1 AO106.11 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD APPEAL FROM ORDER NO. 106 OF 2011 WITH CIVIL APPLICATION NO. 7154 OF 2011 Aurangabad Textile Mills, A Unit of National Textile Corporation, (South Maharashtra) Ltd, Subsidiary of National Textile Corporation, A Govt. of India Undertaking, Kotwalpura, Aurangabad. Represented through its General Manager, Vasant s/o Bhaskar Naik, Age: 57 years, Occ: Service, R/o. Mumbai. ...APPELLANT VERSUS 1. Abdul Khaliq s/o Abdul Kadar, Age: 63 years, Occ: Business, Hotel Keeper, R/o. Kaisar Colony, Shahbazaar, Aurangabad, District Aurangabad. 2. Abdul Majid s/o Abdul Rehman, Age: 68 years, Occ: Business, R/o. Sillekhana, Aurangabad, District Aurangabad. ...RESPONDENTS ... Mr. Manish N. Navandar, Advocate for appellant. Mr. D.V. Soman, Advocate for respondent No.1. Mr. R.M. Sharma, Advocate for respondent No.2. ... 2 AO106.11 CORAM: S.S. SHINDE,J. DATE : 9TH AUGUST,2011 ORAL ORDER : This Appeal from Order is filed challenging the order dated 30-04-2011 passed by the District Judge-2, Aurangabad below Exhibit-10-D in Regular Civil Appeal No. 130 of 2011. 2. When this matter was heard for admission on 21-06-2011, this Court was pleased to issue notice to the respondents and ad interim relief was granted in terms of prayer clause (C) of the Civil Application. 3. In pursuant to the notice issued to the respondents, the respondents have appeared through Counsel and they have also filed reply and also notes of arguments. With the consent of parties, Appeal from Order is taken up for 3 AO106.11 final disposal. 4. Learned Counsel appearing for the appellant submits that, the order which was passed on an application filed by the respondents in M.A.R.J.I. No. 122 of 2007 came to an end, when M.A.R.J.I. No. 122 of 2007 came to be disposed of finally on 23-03-2011. Learned Counsel further submits that, the interim order which was passed by the lower appellate Court in MARJI No.122 of 2007 was to remain in force till appearance of respondents. Respondent No.1 appeared before the Court on 16-04-2011 and respondent No.2 appeared on 21-04-2011, in MARJI No.122 of 2007 and therefore, order of status quo and not to create third party rights ceased to operate from 21-04-2011. According to learned Counsel for the appellant, when the effect of interim order passed by the lower appellate Court on an application filed by the respondents came to an end on 23-03-2011 and 4 AO106.11 subsequently order of status quo and not to create third party rights which was passed in M.A.R.J.I. No.122 of 2007 ceased to operate from 21-04-2011, there was no question of confirming any interim orders by the lower appellate Court on 30-04-2011, when said orders were not in force. Therefore, according to the learned Counsel for the appellant, when the order granting status quo and not to create third party rights itself was not in force/operation from 21-04-2011 there was no question of confirmation of said order on 30-04-2011 by the lower appellate Court. 5. Learned Counsel appearing for the appellant further submitted that, the respondents made encroachment on the suit property which is owned by the appellant herein. Learned Counsel appearing for the appellant invited my attention to the Pages 38 to 41 of the compilation of this Appeal from 5 AO106.11 Order and submitted that, the letter which was written by the Collector, Aurangabad to the Administrator, Municipal Corporation, Aurangabad and order passed in Revision by the revisional authority are set aside by this Court in Writ Petition No. 436 of 1988. The sum and substance of the arguments of the learned Counsel for the appellant is that, the status of the respondents on the suit property is encroachers and they have no any right to continue in the suit property. . Learned Counsel appearing for the appellant further invited my attention to the Writ Petition No. 436 of 1988 filed by the appellant herein which is placed at page 47 of the compilation of this Appeal from Order. It is further submitted that, on 01-10-2004 this Court allowed the Writ Petition No. 1100 of 1986 and Writ Petition No. 436 of 1988 and held that the land belongs to the Central Government and vests in the Central Government 6 AO106.11 and N.T.C. 6. Learned Counsel for the appellant invited my attention to Para. Nos. 29,30,31,34 and 36 of the judgment in Writ Petition No. 1100 of 1986 and Para. Nos.16 to 20 in Writ Petition No.436 of 1988. 7. It is further submitted that, aggrieved by the judgment and order in Writ Petition No.1100 of 1986 and Writ Petition No. 436 of 1988, State Government filed two Special Leave Petitions before the Hon'ble Supreme Court and said Special Leave Petitions came to be dismissed on 15-07-2005. 