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2022 DIGILAW 395 (GUJ)

State of Gujarat v. Madhav Ispat

2022-03-22

N.V.ANJARIA, SAMIR J.DAVE

body2022
JUDGMENT : N.V. Anjaria, J. Heard learned Assistant Government Pleader Mr. Sahil Trivedi for the appellant - State and learned advocate Mr. Hriday Buch for the respondent. 2. The present Letters Patent Appeal preferred under clause 5 of the Letters Patent by the State is directed against order dated 19th February, 2020 passed by learned single Judge, whereby the learned single Judge disposed of the Special Civil Application by issuing certain observations and directions. 2.1 Learned single Judge provided in para 8 of the order that the order of Special Secretary (Appeals), Revenue Department, dated 16.2.2018 impugned before him shall operate only with regard to the observations made in para 2 of the operative order. As per those observations, the petitioners were directed to approach the competent authority with proposal for payment of premium within stipulated time and the Collector was directed to decide the same. Learned single Judge maintained the said direction, but set aside para 1 of the Revisional order, in which the Collector's order forfeiting the land was maintained. 2.2 The Collector was directed to decide the application of the petitioner with regard to the regularisation of the land in question by fixing premium as per the policy dated 6.6.2003 or any other policy which may apply. The parties were directed to maintain status quo with regard to the land in question. 2.3 It may be stated that the Collector passed the order forfeiting the land on the ground that there was breach of condition of original lease deed and that the transfer of lad was in reach of condition. As stated above, the Revisional Authority confirmed the said aspect yet simultaneously relegated the petitioners to approach the Collector for determination of premium on the ground that the petitioners had shown such willingness and readiness. 2.4 Thus, while maintaining the above observations of the Revisional Authority in para 2 of the operative portion, learned single Judge at the same time directed the Collector, Bhavnagar to decide the application of the petitioner with regard to regularising the land in question by fixing premium. It was the parcels of land bearing Survey Nos. 240, 244, 245, 500, 501 and 502 admeasuring 28.01 bighas situated at Sihor, Bhavnagar District, which was the subject matter of dispute before the revenue authorities. 3. It was the parcels of land bearing Survey Nos. 240, 244, 245, 500, 501 and 502 admeasuring 28.01 bighas situated at Sihor, Bhavnagar District, which was the subject matter of dispute before the revenue authorities. 3. The facts were that the erstwhile Ruler of the then Bhavnagar State had granted the said land on 99 years' lease basis to one M/s. Bharat Electrical Manufacturing Co. Ltd. for the purpose of establishing a factory to manufacture electrical accessories. The lease commenced on 14.1.1948 as per order dated 6.1.1948 of the Administrator of erstwhile rural. 3.1 The order of grant, on record, which contained conditions inter alia that in the event of sale or transfer of the land, the Administrator of the Ruler would have to be informed in advance and further that 1/4th of the profit earned was required to be deposited with the erstwhile ruler. The lease deed dated 16.3.1948 was executed containing such condition. 3.1.1 The said grantee M/s. Bharat Electrical Manufacturing Co. Ltd. had obtained financial assistance from the then Saurashtra Finance Board established by the government of Saurashtra State to the tune of Rs. 2,80,000/-. The factory premises as well as the machinates were mortgaged for the said financial assistance on 5.6.1949. 3.1.2 It further appears that the allottee M/s. Bharat committed default in making the repayment. The Saurashtra Finance Board took the possession of the land as well as the factory premises on the ground of breach of conditions of mortgage. When the State Financial Corporation Act, 1951 came into force in the year 1952, the Saurashtra Finance Board merged with the Corporation. The Corporation auctioned the land as the allottee had failed to pay the dues. The highest bidder was Saurashtra Electrical and Metal Industries Pvt. Ltd., which offered Rs. 3.71 lakhs for the land as well as the superstructure. It appears that the said Saurashtra Electrical and Metal Industries assigned its rights to M/s. Bralco Metal Industries and finally on the basis of the Power of Attorney executed in favour of one Arvindbhai Ramjibhai Patel, land in question as well as the factory premises came to be transferred to the respondent Madhav Ispat. It was stated that presently part of the factory premises is operated and in other part of the land, which is vacant, there are quarters where the workers reside. It was stated that presently part of the factory premises is operated and in other part of the land, which is vacant, there are quarters where the workers reside. 3.2 Looking back, the application for change of use of land submitted by the petitioner came to be rejected by the Collector on 20.3.1999. On 12.9.2000, the Mamlatdar, Sihor proposed to the Collector respondent No.2. to take action against the petitioners on the ground that the land came to be transferred to the petitioners in breach of the conditions namely that the land was transferred without seeking prior permission of the competent authority. A show cause notice was issued on 9.8.2002 which was sent only to Saurashtra Electrical Metal Industries Private Limited and as per the case of the petitioners, it was neither sent nor received by the petitioners. The proceedings pursuant to the said show cause notice remained pending. In the meantime, the application was made by the petitioner to regularise the sale transaction. The Collector directed by communication dated 14.7.2004 for paying the amount of Rs. 65,41,488/- within stipulated time to process the prayer for regularisation of the sale transaction. The petitioners made representation that it was not possible to pay the huge amount in view of recession in the market. 