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TMI Blog2004 (4) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... the list annexed hereto are trespassers and encroachers in the said premises known as Dhupsingh Chali, on land baring Survey No. 646 Mouje Asarva, City and Taluka Ahmedabad now included in Final Plot Nos. 4, 10 and 11 of Town Planning Scheme No. XVI (Asarva) Ahmedabad. ( c )That Shri Charansingh and 51 others, whose names are given in the list hereto annexed be directed to hand over the vacant and peaceful possession of the premises in occupation and if they fail to do so be removed from the occupation of the premises known as Dhupsingh Chali, on land bearing Survey No. 646 Mouje Asarva, City and Taluka Ahmedabad now included in Final Plot Nos. 4, 10 and 11 of Town Planning Scheme No. XVI (Asarva) Ahmedabad." 2. On 17-1-2002, the following order came to be made by this court : "Heard Mr. D.S. Vasavda learned counsel for Textile Labour Association and Mr. R.M. Desai learned counsel for the Official Liquidator of Aryodaya Spinning Mills Ltd. and for State Bank of India. 2. In view of the report dated 16th January, 2002 submitted by the Official Liquidator in the present proceedings, it is directed that the Official Liquidator shall give a general notice to the occupants of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not heard and proper facts had not been placed before this court; therefore, the prayer to recall the said order of 17-1-2002. Accordingly, this Court vide its order of 22-1-2002 has stayed the operation of the order dated 17-1-2002 subject to the condition that, in the meantime, all the parties shall maintain status quo regarding the property in question. The ad-interim relief which was granted by staying the order on 22-1-2002 has thereafter been continued till further orders. Thereafter the matters have been heard at length from time to time and have ultimately been heard by this court finally. Though no formal order of recalling the order of 17-1-2002 was made, the respondents have been granted opportunity of hearing. Therefore, rule is made absolute qua Misc. Civil Application No. 5 of 2002 and Misc. Civil Application No. 6 of 2002 to this limited extent of recalling the order dated 17-1-2002 for the purpose of granting hearing to the applicants of these applications while keeping in abeyance the order and directions made on 17-1-2002. 6. Thereafter vide amendment, granted by this Court on 21-3-2002, following prayers were added : "(AA)Declare that the heirs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the premises i.e. property known as Dhupsingh s Chawl, Asarwa, Ahmedabad; that they have no right to remain in possession of the premises and that they may be removed from the premises. The Official Liquidator has also further prayed for a declaration that neither respondent Nos. 1/A to 1/F nor the 61 persons have any right, title or interest in the premises and hence be declared as encroachers and/or trespassers and being in illegal occupation of the premises be removed, if necessary with the assistance of the police. 10. The company is a company registered under the Companies Act, 1913. It had taken on 11-11-1918 the land on lease from one Shri Gordhandas Gulabdas Patel, who was the grandfather of the present respondent No. 2 Manubhai Tribuvandas Patel. As per Lease Deed available on record of Company Application No. 153 of 1999 the lease was a permanent lease. 11. A part of the land taken on lease was let out by the company to one Shankarlal Harilal by a Lease Deed dated 28-7-1945 which was registered on 17-11-1945. The land let out to Shankarlal Harilal was only 16 gunthas out of Survey No. 646 which admeasured in all 22 + 6 = 28 gunthas of land. The lease was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... priation of such amounts shall be made later on after disposal of the aforesaid OJ Appeal, the Official Liquidator is permitted to invest the said amounts after deducting the expenses with State Bank of India which is a secured creditor of the Company in liquidation. ( iii )Till final disposal of this application, respondent Nos. 1/A to 1/F and respondent Nos. 2 to 61 are also restrained from inducting any other person in the premises in question nor shall they part with possession of the said premises or any part thereof in favour of any third party nor shall they encumber any alleged right of theirs over the premises in question in favour of any party. ( iv )In case respondent Nos. 1/A to 1/F and respondent Nos. 2 to 61 fail to deposit the amounts as aforesaid, it will be open to the Official Liquidator to move this court for seeking eviction of the defaulters. ( v )Respondent No. 1/F shall file an affidavit giving details of the names of all the occupants and if there is any discrepancy between the names which are to be given now and the names disclosed in Annexure I to Misc. Civil Application No. 6 of 2002, the deponent of the affidavit shall also give an explanation f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply on behalf of respondent Nos. 2 to 61 is taken into consideration, it is stated in paragraph 2 therein