State Of U.P. & Ors vs M/S Jaswant Sugar Mills Ltd.& Ors.Etc

2. The Company preferred two writ petitions challenging the orders passed by the District Magistrate/Collector, Meerut and Board of Revenue dated 18th December, 1995 and 3rd August, 1996 respectively. The aforesaid orders were also challenged by the State Government. The writ petitions were disposed of by the learned Single Judge of Allahabad High Court by a common judgment dated 1st March, 2011. By the said judgment, the High Court directed the State Government to pay the Company the compensation on the basis of the compromise reached between the State Government and the tenure holder Company for acquisition of their land by Meerut Development Authority. It is also directed that out of compensation paid by the Meerut Development Authority (about Rs.4.33 crores) an amount of Rs.1.62 crores shall be deducted and the remaining amount shall be paid to the Company. The State has been given liberty to realize the said amount from those authorities to whom it was wrongly paid by the previous Collector, Tulsi Gaur, under his order dated 20th February, 1992. The impugned judgment dated 1st March, 2011 has been challenged by the State of U.P. in C.A. Nos.6169-6171 of 2013 (State of U.P. & ors. Vs. M/s. Jaswant Sugar Mills Ltd. & Ors.etc.), as also by M/s. Jaswant Sugar Mills Ltd. in C.A. Nos. 6172-6174 of 2013 & Ors. (M/s. Jaswant Sugar Mills Ltd. vs The Colletor/District Magistrate & Ors.).

5. Subsequently, the Company was acquired by the State on 28th October, 1984 as per provisions of the U.P. State Sugar Undertakings Acquisition Act, 1971 (hereinafter referred to as the “Acquisition Act, 1971”), as amended in the year 1984, free from all encumbrances and the said Unit was vested with the U.P. State Sugar Corporation (hereinafter referred to as the “Corporation”).

6. Since, the Company was in arrears to the extent of Rs.1.29 crores, the District Collector, Meerut by order dated 28th November, 1984, attached all the remaining five constituent units except the Sugar Mill. The General Manger of the aforesaid Sugar unit was appointed as a Receiver with reference to all the aforesaid remaining five units. In between 1977 to 1984, for smooth functioning of the Sugar Mill, payment of dues to sugarcane grower, repairing of machinery etc., on the request of the Receiver, the State Government granted loan of Rs.6.13 crores to the Company, and was to be recovered as the arrears of Land Revenue along with interest.

9. During the pendency of the aforesaid writ petition the State Government issued a Notification dated 14th August, 1987 under Section 4 read with Section 17(4) of the Land Acquisition Act, 1894 for the Meerut Development Authority. It was followed by a Notification dated 4th September, 1987 issued u/s 6 of the Acquisition Act. The said Notification included the land of M/s Pootha Farm, a constituent unit of the Company. In the said case compensation amount of Rs.4.33 crores was awarded by Special Land Acquisition Officer vide award dated 22nd February, 1990.

11. Pursuant to a Court’s order, the District Collector, Meerut passed a speaking order dated 20th February, 1992 showing the details of adjustments to be made out of compensation amount of Rs.4.34 crores payable by the Company, as detailed below:

18. During the pendency of the said case, the Chairman, Board of Revenue, by order dated 3rd August, 1996 directed that out of the total amount of Rs.4.33 crores received as compensation from Meerut Development Authority, after deduction of a sum of Rs.1.62 crores along with interest and collection charges the balance amount shall be refunded to the Company.

25. The High Court by judgment and order dated 23rd February, 2011 quashed the notice dated 22nd August, 2005 with direction to the appellant to pay the compensation amount to the Company. However, it was clarified that if the land, which have been acquired finally, does not fall within the ceiling limit of the Company, then it will be open for the State to recover it after the finalisation of the ceiling proceedings, as per law. Subsequently, impugned common judgment and order dated 1st March, 2011 was passed in Writ Petition No.31378/1996, etc., with observation and directions as referred to above.

34. For the reason aforesaid, the impugned order dated 1st March, 2011 passed by the High Court in W.P. No.10220 of 1996 etc. cannot be upheld. The same is accordingly set aside. The matter is remitted to the District Collector, Meerut to determine the liability of the Company upto the date of vesting i.e. 28th October, 1984 after notice to the parties. The authority while so determining shall take into consideration the liability of the Company as on 28th October, 1984, including labour charges, Sales Tax, loan amount given by the State Government etc. if payable. After determination of liabilities and adjustment of the dues which is payable by the Company, if any amount is found payable to the Company, the appellant shall pay the amount within four months from the date of determination. On the other hand, if any amount is found payable by the Company, the Competent authority may recover the amount, in accordance with law. C.A.No.7122 of 2003, C.A.Nos.7123-7124 of 2003 and C.A.No.7125 of 2003.

40. In view of the fact that this Court vide order dated 27th April, 2003 in C.A. Nos. 7123-7124 of 2003 held that this Court is satisfied that no fault can be found with the impugned judgment of the High Court so far as the setting aside of the sale is concerned, we dismiss the appeals, so far it relates to cancellation of auction sale.

41. We have heard the parties only on the limited question as to why the amount which has been directed to be refunded to the auction purchasers- appellants herein should not bear reasonable interest.

2000. Appeals are allowed to the extent indicated without any stipulation of costs.”

44. In the present case, we find that there was no mis-representation on the part of the auction purchasers; they deposited the total auction amount within the time stipulated. It has not been in dispute that the title of the land was also transferred in their favour. But for the reasons mentioned by the High Court the sale has been cancelled. It has been ordered to refund amount in favour of the auction purchaser-appellant(s). We find no reason as to why on equitable grounds the appellants should not get interest on the said amount. Taking into consideration the aforesaid factor while working out equities, it would, therefore, be appropriate to direct the State to pay interest at the rate of 6% on the amount to be refunded as per the High Court’s order with effect from 27th April, 2001 and 3rd September, 2001, the day, the High Court passed the impugned order. The concerned respondents are directed accordingly.

45. C.A. Nos. 6169-6171 of 2013, C.A. Nos. 6172-6174 of 2013, C.A.No.7122 of 2003, C.A.Nos.7123-7124 of 2003, C.A.No.7125 of 2003 are allowed in terms of the directions as above. The appeals (C.A.Nos.7126-7129 of 2003) filed by the Commissioner, Meerut are dismissed. No costs.