Research › Search › Judgment

Gujarat High Court · body

2025 DIGILAW 997 (GUJ)

Somabhai Jinabhai Patni v. Official Liquidator of Aryodaya Spinning And Weaving Mills Co. Ltd.

2025-09-08

A.Y.KOGJE, N.S.SANJAY GOWDA

body2025
ORDER : N.S. SANJAY GOWDA, J. 1. The facts leading to the filing of the above appeal are as follows: (1) M/s. Aryodaya Spinning & Weaving Mills Company Limited was ordered to be wound up by this Court in Company Petition No.33 of 1983 under an order dated5.5.1989 and the Official Liquidator was appointed to liquidate the assets of the company. (2) The Official Liquidator had issued eviction notices to the persons who were in occupation of a portion of the property belonging to the company and in response, the occupants had filed Company Application No.441 of 2009. However, this Court passed an order on 3.12.2009 in the following terms: “1. Official Liquidator submits that the notices are issued for ascertaining the legal status and rights of the applicants and similarly situated persons who are admittedly on the property of the company under liquidation. The ultimate course of action, pursuant to the notice, would be strictly in accordance with the provisions of Section 456 of the Companies Act. The applicants have, therefore, right to approach the Liquidator with their response and reply to the notice and further action thereupon would be in accordance with Section 456 of the Companies Act. 2. In view of this, Shri MK Vakharia, learned advocate seeks permission to withdraw this Company Application at this stage. Permission as sought for is granted. Application is disposed of as withdrawn. Notice discharged.” (3) The Official Liquidator presented a report in OLR No.35 of 2018 in Company Application No.112 of 2013 putting on record the events pursuant to the advertisement given for sale of the company’s properties and informed the Court that he did not receive any offer from any intending purchaser. This Court on consideration of the said report, passed an order on 12.4.2018, in the following terms: “1. The present report is filed to take on record the facts that in response to the advertisement given by the Official Liquidator for sale of the company’s properties, the Official Liquidator has not received any offer from any intending purchaser upto last date of receipt of the tender and with further prayer to permit the Official Liquidator to call a meeting of the sale committee to discuss and decide to take further course of action to sell the land of the company in liquidation. 2. 2. As stated in the report, the Court ordered to fix reduced upset price and EMD as recommended by the sale committee for sale of the company’s properties. However, despite fixation of reduced upset price, nobody came forward to bid for the company’s properties in response to the advertisement given by the Official Liquidator for sale of the company’s properties. 3. The Official Liquidator submitted that it appears that because of the encroachment on the land of the company in liquidation, nobody wants to take risk or chance to purchase the company’s properties with encroachment thereon. He submitted that the Court may presently take note of the facts stated in the report so as to permit him to call the meeting of the sale committee to take further course of action for sale of the company's properties. 4. In view of the above, the prayers contained in Paragraph No.8 are granted. However, the Court finds it appropriate to direct the Official Liquidator to take immediate steps for removal of encroachment from the land of the company in liquidation. The Official Liquidator shall make report on the action taken by him for removal of the encroachment from the land of the company in liquidation. It is observed that for the purpose of removal of the encroachment on the land of the company in liquidation, if the Official Liquidator after service of notice to the encroachers approaches the concerned authorities including the Police, office of the Collectorate and Ahmdeabad Municipal Corporation, such authorities may provide help to the Official Liquidator. The report stands disposed of.” (4) Thereafter, the Official Liquidator proceeded to issue notice to the occupants, which was challenged by them in Company Application No.16 of 2019 and this Court by an order dated 20.2.2019 had disposed of the said company application in the following terms: “Learned advocate Mr. Vakharia states that since the applicants desire to represent their case in response to the