Research › Search › Judgment

Calcutta High Court · body

2009 DIGILAW 532 (CAL)

Iisco Ujjain Pipe And Foundry Co. Ltd. , (In Liquidation) And Ujjain Vikash Pradhikaran v. Official Liquidator

2009-07-22

PINAKI CHANDRA GHOSE, TAPAN KUMAR DUTT

body2009
Judgment : GHOSE, J (1) This appeal is directed against an order dated August 5, 2005 passed by the Honble Company Judge on an application filed by the appellant Ujjain Vikash Pradhikaran. (2) The facts of the case briefly are as follows : This appeal under a pro-inter se-suo application filed by the appellant before the Honble Company Judge. The appellant claimed himself to be the owner of a plot of land admeasuring about 43.407 sq. meters situate at Ujjaini in the State of Madhya Pradesh. (3) The said land was leased out in favour of the company in liquidation for 30 years with effect from 21st December, 1982 with an option of renewal for another period of 30 years. According to the appellant, the appellant is a statutory body incorporated under the Madhya Pradesh Urban and Rural Development Act, 1973, granted the lease to the company in liquidation in respect of the land at a premium of Rs. 4,34,070/- and annual lease rent of Rs. 8,681/-. (4) It is the case of the appellant that the lease contains a restrictive covenant regarding transfer of land and also provided that in case the lessee does not start the construction within the time mentioned therein, the appellant shall be entitled to re-enter the plot. (5) It appears that the company in liquidation, the original lessee of the land, has been wound up by an order dated 10th of July, 1997. The Official Liquidator was appointed and duly took possession of the assets and properties of the company in terms of the direction of this Court. The residuary period of the said leasehold land was eventually sold and/or assigned by Official Liquidator in favour of the respondent No.2, who is the purchaser of the entire assets and properties of the company in liquidation. Such sale was made pursuant to the publication of notice in the leading newspapers throughout the country including Ujjain. (6) It is the case of the appellant that on 29th of June, 1999 the appellant wrote a letter to the Official Liquidator informing him that since no construction has been made, the vacant land should be returned to the petitioner. The appellant also wrote a letter to the respondent demanding return of the said vacant land. (6) It is the case of the appellant that on 29th of June, 1999 the appellant wrote a letter to the Official Liquidator informing him that since no construction has been made, the vacant land should be returned to the petitioner. The appellant also wrote a letter to the respondent demanding return of the said vacant land. (7) On 9th August, 1999, the Official Liquidator replied to the said letter dated 21st July, 1999, stating inter alia that it is not in a position to hand over possession of land without any order of Court. On 4th April, 2003, the Honble Company Court directed to sale of the properties of the company in liquidation and subsequent thereto on 6th of June, 2003, a letter was issued by the appellant to Official Liquidator cancelling the allotment of land and proposed to re-enter on the said plot of land on 7th July, 2003. (8) On 4th July, 2003, order for sale was passed by the Court and on 28th of July, 2003 the appellant further wrote a letter to the Official Liquidator for cancellation of allotment of said land and a cheque for Rs. 2,44,052/-was forwarded to the Official Liquidator after deducting 20% of the price at which the land was originally leased out. (9) On 4th August, 2003 the Official Liquidator narrated all the facts and intimated about the sale of the land, assets and properties of the company in liquidation to the appellant and returned the cheque which was forwarded by the appellant. Subsequent thereto, the sale order was modified by the Court and the present purchaser was declared as the highest bidder and the possession of the land in question was handed over to the said respondent on 30th September, 2003. (10) On 6th July, 2004, a direction was given by the Company Court to the Official Liquidator to execute the deed of conveyance in favour of the purchaser. On 12th July, 2004 the appellant for the first time approached the Court by filing the pro-inter se-suo application. In the said application, the appellant admitted the knowledge of the public advertisement for sale of the property in question. The matter was heard out and disposed of by the Honble Company Judge on 5th August, 2005. (11) Being aggrieved from the order of 5th August, 2005, this appeal has been filed. In the said application, the appellant admitted the knowledge of the public advertisement for sale of the property in question. The matter was heard out and disposed of by the Honble Company Judge on 5th August, 2005. (11) Being aggrieved from the order of 5th August, 2005, this appeal has been filed. (12) It is the duty of the Official Liquidator to give notice to the landlord prior to the sale of the assets of the company in liquidation to the appellant and further the Official Liquidator was