Case: National Textile Corpn. (Up) Ltd Vs. Raja Ram Jaipuria

(a) In the year 1921, the Swadeshi Cotton Mills Company Limited (SCMCL) was incorporated as a private company and converted into a public company in 1923 which was engaged in the business of activity of operating and managing textile mills. The SCMCL acquired property at Civil Lines, Kanpur, Uttar Pradesh on which an integrated complex popularly known as ‘Swadeshiwas constructed. The said House consisted of three buildings, viz., Bungalow No. 1 which was used prior to 1971 as the Registered Office of the SCMCL and after 1971 it was used for general meetings of the Board of Directors and also as a Guest House, Bungalow No. 2 was in the physical possession of the Managing Director of SCMCL and Bungalow No. 3 was the Administrative Block of the SCMCL.(b) The Central Government, vide notification dated 13.04.1978, under Section 18AA of the Industrial Development Regulation Act, 1951, took over the management of six textile undertakings of the SCMCL including the Swadeshi Cotton Mills, Kanpur and the National Textile Corporation Limited, New Delhi (NTC), a Government undertaking, was appointed as the authorized representative under the said takeover. As a result of the takeover, the NTC took possession and custody of various properties belonging to the SCMCL including the Guest House and the Administrative Block. However, Bungalow No. 2 continued to be in the physical possession of Dr. Raja Ram Jaipuria, the then Director of the SCMCL (Respondent No. 1 herein).(c) Aggrieved by the order dated 13.04.1978 of take over, the SCMCL filed Writ Petition No. 408 of 1978 before the High Court of Delhi. In the High Court, vide order dated 04.05.1978, a working arrangement between the parties was made out wherein Respondent No. 1 herein was permitted to continue the physical possession of the residential bungalow on the condition that the same will not be disposed of or alienated in any way to any outsider. Ultimately, by order dated 01.05.1979, the High Court upheld the notification dated 13.04.1978 but certain assets were excluded from the purview of the same including the ‘Swadeshihe residence of the Secretary of the SCMCL.(d) Being aggrieved by the aforesaid judgment with regard to the validity and legality of the order of takeover, Swadeshi Cotton Mills, National Textile Corporation and Union of India preferred Civil Appeal Nos. 1629, 1857 and 2087 of 1979 respectively before this Court. This Court, vide judgment dated 13.01.1981 in Swadeshi Cotton Mills vs. Union of India (1981) 1 SCC 664  held the said takeover invalid on the ground that no opportunity of hearing was given to the SCMCL before the takeover.(e) On 19.04.1986, the Central Government promulgated the Swadeshi Cotton Mills Company (Acquisition and Transfer of Undertakings) Ordinance, 1986. Thereafter, on 30.05.1986, the said ordinance was replaced by the Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertakings) Act, 1986 (in short ‘the SwadeshiAs per Section 3 of the Swadeshi Act, every textile undertaking and the right, title and interest of the SCMCL in the said textile undertaking stood transferred and vested with the Central Government. The transferred undertakings were further transferred and vested in the NTC. Several proceedings were instituted by the parties as a result of the acquisition of the undertakings of the SCMCL.(f) One Mukesh Bhasin, a minority shareholder of Swadeshi Polytex Limited (SPL), filed a Civil Suit being No. 506 of 1987 before the High Court of Delhi at New Delhi praying for a declaration and injunction against the SCMCL on the ground that all the investments and assets vest with the NTC which is the rightful owner of the property after coming into force of the Swadeshi Act. In the said suit, he also sought an injunction against SPL from recognizing SCMCL and Swadeshi Mining (subsidiary of SCMCL) as the owners of the Swadeshi House.(g) Swadeshi Cotton Mills and SCMCL also preferred a Writ Petition being No. 2214 of 1987 before the High Court of Judicature at Allahabad (Lucknow Bench) claiming that equity shares held by the SCMCL in SPL and Swadeshi Mining and otherld be declared to be exempted from the scope and ambit of the Swadeshi Act.(h) The aforementioned Civil Suit No. 506 of 1987 and Writ Petition No. 2214 of 1987 were transferred to this Court and numbered as Transfer Case Nos. 14 and 13 of 1987 respectively. This Court, vide judgment dated 12.02.1988, in M/s Doypack Systems Pvt. Ltd. vs. Union of India and Others (1988) 2 SCC 299 , allowed Transfer Case No. 14 of 1987 and dismissed Transfer Case No. 13 of 1987 and held that the ownership and control of the SCMCL vests with the NTC. It was also held that Bungalow No. 1 and the Administrative Block, Civil Lines, Kanpur also vested in the Central Government.