eviction notice issued by the Official Liquidator before the Official Liquidator, the applicants may be permitted to withdraw the application. Permission, as sought for, is granted. The application stands disposed of.” (5) The Official Liquidator thereafter, proceeded to issue a sale notice dated 27.1.2020 in respect of the residential properties. Permission, as sought for, is granted. The application stands disposed of.” (5) The Official Liquidator thereafter, proceeded to issue a sale notice dated 27.1.2020 in respect of the residential properties. The residents of that portion had filed Company Application No.16 of 2020 and this Court vide order dated 27.2.2020 had disposed of the said company application in the following terms: “By way of the present application, the applicants have prayed to quash and set aside the auction sale notice dated 27.1.2020 issued by the Official Liquidator qua the residential houses property known as Aryoday Spinning Mill Ni Chali admeasuring 3746.36 Sq. Mts. being part of Survey No.504/p, Final Plot No.4, City Survey No.189/p, T. P. No.16, Mouje Saher Kotda, Tal. Asarwa (City East), Dist. Ahmedabad as the applicants are residing over the said property with their families. I have heard learned advocate appearing for the applicant and learned advocate appearing for the Official Liquidator. It would be open for the applicants to approach the Official Liquidator with the prayers made in the present application. With the above observation, the present application stands disposed of.” (6) Pursuant to the said order, the applicants submitted a representation to the Official Liquidator on 10.8.2023, contending that they were occupying the premises to the extent of 3746.36 Sq. Mtrs., being part of Survey No.504/P, which formed a portion of the total land measuring 24,787 Sq. Mtrs. They contended that they were not encroachers but were entitled to legally reside there since they were working in erstwhile company and were provided accommodation by the erstwhile company and they were essentially the tenants and were in lawful possession of the property. They contended that they could not be treated as encroachers and that they were actually interested in purchasing the property and requested the Official Liquidator not to sell the said property to any third party without informing them. (7) The Official Liquidator, in response, replied by his letter dated 13.9.2023 and narrated the facts mentioned above and as regards the objection raised, stated as follows:- “(iv) In terms of the aforesaid order, your clients vide letter dated 28.02.2020 through an advocate namely Mr. Jainish P. Shah, who shares the same address as you, raised the same contention. This office has vide letter dated 18.03.2020 replied to the said representation whereby representation of your client was rejected. Jainish P. Shah, who shares the same address as you, raised the same contention. This office has vide letter dated 18.03.2020 replied to the said representation whereby representation of your client was rejected. The copy of the letter dated 18.03.2020 is enclosed herewith for ready reference. In this regard, it may be observed that your client is raising the same contentions time and again which has already been rejected by this office. Now, coming to the merits of the matter raised in your letter under reference wherein your client is claiming the land of the company in liquidation being legal heirs of ex- workmen of the company in liquidation. In this regard, your attention is invited towards the Provisions of Section 445 (3) of the Companies Act, 1956, wherein it is stated that, winding up order shall be deemed to be notice of discharge to the officers and employees of the company in liquidation. Hence, once Company goes into liquidation, the relationship of the employer-employee comes to an end and, therefore, the ex-employee has no right to stay in the premises allotted by the Company by virtue of his employment. In view of the aforesaid facts, your client has no locus to file another representation in compliance of the order dated 27.02.2020 nor occupy the land of the company in liquidation in terms of Provision of Section 445 (3) of the Companies Act, 1956. It seems that by issuing such letter you are only trying to hinder the Sale Process initiated by this office in compliance of the order passed by the Hon'ble High Court of Gujarat.” (8) The Official Liquidator vide an application to the Company Court requested for permission to sell the