Case: U.P. State Sugar &amp; Cane Development Ltd Vs. Raza Buland Sugar Co. Ltd.

Prior to 1946 there were two independent companies namely, Raja Sugar Company and Buland Sugar Company. M/s Govan Bros. were its Managing Agents. In the year 1946 the Dalmias purchased it from M/s Govan Brothers. Both the companies were amalgamated in the year 1957 and one company under the name of Raza Buland Sugar Company Ltd. came into existence. In the year 1968 Jhunjhunwalas purchased the company from Dalmias. On coming into force of the U.P. Sugar Undertakings Acquisition Ordinance (in short the `Ordinance) later on became Act no.33 of 1971 (hereinafter referred to as the `Act). The plaintiffs filed a Writ Petition No.4130 of 1971 challenging the validity of the Ordinance. The High Court stayed the operation of the Ordinance on 5.7.1971 and also directed restoration of the status quo ante on 2.7.1971. In the year 1978, the Sugar Undertakings (Taking Over of Management) Act, 1978 (in short the `Taking Over Act) came into force. It provided for appointment of Authorized Controller to manage the sugar factories. The possession of the undertakings was taken over by the Authorized Controller on 30th October, 1979. The Central Government rescinded the aforesaid order w.e.f. 1.11.1979. The authorized controller delivered the possession of the undertaking to the Collector, Rampur on 2.11.1979. The High Court dismissed the writ petition filed by the plaintiffs on 3.5.1979. Suit No.28 of 1979 was filed by the plaintiffs against the defendants i.e. (Corporation and others) for permanent injunction restraining them from interfering in any manner in the possession and management of affairs and business and assets of the registered office of the company as detailed in para 10 of the plaint and further sought declaration that the properties mentioned in para 10 of the plaint are outside the purview of the Ordinance and the Act and defendants Nos. 4 and 5 were not entitled to the possession of those properties.Plaintiffs during the pendency of the suit got the plaint amended by adding the relief that if the court comes to the conclusion that the defendants were in possession of all or any of the items mentioned in para 10 of the plaint, a decree for possession be passed in favour of the plaintiffs. The suit was based on the allegations that the properties mentioned in para 10 of the plaint are not covered by the definition of `scheduled undertaking as defined in clause (h) of Section 2 of the Act. It was alleged that the plaintiffs were entitled to take possession of such property which is not covered by the expression `scheduled

Reasoning:
In respect of buildings the burden of proof was on the Corporation to establish that the buildings were held or occupied for the purpose of factory. The description of buildings under clause (vi) of Section 2(h) is not in the same language as in respect of lands. While defining lands the words used are "other than" but in respect of buildings such words are missing and therefore the Corporation has to lead the evidence to prove that the buildings held or occupied by the company were used for the purpose of factory and obviously the burden is on the person who claims exclusion.So far as the shops are concerned in respect of which relief has been granted to the plaintiffs, it is noted that they came into existence after construction in 1974 i.e. subsequent to 1971. It has also come in evidence that the properties have been purchased and acquired out of the fund of the company. The trial Court categorically held that there was no evidence to show that any other business was being carried on there. In Writ Petition No.315 of 1980 it was brought on record that the Sugar Undertaking was held by the plaintiffs from July 1971 to January 1979 on behalf of the Corporation. Hence, the shops on Nainital Road were constructed out of the funds of the Sugar Undertaking and since the cash was converted into immovable properties, those shops were clearly covered by the definition of scheduled