3.3 The proceedings for breach of condition went on. The Collector issued show cause notice dated 3.2.2006 calling upon the petitioners as to why the land should not be forfeited. The reply was filed on 21.11.2006 and 7.3.2007 by the petitioners stating that there was no breach and the proceedings taken out after order dated 3.2.2006 of the Collector were misconceived. It was the contention raised that the petitioners were bona fide purchasers. It was also stated that the petitioners were ready to pay 1/4th amount of profit earned as per the condition imposed in the original deed of grant as well as the amount of premium, if there was breach of condition. A request was also made to the respondent No.2 Collector to convert the leasehold right to permanent allotment in view of the state government Resolution dated 6.6.2003 by computing proper price of premium as per the Resolution. The representation dated 14.9.2010 came to be made by the petitioners in that regard and the request was reiterated on 19.11.2013. A request was also made to the respondent No.2 Collector to convert the leasehold right to permanent allotment in view of the state government Resolution dated 6.6.2003 by computing proper price of premium as per the Resolution. The representation dated 14.9.2010 came to be made by the petitioners in that regard and the request was reiterated on 19.11.2013. 3.4 While the aforesaid facts and events stay in the background, the Collector, Bhavnagar District initiated case for breach of condition and passed order dated 5.1.2015. The Collector held in the said order that government had suffered loss when auction was held by the State Financial Corporation in the year 1951 and that the lands were transferred without seeking prior permission of the competent authority resulting into breach of condition. It was held that the petitioners tired to profiteer by transferring the land. The Collector took the view that the policy Resolution dated 6.6.2003 of the government shall not apply as the transfer had already made inter se by the grantee. It was concluded that the initial auction by the State Finance Corporation held in the year 1959 was without authority of law. The Collector directed forfeiture of the land, the superstructure as well as the premises to the state government. The state was directed to take over the possession of the land. 3.5 The petitioners thereafter preferred the Revision Application before the Secretary (Appeals), Revenue Department under section 211 of the Land Revenue Code. The Revision came to be decided by order dated 16.2.2018/3.3.2018. The Revisional Authority recorded the willingness of the petitioners to pay the total amount of premium as may be determined by the state government. It was mentioned that the land was subjected to industrial use between 1948 to 1968. Thereafter, Saurashtra Electrical and Metal Industries was in possession having purchased the land. It was stated that thereafter the petitioners purchased the land in the year 1995-1996. 3.6 Findings recorded by the Revisional Authority in para 4.1 and 4.2 were in favour of the petitioner. It was mentioned that the term of lease had not expired. The submission was noted that even in presenti the factory is operated on the land and further that the petitioners have shown willingness to pay the premium amount. 3.6 Findings recorded by the Revisional Authority in para 4.1 and 4.2 were in favour of the petitioner. It was mentioned that the term of lease had not expired. The submission was noted that even in presenti the factory is operated on the land and further that the petitioners have shown willingness to pay the premium amount. In para 4.2 of the order, the Revisional Authority further recorded about the policy reflected in Resolution dated 6.6.2003 of the Revenue Department, which inter alia provided to grant the lease land for non-agricultural purpose on payment of 100% market price. With such observations and findings, the Revisional Authority remanded the matter to the Collector in view of the willingness shown by the petitioners to pay the premium and to decide the same within 30 days in light of the policy of lease. The Revisional Authority, however, maintained the order dated 5.1.2015 of the Collector, Bhavnagar which had directed the forfeiture of the land. 3.7 The petitioners felt aggrieved by the order of the Revisional Authority and filed Special Civil Application. In the petition it was inter alia contended that there was no breach of any condition and that the condition when correctly read, did not provide for seeking prior permission before the sale of the land. It was also the case that land in question was put to use for the purpose for which it was allotted. It was contended that the petitioners were bona fide purchasers in auction conducted by the State Finance Corporation and took the possession of the land by paying the amount. 3.8 Learned single Judge noted the facts to observe that the dispute related to the year 1948 which was in respect of allottment of land; that the auction was carried out by the state government in the year 1959 and that the rights of the government were affected in that year as the auction undertaken by the State Finance Corporation was without authority of law and hence the subsequent transaction also suffered on account of breach of condition. According to learned Judge, this aspect was properly noted by the Revisional Authority. According to learned Judge, this aspect was properly noted by the Revisional Authority. 3.8.1 Learned Judge observed that though the direction was given by the Revisional Authority maintaining the order of Collector which provided for forfeiture of the land, the Revisional Authority simultaneously gave directions to the Collector to decide the proposal of the petitioners with regard to the payment of premium. Learned Judge viewed that the two directions were self-contradictory. He was of the view that no direction regarding premium could have been passed since the order of the Collector for forfeiting the property was maintained. 