COMA/125/2005 1/58 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD COMPANY APPLICATION No. 125 of 2005 In OFFICIAL LIQUDATOR REPORT No. 58 of 2003 For Approval and Signature: HONOURABLE MR.JUSTICE C.K.BUCH ========================================= 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 ? ========================================= AAKAR DEVELOPERS, - Applicant(s) Versus O.L OF YAMUNA MILLS LTD. & 3 - Respondent(s) ========================================================= Appearance : MRS SWATI SOPARKAR for Applicant(s) : 1, OFFICIAL LIQUIDATOR for Respondent(s) : 1, NOTICE SERVED for Respondent(s) : 2, MR HM BHAGAT for Respondent(s) : 3, MR DS VASAVADA for Respondent(s) : 4, ========================================================= CORAM : HONOURABLE MR.JUSTICE C.K.BUCH Date : 01/09/2006 ORAL JUDGMENT 1. The applicant-M/s.Aakar Developers has taken out Judges' Summons on number reliefs as prayed for in it saying that the order dated COMA/125/2005 2/58 JUDGMENT 02nd September, 2003 passed by the Company Court (Coram : C.K. Buch, J) in O.L. Report No.58 of 2003 may be reviewed and other appropriate reliefs as prayed for in the Judges' Summons may be granted. The Court would like to reproduce the reliefs as prayed for in the Judges' Summons taken out by the applicant, which are as under : “(a) To review the order dated 2.9.2003 passed by the Hon'ble Company Court (Coram : C.K. Buch, J) in OLR 58 of 2003 and to permit extension of time to the Applicant for the payment of the last two instalments, being the amount remaining outstanding after deducting the reliefs asked for in prayers(e) and (f) from the remaining sale consideration of Rs.1,25,50,000/-. (b) To quash and set aside notice issued by the Official Liquidator, dated 23.3.2005. COMA/125/2005 3/58 JUDGMENT (c) To direct the Official Liquidator to clarify and give the exact area, length, depth, nature, title and tenure of the Land purchased by the Applicant. (d) To direct the Official Liquidator to get the requisite permissions from the concerned authorities for the zone conversion of the land sought by the Applicant, from “non obnoxious non hazardous zone” to “residential zone”, and also to get the said area converted from “Others” to “Gamtal/Nucleous” under section 126 of the Bombay Land Revenue Code. (e) To direct the Official Liquidator to refund to the applicant, or deduct from the remaining sale consideration, the proportionate amount of money, equivalent to the difference in the area mentioned in Clause 4 of the Terms and Conditions given by the COMA/125/2005 4/58 JUDGMENT O.L. Being 4,84,634 sq.ft. (i.e.45023.973 sq.mt.) and that which it actually got possession of, being 4,42,413.80 sq.ft. (i.e.41101.5888 sq.mt.). (f) To direct the Official Liquidator to refund to the Applicant, or deduct from the remaining sale consideration, the loss caused to the Applicant due to the change in area location, an amount equal to the difference in the value of land, as per the land position provided in the map supplied with the OLR 58/2003 and the actual land position made available to the Applicant after excluding the extra land taken by the ULC, on the basis of Theory of Valuation.” 2. The submissions of the applicant-Company is that they have purchased a parcel of land described in the advertisement published in proceedings of O.L. Report No.58 of 2003 i.e. COMA/125/2005 5/58 JUDGMENT Company's immovable properties such as land and building structure situated at Survey No.116 to 118, 131, 935, 958, 962 to 964 admeasuring approximately 4,84,634 sq.ft. as a bidder of Yamuna Mills Ltd. (company in liquidation) and the same is given along with the terms and conditions attached with the tender advertisement. Along with the said terms and conditions, the Official Liquidator also had attached a map of the land to be sold under O.L. Report. A copy of the tender condition Annexure-A and a copy of the map Annexure-B are considered by him. 3. The applicant was declared the highest bidder and vide order dated 02nd September, 2003, the Company Court confirmed the sale in favour of the applicant on the terms and conditions decided by the sale deed. These conditions are at Annexure-C. After considering the say of Mr.D.H. Vasavada, learned counsel appearing for the opponent-Majoor Mahajan Sangh, and his accent qua the price offered by the applicant, the applicant was declared successful bidder COMA/125/2005 6/58 JUDGMENT against consideration of Rs.4.51 crores. The sale was confirmed on conditions of sale mentioned in the Schedule attached with the order of the Court. The say of the applicant is as per Clause 4 of the terms and conditions, the area of the land and building was 4,84,634 sq.ft. approximately, if mentioned in sq.mtr. it would come to about 45023.973 sq.mtr. The