IN THE HIGH COURT OF GUJARAT AT AHMEDABAD COMPANY APPLICATION No.278 of 2001 in COMPANY PETITION No.33 of 1983 with MISC. CIVIL APPLICATION No.5 of 2002 with MISC. CIVIL APPLICATION No.6 of 2002 For Approval and Signature: HON'BLE MR.JUSTICE D.A.MEHTA Sd/- ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the concerned : NO Magistrate/Magistrates,Judge/Judges,Tribunal/Tribunals? -------------------------------------------------------------- O.L.OF ARYODAYA SPG. & WEAVINGMILLS CO.LTD. Versus CHARANSINGH DHUPSINGH -------------------------------------------------------------- Appearance: 1. COMPANY APPLICATION No. 278 of 2001 MR RM DESAI for Petitioner No. 1 MR SURESH M SHAH for Respondent No.1A to 1F MR KN PATEL for Respondent No.2 MR PJ KANABAR for Respondent No.2 to 61 -------------------------------------------------------------- CORAM : HON'BLE MR.JUSTICE D.A.MEHTA Date of decision: 16/04/2004 CAV JUDGEMENT 1. The Judge's Summons have been taken out by the Liquidator of Aryodaya Spinning and Weaving Mills Company Limited originally seeking following reliefs :- (a) That Shri Charansingh and 51 other persons, whose names are given in the list annexed hereto be directed to establish their right, interest and title to reside in the property known as Dhupsingh Chali at the premises of Aryodaya Spg. & Wvg. Mills Co. Ltd. (In Liquidation) on land bearing S. No.646, Mouje Asarva, City Taluka, Ahmedabad, now included in Final Plot Mo.4, 10 and 11 of Town Planning Scheme No.XVI (Asarva) Ahmedabad. (B) It may be declared that Shri Charansingh and 51 others, whose names are given in the list annexed hereto are trespassers and encroachers in the said premises known as Dhupsingh Chali, on land bearing Survey No.646 Mouje Asarva, City and Taluka Ahmedabad now included in Final Plot Mo.4, 10 and 11 of Town Planning Scheme No.XVI (Asarva) Ahmedabad. (C) That Shri Charansingh and 51 others, whose names are given in the list hereto annexed be directed to hand over the vacant and peaceful possession of the premises in occupation and if they fail to do so be removed from the occupation of the premises known as Dhupsingh Chali, on land bearing Survey No.646 Mouje Asarva, City and Taluka Ahmedabad now included in Final Plot Mo.4, 10 and 11 of Town Planning Scheme No.XVI (Asarva) Ahmedabad." 2. On 17-01-2002, the following order came to be made by this Court : " Heard Mr DS Vasavda learned counsel for Textile Labour Association and Mr RM Desai learned counsel for the Official Liquidator of Aryodaya Spinning Mills Ltd. and for State Bank of India. 2. In view of the report dated 16th January, 2002 submitted by the Official Liquidator in the present proceedings, it is directed that the Official Liquidator shall give a general notice to the occupants of the chawl that if the occupants do not hand over the vacant and peaceful possession of the premises to the Official Liquidator within one week, the Official Liquidator will take possession of the premises with the police protection as per the orders of this Court in the present proceedings. The notice shall be in Hindi and Gujarati. 3. In case the notice is not complied with, it will be open to the Official Liquidator to move the police authorities and thereupon the Police Commissioner, Ahmedabad City shall provide all necessary police protection to the Official Liquidator for recovering possession of the premises from unauthorised occupants and also for removing unauthorised construction put up on the land of Aryodaya Spinning Mills Ltd. S.O. to 6th February, 2002. Sd/- (M.S.Shah,J) 3. Misc. Civil Application No.5 of 2002 has been preferred by respondent Nos.1/A to 1/F and the reliefs sought are as under :- "10. It is, therefore, prayed that : a) Your Lordship may be pleased to kindly allow the petitioner No.1 as resp. No.64 and kindly recall the Oral Order (Annexure "A" herein). b) Pending admission and disposal, kindly direct the respondent not to implement or execute the Order." 4. Similarly, Misc. Civil Application No.6 of 2002 has been preferred by the 54 persons out of 61 persons seeking the following reliefs :- "7. The applicants therefore, humbly pray to this Hon'ble Court that :- (A) Your Lordships be pleased to admit and allow this Misc. Civil Application recalling the oral order passed on 17/1/2002 by this Hon'ble Court (Coram : M.S.Shah, J.) in Company Application No.278 of 2001 in Company Petition No.33 of 1983 with Company Application No.284 of 2001 in the facts and the circumstances of the present case and in the interest of justice; (B) Pending admission, hearing and final disposal of this Misc. Civil Application, Your Lordships be pleased to stay the operation, execution and implementation of the oral order passed on 17/1/2002 in Company Application