2014 (7) TMI 1187 - HC - Companies Law

Invalidation of sales - violation of the condition of non-alienation contained in the assignments - Non-production of the Assignment Registers - Held that - What this Court is unable to comprehend is the failure of the State to produce the Assignment Registers for the period prior to 1969. As noted above, PW-1 in her evidence stated that these records are kept in old record room. Substantial time was granted to the State to produce the Assignment Registers. Despite availing such time, the State failed to produce these records. The non-production of the Assignment Registers for the earlier periods would give rise to an adverse inference against the State that it has deliberately withheld the record to suppress the fact that the lands were assigned prior to 18-6-1954 and that once again they are being shown as having been assigned from the year 1969 onwards. The State has got the Darkhast file marked as Ex.A-5 and also produced a few assignment copies in order to fortify their plea that the assignments were made after 18-6- 1954. As observed earlier, Ex.A-5-Register contains several corrections regarding the names of the alleged assignees by rounding off the names originally written and writing fresh names. It is the common case of both the parties that revenue records have been tampered with. As the State has failed to prove that the assignments containing the condition of non-alienation were made for the first time after 18-6-1954, it is not possible for this Court to invalidate the sales purportedly on the ground that such sales are in violation of the condition of non-alienation contained in the assignments. For the above mentioned reasons, do not find any merit in Company Application

Issues Involved:
1. Validity of the auction sale of land.
2. Impleadment of the State in the auction purchaser's application.
3. Survey and demarcation of the land purchased by the auction purchaser.
4. Alleged tampering of revenue records.
5. Prohibition of alienation of assigned lands.
6. State's claim over the auctioned land.
7. Alienation of part of the land to VANPIC Projects Pvt. Ltd.
8. Costs and procedure for the survey of the land.

Detailed Analysis:

1. Validity of the Auction Sale of Land:
The auction purchaser acquired 350 acres of land in Ulichi and Devarampadu villages through an auction held on 21-1-2010. The sale was confirmed by the Court on 26-2-2010, and the auction purchaser paid the entire sale consideration with interest by 9-8-2010. The State later filed an application to set aside the auction for 239.85 acres, claiming the land was assigned/government land and should not have been sold.

2. Impleadment of the State in the Auction Purchaser's Application:
The State, represented by the District Collector, Revenue Divisional Officer, and Tahsildar, filed an application for their impleadment in the auction purchaser's application. This was supported by an affidavit from the Revenue Divisional Officer, and the Court ordered their impleadment on 15-2-2012.

3. Survey and Demarcation of the Land Purchased by the Auction Purchaser:
The auction purchaser sought a direction for the survey and demarcation of the purchased land. The Assistant Director, Survey and Land Records, stated that the land was covered with trees and shrubs requiring clearance before the survey. The Court directed the Assistant Director to inform the auction purchaser of the costs for jungle clearance and survey within one month. The auction purchaser was to remit the costs within one month of intimation, and the survey was to be completed within three months thereafter.

4. Alleged Tampering of Revenue Records:
The State and the auction purchaser accused each other of tampering with the revenue records. The Court noted that the State, as the custodian of records, bore the responsibility to explain the tampering. The State's failure to produce the Assignment Registers for the period prior to 1969 led to an adverse inference against it, suggesting deliberate withholding of records.

5. Prohibition of Alienation of Assigned Lands:
The State claimed the lands were assigned with a prohibition on alienation, making the auction sale invalid under the A.P. Assigned Lands (Prohibition of Transfers) Act, 1977. The Court observed that assignments made before 18-6-1954 did not contain such a prohibition. The State failed to prove that the assignments were made after 18-6-1954, and thus, the sales could not be invalidated on this ground.

6. State's Claim Over the Auctioned Land:
The State argued that the auctioned land was assigned/government land and should not have been sold. The Court found that the State did not initiate proceedings for cancellation of assignments or resume the lands. The State's failure to produce relevant records and the fact that the lands were registered without objection suggested they were assigned before 18-6-1954.

7. Alienation of Part of the Land to VANPIC Projects Pvt. Ltd.:
The State claimed that 165.27 acres of the disputed land were alienated to VANPIC Projects Pvt. Ltd. under G.O.Ms.No.1110, dated 15-9-2008. The Court noted that this alienation had not been canceled, and the State could not maintain its application for this portion of the land.

8. Costs and Procedure for the Survey of the Land:
The Assistant Director, Survey and Land Records, stated the expenses required for jungle clearance and survey. The Court directed the Assistant Director to inform the auction purchaser of these costs within one month. The auction purchaser was to remit the costs within one month of intimation, and the survey was to be completed within three months thereafter.

Conclusion:
Company Application No.1528/2011 filed by the auction purchaser is allowed, directing the survey and demarcation of the land. Company Application No.6 of 2013 filed by the State to set aside the auction is dismissed.

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