8. Learned Counsel for the appellant invited my attention to the Page-25 of the compilation and submitted that, on the basis of the judgments and orders of this Court in the aforesaid Writ Petitions, which came to be confirmed by the Supreme Court, entries in the 7 AO106.11 name of the appellant were taken in Property Register Card by the competent State Authorities. 9. It is further submitted that, the suit was filed by the appellant herein for removal of the encroachment and for possession. Learned Counsel invited my attention to Issue Nos. 4,10 and 13 framed by the trial Court in the said suit which are at Page-85 of the compilation of the Appeal from Order and submitted that, the defendants failed to prove that Mr. P.V. Joshi had title or authority to sell the land to them and that he executed agreement to sell and put them in possession of suit plot. It is further submitted that, so far possession of defendant Nos. 1 and 2 is concerned, issue No.10 was specifically framed and said issue is answered in the negative. Learned Counsel further submitted that, the Court held that the Court has no jurisdiction to try the suit. 8 AO106.11 Therefore, according to learned Counsel for the appellant, status of the respondents is encroachers, they have utterly failed to prove that Mr. P.V. Joshi had title or authority to sell the land to them and he had executed agreement to sell and put them in possession of suit plot. . Learned Counsel further invited my attention to Para-94 of the judgment in Special Civil Suit No. 11 of 1981 and submitted that, even the trial Court has observed that " as there is no dispute about the plaintiffs property to be the public premises having control of Central Government covering under Section 2(e) of the Act 1971. Therefore, the Court held that the Court has no jurisdiction under Section 15 of the Public Premises (Eviction of unauthorised Occupants) Act, 1971." It is further submitted that, there was no application filed by the respondents for any interim relief. It is 9 AO106.11 further submitted that, the order of status quo and not to create third party rights came to an end on 21-04-2011, since on said date respondent No.2 appeared in the matter. Therefore, according to learned Counsel for the appellant, after 21-04-2011 there was no any application which was pending with prayer for interim relief or for continuation of the interim relief. 10. Learned Counsel for the appellant further invited my attention to the advertisement published by the appellant which is at Page-141 and also notice given at Page-145 about the pendency of the matters in respect of the property. According to learned Counsel for the appellant, the advertisement at Page-141 of the compilation, makes it clear that the appellant wants to sell the said property on "AS IS WHERE IS" and "AS IS WHAT IS" basis. Learned Counsel further submitted that, by way of such advertisement, 10 AO106.11 purchasers/buyers are made aware that the appellant wants to sell the said property "AS IS WHERE IS" and "AS IS WHAT IS" basis. At the cost of repetition, learned Counsel for appellant submitted that, the disclosure is made in the tender document itself that legal case in respect of the suit property is pending i.e. MARJI No.122 of 2007 Aurangabad Textile Mills vs. Abdul Khaliq pending in City Civil Court, Aurangabad, further making it clear that the said appeal filed by Aurangabad Textile Mills is against the order passed by City Civil Court, Aurangabad in Civil Suit No. 11 of 1981 filed by Mills for eviction of unauthorized occupant. Therefore, according to learned Counsel for the appellant, it is not the case that the prospective purchasers/buyers who are interested to purchase the property are not made aware about the pending litigation in respect of the suit property. It is further submitted that, the appellant being absolute owner of the 11 AO106.11 property, he should not be restrained from selling the same. 11. Learned Counsel for the appellant placed reliance on the judgment of the Hon'ble Supreme Court in the case of Tamil Nadu Housing Board vs. A. Viswam (deceased) through L.R's. reported in [1997(1) B.C.J. 429 (SC)]. Relying on Head Note (C) and Para-12 of the said judgment, learned Counsel for the appellant would contend that, title of the suit property having been vested in the appellant, no one can lay any claim to the said property and nobody can claim injunction against the true owner of the property. Learned Counsel further invited my attention to the judgment of this Court in the case of Kachhi Properties vs. Ganpatrao Shankarrao Kadam and others reported in 2010(5) Bom.C.R. 43 and in particular Para-22 and 30 of the said judgment and submitted that, rule of lis 12 AO106.11 pendens itself is adequate under Section 52 of the Transfer of Property Act. The sum and substance of the arguments of the learned Counsel for the appellant is that, provision of Section 52 of the Transfer of Property Act will take care of the situation and for that, any order of injunction in respect of the suit property, in the facts of this case are wholly unwarranted. 