No.278 of 2001 in Company Petition No.33 of 1983 with Company Application No.284 of 2001 in the facts and circumstances of the present case and in the interest of justice;" 5. Therefore, apparently, the respondent Nos.1/A to 1/F and the 61 persons felt aggrieved by the order made by this Court on 17-01-2002 because, according to them, they were not heard and proper facts had not been placed before this Court; therefore, the prayer to recall the said order of 17-01-2002. Accordingly, this Court vide its order of 22-01-2002 has stayed the operation of the order dated 17-01-2002 subject to the condition that, in the meantime, all the parties shall maintain status quo regarding the property in question. The ad-interim relief which was granted by staying the order on 22-01-2002 has thereafter been continued till further orders. Thereafter the matters have been heard at length from time to time and have ultimately been heard by this Court finally. Though no formal order of recalling the order of 17-01-2002 was made, the respondents have been granted opportunity of hearing. Therefore, rule is made absolute qua Misc. Civil Application No.5 of 2002 and Misc. Civil Application No.6 of 2002 to this limited extent of recalling the order dated 17-01-2002 for the purpose of granting hearing to the applicants of these applications while keeping in abeyance the order and directions made on 17-01-2002. 6. Thereafter vide amendment, granted by this Court on 21-03-2002, following prayers were added :- "(AA) Declare that the heirs and legal representatives of Shri Dhupsing Charansingh Respondents Nos.1/A to 1/F are encroachers and trespassers and in illegal occupation of the premises in the property known as Dhupsinh's Chawl, Asarwa, Ahmedabad and have no right to remain in the said premises and they may be removed from the said premises, if necessary by assistance of the Police; (AB) It may declared that Respondents Nos.1/A to 1/F and Respondent Nos.2 to 61 had no right, title or interest in the premises and are encroachers, trespasser and in illegal occupation of the said premises being Dhupsinh Chawl and be removed from the said premises, if necessary with the assistance of the Police; (AC) In the affidavit in support of the judges summons in Company Application No.278/2001, Paragraph as mentioned in Annexure 'A' hereto be incorporated." 7. It is necessary to note that originally respondent No.1 was shown as Charansingh Dhupsingh but in Paragraph 5 and 10A to 10F of the application reference is made to Dhupsingh Charansingh and the respondents i.e. respondent Nos.1/A to 1/F are the heirs and legal representatives of Dhupsingh Charansingh; and the said respondents as well as respondent Nos.2 to 61 have all along proceeded on the basis that the reference to Charansingh Dhupsingh is reference to Dhupsingh Charansingh and there is no dispute about the names and descriptions. Accordingly the request of Mr.R.M.Desai, learned Advocate appearing on behalf of the Official Liquidator, was granted by order of 03-12-2003 for correcting the cause-title to correctly describe original respondent No.1 as Dhupsingh Charansingh instead of Charansingh Dhupsingh. 8. Though in earlier orders reference is made to respondent Nos.2 to 61, it is necessary to note that respondent No.2 is one Manubhai Tribuvandas Patel, who claims to be the owner of the land in dispute and thus the person who is said to have leased out the land to Aryodaya Spinning and Weaving Mills Company Limited (hereinafter referred to as 'the Company'). Therefore, wherever reference is to respondent Nos.2 to 61 in the record, in fact the reference is to 61 persons whose names have been annexed with the application. 9. The Official Liquidator of the Company has preferred the application praying for a declaration that respondent Nos.1/A to 1/F are encroachers and trespassers and hence in illegal occupation of the premises i.e. property known as Dhupsingh's Chawl, Asarwa, Ahmedabad; that they have no right to remain in possession of the premises and that they may be removed from the premises. The Official Liquidator has also further prayed for a declaration that neither respondent Nos.1/A to 1/F nor the 61 persons have any right, title or interest in the premises and hence be declared as encroachers and/or trespassers and being in illegal occupation of the premises be removed, if necessary with the assistance of the police. 10. The Company is a Company registered under the Companies Act, 1913. It had taken on 11-11-1918 the land on lease from one Shri Gordhandas Gulabdas Patel, who was the grandfather of the present respondent No.2 Manubhai Tribuvandas Patel. As per Lease Deed available on record of Company Application No.153 of 1999 the lease was a permanent lease. 