State Of U.P. & Ors vs United Bank Of India

4. The facts of the case in brief as narrated in the writ petition are that the property in question i.e. Bungalow no.19, Clive Road, Allahabad was initially leased out to one Ms. Mortha Anthony on 11.8.1887 for 50 years and the said period expired on 11.8.1937. On 7.4.1945, the lease was renewed in favour of Miss Verna Anthony and Miss Leena Anthony for another 50 years by the Collector Allahabad, for the Governor of United Provinces, which was made effective from 1.9.1937, and as such, the said lease was valid up to 31.8.1987. Subsequently, on 22.10.1945, the lease was transferred in favour of M/s. Amrita Bazar Patrika Pvt. Ltd. (in short, “the ABP Company”) by means of a registered deed. On the basis of the said transfer deed, a lease deed was executed on 25.07.1949 by the State of Uttar Pradesh in favour of the ABP Company for 50 years from the first day of September 1937 in pursuance of G.O. No.1286/XI-780/45 dated 22.03.1947. Consequent thereupon, the name of the Company was mutated as lessee in respect of the property situated at 19, Clive Road, Allahabad in the Nazul property register. The ABP Company, having its registered office in Calcutta, its Managing Director has been carrying on two businesses of publishing newspapers from Calcutta as well as from Allahabad and other regional offices all over the country. The Company owns two properties at Allahabad being premises no.19, Clive Road, Allahabad and premises no.10, Edmonston Road, Allahabad.

5. Further the case of the appellant is that the United Bank of India (in short, “the Bank”) had advanced credit facilities to the Company M/s ABP Pvt. Ltd. and the said Company had taken loan for the purposes of giving salaries to their staff as well as to modernize its printing technology for which the company alleged to have mortgaged their immovable properties at Calcutta and Allahabad, including leasehold property situated at 19, Clive Road, Allahabad by means of deposit of title deeds. Since the Company became irregular in paying the loan instalments, the Bank issued a demand notice calling upon the Company and others to pay the outstanding dues. Thereafter, for recovery of its dues, the Bank had filed a Suit No. 510 of 1990 at Calcutta High Court in the capacity of mortgagee of the various properties of the said Company including 19, Clive Road, (25 and 25- A Chikatpur Nasibpur Bakhtiyara), Allahabad, which was held by the said Company as lessee. The said suit was decreed on 09.10.1991 and a mortgage decree was passed in favour of Bank. It would be relevant to mention here that the paramount title holder namely the State of Uttar Pradesh was not made party in the suit and the mortgage decree was passed on the basis of settlement arrived at between the parties.

7. The Bank alleged that it had further granted credit facilities to the ABP Company on the request made by it along with four other banks in order to rehabilitate the Company. In the meanwhile, the Additional District Magistrate (F & R) Allahabad issued a show cause notice dated 19.12.1998 to the Company M/s. ABP Pvt. Ltd. as to why their lease right over 19, Clive Road, may not be terminated. The lessee namely M/s ABP Pvt. Ltd. did not challenge the notice. The appellant on the basis of the mortgage decree challenged the notice by filing Writ Petition No. 775 of 1999 for quashing the above show cause notice. The Bank further requested that as per the G.O. dated 01.12.1998 issued by the State Government, which lays down a detailed policy along with various provisions about entitlement for getting conversion of lease land into free hold status, the property situated at 19, Clive Road may be converted into free hold. The Bank as a mortgagee decree holder and as a nominee of the lessee Company subsequently submitted an application along with relevant challans in respect of part-payment of free hold charges depositing a sum of Rs.21,85,200.00 on 15.06.1999 in the State Bank of India, Allahabad Main Branch. Moreover, in paragraphs 14, 16 and 22 of the counter affidavit filed by the Company in Writ Petition No.775/99, it has been admitted that the appellant Bank is their nominee.