12. Learned Counsel for the appellant further invited my attention to para-15 in Appeal from Order at Page-8 and submitted that, the appellant mill being owned by the Central Government, and the proceedings were initiated before the Board for Industrial and Financial Reconstruction i.e. B.I.F.R. The appellant Mill is covered under The Sick Textile Undertakings (Nationalization) Act of 1974. 13. At the cost of repetition, learned 13 AO106.11 Counsel for the appellant further submitted that, the Property Register Card is issued in the name of the appellant on the basis of the judgment of this Court in Writ Petition Nos. 1100 of 1986 and 436 of 1988 and therefore, the judgment cited by the Counsel for the respondents that it is not conclusive proof of the ownership or title cannot be made applicable in the facts of this case. Learned Counsel further submitted that, the arguments advanced by the Counsel for the State when the above mentioned Writ Petitions were heard, that such land was given on "Kabala" to the respondents cannot be said to be the argument of the appellant or the Central Government. Learned Counsel further submitted that, the suit was filed in 1981, however, the same came to be decided in 2006. Though it is observed by the lower appellate Court in the impugned order that the appeal can be disposed of within six months, however, on last four dates there is no any effective hearing in the said 14 AO106.11 appeal. Therefore, according to learned Counsel for the appellant, when the appellant is true owner of the property and the status of the respondents is encroachers, in that case, why true owner should be deprived from selling the property, that too, by making aware to the prospective buyers/purchasers that, the case is pending in the Civil Court about the said property and if anybody wants to purchase, they have to purchase the property on "AS IS WHERE IS" and "AS IS WHAT IS" basis". 14. On the other hand, learned Counsel for respondent No.1 submitted that, the point which is dealt with and set at rest in the Writ Petitions is whether the State Government or Central Government is owner of the property. So far the ownership/title of the present appellant is concerned, issue was framed in that respect by the trial Court and said issue is answered against the appellant. 15 AO106.11 Therefore, if the appellant is allowed to sell the property even without having any title, it will cause prejudice to the respondents' interest. It is further submitted that, the issues which were framed in the civil suit are answered against the plaintiff-appellant. Title of the suit is not proved by the appellant. No notice of the sale was given to the respondents-defendants and further, the appellant has not taken permission as required under Section 52 of the Transfer of Property Act from the concerned Court for sale of the property and therefore, the lower appellate Court has rightly passed interim order. It is further submitted that, since the appeal itself can be disposed of within six months by the lower appellate Court, in that case, this Court may not interfere in the impugned judgment and order passed by the appellate Court. It is further submitted that, record of rights would not confirm the title on the appellant. The Property Register Card itself 16 AO106.11 is not conclusive proof of the title of the appellant. In support of this contention, learned Counsel for respondent No.1 placed reliance on the judgment of the Hon'ble Supreme Court in the case of Suraj Bhan and others vs. Financial Commissioner and others reported in 2007 ALL SCR 1754. It is further submitted that, title of the appellant itself is in question and therefore, the appellant has no right to sell immovable property i.e. suit property and therefore, pending the appeal of the appellant, they may not be allowed to proceed with the sale of the property. The appellant herein, who is the appellant even before the lower appellate Court, has not shown how the balance of convenience lies in its favour. According to learned Counsel for respondent No.1, this Appeal from Order is devoid of any merits and same may be dismissed. . Learned Counsel for respondent No.1 17 AO106.11 further submitted that, on 22-02-2011 the application at Exhibit-35 was filed by the respondents for stay to the further steps for sale of the property. The Court granted stay and same was confirmed on 03-03-2011. Therefore, according to learned Counsel for respondent