11. A part of the land taken on lease was let out by the Company to one Shankarlal Harilal by a Lease Deed dated 28-07-1945 which was registered on 17-11-1945. The land let out to Shankarlal Harilal was only 16 gunthas out of Survey No.646 which admeasured in all 22 + 6 = 28 gunthas of land. The lease was admittedly for agricultural purpose and for a period of five years upto 12-06-1950. It appears that in 1956, the Company filed Civil Suit No.870 of 1956 against Shankarlal Harilal for getting back possession of the land as the possession had not been handed over despite expiry of the period of lease. On 26-04-1958 the said Shankarlal Harilal expired. 12. In the meantime, it appears that Dhupsingh Charansingh had been put in possession of the land in question by Shankarlal Harilal and hence Dhupsingh Charansingh filed an application before the Small Causes Court, Ahmedabad praying for fixation of standard rent on the ground that he was a tenant of the land in question. The said application was dismissed. On 17-10-1962 the Company gave notice to Dhupsingh Charansingh to the effect that he was a trespasser and was required to hand over possession of the land. Dhupsingh Charansingh replied on 04-11-1962 contending that he had got possession of the land through Shankarlal Harilal. The Company, therefore, filed Special Civil Suit No.1034 of 1974 for a decree for possession from Dhupsingh Charansingh. On 18-12-1978 a consent decree was passed. The terms of the consent decree shall be referred to subsequently at an appropriate stage. 13. On 05-05-1989 this Court passed the final order of winding up in Company Petition No.33 of 1983 for winding up the Company and hence, the Official Liquidator took over possession of the assets of the Company. It is in the aforesaid circumstances that the present application has been moved by the Official Liquidator. 14. On 03-12-2003 this Court, after hearing the learned advocates for the parties, made the following directions : "12. Hence, it is directed that - (i) respondent Nos.2 to 61 shall deposit the amounts stated in Annexure "I" to Misc. Civil Application No.6 of 2002 with the Official Liquidator every month regularly and the collection shall be made by Bhupatsingh Dhupsingh, respondent No.1/F herein. The amounts shall be collected for each month by 10th day of the next month and shall be deposited with the Official Liquidator by the 15th day of the said month. The deposits shall be without prejudice to the rights and contentions of the parties and subject to any direction the Division Bench may give in the OJ Appeal or as may be given by this Court thereafter. (ii) While final directions regarding appropriation of such amounts shall be made later on after disposal of the aforesaid OJ Appeal, the Official Liquidator is permitted to invest the said amounts after deducting the expenses with State Bank of India which is a secured creditor of the Company in liquidation. (iii) Till final disposal of this application, respondent Nos.1/A to 1/F and respondent Nos.2 to 61 are also restrained from inducting any other person in the premises in question nor shall they part with possession of the said premises or any part thereof in favour of any third party nor shall they encumber any alleged right of theirs over the premises in question in favour of any party. (iv) In case respondent Nos.1/A to 1/F and respondent Nos.2 to 61 fail to deposit the amounts as aforesaid, it will be open to the Official Liquidator to move this Court for seeking eviction of the defaulters. (v) Respondent No.1/F shall file an affidavit giving details of the names of all the occupants and if there is any discrepancy between the names which are to be given now and the names disclosed in Annexure I to Misc. Civil Application No.6 of 2002, the deponent of the affidavit shall also give an explanation for the same. The affidavit as aforesaid shall be filed by 19.12.2003. " 15. Accordingly, one Bhupatsingh Dhupsingh Chaudhary has filed an affidavit dated 19-12-2003 styled as 'COMPLIANCE AFFIDAVIT.' It is stated in Paragraph 3 of the said Affidavit :- "3. I further say that as per the order of the Hon'ble Court, I have informed orally some of the respondents from amongst respondent Nos.2 to 61 that they are required to pay to me the amount stated in Annexure-"I" to Misc. Civil Application No.6 of 2002 every month and regularly in the first week of every month. However, I am told by those persons that the amount mentioned in Annexure-"I" as aforesaid is due and payable every year and, therefore, I should tell the respondents concerned that how much amount they have to pay to me every month. I say that I intend to inform each of respondent Nos.2 to 61 in writing that how much amount they will have to pay to me in the first week of every month from the amount of yearly rent as mentioned in Annexure-"I" to Misc. Civil Application No.6 of 2002. I will undergo the said exercise before the end of this month i.e. latest by 31/12/2003 and make all the efforts to comply with the direction of this Hon'ble Court given to me as per the said order." 