applicant on confirmation of sale when tried to get the land measured and ascertained about the land available of Yamuna mills in the background of the map Annexure-B, the area sold to the applicant was found to be of 4,42,431.80 sq.ft. and the land actually vested and transferred to the State of Gujarat under the provisions of Urban Land Ceiling Act, if considered, the land available to the applicant was less by 3922.385 sq.mtr. It is true that the property sold is strictly on “as is, where is an whatever is there” basis. But it was neither possible for the applicant to get the land measured physically nor the COMA/125/2005 7/58 JUDGMENT Revenue Authorities were cooperating with the applicant even after confirmation of sale under the pretext that titles were not with the applicant. The applicant approached the Official Liquidator time and again for the grievances addressing letters to the Official Liquidator on various occasions. The Official Liquidator otherwise was under obligation to give all necessary guidance and help to the successful bidder in getting necessary permission from the concerned revenue and local authorities because it was necessary for the applicant to approach these authorities to get permission for conversion of these lands from industrial to residential and/or commercial zone. The applicant was entitled to remove the superstructure after paying 200 lakhs and the Official Liquidator was supposed to give necessary permission to approach the authorities to confer the land from one zone to other. Undisputedly, the applicant has paid Rs.3.26 crores uptill now. 4. Though there was no help or guidance fro the COMA/125/2005 8/58 JUDGMENT Official Liquidator, it is stated in the affidavit filed in support of the Judges' Summons, the applicant has said that on the basis of the map of the land, the applicant itself got the plan of the land approved by Vadodara Municipal Corporation vide permission dated 21st May, 2004. But the applicant could not start construction as per the said plan because it was informed that the part of the said land had vested as excess vacant land in the State of Gujarat. The applicant, therefore, has applied for copy of the map of the land as per its record. The say of the applicant is that the area of the purchased land as originally shown in the map supplied with the O.L. Report No.58 of 2003 had a larger breadth parallel to the right and narrow length parallel to the inner land; but later as per the map supplied by the authorities, the applicant found that the area of the land available to the applicant had lesser breadth parallel to the road and more land parallel to the inner land and it COMA/125/2005 9/58 JUDGMENT touched the original track from behind. It is contended that not only the area of the land is much lesser in terms of size but even in terms of value. The applicant had approached thereafter to Official Liquidator informing him about grievance vide letter dated 04th October, 2004 and thereafter, the applicant got a new plan sanctioned from the Vadodara Municipal Corporation on 13th January, 2005. The Official Liquidator was under obligation to cooperative with the applicant so that the issues with the Revenue Authorities including Collector can be resolved amicably and the applicant may not have to suffer at every stage of revenue proceedings. As the Official Liquidator was not cooperative, the applicant addressed a letter to the City Survey Superintendent asking for actual measurement of the land of the area of various Survey Numbers mentioned in the advertisement. But the City Survey Superintendent refused to give measurement on the ground that the name of the applicant is not reflected in the property COMA/125/2005 10/58 JUDGMENT card. When the applicant started expressing grievance and so pointed out difficulties, had received a notice from the Official Liquidator dated 21st March, 2005 asking the applicant to pay up the remaining instalments. The applicant was asked to pay the balance amount. The applicant requested to consider the legitimate demands. It is averred in the affidavit that but for the grievances, “on 06th April, 2005, the representatives of Official Liquidator visited the site for taking back possession of the land in question. However, at the written request of the applicant vide its letter dated 06th April, 2005, the representatives of the Official Liquidator have not taken possession. The applicant had therefore prayed for interim relief. Till date the possession of the land is with the applicant under the ad-interim relief. There is no dispute interse between the parties on this aspect. 