2004 (2) TMI 724 - SC - Indian Laws

Summary

Issues Involved:
1. Constitutional validity of the U.P. Sugar Undertakings (Acquisition) Act, 1971.
2. Legality of the possession of properties by the appellant.
3. Preferential right to purchase the unit by the ex-owner.
4. Specific controversy regarding House No. 54/14 Canal Range, Kanpur.

Detailed Analysis:

1. Constitutional Validity of the U.P. Sugar Undertakings (Acquisition) Act, 1971:

The Act was enacted to address serious problems created by the owners or lessees of certain sugar mills for canegrowers and laborers, adversely impacting the general economy of the areas. The Act provided for the acquisition of properties and assets of such mills, payment of compensation, and prioritization of dues of canegrowers and laborers over the State Government's taxes. The High Court upheld the constitutional validity of the Act, and this decision was affirmed by the Supreme Court in the case of Ishwari Khetan Sugar Mills (P) Ltd. and Ors. v. State of UP. and Ors.

2. Legality of the Possession of Properties by the Appellant:

Respondent No. 1 challenged the possession of properties other than those specified under Section 2(h) of the Act. The High Court concluded that certain properties, such as House No. 54/14 Canal Range, Kanpur, did not vest in the Corporation as it housed the registered office of the company. The possession of other properties like the car and land appurtenant to the factory was retained by the appellant as they were used for factory purposes.

3. Preferential Right to Purchase the Unit by the Ex-Owner:

Respondent No. 1 filed a writ petition challenging the notice inviting tenders for the sale of the factory, claiming a preferential right to purchase the unit. The High Court did not grant the relief sought by Respondent No. 1, and this decision was not appealed, thus attaining finality.

4. Specific Controversy Regarding House No. 54/14 Canal Range, Kanpur:

The primary issue in the appeal was whether House No. 54/14 Canal Range, Kanpur, vested in the appellant. The appellant argued that the house was used as a godown for storing sugar, a residence for the Director, and a guest house. However, the court found no material evidence supporting these claims. The house was the registered office of the company and not part of the "Schedule Undertaking" as defined in Section 2(h) of the Act. The court concluded that the handing over of its possession by the Receiver to the appellant was illegal and contrary to the provisions of the Act.

Conclusion:

The appeals were dismissed, and the High Court's decision was upheld. The court found no merit in the appellant's claims regarding the use of House No. 54/14 Canal Range, Kanpur, as a godown, residence, or guest house, and confirmed that it did not vest in the appellant under the Act. The judgment emphasized the distinction between the company owning the sugar undertaking and the undertaking itself, with only the latter being acquired under the Act.