land in question through auction. The Company Court passed an order dated 14.6.2024 in the following terms: “3. Considering the fact that by way of this report, the Official Liquidator has sought for permission to sell the land in question through auction and whereas since the valuation report, gives an enhanced value of the land in question therefore, it would be appropriate at this stage to direct the Sale Committee to take appropriate steps to ensure that the auction be conducted as per a pre-set schedule. Proposed schedule is reproduced as hereinbelow: PROPOSED SALE SCHEDULE OF ARYODAY SPG. & WEVG. MILL CO. LTD ( IN LIQN.) Sr. Proposed schedule is reproduced as hereinbelow: PROPOSED SALE SCHEDULE OF ARYODAY SPG. & WEVG. MILL CO. LTD ( IN LIQN.) Sr. No. Particulars Date 01 Issuance of sale proclamation in Newspaper 26.06.2024 02 Issuance of Tender Forms to the intending purchases 27.06.2024 03 Inspection to the intending purchasers 04.07.2024 04 Last date of receipt of Tenders 08.07.2024 08.07.2024 05 Opening of Tenders and E-Auction will be conducted through https:olacution.envida.com 17.07.2024 4. The Sale Committee after the tenders are opened and the highest bidder is selected shall place an appropriate report through the Official Liquidator for confirmation of the auction before this Court. 5. It is further directed that Official Liquidator shall publish the sale proclamation in newspapers namely ‘Gujarat Samachar’ in Gujarati Script in all Gujarati editions and in newspaper ‘Times of India’ in English in all editions to the State of Gujarat and whereas sale proclamation shall also be uploaded on the website of the Ministry of Corporate Affairs as well as on the website of the High Court of Gujarat. 6. It is also clarified that the auction notice shall inter alia ensure separate EMDs for the freehold land as well as leasehold property and the same would be in tune with the direction as observed hereinabove i.e. as per the fresh valuation report.” (9) Pursuant to the said order, the Official Liquidator issued a sale notice dated 20.6.2024 notifying that he intended to sell the property and fixed the upset price to the tune of Rs.69.87 crores. (10) As far as this appeal is concerned, it would be relevant only to consider Lot No.1 of the said sale notice. (11) Lot No.1 was described in the sale notice in the following terms:- Lot No. Description of Properties Upset Price (Rs.) EMD (Rs.) 01 Approximately 24,787 Sq. Mtrs., ?.?. freehold Land along-with civil construction [including Encroachment residential chawls over 3,945.00 Sq. Mtrs land) thereon situated at Survey No.504/P, F.P. No.4/P, C.S. No.189/P, T.P. No.16, Mouje (Saher Kotda), Tal. Asarwa (City East), Dist. & SubDistrict. Mtrs., ?.?. freehold Land along-with civil construction [including Encroachment residential chawls over 3,945.00 Sq. Mtrs land) thereon situated at Survey No.504/P, F.P. No.4/P, C.S. No.189/P, T.P. No.16, Mouje (Saher Kotda), Tal. Asarwa (City East), Dist. & SubDistrict. Ahmedabad 34,04,27,700/- 3,40,00,000/- (12) Note No.01 and Note No.04 which would also be relevant for the purpose of this case, are reproduced here-under to have a complete understanding of the matter: “(01) The said of asset of the Company are on “AS IS WHERE IS AND WHATEVER THERE IS BASIS” (04) Kindly note that total area of the freehold land mentioned herein above bearing Survey No.504 is 24,787 Sq. Mtrs., which is confirmed by the Town Planning and Assessment Authority as per records maintained by the District Survey Office and out of total area of land, there is an encroachment over 3,945.00 Sq. Mtrs. of freehold land. (13) Thus, at an undisputed point of time i.e., when the property of the Company was proposed to be sold, it was an admitted fact that an extent of 3,945 Sq Mtrs. had been encroached upon and thus was not in possession of the Official Liquidator. (14) The auction was conducted on 15.7.2024, in which two entities had emerged as highest bidders. M/s. Arham Developers was the highest bidder having made an offer of Rs.70.27 crores and at that stage, M/s. Devbhumi Agrifresh Pvt. Ltd. made an application being Company Application No.44 of 2024 showing willingness to offer the higher amount than that of Rs.70.27 crore. (15) The Company Court by its order dated 22.10.2024 recorded the fact that M/s. Bhagyalaxmi Corporation (respondent No.4 therein) had made an offer of Rs.81 crore, whereas M/s. Devbhumi Agrifresh Pvt. Ltd. made an offer of Rs.82 crores. The Court recorded the fact that