5. The Official Liquidator has resisted the Judges' Summons by way of filing affidavit COMA/125/2005 11/58 JUDGMENT dated 01st August, 2005. It is the say of the opponent no.1 that the allegations made in the affidavit filed in respect of the Judges' Summons are false. The applicant being the bidder was under obligation to inquire and satisfy himself about exact area of land portion of the above mentioned Survey Numbers. It is argued by Mr.Soparkar that the description of the land under auction is misleading and the Survey Number actually not owned and occupied by the Yamuna Mills Ltd. is shown as property of Yamuna Mills Ltd. and the area which had gone to the Government or taken by the Vadodara Municipal Corporation much prior to the date of auction, is shown as if this parcel of land that had not remained with Official Liquidator of Shri Yamuna Mills Ltd. are shown in the tender notice and in Clause 4 of the said notice while describing the land and property under auction. However, the Official Liquidator has said in paragraph no.11 of his affidavit that the applicant has no case. It suffers from bona fide and it is COMA/125/2005 12/58 JUDGMENT based on false and misleading facts without any substance. In fact, the dispute is raised time and again when the applicant was asked to pay the balance sale consideration and he has defaulted in making payment. It is submitted by the Official Liquidator in his report at page no.90 of the application that: “A. That pending hearing and final disposal of the Company Application No.125 of 2005, this Hon'ble Court may be pleased to direct the applicant EITHER to hand over possession of the Land back to the Official Liquidator forthwith, in terms of clause 9 of the terms and conditions of the sale forming part of the orders dated 02.09.2003. OR In terms of clause 3 of the Terms and Conditions of the Sale forming part of the order dated 02.09.2003, to pay to the Official Liquidator forthwith, the COMA/125/2005 13/58 JUDGMENT balance sale consideration of Rs.1,25,50,000/- together with interest @ 18% thereon with effect from 01.10.2004 being the date from where the default in payment started.” 6. The applicant thereafter has filed rejoinder affidavit in reply to the said O.L. Report and the applicant has clarified that the main purpose of filing of present application is to rectify the record as per the location and to remove variation in the title and to get the actual area and measurement as per the exact site situation of the land in question and to get clear title of the said property along with other prayers as prayed for in the application. The Official Liquidator made a grave mistake in giving Revenue Survey Number and the area, measurement and the location of the said land and because of the same, he had to ratify the public advertisement given in the newspaper. The first advertisement was published on 27.3.2000 for consolidated sale of land and building as well as plants and COMA/125/2005 14/58 JUDGMENT machineries, which could not be materialised. The second advertisement dated 01st February, 2002 was published by the Official Liquidator for auction of only land in question. The proposed area of the land under auction was 838350 sq.ft. In the Official Liquidator's file the said land was bearing Survey Nos.116, 118, 131, 935, 958, 962 and 964. In response to the said advertisement, the applicant deposited Rs.50 lakhs and participated in the auction. It was discovered that the area and measurement of the land in the first and second auction were incorrect. The State had acquired land admeasuring 31189 sq.mtrs. under the Urban Land Ceiling Act and that area was required to be deducted from the total area of the land. The Sale Committee, therefore, decided to give new advertisement and thereafter only, the land was to be auctioned after deducting the area that had vested with the State under the Urban Land Ceiling Act. Therefore, the third advertisements came to published on 24th June, 2003. Again wrong COMA/125/2005 15/58 JUDGMENT Revenue Survey Numbers were mentioned and the area shown in the advertisement was again found incorrect at the time of taking actual measurement. It is very clear from the record that the applicant has attempted to get exact Revenue Survey Numbers of the land purchased by him in the bid and to ascertain the measurement of the land. But he could not succeeded for want of co-operation from the concerned authorities. After paying an amount of Rs.200 lakhs, the applicant issued notices to the Official Liquidator stating that the discrepancies in the areas, measurements, location and variation in the title, etc. should be corrected and therefore, the applicant has expressed its inability to pay any further amount. However,the applicant has initially paid an amount of Rs.3.26 crores to the Official Liquidator. The applicant was constrained to file a writ petition being Special Civil Application No.11934 of 2004 before this