16. Thereafter when the matter came up for hearing on 11-02-2004 this Court made the following order :- " Heard Mr.S.M.Shah, learned advocate appearing on behalf of respondent Nos.1-A to 1-F. The learned advocate has invited attention to affidavit dated 19th December 2003 made by one Shri Bhupatsingh Dhupsingh Chaudhari stated to be compliance affidavit of the directions issued by this Court vide order of 3rd December 2003. It is stated in the said affidavit that respondent Nos.2 to 61 were required to pay the amounts stated in Annexure I to Misc. Civil Application No.6 of 2002, but according to those respondents, the amounts stated in Annexure I as aforesaid is due and payable every year. As can be seen from the said Annexure I annexed to MCA No.6/02, the amount of rent is stated, but there is nothing to show that the said amount is payable annually and not monthly. By way of illustration, if the case of one Shri Muralidhar Ganesh at item No.63 is taken into consideration, the amount of rent is stated to be Rs.10/= per annum. As against this, when affidavit dated 13th August 2002 being affidavit in reply on behalf of respondent Nos.2 to 61 is taken into consideration, it is stated in paragraph 2 therein that the said respondents are regularly paying rent to respondent Nos.1-A to 1-F and that respondent Nos.2 to 61 pay taxes to the Ahmedabad Municipal Corporation. At Annexure I (collectively) to the said reply affidavit, copies of tax bills issued to the said respondents by the Ahmedabad Municipal Corporation are placed on record. Taking the case of same gentleman Shri Muralidhar Ganesh, by way of illustration, when municipal bill at page 128 is looked into, it is seen that the annual property tax payable by the said gentleman is Rs.264/-. On the face of it, prima facie, the stand of respondent No.2 as to the figure of rent stated in Annexure I to MCA No.6/02 is unbelievable. When Mr.P.J.Kanabar, learned advocate on behalf of the said respondents, namely respondent Nos.2 to 61 was asked to explain this, he has sought time in this regard. To come up on 19th February, 2004." 17. The learned advocates appearing respectively for the parties have addressed the Court at length as well as invited attention to the written submissions filed by them from time to time, and cited various decisions. 18. Mr.R.M.Desai, learned Advocate appearing on behalf of the applicant, submitted that in terms of the decree dated 18-12-1978 respondent Nos.1/A to 1/F, through their predecessor-in-title, were required to carry out some acts but had failed to comply with the terms of the decree and were thus liable to be evicted. That respondent Nos.2 to 61 who are claiming possession / occupation of the premises through respondent Nos.1/A to 1/F are thus encroachers and/or in unauthorized occupation, there being no right with respondent Nos.1/A to 1/F to remain in possession of the premises. It was submitted that even as per the say of respondent Nos.1/A to 1/F admittedly, the said respondents had failed to make payment of compensation for user after 31-05-1986. That even the payment for subsequent period upto April 1987 stated to have been sent by Registered Post A.D. to the Company (in liquidation) and returned undelivered had not been made over to the applicant nor deposited with the Court; and, therefore, the default of respondent Nos.1/A to 1/F was established entitling the applicant to seek their eviction from the land in question. That the construction of superstructure by late Dhupsingh Charansingh itself was illegal and, therefore, subsequent action of renting out the same to third party was per se illegal, as late Dhupsingh Charansingh was merely an occupant of the premises as a permitted user as per decree dated 18-12-1978. 18.1 Adverting to the order of this Court dated 03-12-2003 and the Compliance Affidavit of Bhupatsingh Dhupsingh Chaudhary sworn on 19-12-2003, it was submitted that there was discrepancy in the affidavit of the said respondent vis-a-vis the averments made in Misc. Civil Application No.6 of 2002 : that the number of persons was at one place shown to be 60/61, at another place it was shown as 72 persons and at third place there were names of 83 persons as occupants; in such circumstances respondent No.1/F having made a wrong statement on affidavit was liable to be evicted for breach of the direction issued by this Court in its order dated 03-12-2003. 