M/s. Bhagyalaxmi Corporation was not interested in raising its bid to match the bid of M/s. Devbhumi Agrifresh Pvt. Ltd. and the Company Court, therefore, declared M/s. Devbhumi Agrifresh Pvt. Ltd. (respondent No.2 herein) as the highest bidder and confirmed the sale in its favour. The relevant portion of the order reads as follows: “15. On 16/10/2024, after hearing all the Ld Advocates for respective parties on objections raised by the respondent no. 3, inter-se bidding was held between applicant and respondent no. The relevant portion of the order reads as follows: “15. On 16/10/2024, after hearing all the Ld Advocates for respective parties on objections raised by the respondent no. 3, inter-se bidding was held between applicant and respondent no. 3 & 4, whereby, respondent no.4 i.e. M/s Bhagyalaxmi Corporation had offered highest bid of Rs 81,00,000,00/- (81 Crores) and against it applicant i.e. Devbhomi Agrifresh Pvt Ltd had offered highest bid of Rs. 82,00,000,00/- (82 Crores) whereas Ld Advocate of respondent no.3 i.e. M/s Arham Developers had sought time of two days to seek instructions as to whether respondent no.3 wants to increase his bid than offer of applicant, so, matter was adjourned to 18.10.2024. Thereafter, 18.10.2024, Ld Advocate Mr Acharya for respondent no 3 submitted that respondent no.3 does not want to participate in further inter-se bidding and instead requested for refund of his EMD amount of Rs. 7,00,000,00/- . therefore, in view of subsequent development, present respondent no.4 i.e. M/s Bhagyalaxmi Corporation stands as second highest bidder with offer of Rs 81,00,000,00/- and present applicant i.e. Devbhomi Agrifresh Pvt Ltd is declared as first highest bidder with offer price of Rs. 82,00,000,00/- and accordingly sale is confirmed in favour of applicant i.e. Devbhomi Agrifresh Pvt Ltd with highest offer price of Rs. 82,00,000,00/- as per Terms and Condition of Sale issued by the Official Liquidator.” (16) Respondent No.2- M/s. Devbhumi Agrifresh Pvt. Ltd. thereafter made an application being Company Application No.4 of 2025, requesting for extension of time of three months to deposit the balance amount and the Company Court taking note of the fact that M/s. Devbhumi Agrifresh Pvt. Ltd. deposited earlier two installments as per the condition of auction, vide order dated 17.2.2025 thought it appropriate to grant the period of three months from 21.2.2025 to make balance payment. The Company Court directed M/s. Devbhumi Agrifresh Pvt. Ltd. to pay the balance amount of Rs.46,50,00,000/- with interest @ 10% per annum from 21.2.2025 till the date of actual payment and the Court also permitted M/s. Devbhumi Agrifresh Pvt. Ltd. to pay the balance amount in three equal installments. (17) M/s. Devbhumi Agrifresh Pvt. Ltd. accordingly paid third installment on 15.5.2025 along with interest. (17) M/s. Devbhumi Agrifresh Pvt. Ltd. accordingly paid third installment on 15.5.2025 along with interest. (18) On 19.5.2025, M/s. Devbhumi Agrifresh Pvt. Ltd. filed Judges’ Summons seeking for the following reliefs: “B. This Hon'ble Court may be pleased to ratify and approve act of the applicant whereby entire consideration amount along with penal interest amount has been deposited on 15.05.2025 by way of RTGS in compliance of order dated 17.02.2025 by deducting TDS as per Section 194-IA of Income Tax Act, 1961. C. That this Hon'ble Court be pleased to approve and vet "Draft Conveyance/ Sale Deed" for freehold land and "Draft Deed of Conveyance" for leasehold land of the subject land ('ANNEXURE- E') and further this Hon'ble Court be pleased to direct the official liquidator to initiate consequential proceedings for executing the aforementioned two deeds;” (19) This application was taken up for consideration by the Company Court and was disposed of vide order dated 4.7.2025 in the following terms: “1. This application is filed to approve and vet the ‘Draft Conveyance Deed’ in favour of the applicant. It is case of the applicant that the applicant has paid entire consideration along with penal interest as directed by this Court under order dated 17.02.2025 through RTGS. 2. Therefore, in view of the payment made as directed by this Court vide order dated 17.02.2025, learned advocate for the applicant submitted that he may be permitted to execute the ‘Draft Conveyance Deed’ and prior thereto, he may be permitted to take possession of the subject property. Thus, it is case of the applicant that on the payment of consideration made as per the Sale Proclamation dated 27.06.2024, he may be permitted to take possession of subject property and execute the sale deed in his favour. 