Court and the applicant was asked to approach the Official Liquidator for COMA/125/2005 16/58 JUDGMENT necessary permission. According to the applicant, this is a case of material suppression facts by the Official Liquidator not only about the actual area available for sale described in Clause-4 of the tender advertisement and the map attached to it, but also about one litigation i.e. Civil Suit filed by the Vadodara Municipal Corporation for recovery of an amount of Rs.1.88 crores against the erstwhile company. If a litigation is pending for recovery of amount, that could have been mentioned in the third advertisement. The applicant has denied the other allegations made in the report filed by the Official Liquidator. 7. Only with a view to resolve the basic dispute and other relevant issues raised by the Official Liquidator, the Court passed an order on 12th December, 2005 because the Court was intimated that on the day of auction, the land was nowhere known or otherwise identifiable on the strength of the Revenue Survey Number and the land owned by Shri Yamuna Mills Ltd. (in COMA/125/2005 17/58 JUDGMENT liquidation) has been given City Survey Numbers. Before fixing the upset price of the land required to be auctioned, an approved valuer obviously was consulted and in that background, the order dated 12th December, 2005 has been passed. I would like to reproduce the said order for the sake of brevity and convenience as under: “1. The Official Liquidator is directed to remind the valuer about the request extended by him to ascertain the correct City Survey Number of the property in question at the earliest and he shall also be asked to accede to the request at the earliest, preferably within a period of one week. 2. Meanwhile, the Official Liquidator shall also see that the City Survey Superintendent of Vadodara City is contacted and he shall also be asked to furnish the details of the City Survey Numbers of the property. The COMA/125/2005 18/58 JUDGMENT City Survey Superintendent being a Revenue Officer, shall be provided with the details of the property sold and the location. The Member of the Sale Committee, Majoor Mahajan Mandal may also simultaneously pursue the Superintendent on the strength of the letter to be addressed by the Official Liquidator. The matter is adjourned to 26th December, 2005.” 8. On 26th December, 2005, the details as to various Survey Numbers referred to in the present matter were tendered before the Court for perusal and after going through the documents, the Court found that Mr.Vasavada appearing for the respondent-Majoor Mahajan Sangh, Vadodara requires to be heard along with the learned counsel appearing for the applicant. I have considered one letter tendered by Mr.Vasavada on 30th January, 2006 received by him from the member of the Sale Committee (page no.142). A copy of the said COMA/125/2005 19/58 JUDGMENT letter was given to the Official Liquidator and also to the counsel appearing for the applicant. In the background of relief 'C' prayed for in the Judges' Summons, the applicant as well as the opponent no.4- Secretary, Majoor Mahajan Sangh, Vadodara produced one map and both of them have admitted to one aspect before the Court that on amalgamation of certain Survey Numbers one number was cared out and the same was given Survey No.114. The Official Liquidator, therefore, was directed to clarify the details about the amalgamation of the Survey Numbers and the exact area showing the length and width of the land bearing Survey No.114 and he was asked to bring details before this Court including the details of the title and the tenure of the land sold to the applicant. Unless the correct description is not made in the sale deed, the title of the purchaser would remain confused and the same cannot get clarity and the parties were asked to take further steps vide order dated 22nd February, COMA/125/2005 20/58 JUDGMENT 2006. The Official Liquidator thereafter submitted a detailed report which throws sufficient light at least on the Survey Numbers and measurement part of the land of erstwhile Shri Yamuna Mills Ltd. I would like to reproduce the relevant part of the said report whereby it is submitted that : “... As per Valuation Report dated August, 1998 submitted by R.N. Consultancy Services, A Govt. Approved Valuer, the total area of the Land belonging to the Company is 8,38,530 Sq.Feet comprising Survey No.114, 116, 117, 118, 129, 131, 935, 958, 962, 963, 964 and 966. That, out of the aforesaid area of 8,38,530 Sq.Feet of Land 32,890 Sq.Metre of the Land (32,890 x 10.76 = 3,53,896 Sq.Feet) was acquired by Government of Gujarat under ULC Act, vide Gazette Notification dated 15.10.1987. That, the description of Land acquired by the Government of Gujarat as appearing in the Gujarat COMA/125/2005 