Government to GIDC and in turn GIDC COMA/569/2007 20/32 JUDGMENT allotted the said land to Shree Vallabh Glass Works Limited (now in liquidation). Plot Nos.3 & 4 falling in Survey No.114 were initially allotted to the applicants of Company Application Nos.70 & 80 by award dated 03.01.1973 and 09.07.1973. Necessary demarcation was made in the map produced alongwith the affidavit. The map clearly reveals that except these two plots, land admeasuring about 40470 Sq. Mts. was allotted to the Company in liquidation. The map further reveals that plot holders of the said Plot Nos.3 & 4 have made encroachment adjacent to boundary area. 20.Mr. N. K. Pahwa, learned advocate appearing for the respondent No.2 i.e. Elecon Engineering Company Limited has submitted that the action of removal of the hutments has been taken by the Official Liquidator upon the orders passed by this Court. The Official Liquidator apropos to the order dated 28.11.2007 had addressed a letter dated 04.01.2008 to GIDC to inquire as to whether the claims made by Shri Mangal Dahya Thakore and four others with respect to land situated at Survey No.1694 admeasuring 786.34 Sq. Mts. of COMA/569/2007 21/32 JUDGMENT village Mogri which is nearby to Survey No.114 & 371/2. In response to the said letter, GIDC addressed a letter dated 08.01.2008 to the Official Liquidator informing that GIDC has allotted land bearing Survey No.371/2/B + 372/5 of village Karamsad and Revenue Survey Nos.113 & 114 of village Mogri admeasuring 40,470/- Sq. Mts. to the Company in liquidation. There was no mention made about any portion of land from the subject parcels of land given to Shri Mangal Dahya Thakore and four others. Along with the letter dated 08.01.2008, GIDC also submitted a map which does not make any reference to any land owned by Shri Mangal Dahya Thakore and four others. When the Official Liquidator approached the site for removal, no objection whatsoever was taken by the applicants even though the applicants were fully aware about the action being taken by the Official Liquidator. He has further submitted that though the Official Liquidator had initiated the action for removal of encroachment on the subject land, the applicants did not approach this Court knowing fully well of the orders made by this Court and instead of approaching this Court, have COMA/569/2007 22/32 JUDGMENT filed civil suit before the Civil Court at Anand. He has, therefore, submitted that no indulgence should be shown by the Court. 21.Mr. Pahwa has further submitted that irrespective of his submissions on merits, the respondent No.2 Company only with a view to buy peace, has offered the applicants of both the applications an amount of Rs.25 Lacs in aggregate if and subject to the condition that the applicants agree to transfer their rights in the 4 Gunthas of land as earmarked by GIDC in the map produced along with last affidavit in favour of the respondent Company. In the alternative, the respondent Company was willing to hand over / transfer land owned by the respondent Company admeasuring 8 Gunthas in the radius of 10 Kms. from the subject place in favour of the applicants free from all encumbrances. Mr. Pahwa has further submitted that if the applicants are agreeable to this proposal, in that case, appropriate orders may be passed by this Court for disposal of the applications filed by the applicants and also the suit filed by the applicants COMA/569/2007 23/32 JUDGMENT earlier either directly or through their Power of Attorney in the trial Court. In that case, the applicants should be directed to give declaration before this Court that the applicants have not transferred their rights in respect of 4 Gunthas of land as claimed by them in favour of any other person. The applicants are also to be directed to make a declaration that the applicants would have no right or any claim over the subject land either directly or indirectly. 22.Mr. Pahwa on the basis of affidavit filed in Company Application No.70 of 2008 on 06.05.2008,