3.8.2 In para 7 of the impugned order, learned Judge observed the above aspects in the following words, "The S.S.R.D. has noted the aforesaid facts and infact has accepted the proposal of the petitioners to pay the premium. While, issuing the directions vide order dated 16.02.2018, the S.S.R.D. though has maintained the order passed by the Collector, Bhavnagar for forfeiting the property, simultaneously has given the directions to the Collector, Bhavanagar to decide the proposal of the petitioners with regard to the payment of the premium. Thus, a self contradictory order has been passed and no such directions could have been issued in wake of the fact since the order of the Collector, Bhavanagar dated 05.01.2015 for forfeiting the property has been maintained." 3.8.3 Thereafter, learned single Judge proceeded to pass the following directions, "8. Under the circumstances, the impugned order dated 16.02.2018 passed by the S.S.R.D. shall only operate with regard to the observations made in paragraph No. 2, wherein the petitioners are directed to approach with the proposal for payment within a period of 30 days and accordingly the Collector, Bhavnagar is directed to decide the same. The directions issued in paragraph No. 1 of the order dated 16.02.2018 are hereby quashed and set aside. 9. The Collector, Bhavnagar is directed to decide the application of the petitioners with regard to the regularization of land in question by fixing premium as per the policy dated 06.06.2003 or any other policy, which would be applicable in case of the petitioners. 10. The appropriate order shall be passed within a period of three months from the date of receipt of the writ of this Court. Till then the parties shall maintain the status-quo with regard to the land in question. Rule is made to the aforesaid extent. Direct service is permitted." 4. 10. The appropriate order shall be passed within a period of three months from the date of receipt of the writ of this Court. Till then the parties shall maintain the status-quo with regard to the land in question. Rule is made to the aforesaid extent. Direct service is permitted." 4. Learned Assistant Government Pleader submitted to assail the impugned order of learned single Judge that directions in para 8 and para 9 of the order of learned single Judge virtually meant allowing land to the petitioners. It was submitted that on one hand, learned single Judge provided that certain observations in para-2 of the order of the Revisional Authority would operate, at the same time, it set aside the direction in para 1 of the operative order. Thus, what was set aside was the part of the order of the Revisional Authority whereby it had maintained the order of the Collector forfeiting the land. Learned single Judge then proceeded to direct the Collector to decide the application of the petitioners with regard to regularisation of the land by fixing the premium. 4.1 Learned Assistant Government Pleader further submitted that land in question was transferred illegally by way of auction at the relevant point of time in favour of the petitioners. It was submitted that condition was specifically incorporated in the original lease deed that the Administrator of the erstwhile Ruler was required to be informed about the intended sale and further that 1/4th of the profit was to be deposited with the erstwhile ruler. It was next submitted that the Revisional Authority did not set aside the order of forfeiture of land which was directed by the Collector and the remand was made only to the extent of examining the applicability of acceptance of premium in light of the Resolution dated 6.6.2003 of the State Government. 4.2 On the other hand, learned advocate for the respondent original petitioners highlighted that the petitioners were the purchasers in auction and they had paid auction price to become the full-fledged owners of the land. He submitted by referring to the condition in the original lease deed that the condition was wrongly read and interpreted. The condition never contemplated the purchasers to intimate in advance. It was submitted that it was not a prohibitory condition and did not bar the transfer. He submitted by referring to the condition in the original lease deed that the condition was wrongly read and interpreted. The condition never contemplated the purchasers to intimate in advance. It was submitted that it was not a prohibitory condition and did not bar the transfer. 4.3 What condition provided, it was submitted, was that when the eventuality of sale of the land was to arise, the Administrator would be informed about the sale and that 1/4th of the profit earned would have to be paid to the erstwhile owner. He highlighted that it never contained the condition of prohibition or bar against the transfer. 5. Having noticed the controversy and the nature of orders passed by the revenue authorities, in particular Revisional Authority, it could be immediately gathered that the operative order of the Revisional Authority divided in two parts, was inconsistent. On one hand, the Revisional Authority maintained the order of the Collector, whereby the Collector directed forfeiture of the land and at the same time, maintained such status of forfeiture relegating the petitioners to the Collector, directing the Collector to determine the premium to be paid and to consider the case of the petitioners in light of the policy Resolution dated 6.6.2003 of the State Government, which was regarding grant of land on payment of market price. It was in view of this inconsistency in the order of Revisional Authority that the original petitioners-grantee filed the Special Civil Application. 