No.1, independent application was filed by the respondents praying relief against the appellant that they should not be allowed to sell the suit property. Learned Counsel further submitted that, respondent NO. 1 appeared in MARJI No.122 of 2007 on 15-04-2011 and respondent No.2 appeared in the matter before the lower appellate Court on 21-04-2011. Therefore, till that time, order of status quo and not to create third party rights was in operation. He further submitted that, Writ Petition No.1947 of 2011 was filed by the appellant before this Court and this Court passed order in the said Writ Petition on 19-04-2011. Pursis are filed by the appellant before the lower appellate Court, 18 AO106.11 that the High Court has directed the said Court to decide finally the prayer for interim relief. It is further submitted that, since respondent No.2 appeared before the lower appellate Court on 21-04-2011, and therefore, order of status quo and not to create third party rights cease to operate on said date, would be taking to technical view. Learned Counsel invited my attention to Exhibit-35 i.e. application filed by the respondents in MARJI No.122 of 2007 on 22-02-2011. It is further submitted that, another application was filed by the respondents for continuation of interim relief on 26-04-2011 and considering the averments in the said application, status quo order as well as not to create third party rights is confirmed by the impugned judgment and order on 30-04-2011. 15. Learned Counsel for respondent No.1 placed reliance on the judgment of the Hon'ble 19 AO106.11 Supreme Court in the case of Maharwal Khewaji Trust (Regd.), Faridkot vs. Baldev Dass, reported in 2005 AIR (SC) 0-104 and submitted that, the appellant has not made out a case of irreparable loss and therefore, they may not be permitted to put the property for sale. It is further submitted that, this Court may not interfere with the impugned judgment and order since the appeal filed by the appellant is pending before the District Court. 16. Learned Counsel appearing for respondent No.2, in addition to the submissions made by learned Counsel for respondent No.1, submitted that the interim order granted by the Court below may be continued during the pendency of the appeal. Since the matter is pending before the lower appellate Court about status of the property and also title of the appellant is not clear, therefore, this Court may not interfere at the stage when the appeal is pending. Learned 20 AO106.11 Counsel for respondent No.2 invited my attention to the judgment of the Hon'ble Supreme Court in the case of Dev Raj Deogra and others vs. Gyan Chand Jain and others reported in A.I.R. 1981 SC 981 and in particular Para-16 of the said judgment, and the judgment of this Court in the case of Murlidhar s/o Bhima Vaidya and another vs. Nababbi Yousufkhan, deceased through legal heirs and others reported in 2000(1) Bom.C.R. 670. Relying upon aforesaid judgments, Counsel for respondent No.2 would contend that, without permission from the Court, the appellant should not be allowed to sell the property. . Learned Counsel appearing for respondent No.2 further submitted that, while disposing of the Writ Petition No.436 of 1988 in Para-18 this Court has observed that, the Special Civil Suits will be decided on their 21 AO106.11 own merits and in accordance with law. The Civil Court will consider rival claims and pass appropriate orders in the Special Civil Suits in accordance with law. 17. I have heard learned Counsel appearing for the respective parties at length, perused the entire documents placed on record and reply filed by the respective respondents. At this stage, it would be appropriate to reproduce hereinbelow the contention of the appellant on Page-VII Clause (V) of the compilation of Appeal from Order that " the appellant by way of alienation is not going to dispossess the respondents, as the appeal of the appellant is for recovery of possession and at the most the Tender is finalized and the property will be sold in auction, then the prospective purchaser will stand in the shoes of the appellant and he may prosecute the appeal. That, even Section 52 of the Transfer of Property Act will adequately 22 AO106.11 protect the so called possession of the respondents". (Emphasis supplied). . At this stage, it is also relevant to mention that the appellant intent to sell the property on "AS IS WHERE IS" and "AS IS WHAT IS" basis. The appellant has also made prospective purchasers/buyers aware about the pending litigation in the Court in tender notice at Page-145. Relevant portion from the said tender notice reads thus : "Following legal case is pending in the Court in respect of this property. MARJI No.122 of 2007 Aurangabad Textile Mills v/s Abdul Khaliq pending in City Civil Court, Aurangabad. This is appeal filed by Aurangabad Textile Mills against the order passed by City Civil Court, Aurangabad in Civil Suit No. 11/81 filed by Mills for eviction of unauthorized occupant. 