(i) As the SCMCL failed to handover the possession of Bungalow No. 2 of Swadeshi House, the NTC filed Civil Misc. Petition No. 26004 of 1988 in Transfer Case No. 13 of 1987 praying for a direction to the SCMCL to handover the vacant possession of Bungalow No. 2. Vide order dated 03.08.1989, the petition was dismissed without any order with liberty to move the appropriate court. In view of the said order, the National Textile Corporation (U.P.) Ltd. (the appellant herein), which was a successor-in-interest to the NTC preferred Criminal Complaint No. 1661 of 1991 against the respondent herein and others in the Court of Metropolitan Magistrate, Kotwali, Kanpur under Section 27 of the Swadeshi Act for possession of the said Bungalow. Vide order dated 18.02.1993, the said complaint got dismissed in view of the ruling given in Doypack (supra) that only Bungalow No. 1 and the Administrative Block vested with the Central Government.(j) Being aggrieved by the order dated 18.02.1993, the NTC filed Criminal Revision No. 86 of 1993 before the Session Judge, Kanpur which also got dismissed vide order dated 30.10.1993 holding that the NTC failed to prove beyond doubt that the said Bungalow vested with Central Government with a direction to move the appropriate court in terms of the order dated 03.08.1989.(k) Aggrieved by the same, the NTC preferred Writ Petition No. 25090 of 1994 before the High Court of Allahabad. In the meantime, the NTC filed Contempt Petition No. 75 of 2005 in Transfer Case No. 14 of 1987 before this Court alleging violation of the judgment in Doypack (supra) but the same got dismissed vide order dated 03.02.2006 on the ground of omission to disclose about the instant proceedings. Vide order dated 25.11.2005, the High Court dismissed the above said writ petition.(l) Being aggrieved by the order of the High Court, the appellant herein has preferred this appeal by way of special leave.SLP (Civil) No. 4773 of 2006(m) On 26.10.1989, the NTC also moved an application under Sections 5 and 7 of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 (in short ‘the PPfor eviction of the respondent herein from the said Bungalow on the ground that in Doypack (supra), it has already been held that the Swadeshi House (which also includes Bungalow No. 2) vested with the NTC and there is no question as to the title of the respondent herein. During the pendency of the proceedings before the Estate Officer, Shri Rajaram Jaipuria (Respondent No. 2 herein) removed certain valuables from the Bungalow No. 2. The NTC moved an application for restraining the Respondents herein for the same before the Estate Officer which was allowed vide order dated 02.05.1993.(n) Being aggrieved, M/s Ganesh Synthetics Pvt. Ltd (Respondent No. 16 herein), a related entity of SCMCL, preferred a Writ Petition being No. 16091 of 1993 before the High Court. The High Court, by order dated 11.05.1993, restrained the respondents from removing any article kept in Bungalow No. 2. Vide order dated 05.08.1994, the Estate Officer rejected all the preliminary objections filed by the SCMCL. The respondents herein preferred an Appeal being No. 228 of 1994 under Section 9 of the PP Act before the District Court, Kanpur.(o) Vide order dated 01.05.1996, the above said appeal was allowed holding that Doypack (supra) had not addressed the issue relating to Bungalow No. 2. Being aggrieved, the NTC preferred Writ Petition being No. 30122 of 1996 before the High Court. The High Court, vide order dated 25.11.2005 dismissed the said petition.(p) Being aggrieved by the order of the High Court, the appellant herein has preferred this appeal by way of special leave.

Reasoning: We are satisfied that in view of categorical decision of this Court in Doypack (supra), rejection of subsequent application filed by the appellant for clarification/modification, direction to approach the Civil Court, initiation of proceedings under the PP Act which ended in dismissal, dismissal of complaint under Section 27 of the Swadeshi Act, were passed by various courts which undoubtedly go against the claim and stand of the appellant. It is also brought to our notice by the newly impleaded parties that they had purchased the said property in a bona fide manner with clean title of the property vested in the SCMCL, therefore, they are entitled for the same. It is made clear that we have not expressed any thing about the said issue.