3. This aspect could not be disputed by learned advocate Mr. Dhawan Jayswal appearing for Official Liquidator. Learned advocate Mr. Jayswal submitted that pursuant to directions of this Court dated 17.02.2025 the applicant has paid the amount as per the sale proclamation dated 27.06.2024 in the office of Official Liquidator and therefore they do not have any objection if the Conveyance Deed is executed in favour of the applicant and also the possession is handed over to the applicant. 4. Learned advocate Mr. Jayswal submitted that general procedure adopted is to handover the possession and thereafter to enter into the execution of conveyance deed. 5. 4. Learned advocate Mr. Jayswal submitted that general procedure adopted is to handover the possession and thereafter to enter into the execution of conveyance deed. 5. Learned advocate for the applicant submitted that they will follow the due process. 6. Accordingly, the applicant is permitted to execute the Conveyance Deed in its favour and also to take possession of the subject property. 7. With the above directions, present application is disposed of.” (20) The appellants herein preferred Misc. Civil Application No.2048 of 2025 requesting the Company Judge to recall the order dated 4.7.2025. (21) The Company Judge vide order dated 2.9.2025 has refused to recall the said order giving following reasons : “6. Considered the submissions and documents on record. It is noticed that respondent No.2 had purchased the property pursuant to the order of this Court dated 08.04.2025 in OLR NO.24 of 2025 in Company Petition No.33 of 1983. As recorded in the order dated 08.04.2025 prior to purchase of the property in question, the official liquidator had published sale proclamation in the newspaper to invite offers from intending purchaser for the sale of the property. Further, as prescribed under Rule 148(1) of the Company Courts Rules, 1959, the Official Liquidator had followed the process inviting claim from all secured creditors, workmen and preferential creditors of the company in liquidation and thereafter, after due verification of the claim, the property was permitted to be auctioned as ‘as is where is and whatever there is basis.’ Undisputedly, till the order dated 08.04.2025, the workers were represented through Union and they have participated in the proceedings. Therefore, in the opinion of this Court, when the order was passed dated 04.07.2025 in Company Application No.22 of 2025 in OLR No.42 of 2024 permitting the handing over the possession to respondent No.2 and to execute conveyance deed, no error was committed by this Court. Moreover, the submission canvassed on behalf of Official Liquidator that since the property has been purchased by respondent No.2 after payment of due consideration, official liquidator does not have right over the asset of the company, merit acceptance. Moreover, there is no error in the order dated 04.07.2005, which calls for recall of the order. Moreover, the submission canvassed on behalf of Official Liquidator that since the property has been purchased by respondent No.2 after payment of due consideration, official liquidator does not have right over the asset of the company, merit acceptance. Moreover, there is no error in the order dated 04.07.2005, which calls for recall of the order. On both these grounds, the present application fails and is hereby rejected.” (22) As a result, the appellants are before this Court challenging the order dated 4.7.2025 and also the order dated 2.9.2025 by which the Company Court permitted M/s. Devbhumi Agrifresh Pvt. Ltd. to execute the conveyance deed in its favour and also take possession and also the order dated 2.9.2025, by which the Company Court refused to recall the order and rejected the request made by the appellants. 