informed about the cancellation of lease deed by a letter dated 22nd July, 2003. (13) It is submitted on behalf of the appellant that appellant is entitled to have forfeited the lease granted to the company in liquidation even though the Official Liquidator subsequently was appointed in the property in liquidation. In any event, it is submitted that the Official Liquidator was bound to give a notice to the appellant before the sale was declared since no steps have been taken by the Official Liquidator. (14) Hence, the order so passed by the trial Court should be set aside. (15) It is further submitted that the trial Court failed to appreciate that the Official Liquidator was bound by the terms of the original lease in so far as the transfer of the leasehold rights in question and reliance was placed in the decisions of Smt. Nirmala R. Bafna/kershi Shiva Cambatta and Ors. v. Khandesh Spinning and Weaving Mills Co. Ltd. and Anr. reported in AIR 1993 Supreme Court 1380, Revenue Divisional Officer v. Brunton and Co. (Engineers) Ltd., reported in 1990 Company Cases Vol. 69 497 in support of such contention made by Mr. S. N. Mookherjee, learned senior Advocate, appearing on behalf of the appellant. (16) On the contrary, Mr. P. C. Sen, learned senior Advocate appearing on behalf of the respondent No. 2 submitted that whether an application in the nature of pro-inter se-suo application should be entertained by the Court when the applicants is not at all diligent and it is also submitted that it has two tests to be followed to maintain a pro-inter se-suo application one is due diligence and on the other, there is no disputed question on title. (17) He further submitted that the appellant had knowledge about the pendency of the liquidation proceedings as also about the Official Liquidators WBLR-48 possession over the property in question and his action to sale the same in terms of the order of the Court. Knowledge of the publication of the sale notice was also admitted by the appellant in its pro-inter se-suo application at paragraph 12 at page A-20 of the stay petition. The Official Liquidator even prior to the publication of sale notice intimated to the appellant, and, therefore, the facts were well known to the appellant even before filing of the pro-inter se-suo application before the Court. But no steps have been taken by the appellant for a long time and the application has been filed even after five years. Therefore, the said fact would show that there is no diligence on the part of the appellant and for want of such diligence, the pro-inter se-suo application is liable to be rejected. (18) Mr. P.C. Sen, learned senior Advocate appearing on behalf of the respondent No. 2 relied upon the decisions of Sreedhar Chaudhury v. Nilmony Chaudhury and Ors., reported in AIR 1925 Calcutta 681; Bajranglal Khemka and Ors. v. Sm. Sheila Devi and Ors., reported in 74 Cal WN 444 and Central Bank of India v. Srish Chandra Guha and Anr., reported in AIR 1972 Calcutta 345 in support of his contention. (19) He further contended that the appellant had admittedly knowledge about the publication of notice in the newspapers and it had also framed notice about the liquidation proceedings and involvement of the leasehold land therein as it would be evident from the correspondences exchanged between the appellant and the Official Liquidator. The Official Liquidator also asked the appellant to approach the Honble Company Judge with regard to the said leasehold land. The said letter dated 4th August, 2003 which is appearing at page 85 of the Affidavit- in-Opposition. Therefore, he submitted that appellant had knowledge and/or notice. In support of such contention he relied on the following decisions of Nilkantha Sidramappa Ningashettiv. Kashinath Somanna. Ningashetti and Ors., reported in AIR 1962 SC 666 V 49 C 99 ; Radha Rai andAnr. v. Ram Rekha Rai and Anr., reported in AIR 1964 Patna 144 Vo. 51 C 38 ; and Parasramka Commercial Co. In support of such contention he relied on the following decisions of Nilkantha Sidramappa Ningashettiv. Kashinath Somanna. Ningashetti and Ors., reported in AIR 1962 SC 666 V 49 C 99 ; Radha Rai andAnr. v. Ram Rekha Rai and Anr., reported in AIR 1964 Patna 144 Vo. 51 C 38 ; and Parasramka Commercial Co. Ltd. v. Union of India, reported in AIR 1970 Supreme Court 1654 V. 57 C 352. (20) It is further submitted that the appellant at that stage cannot have knowledge about formal notice of the Official Liquidator when admittedly the appellant came across the notice published in the newspaper. He further drew our attention to Sections 449 to 451 and 456,457 and 458 of the provisions of the Act and submitted that the Official Liquidator has given discretion to deal with the properties in question of the company in liquidation. (21) On the basis of the above provisions the Company Court took all necessary steps and gave direction and on the basis of such direction sale notice was published in the newspaper. (22) On the question of Clause 5 of the lease which contains a condition that lessee has to start building construction on the leasehold land within two years from the date of the lease and