23 AO106.11 DUE DILIGENCE TO BE CARRIED OUT BY THE BUYER : Although the documents such as PR Cards/City Survey Maps/DP Plans,etc, are available with NTC or mills, the tender should verify before submission of tender bid necessary information on their own from AMC/Urban Development Department and any other Government Departments, Authorities regarding Zoning Regulations, Land Area, Built-up area, allowable FSI, Ground Coverage, and Landscaped Area and/or regarding any other issues as deemed necessary by the prospective Tenderers. The details of the existing encroachments have been provided. Tenderers are required to verify the same on their own as the sale is on 'as is where is' basis. Tenderers may carry out due diligence in respect of all the points including encroachment and 24 AO106.11 Complaints/disputes, if any, with regard to all the points mentioned above shall not be entertained at later stage." . Therefore, it is not the case that the appellant has not made aware to the prospective purchasers/buyers about the status of the property in pending case and its honest intention to sell the property "AS IS WHERE IS" and "AS IS WHAT IS" basis. 18. So far issues of ownership of the appellant and also status of the respondents are concerned, relevant paragraph Nos.29 to 34 from the judgment of the Writ Petition No. 1100 of 1986 are reproduced hereinbelow. "29. In my view, therefore, assuming that the State Government had granted the land to the predecessor in title of petitioner herein and that the said lands are capable of being resumed for alleged 25 AO106.11 breach and violation of terms and conditions of the same, the power of resumption conferred in the State Government cannot be exercised once the said Act has come into force. It is not disputed nor it can be disputed that the ownership and all right, title and interest in the properties of the textile undertaking namely Aurangabad Mills, Aurangabad up till now under the ownership of the Aurangabad Mills Limited has been taken over by the Central Government under the said Act. In other words, there is absolutely no dispute about the fact that the said Act applying to the Aurangabad Mills. Once the said Act applies and it's a provisions not challenged, then they apply with full force and rigour to the facts and circumstances of this case. Therefore, all proceedings of resumption of the lands in question ceased to have any legal sanction, the moment the undertaking vested in the Central Government. The fact of vesting is admitted. On the appointed day every sick textile undertaking and the right, title and 26 AO106.11 interest of the owner in relation to every such sick textile undertaking stands transferred to and absolutely vests in the Central Government. The moment it vests in the Central Government by virtue of Section 3(1), it also vests and stands transferred to in the NTC. The general effect of vesting is that properties and assets mentioned in Section 4(1) by virtue of vesting in the Central Government, are freed and discharged from any trust, obligation, mortgage, charge, lien and all other incumbrances affecting it. 30. It is not possible to uphold the contentions of learned AGP that general effect of vesting provided by Section 3(1) will not mean that NTC is also freed and discharged from liabilities, obligations as well as incumbrances. If the contentions of Mr. Choudhary are accepted, then it would mean that Section 3(2) is wholly redundant and nugatory. What vests in the Central Government vests immediately in the NTC. Therefore, the moment Government is freed and 27 AO106.11 discharged necessarily the NTC must also be held to be so discharged and relieved. It is not disputed nor it could be disputed that a subsidiary Corporation of NTC must have the same advantage, privileges and rights as that of NTC. The very purpose of enabling the NTC to set up subsidiaries would mean that powers as well as duties, obligations and functions to be carried put under the said Act as well as the rights granted thereunder stand transferred to such subsidiary. The Central Government and NTC is one and the same entity for the purpose of Chapter II of the said Act. Hence all proceedings for resumption must come to an end after the appointed day. 31. There is no dispute about the fact that the grant in this case pertains to immovable property. It is thus an incumbrance affecting the immovable property. The moment said Act makes provisions for discharging and relieving from all incumbrances, then such incumbrances must