2. Learned counsel Mr. Hriday Buch appearing on behalf of the appellants put forth the following contentions: (1) The sale notice dated 20.6.2024 had clearly stipulated the sale of the assets of the company, i.e. three lots, on “AS IS WHERE IS AND WHATEVER THERE IS BASIS” and the property was clearly described as containing an encroachment over 3945 Sq. Mtrs. (2) He contended that once the Official Liquidator himself had candidly admitted that there was encroachment over 3945 Sq. Mtrs. freehold land, the Company Court could not have permitted M/s. Devbhumi Agrifresh Pvt. Ltd. to take possession of the said encroached property. (3) He highlighted the fact that though the application made by M/s. Devbhumi Agrifresh Pvt. Ltd. was only for approving the ratification and to process the draft conveyance deed, the Company Court had gone beyond the said prayer and had permitted M/s. Devbhumi Agrifresh Pvt. Ltd. to take possession which was completely wrong. (4) He submitted that since it was an admitted fact that the appellants were in possession, the Company Court ought not to have passed an order permitting M/s. Devbhumi Agrifresh Pvt. Ltd. to take possession, which basically permitted it to take possession without following due process of law. (5) He submitted that though M/s. Devbhumi Agrifresh Pvt. Ltd. stated that they would follow due process, taking the advantage of the order and misinterpreting same, attempts were being made to dispossess the appellants by using the State machinery. (5) He submitted that though M/s. Devbhumi Agrifresh Pvt. Ltd. stated that they would follow due process, taking the advantage of the order and misinterpreting same, attempts were being made to dispossess the appellants by using the State machinery. (6) He submitted that unless due process that M/s. Devbhumi Agrifresh Pvt. Ltd. had undertaken to follow was clearly specified, the order of the Company Judge was capable of misinterpretation and therefore, it was necessary for the Company Judge to at least clarify the order, if not recall it in its entirety. 3. Mr. Kamal Trivedi, learned Senior Counsel, appearing on behalf of the respondent No.2- M/s. Devbhumi Agrifresh Pvt. Ltd. put forth the following contentions: (1) He submitted that every possible attempt had been made by the appellants to continue their illegal occupation which had miserably failed. He submitted that despite the rejection of their challenge to the eviction notices and also the Official Liquidator’s communications dated 13.9.2023 and 17.3.2020 having not been challenged, impediments were being put up by them to prevent M/s. Devbhumi Agrifresh Pvt. Ltd. to secure possession of the land which had purchased by paying a huge soncideration.. (2) He submitted that since the appellants had no right to be in possession by virtue of the company being in liquidation, they cannot obstruct taking over the possession of the property by M/s. Devbhumi Agrifresh Pvt. Ltd. In this regard, he placed reliance on Section 456(3) of the Companies Act to contend that the order of winding up, by operation of law, amounted to discharge of the employees on account of the company being ordered to be wound up and, therefore, the appellants could not claim that they are entitled to be in possession. 4. Learned counsel Mr. Dhawan Jayswal appearing on behalf of the Official Liquidator submitted that they were oblige to sell the property and handover it to the successful bidder, i.e. M/s. Devbhumi Agrifresh Pvt. Ltd., and they had accordingly handed over the possession and their acts could not be found fault with since they had only complied with the orders passed by the Company Judge. 5. Learned counsel Mr. D.S. Vasavada, appearing on behalf of the respondent Textile Labour Association contended that the sale of the property was only to ensure that the workers’ dues are paid and, therefore, the auction sale ought not to have been interfered with. 6. 5. Learned counsel Mr. D.S. Vasavada, appearing on behalf of the respondent Textile Labour Association contended that the sale of the property was only to ensure that the workers’ dues are paid and, therefore, the auction sale ought not to have been interfered with. 6. In the light of the above, the questions to be considered are as to whether the order of the Company Court permitting the respondent No.2- M/s. Devbhumi Agrifresh Pvt. Ltd. to take possession of the property was justified and whether the reasoning given by the Company Judge refusing to recall the order is correct? 