that the said respondents are regularly paying rent to respondent Nos. 1/A to 1/F and that respondent Nos. 2 to 61 pay taxes to the Ahmedabad Municipal Corporation. At Annexure I (collectively) to the said reply affidavit, copies of tax bills issued to the said respondents by the Ahmedabad Municipal Corporation are placed on record. Taking the case of same gentleman Shri Muralidhar Ganesh, by way of illustration, when municipal bill at page 128 is looked into, it is seen that the annual property tax payable by the said gentleman is Rs. 264. On the face of it, prima facie , the stand of respondent No. 2 as to the figure of rent stated in Annexure I to MCA No. 6/02 is unbelievable. When Mr. P.J. Kanabar, learned advocate on behalf of the said respondents, namely respondent Nos. 2 to 61 was asked to explain this, he has sought time in this regard. To come up on 19h February , 2004." 17. The learned advocates appearing respectively for the parties have addressed the court at length as well as invited attention to the written submissions filed by them from time to time, and cit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to entertain this application; ( c )it is clear from the decree dated 18-12-1978 passed in Civil Suit No. 1034 of 1974 that respondent Nos. 1/A to 1/F are not in unauthorized occupation of the premises; ( d )Dhupsingh was in occupation of the land, he erected superstructure thereon, there was a dispute about nature of the right in 1962 between the Company and Dhupsingh and, therefore, respondent Nos. 1/A to 1/F who have acquired title through Dhupsingh cannot be treated to be encroachers, and also the present proceedings are clearly barred by limitation. Over and above the aforesaid contentions, reliance has been placed on Additional Affidavit filed by Shri Jitendra Dhupsingh dated 21-4-2003 to contend that the Company Petition seeking winding up of the Company had been filed in 1983, but as could be seen from the record respondent Nos. 1/A to 1/F had made payment of rent to the company upto 31-5-1986; that in April 1987, payment for the subsequent period was sent to the company by Registered Post Acknowledgement due but the same was returned as the company was closed; and hence also, respondent Nos. 1/A to 1/F cannot be treated as encroachers. That as such, rights of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xed and marked as Annexure-II to the said application. 20.2 It was further submitted that the said respondents were not employees of the company (in liquidation) at any point of time and the rented premises occupied by them are of the ownership of respondent Nos. 1/A to 1/F. That in the circumstances they were neither encroachers on the land of the Company (in liquidation) nor was their occupation in any way unauthorized; that the suit for possession of land in question had in fact not been decreed and as per the terms of compromise recorded in the decree the applicant was disentitled to dispossess the respondents. 20.3 Mr. Kanabar placed reliance on written submission dated 21-4-2003 primarily for the purpose of submitting that : ( a )the application was barred by limitation; and ( b )there were various disputed questions of fact which could not be resolved summarily by this application. 20.4 In relation to the submission regarding the application being beyond period of limitation, reliance was placed on articles 64 and 136 read with section 27 of the Limitation Act, 1963 (hereinafter referred to as the Limitation Act ) and section 458-A of the Companies Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ); ( c )any application made under section 391 by or in respect of the company; ( d )any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in course of the winding up of the company; Whether such suit or proceeding has been instituted, or is instituted, or such claim or question has arisen or arises or such application has been made or is made before or after the order for the winding up of the company, or before or after the commencement of the Companies (Amendment) Act, 1960. (3) Any suit or proceeding by or against the company which is pending in any court other than that in which the winding up of the company is proceeding may, notwithstanding anything contained in any other law for the time being in force, be transferred to and disposed of by that court." 23. The scope and ambit of jurisdiction conferred on the High Court under section 446(2) of the Act has been succinctly stated by this Court in the case of Rajratna Naranbhai Mills Co. Ltd. v. New Quality Bobbin Works [1973] 43 Comp. Cas. 131 in the following words :- ". . .section 446 which I have set out in extenso provides that the Court whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty of a liquidator of a company ordered to be wound up. Now, if the liquidator in course of winding up is required to file suits for recovering properties and assets of the company, one has only to imagine at what length of time winding-up proceedings can be brought to a close. If a suit has to be filed it is implicit therein that it will have to go through the gamut of an appeal, second appeal, letters patent