after obtaining sanction plan from the competent authority, he drew our attention to Clauses 2, 4 and 5 of the said lease deed prior to liquidation and within the time as stipulated in Clause 5 of the lease. (23) It is submitted that the company commenced and completed construction of the workers quarters to a substantial portion of the land measuring approximately 29,807 sq. meters within 43,407 sq. meters. Commencement and construction of said portion is also an admitted position as it would be evident from the appellants letter dated 21st of July, 1999 (which is appearing at page A-49 of the stay petition). (24) It is further contended that Clause 6 of the lease does not contain any covenant that the entire construction on the leasehold land has to be completed within any particular period. The condition was only about commencement of construction within the time prescribed under Clause 5 of the said deed of lease. (24) It is further contended that Clause 6 of the lease does not contain any covenant that the entire construction on the leasehold land has to be completed within any particular period. The condition was only about commencement of construction within the time prescribed under Clause 5 of the said deed of lease. Therefore, it is submitted that the appellant cannot allege that there was any violation of Clause 5 or 6 of the said Act nor can therefore, take any benefit of Section 111 (g) of the Transfer of Property Act. (25) It is further submitted that no notice of cancellation was served on the Official Liquidator by the appellant. Therefore, such purported cancellation is bad in law. In any event, it is submitted that the Official Liquidator was in possession of the property much prior to the alleged cancellation. (26) Hence, he submitted that the appeal should be dismissed. (27) It is also submitted on behalf of the respondent No. 2 that the entire assets and properties of the Company in Liquidation has been purchased at Rs. 22.50 crores. Upon payment of the entire sum, the Official Liquidator has given possession of the property on 30th September, 2003. The fact would be evident from 1he minutes of the meeting of the Official Liquidator and it is submitted that since the date of handing over the possession by the Official Liquidator the properties lying within the possession of the respondent No. 2. (28) It is further pointed out that the assignment of lease, in any event, has been given for the residuary part of the first term of the lease that is for seven years, out of which already one year has been expired. (29) In these circumstances, it was submitted that the respondent No. 2 has already acted in terms of the order of the Honble Court and altered its position in the manner as stated in the affidavit. In any event, the respondent No. 2 cannot suffer from any act on the part of the Court. (30) Hence, it is submitted that the respondent No. 2 has purchased the property in question. It is also applicable in the instant case and relying on the decision of Mahomed Akbar Zaman Khan v. Sukhdeo Pandae and Anr., reported in (1911)13 Cal LJ (Vol. XIII) 467 relied upon by the learned Advocate, appearing on behalf of the respondent. (30) Hence, it is submitted that the respondent No. 2 has purchased the property in question. It is also applicable in the instant case and relying on the decision of Mahomed Akbar Zaman Khan v. Sukhdeo Pandae and Anr., reported in (1911)13 Cal LJ (Vol. XIII) 467 relied upon by the learned Advocate, appearing on behalf of the respondent. It is further submitted that the decision cited by the appellant has no application in the facts and circumstances of this case. In view of this, it is submitted that the appeal should be dismissed. (31) After considering the facts of this case and after scrutinizing the facts in this matter, it appears to us that the appellant had knowledge of the fact that the company has gone into liquidation and, further notice of sale was duly published in the newspaper which is admittedly within the knowledge of the appellant since the appellant did not take any steps in the matter for a long time. After the sale was confirmed, the properties were handed over and that too, only for the residuary part of the first term of the lease. The appellant filed this application and there is no reason has been shown in the petition in support of such delay caused by the appellant. (32) In these circumstances, we have to come to the conclusion that the appellant had due notice of the facts of this case including the fact that the properties have been transferred and sold at this stage. (33) In our considered opinion, the possession of the property cannot be changed in any manner whatsoever since the order has given effect to. It is to be noted that the appellant did not take any steps in the matter for a long period. (34) Therefore, in our considered opinion, the contentions which have been made by Mr. P.C. Sen, learned senior Advocate on behalf of the respondent have substance and we do not have any hesitation to accept such contention and accordingly, we do not find that there is any merit in this appeal and the appeal is thus, dismissed.