21/58 JUDGMENT Government Gazette dated 15.10.1987 is as under :- Sr.No. Survey Nos. Area Sq. Metres 01 142 & 145 between compound wall. 284.00 02 114 paiki 31,189.05 03 129 Railway siding 405.00 04 Bin Number siding 405.00 05 966 siding 202.00 06 Bin Number siding 405.00 Total 32,890.05 That, therefore as per decision taken by the Sale Committee in its meeting held on 21.03.2003 4,84,634 Sq.Feet of Land and Building Superstructure situated at Survey No.116, 117, 118, 131, 935, 958, 962, 963 and 964 were put to sale ... .. ... xxx xxx xxx 3. That, therefore since 3,53,896 Sq.Feet of Land is acquired by the Government of Gujarat under ULC Act, out of total area of 8,38,530 Sq.Feet of Land, the remaining area being 4,84,634 Sq.Feet (838,530-353,896 = COMA/125/2005 22/58 JUDGMENT 4,84,634) with aforesaid description of Land i.e. Survey No.etc., has been sold to the applicant. 4. That, however it reveals that certain survey nos., are amalgamated into Revenue Survey No.114. That, the Official Liquidator further most respectfully submits that the letter of response submitted by the Learned Advocate Shri D.S. Vasavada on the records on 26.12.2005 reveal that as per Revenue/Land Records an area of 3,35,718 Sq.Feet was acquired by Government of Gujarat under ULC Act, out of 8,23,288 Sq.Feet of Land belonging to the Company in Liquidation leaving the area of 4,87,570 Sq.Feet with the Company. But this position does not seem to be correct. The Total area of Land belonging to the Company was 8,38,530 Sq.Feet out of which 3,53,896 Sq.Feet is acquired by the Government of Gujarat under ULC Act, as aforesaid and therefore the correct COMA/125/2005 23/58 JUDGMENT area left out with the company is 4,84,634 Sq.Feet. That, in this connection it is further observed that 1,039 Sq.Metres of Land i.e. 11,180 Sq.Feet also appears of have been acquired by the Baroda Municipal Corporation for Road Widening. That, therefore the net area of Land available to the purchaser would be 4,84,634-11,180= 4,73,454 Sq.Feet. That so far as details furnished by Asstt.,/Junior Town Planner Vadodara Urban Development Authority vide his letters Nos.6116 and 6117 both dated 17.01.2006 and the Map attached therewith are concerned, it is revealed from the aforesaid documents that as per revised development plan effective from 26.11.1996 the Land at Revenue Survey No.114 + (117/1 + 117/2 + 118 + 132 + 958 + 959 + 961 + 963 + 964 + 106) and Revenue Survey No.962 are in the non obnoxious and non hazardous industrial zone as per revised development plan in force as sanctioned COMA/125/2005 24/58 JUDGMENT by the Government of Gujarat under Gujarat Town Planning and Urban Development Act. That, however the claim of the applicant that he has got possession of Land of only 4,42,413.80 Sq.Feet i.e. less by 42,221 Sq.Feet is not correct. That, the exact correct net area of Land available to the applicant as per details furnished in Para 3 and 4 of this Report is 4,73,454 Sq.Feet, which is falling short by 11,180 sq.ft. only due to acquisition of 11,180 Sq.Feet of Land by Baroda Municipal Corporation for Road Widening.” 9. In response of the report submitted by the Official Liquidator and other facts placed by the applicant before the Court, the respondent no.4-Majoor Mahajan Sangh tendered one reply affidavit through Mr.D.H. Vasavada. After hearing the learned senior counsel Mr.Soparkar on 17th March, 2006, the Court found that even after filing affidavit by the respondent no.4, there is still confusion and the actual City COMA/125/2005 25/58 JUDGMENT Survey Numbers covered under the Area available for executing actual Conveyance Deed by the Official Liquidator of Shri Yamuna Mills. As the parties had agreed that some exercise if not be made carried out. So on the basis of the suggestion made by the learned senior counsel appearing for the applicant Mr.Soparkar, the Court passed further order on 17th March, 2006 and directed the Official Liquidator that : “3. The Officer Liquidator, therefore, is now directed to approach the City Survey Superintendent of Vadodara District with a copy of this order. The City Survey Superintendent be apprised of the nature of controversy between the parties by the Official Liquidator and if need be, a formal application may also be made to the concerned officer to carry out joint measurement of the land of Yamuna Mill situated at Vadodara. The City Survey Superintendent shall carry out the measurement either himself or COMA/125/2005 26/58 JUDGMENT through any competent subordinate officer, who is enough experienced in measuring the land having complex shape. This measurement shall be carried out by the said officer in presence of the Official Liquidator or the officer authorized by him, and also in presence of the representatives of the respondent