7. At the very outset, it would be necessary to state the admitted facts: (1) M/s. Aryodaya Spinning & Weaving Mills Company Ltd. was ordered to be wound up on 5.5.1989 and in order to liquidate its assets, the Official Liquidator under the orders of the Company Court issued sale notice proposing to sell the assets of the company in order to ensure that the dues of the company were repaid. (2) It is not in dispute that the appellants do not have any title over the property of the company in order to object to the sale of the said property. In fact, it is admitted by the learned counsel for the appellants that the appellants had no locus to challenge either the auction sale or its confirmation by the Company Court. It is, therefore, clear that the sale of the property of the company in liquidation has become final and conclusive. (3) However, the controversy has arisen regarding handing over the possession of the property that has been sold in the public auction. (4) It is not in dispute that the sale notice had clearly and categorically stated that out of total 24787 Sq. Mtrs. of land, there was encroachment/ residential chawls over an extent of 3945 Sq. Mtrs. of land. This notice also indicated that the assets of the company was being sold on “AS IS WHERE IS AND WHATEVER THERE IS BASIS”. (5) It was therefore obvious that the purchaser would have to purchase the total extent of land (24787 Sq. Mts) including the encroached portion of 3945 Sq. Mts in the public auction. Mtrs. of land. This notice also indicated that the assets of the company was being sold on “AS IS WHERE IS AND WHATEVER THERE IS BASIS”. (5) It was therefore obvious that the purchaser would have to purchase the total extent of land (24787 Sq. Mts) including the encroached portion of 3945 Sq. Mts in the public auction. In other words, possession of the entire land would be handed over only symbolically, and the purchaser had to accept the extent of land which had been encroached upon as a part of his purchase and physical possession of this encroached portion would not be handed over. (6) If a property has been sold, to realize the assets of the company, the conveyance of the title pursuant to such sale cannot be doubted at all. However, the possession of the property can be handed over by the Official Liquidator only in respect of that extent of the land that the company was in possession. (7) Since, admittedly, an extent of 3945 Sq. Mtrs. out of 24,787 Sq. Mtrs., of Survey No.504 had been encroached upon and there was no residential chawls in existence, it is obvious that the Official Liquidator was not in possession of this encroached portion of the land and he could not therefore hand over possession of the encroached portion. In other words, the encumbrance on the property auctioned i.e., the encroached portion of 3945 Sq. Mts would devolve on the auction purchaser. 8. Since the auction notification also stipulated the sale of the assets of the company in liquidation on “AS IS WHERE IS AND WHATEVER THERE IS BASIS” and there was a clear stipulation that an extent of 3945 Sq. Mtrs. of land had been encroached upon, it is obvious that the auction purchaser was buying the land including the encroached portion, and he would have to obviously secure possession of this encroached portion in a manner known to law and he could not even expect the Official Liquidator to hand over possession of this encroached portion. 9. The auction purchaser, having agreed to the terms of the sale notice about having to acquire the property on a “AS IS WHERE IS AND WHATEVER THERE IS BASIS” could not even seek for any orders from the Compnay Court regarding the possession of the encroached portion of 3945 Sq. Mts. 10. 9. The auction purchaser, having agreed to the terms of the sale notice about having to acquire the property on a “AS IS WHERE IS AND WHATEVER THERE IS BASIS” could not even seek for any orders from the Compnay Court regarding the possession of the encroached portion of 3945 Sq. Mts. 10. In fact, the Company Judge, while passing the order on 4.7.2025 has accepted this position when the clear statement made that M/s. Devbhumi Agrifresh Pvt. Ltd. that it would follow the due process was recorded. This would obviously mean that the auction purchaser also acknowledged that it cannot take possession unilaterally and it will have to approach appropriate legal forum to secure possession in accordance with law. 11. Though the order of the Company Judge though states that the applicant was permitted to take possession of the property, in order to remove any ambiguity, it will have to be clarified that the company Judge had not permitted respondent No.2- -M/s. Devbhumi Agrifresh Pvt. Ltd. to take possession unilaterally without approaching the appropriate legal forum to secure possession in a manner recognized by law. 12. In this context, the following observations made by the Apex Court in the case of East India Hotels Ltd. v. Syndicate Bank reported in 1992 Supp (2) SCC 29 would be necessary: “44. Law respects possession even if there is no title to support it. No-one is