Fairdeal Supplies Ltd. v. K. Arumugam Secretary, South Indian Viscose National Workers Union
2014-12-16
M.SATHYANARAYANAN, SANJAY KISHAN KAUL
body2014
DigiLaw.ai
Judgment Sanjay Kishan Kaul, C.J. The appellant has filed the present appeals against an order dated 17.02.2014 passed by learned Company judge while dealing with the application filed by the workmen, contending that the property sold to them through a negotiated sale has not been fully conveyed to them. 2. The matter has chequered history qua the sale of the assets of the company in Liquidation M/s. SIV Industries limited. The land, superstructure and machinery thereof was originally sought to be auctioned in 2007 when the appellant before us bid 240 Crores for them but later tried to backtrack. The appellant had also deposited Rs.23.5 Crores and continued the battle till the Honourable Supreme Court but unsuccessfully. The resultant situation was that the amount deposited by the appellant was forfeited and a fresh auction has to be held. 3. The fresh auction was in pursuance of the advertisement published in the Times of India dated 22.2.2009 In terms thereof, an extent of 253. 89 acres of land and building there on was sought to be sold on ? as is where is basis? with the total upset price fixed at Rs.100 Crores. However, it appears that there was no response to the notice and ultimately the major secured creditors M/s. ARCIL proposed a negotiated sale for Rs.101 Crores, once again in favour of the appellant. This proposal was accepted by the learned Company Judge by order dated 26.3.2009 the full price was paid and possession was taken over. 4. The matter did not end there, as the workmen Association filed the C.A.No.1048 of 2010, seeking an auction of land measuring 7.33 acres in S.P.N0.39 and 40, as according to them, this is the land under the officers Quarters, which did not form part of the sale transaction. The appellant on the other hand also filed C.A.No316 of 2013, seeking execution of the sale deed in their favour, inclusive of 7.41 acres of land, These two applications have been dealt with in the common impugned order. There was an interim order operating during the pendency of these applications, not to demolish the structure on 7.41 acres and in order to facilitate the transfer at least of the undisputed land and superstructure there was an agreed arrangement, whereby a sale deed had been executed to the extent of land measuring 246.05 acres with superstructure thereon -together with building on 7.41acares of land.
The net result was that while the superstructure over 7.41 acres of land was conveyed the land was not conveyed. The possession of the superstructure has also been handed over to the appellant. 5. A perusal of the impugned order shows that the learned company judge has taken note of the total land offered for sale of 253.89 acres, but on that it could not direct conveyance of 7.41 acres of land, which was in occupation of the workers. The burden was sought to be shifted on the appellant to obtain requisite commitment from M/s. ARCIL for verifying the total extent of land offered for sale or it should have verified at site before accepting the final order for sale. Simultaneously, C.A.No.1048 of 2010 filed by the workers was allowed, directing the official liquidator to bring the sale by public auction qua 156 residential quarters as in S.F.Nos 38/2A2, 40/2C 40/3B1B, 40/4, 40/5C2 and 40/6A. 6. We have heard the learned counsel for both parties at length on more than one date of hearing. 7. We had asked for the valuation report to be filed before us. We also considered it appropriate to issue notice to M/s. ARCIL, the principal secured creditor to find out what they had to say about the problem. 8. The stand of the workers is that the total extent of land available is about 272.30 acres as to how they arrived at this figure is contained in paragraphs 20 and 21 of their application C.A. No.1048 of 2010 which reads as under: "20 As per the survey plan, the total extent of land available in Sirumalai village is about 272.30 acres, which comprises of (i) 251.925 acres belonging to SIV Industries (ii) 7.40 acres where the quarters of the employees of SIV are located (iii) 2.21 acres where the officers quarters of the company are located (iv) 9.135 acres where a school is now located and (v) 1.63 acres where the lands of another company by name SIV Mecobar lignite Limited are located. The survey plan also indicates that there are roads inside the entire area belonging to the company in liquidation and that these roads constitute 11.73 acres. 21.