6. It is true that the learned single Judge while deciding the Special Civil Application had issued directions as per paras 8 and 9 of his order. What was argued by learned Assistant Government Pleader feeling aggrieved by the order of learned single Judge was that the directions are such which have left no room for the Collector in rendering his decision about the premium and that the authority of the Collector to consider the case of the petitioners on merits is taken away and the Collector would be left with no option except to regularise the land and to permit the change of user. 6.1 There is some substance in the above submission. The main infirmity which this court finds in the order of learned single Judge is that the above directions are not backed by elaborate considerations of facts and the nature of condition about the transfer to have been incorporated in the original lease deed. 6.1 There is some substance in the above submission. The main infirmity which this court finds in the order of learned single Judge is that the above directions are not backed by elaborate considerations of facts and the nature of condition about the transfer to have been incorporated in the original lease deed. The proper findings about the nature and operation of the condition has not been recorded by learned single Judge, when the specific case of the respondents is that the condition is not a prohibitory condition which outrightly bar the transfer of the land. The only reasoning adopted by learned single Judge is that the Revisional Authority had accepted the proposal of the petitioners regarding payment of premium while maintaining the order of forfeiture of the Collector, both of which could not have a parallel operation. The justification or otherwise of the order asking the Collector to consider the plea of the petitioners about the premium of the land which may be paid by the petitioners, was the finding in respect of nature of the condition, the breach of which was the origin of controversy before the authorities resulting into the aforesaid orders. 6.2 It was highlighted by learned advocate for the respondents by submitting that the condition in question in no way prohibited the transfer. He emphatically submitted that the condition was of the nature, only requiring the transferee to intimate the erstwhile Ruler or the Administrator of the Ruler and to pay to him 1/4th part of the profit earned by the transferer out of the transaction. He further highlighted the fact that the original petitioner Madhav Ispat enjoyed the capacity of purchaser in auction held by Gujarat State Financial Corporation, which can be said to have been travelled to the petitioners. It was submitted that entitlement of the petitioners over the land and rights over the land was claimed in the context of such facts and that the petitioners were bona fide purchasers in the auction. It was also the submission of the petitioners that if the question of breach of condition is not to arise in that case, the policy Resolution dated 6.6.2003 was not applicable since it related to dealing with the cases of breach of conditions only. It was also the submission of the petitioners that if the question of breach of condition is not to arise in that case, the policy Resolution dated 6.6.2003 was not applicable since it related to dealing with the cases of breach of conditions only. It was submitted that order of forfeiture by the Collector and the order of the Revisional Authority uphelding the order of the Collector, did not take into account the aforesaid important aspects on merits. 7. Having regard to the nature of final directions we propose to pass in the present appeal, we have not gone into the merits of the aforesaid submissions made on behalf of the petitioners about the nature of condition that it was not a prohibitory condition etc.. We only notice that learned single Judge has not properly and elaborately dealt with the said aspect and without recording findings on such counts, directed the Collector to consider the aspect of premium. Such directions without express findings about the condition having not been breached, would remain tainted with infirmity. Observing thus, we rest there. 7.1 Learned advocate for the respondents also reiterated willingness of the respondents to pay the premium, which was also the stand of the petitioners before the authorities below. 8. For all the aforesaid reasons and considerations, we deem it expedient that the Revisional Authority decides the case afresh and pass appropriate consistent order afresh. In order to remand the matter, we set aside the order of learned single Judge, however without expressing any opinion on the merits of the controversy. Since the Secretary (Appeals), Revenue Department-the Revisional Authority would be deciding the matter afresh as per the directions above, the order of the Revisional Authority dated 16.2.2018 is also set aside. 8.1 It is further observed that the Revisional Authority shall decide the issues including the legality of forfeiture of land ordered by the Collector and while deciding so, the Revisional Authority shall not be guided by the reasonings supplied by the Collector in his order dated 5.1.2015 and take an independent view on the merits of the case treating the merits at large before it. The fresh decision shall be taken by the Revisional Authority within a period of four months from the date of receipt of copy of this order. The fresh decision shall be taken by the Revisional Authority within a period of four months from the date of receipt of copy of this order. 8.2 Till the Revisional Authority decides afresh as per the above directions, the parties shall maintain the status quo with regard to the land in question and further course of action shall be guided by the order which may be passed by the Revisional Authority. 9. The Letters Patent Appeal is allowed to the above extent and in the above terms. Since the main Appeal stands allowed as above, no orders are required to be passed in the Civil Application. Accordingly, it also stands disposed.