permitted to take law in one's own hands and to dispossess the person in actual settled possession without due course of law. No person can be allowed to become a judge in his own case. The object of Section 6 is to discourage people to act in self help, however, good their title may be. The licensee in possession for well over 15 years is in settled possession and is entitled to remain in possession and make use of the premises for the purpose for which it was demised until it is ejected in due course of law. The acquiescence of the landlord in this context would be to the initial unlawful entry into possession and continuation thereafter but not to the continuance in possession of the licencee after the expiry or termination of the licence. That was what this court appears to have meant in the previous decisions. The acquiescence of the landlord in this context would be to the initial unlawful entry into possession and continuation thereafter but not to the continuance in possession of the licencee after the expiry or termination of the licence. That was what this court appears to have meant in the previous decisions. Take for instance that when a licence was granted for a couple of years and after its expiry, by efÒux of time, or on termination, if the possession of the licensee, though unlawful and unjust is not protected, the aggressor or mighty would trample upon the rights of the weak and meek and denial of relief under Section 6 would put a premium upon the aggression or treachery or tricks. No doubt long delay in disposal of cases due to docket explosion became a ruse to unscrupulous litigant to abuse the due course of law to protract litigation and remain in unjust or wrongful possession of the property. Landlord could be suitably compensated by award of damages. It cannot, by any stretch of imagination, be said that a person in settled possession, though unlawful, is not entitled to the protection under Section 6 of the Act. Maintenance of law and order, and enthusing confidence in the efficacy of rule of law are condition precedent for orderly society. Therefore, giving primacy, legitimacy or legality to the conduct or acts of the landlord to take possession of the property in derogation of the due course of law would be deleterious to rule of law and a pat on high-handedness or self-help.” It is, therefore, clear from the above declaration of the law that one person cannot dispossess a person who is in settled possession. In other words, even a rank trespasser cannot be dispossessed except in a manner known to law. 13. In our view, the interest of the appellants herein would be sub-served, if it is clarified that the Company Judge has only permitted respondent No.2- M/s. Devbhumi Agrifresh Pvt. Ltd. to secure possession of the property in a manner known to law, i.e. by approaching the appropriate legal forum and secure possession in a manner acceptable in law. To this extent the order dated 04.07.2025 shall be modified. 14. It is however made clear that the sale of the assets of the company i.e., the sale of the total extent of land measuring 24,787 Sq. To this extent the order dated 04.07.2025 shall be modified. 14. It is however made clear that the sale of the assets of the company i.e., the sale of the total extent of land measuring 24,787 Sq. Mts in favour of M/s Devbhoom Agrifresh (P) Ltds., has indeed become final and this sale has also been accepted by the appellants. The appellants cannot therefore have any objection to the execution of the conveyance deed in favour of M/s Devbhoomi Agnifresh (P) Ltd., since the auction purchaser has an indefensible right to secure necessary instruments to complete the acqusition of its title over the purchased land. 15. The appeal is accordingly disposed of holding that respondent No.2- M/s. Devbhumi Agrifresh Pvt. Ltd. has acquired the title over an extent of 24787 Sq. Mtrs. of land in Survey No.504, including an extent of 3945 Sq. Mtrs., which has been encroached upon where residential chawls have been erected. 16. It is however clarified that Respondent No.2- M/s. Devbhumi Agrifresh Pvt. Ltd. shall secure possession of the encroached portion of land i.e. 3945 Sq. Mtrs. only by approaching appropriate forum and secure the possession in a manner recognized by law and they cannot by virtue of the order dated 04.07.2025 by which their request for execution of a conveyance deed was accepted to secure possession through the assistance of the Police or by force. The appeal is DISPOSED OF accordingly.