19. On behalf of respondent Nos.1/A to 1/F Mr.S.M.Shah, learned Advocate, contended that : (a) this application is not competent and not maintainable and the applicant has to institute suit in appropriate Court; (b) this Court has no jurisdiction to entertain this application; (c) it is clear from the decree dated 18-12-1978 passed in Civil Suit No.1034 of 1974 that respondent Nos.1/A to 1/F are not in unauthorized occupation of the premises; (d) Dhupsingh was in occupation of the land, he erected superstructure thereon, there was a dispute about nature of the right in 1962 between the Company and Dhupsingh and, therefore, respondent Nos.1/A to 1/F who have acquired title through Dhupsingh cannot be treated to be encroachers, and also the present proceedings are clearly barred by limitation. Over and above the aforesaid contentions, reliance has been placed on Additional Affidavit filed by Shri Jitendra Dhupsingh dated 21-04-2003 to contend that the Company Petition seeking winding up of the Company had been filed in 1983, but as could be seen from the record respondent Nos.1/A to 1/F had made payment of rent to the Company upto 31-05-1986; that in April 1987, payment for the subsequent period was sent to the Company by Registered Post Acknowledgment Due but the same was returned as the Company was closed; and hence also, respondent Nos.1/A to 1/F cannot be treated as encroachers. That as such, rights of the Official Liquidator are limited as per decree dated 18-12-1978. 20. Mr.P.J.Kanabar, learned advocate appearing on behalf of respondent Nos.2 to 61 contended that the said 60 persons are staying with their family on the land in question and also, some of them are earning their livelihood by carrying on business activities on the said land. That their possession is legal and authorized as late Dhupsingh Charansingh had leased the land and/or the premises to the said respondents. In the affidavit dated 13-08-2002 it is stated "I further say that respondent Nos.2 to 61 are regularly paying rent to respondent Nos.1/A to 1/F". Attention was invited to further averment in the said affidavit that the said respondents i.e. Nos.2 to 61 are paying tax to Ahmedabad Municipal Corporation and for this purpose reliance was placed Annexure-I (collectively) whereunder copies of property tax bills have been annexed. It was also submitted by Mr.Kanabar that, therefore, a presumption be raised that the occupation of respondent Nos.2 to 61 is neither illegal nor contrary to the Rules and Regulations of Ahmedabad Municipal Corporation. In the alternative, Mr.Kanabar submitted on the basis of the affidavit dated 13-08-2002 that the Standing Committee of Ahmedabad Municipal Corporation vide resolution No.895 dated 28-07-1976 had recommended regularization of huts on government as well as private lands and also resolved to come out with a scheme to settle such encroachers; that the resolution had accordingly been approved in the meeting of the General Board held on 17-08-1976. That in these circumstances also the occupation of respondent Nos.2 to 61 cannot be treated as illegal and/or unauthorized. 20.1 Mr.Kanabar further invited attention to the averments made in Misc. Civil Application No.6 of 2002 filed by respondent Nos.2 to 61 and to Annexure-I annexed to the said application wherein statement showing particulars of the tenure, rent, etc. of all the respondents was shown. Reliance was placed on judgment and decree dated 18-12-1978 made by the Court of City Civil Judge in Civil Suit No.1034 of 1974 in support of the contention that the said respondents are occupying the premises as tenants of deceased Dhupsingh Charansingh and the superstructure was constructed by late Dhupsingh Charansingh prior to 1955. A copy of the aforesaid decree has been annexed and marked as Annexure-II to the said application. 20.2 It was further submitted that the said respondents were not the employees of the Company (in liquidation) at any point of time and the rented premises occupied by them are of the ownership of respondent Nos.1/A to 1/F. That in the circumstances they were neither encroachers on the land of the Company (in liquidation) nor was their occupation in any way unauthorized; that the suit for possession of land in question had in fact not been decreed and as per the terms of compromise recorded in the decree the applicant was disentitled to dispossess the respondents. 20.3 Mr.Kanabar placed reliance on written submission dated 21-04-2003 primarily for the purpose of submitting that :- (a) the application was barred by limitation; and (b) there were various disputed questions of fact which could not be resolved summarily by this application. 20.4 In relation to the submission regarding the application being beyond period of limitation, reliance was