The survey plan also indicates that there are roads inside the entire area belonging to the company in liquidation and that these roads constitute 11.73 acres. 21. The applicant has filed objections to the survey report, primarily contending that the survey of such a vast extent of land could not have been completed within 5 days and that even a laser survey would take 10 to 15 days. The applicant had indicated the situation at site, as follows: Total land Exclusions 272.30 acres Land sold to school 7.00 acres Land encroached by school 2.135 acres Mc. Gabor Original land 1.63 acres Further land transferred to Mc Gabor 2.00 acres Senior Officers quarters 2.21 acres Public Road 6.32 acres SIV quarters area 7.40 acres Total Exclusion 28.695 acres Therefore, according to the applicant, the balance available with the purchaser is only 243.605 acres, which is far below what was agreed to be sold." 9. On a perusal of the valuation report, we found that the lands measuring 7.40 acres have been specifically excluded from the valuation report as per the inner page -13 of the valuation report. The total extent of land is 260.69 acres, after excluding the portion as provided in the valuation report. An extent of 253.89 acres was sold as per the order dated 17.02.2014, which ultimately resulted in negotiated sale and acceptance by the Court. 10. What really emerges is that it is not as if there is a shortage of land, but some survey numbers have been included in the valuation of 260.69 acres which are not being accounted for. The alleged shortage has not taken into account some land by the appellant on the ground that there is a public road, though the land stands in the name of the company in liquidation. There is thus no difficulty in conveying 253.89 acres of land to the appellant without this 7.40 acres, where the quarters are located. We may note that from this 260.69 acres, 7 acres was sold to the union, where a school was located. 11. The mistake which that has crept in really is that in the valuation report, while including the land underneath the superstructure, the superstructure was included. In the valuation report, this was reflected at S.No.29 and 31. 12.
We may note that from this 260.69 acres, 7 acres was sold to the union, where a school was located. 11. The mistake which that has crept in really is that in the valuation report, while including the land underneath the superstructure, the superstructure was included. In the valuation report, this was reflected at S.No.29 and 31. 12. M/s. ARCIL has also filed an affidavit to state that what is to be conveyed to the appellant is land measuring 253.89 acres along with building, plant and machinery. 13. We may also note another aspect that 7.40 acres of land is actually across the road from where the main factory premises are located. Though in proximity. There is, thus, no difficulty in segregating the 7.40 acres. We did endeavour to resolve the issue by proposing to the appellant whether he will be willing to at least pay proportionate price for 7.40 acres of land, but learned counsel on instruction categorically rejected that offer. 14. For all the aforesaid reasons, we dispose of the appeals with the following directions. (i) The appellant has to be conveyed 253.89 acres of land or about that area as it is sale on as where is basis. (ii) The land to be conveyed to the appellant is not required to include 7.40 acres where the quarters are located. (iii) Since the so called road is on the land of the company in liquidation the appellant cannot get away by saying that it has become a public road and thus that the land would not form part of the land which is to be sold to the appellant. (iv) Since the superstructure on the 7.40 acres of land already stands sold to the appellant, the appellant would be within its right to dismantle and remove the same for its own benefit. However, learned counsel for the appellant suggests that the better course of action would be to get the superstructure valued separately so that 7.40 acres of land can be sold and the value obtained for the superstructure can be received by the appellant. It may be open to him either to remove or to sell it to the purchaser. (v) The official Liquidator to get the valuation of the land and to bring up the said portion for sale by auction within a maximum period of three months from today.
It may be open to him either to remove or to sell it to the purchaser. (v) The official Liquidator to get the valuation of the land and to bring up the said portion for sale by auction within a maximum period of three months from today. (vi) It will be open to the appellant to make a bid for the land, but if it becomes successful, naturally it would not have to pay for the superstructure which already stand transferred to it as per the earlier sale deed. (vii) The proceeds would be disbursed by the Official Liquidator in accordance with law for the benefit of the secured creditors and the workers expeditiously 15. The original side appeals accordingly stand disposed of, confirming the impugned order, subject to the aforesaid modifications. No costs.