Case: Hindustan Antibiotics Limited Vs. Special Land Acquisition Officer (14) &amp; Others

ny has been declared as sick industrial unit as per the provisions of the sick Industrial companies (Special Provisions) Act, 1985 hereinafter referred to as SICA on 31.3.97.      3. In May, 1998 Collector, Pune published in official gazette a notification under section 6 of the Land Acquisition act, hereinafter referred to as the Act for acquiring some of the lands of the petitionercompany. On 26.11.1998 a notification under section 9,s 3 and 4 was issued by the Special Land Acquisition Officer (14), Pune hereinafter referred to as SLAO . They pointed out to the SLAO that it is a sick industrial unit and the acquisition should not be proceeded with. Ultimately on 3.1.2000 notice under section 12(2) of the Act was forwarded to the petitioner with a copy of the Award made and its translation. When notice of delivery of possession was issued the present petition was filed challenging the entire proceedings for acquisition of lands taken up under the Act.      4. It is pertinent too note that the proceedings were commenced in the year 1998 and were completed in the year 2000 and throughout these two years though the petitioner had complete knowledge o the proceedings taken up under the Act no challenge of any kind was made before this Court or any other appropriate court. From the facts noted in the petition it appears that no objection in writing was taken before LAO. However a communication dated 8.12.1998 was written to the LAO pointed out the provisions of section 22 of SICA and therefore seeking that the proceedings cannot continue. BY this very letter the land was sought to be valued at Rs.4500per sq. mtr. And compensation was claimed at the rate of 5000 per sq. mtr. Subject to the LAO obtaining consent from Board for Industrial & Financial Reconstruction (BIFR) for acquisition of this land as required by section 22A of the SICA. It appears that this aspect was taken into consideration and award under section 12 of the Act was made. It was after making of the Award and receipt of copy thereof that the present petition has been filed contending that the entire proceedings for acquisition of land under the Act are void ab initio for want of consent from the BIFR was not obtained.      5. Thee and LAO have strongly denied this contention that section 22 of SICA is applicable to proceedings for acquisition under the Act and therefore they defend the action claiming to be legal and valid.

Court's reasoning:
12. In our opinion, proceedings analogous to those enumerated above, but not specifically covered by provisions of section 22 also may not be taken up without previous consent of the Board. But it is only such proceedings which are connected with the financial existence and proprietary rights of the Company which are prohibited. Such proceedings directly deal with the existence of the Company itself and where restructuring on reconstruction or financing is pending contemplation. All these proceedings as contemplated by section 22 therefore must relate to the sickness of the Company and no proceedings of the kind mentioned above and similar proceedings be taken without consent of the Board so that activities undertaken by the Board under the provisions of SICA are not hampered by such proceedings. In our opinion, proceedings contemplated by section 22 are obviously legal proceedings. Proceedings taken up by any authorities which are judicial or quasi judicial. What is contemplated in section 22 is therefore no proceedings of the kind referred to above be taken up except with the previous sanction of the Board. There is no prohibition. All that as stipulated by section 22 is taking up of these legal proceedings without prior consent of the Board. The Board may on being moved for grant of such consent take into consideration the nature of legal proceedings and grant or refusal of sanction. We must therefore keep in mind that initiation of any legal proceedings is not barred by the provisions of section 22. What is provided for by it is prior consent of the Board13. In our opinion, proceedings contemplated under section 22 which can be taken up with prior consent of the Board are therefore proceedings in financial nature or proceedings having financial implications and are connected with the sickness of the industry concerned. They must in all cases be legal proceedings before a judicial authority or quasi judicial authority. That in our opinion would necessarily take us to consider question as to whether proceedings commenced under the Act are legal proceedings as understood in common parlance and whether such proceedings under the Act can be said to have been covered by the provisions of section 22 requiring prior consent of the Board15. In our opinion, no such consent is necessary because these proceedings under the Act are not such legal proceedings as are contemplated under section 22. We have enumerated above kind of proceedings contemplated by section 22. We repeat what in our opinion constitute legal proceedings as contemplated by section 22. By no stretch of imagination proceedings for acquisition of land can therefore be called legal proceedings as contemplated by section 22. Section 22 contemplates legal proceedings which have some bearing on the existence of the industrial company or its sickness or its refinancing or its restructuring or reconstruction. The entire lands which were earlier acquired for they are not being acquired again by the State for another purpose. It must be kept in mind that all lands belonging to they were acquired for the petitionercompany as power provisions of part 7 of the Act. It was acquired for the purposes of running of the Company or conducting its business. All that land acquired for the petitioners after its establishment is not sought to be acquired for the purposes of road widening or any other purposes as stated in section 6 notification. Only part of it is being acquired. The acquisition has nothing to do with any of things relating to sick industry. Even if it is assumed that land belonging to the Company can be sold for the purposes of revenue or for reconstruction of the Company this acquisition cannot affect the profits of the company in relation to its operation as a Company. There is therefore no question of proceedings under the Act in acquiring lands belonging to company are proceedings as contemplated by section 22. There is therefore no question of prior consent of the Board being taken for that purpose18. Reliance was placed on reported decision of the Supreme court of India in the case Maharashtra Tubes Ltd. V/s State Industrial & Investment Corporation of Maharashtra Ltd. & Another, (1993) 2 SCC 144.  A careful consideration of the observations by the Supreme Court of India as a whole would in our opinion, reiterate concrete support to our opinion that proceedings contemplated by provisions of section 22 of SICA must be such as are analogous to proceedings mentioned therein and proceedings for acquisition of land are not such proceedings analogous to those mentioned in section 22. There is therefore no substance in the submission made by the learned counsel19. There is yet another aspect which we would like to note. Proceedings for acquisition of land commenced with the publication of section 6 notification. That was done in 1998. No preventive action like filing of petition of the kind we are dealing with was taken till award was made under section 12 and communicated to the Company under section 12(2). This delay on the part of company to avoid acquisition of a part of its property by reference to section 22 is unexplained. However nothing much turns on this as on merits we have held above that legal proceedings as contemplated by section 22 do not encompass proceedings under Land Acquisition Act of the kind impugned in this petition.