9. Surprisingly enough, before the DRT, Calcutta, a settlement was entered into between the parties. Before the DRT, five banks viz., United Bank of India, Allahabad Bank, Bank of Baroda, Canara Bank, Punjab National Bank, were the applicants and ABP Company (mortgagor) and guarantors were the respondents. Here also, the State of U.P. was not a party to the debt recovery proceeding. On the basis of consent of the parties the Debt Recovery Tribunal passed an order on 11.02.2004. The relevant portion of the order dated 11.02.2004 passed by the DRT is quoted hereinbelow :-

13. The District Magistrate, Allahabad rejected the application of the Bank for grant of free hold right in respect of the land in question i.e. 19, Clive Road, Allahabad on the ground that Bank does not come within the eligibility criteria under G.O. dated 01.12.1998. Pursuant to the order passed by the District Magistrate, Allahabad, the Bank made a representation to the State Government on 30.08.2005 under Paragraph 7 of G.O. dated 17.02.1996 merged in G.O. dated 01.12.1998 for passing orders for grant of free hold rights. It was argued by the writ-petitioner before the High Court that the legal opinion sought by the State Government from its Law Department in the aforesaid matter has also recommended that the said property may be converted into freehold but the District Magistrate, Allahabad did not pay any heed to the aforesaid opinion as well as on the recommendation given by the State Government. Before the High Court, it was pleaded by learned counsel for prospective auction purchaser Jvine Development Ltd. that after the decree of Calcutta High Court and subsequent order of Debt Recovery Tribunal, Kolkata all the rights, title and interest of M/s. Amrit Bazar Patrika Pvt. Ltd. ceased and it vested with the Bank and the Bank had acquired first charge over the aforesaid property. As per the order of Debt Recovery Tribunal, Kolkata, a sale committee was formed, which started its function by calling bids for the aforesaid property. Accordingly, a sale notice was published on 18.5.2004 in ‘The Times of India’ in respect of the immovable properties situated at 19, Clive Road, Allahabad. In reply to this auction sale notice, the writ- petitioner deposited the earnest money by way of bank draft and also submitted the tender.

22. The contention of the appellant-Bank is that only on the basis of the notice issued on 9.12.1998, the appellant cannot be deprived of its rights. It is pertinent to mention here that the above notice was not issued to the appellant Bank, but was issued to the Secretary/Director of M/s ABP Pvt. Ltd. vide letter No. 56/Nazul-(CL)-XXI-8/11(96-97) dated 19th December, 1998 in relation to the Nazul land No.25 and 25A, Chikatpur, Nasibpur Bakhtiara. Hence, the appellant is not competent to file any petition and challenge the above notice. It is worthwhile to mention that the above show cause notice was issued on the ground of violation of the terms of lease for which a reply was filed by Shri B.P. Tiwari, Secretary of M/s ABP Co. Ltd. dated 13.01.1999. This Court vide order dated 8.1.1999 in the writ petition has stayed further proceedings of the above show cause notice issued on 19.12.1998. It is also worthwhile to mention here that in the case of Nazul Land No.120-1/2 Civil Station (which is situated at 10, Edmoston Road), on violating the terms of lease by raising illegal construction without prior sanction and for other irregularities, a show cause notice vide letter No.448/Nazul-(CL)-XXI-8/51(80-81) dated 14th May, 1999 was sent to the Director/Secretary of M/s ABP Pvt.Ltd through registered post and its reply was given by Shri B.P. Tiwari, Secretary, ABP Pvt. Ltd. on 27.5.1999 and in that reply no justified reasons have been given by the Secretary of the above Company for the violation of the terms of the lease by unauthorisedly raising construction and for unauthorisedly running a workshop for repairing LML Vespa Scooter. Hence, after thorough consideration when it was found that the issuance of new lease in favour of M/s ABP was not in accordance with rules, the name of M/s ABP was cancelled from the above land vide order No. 47/Nazul-CL-XXI-8/51(80-81), dated 9th May, 2005 and the entire area of Nazul Land No.120-1/2 Civil Station has been vested with the Government of Uttar Pradesh. Admittedly, no notice was issued to the appellant Bank by the State. Hence, the appellant was not aggrieved by these notices in any manner. Neither the appellant-Bank is having any relation with both the lands in question nor any lease of the above land has ever been sanctioned in its favour.

46. For the reasons aforesaid, Civil Appeal No. 5254 of 2010 is bound to be allowed and the judgment and order passed by the High Court is liable to be set aside.

47. In the result, other appeals filed by the appellants i.e. Civil Appeal Nos. 1969-1970 of 2010, Civil Appeal No. 4688 of 2010 and Civil Appeal No.2462 of 2010 are dismissed.