appeal and appeal to the Supreme Court. Winding-up proceedings would drag on interminably over decades with consequent hardship to everyone. In order to avoid this situation, sub-sections (2) and (3) were incorporated in section 446 by which special jurisdiction has been conferred upon the High Court to entertain certain types of proceedings or also withdraw certain types of proceedings by or against the company in liquidation pending in any court and transfer to itself and to dispose of the same. Therefore, section 446(2) would enable the High Court to entertain an application of the nature filed by the official liquidator and to grant relief in the matter." (pp. 141 142) 24. In the case of Sudarsan Chits (I) Ltd. v. G. Sukumaran Pillai AIR 1984 SC 1579, the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e no impediment in the way of the liquidator, necessitating his getting involved in unnecessary litigation as there is public accountability after a winding-up order has been passed to determine the liquidation proceedings as expeditiously as possible, and tenants of companies under winding-up cannot stretch the winding-up proceedings to suit their personal interest. Faizabad Distillers (P.) Ltd. v. Salim Tailor [1993] 76 Comp. Cas. 127 (All.) 28. That once it is found that a person is a trespasser, proceedings under section 446 of the Act are "due process of law", and the trespasser as such can be directed to be evicted, and such direction cannot be said to be without due process of law. Vidyadhar Upadhyay v. Sree Sree Madan Gopal Jew [1990] 67 Comp. Cas. 394 (Cal.). 29. It is well settled that the law of procedure is a handmaid of justice and not its mistress and the Court can always make an order which is just and proper in the facts and circumstances of a case and it is immaterial as to what the prayers are in the application, and, particularly in a winding-up proceedings, whenever the Court discovers any property of the Company in the possession of anybody, sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the property. 33. Article 136 under the Schedule to the Limitation Act provides for a period of limitation of twelve years for the execution of any decree (other than a decree granting a mandatory injunction) or order of any Civil Court. The period of limitation begins to run when the decree or order becomes enforceable or where the decree or any subsequent order directs any payment of money to be made at a certain date or at recurring periods, when default in making the payment or delivery in respect of which execution is sought, takes place. 34. Where a decree directs the amount declared due to be paid in certain number of instalments at certain specified period and further provides that on default, the entire amount outstanding shall become due, or that the decree-holder shall be entitled to seek possession of the property, on occurrence of default in payment of any one of the instalments, it will be open in execution of the decree to the decree-holder to either seek recovery of the entire balance of the decretal amount or seek possession as per terms of the decree. A judgment-debtor in such circumstances cannot be heard to say that the decree-holder must proceed to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Companies Act, so that the company or its shareholders will not suffer any loss. But by no stretch of imagination, the said provisions contained in section 458-A can be construed to mean that even a barred date ( sic debt) or a claim which was not enforceable on the date of the winding up, would stand revived, once a winding-up application is filed and order is made by virtue of section 458-A of the Companies Act..." (p. 80) 37. Though reference has been made to section 27 article 64 and article 137 of the Limitation Act on behalf of 61 persons by Mr. Kanabar, it has not been shown as to how and in which manner the said provision would operate and apply to the facts of the present case. Once it is found that the period of limitation for institution of suit has not been determined there is no question of the right of a person seeking possession of property being extinguished. Similarly, the applicant herein is not seeking possession of immovable property based on previous possession and not on title, from the date of dispossession. In fact the application categorically states that the Company (in liquidation) is holding title to the land and it is on basis of such title t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39. Civil Suit No. 1034 of 1974 had been filed by the Company against late Dhupsingh Charansingh and the prayer was that the hutments constructed by the defendant be removed and vacant and peaceful possession be handed over by the defendant to the plaintiff. In the said Civil Suit on 18-12-1978 vide Exh. 17 the compromise pursis was presented by the parties and accordingly, the consent decree came to be made on 18-12-1978 wherein it was ordered that : ( i )the plaintiff has filed the suit on the basis of permanent leasehold rights in relation to Asarva land Survey No. 646 admeasuring 1785 sq. yds. and the defendant accepts the right of the plaintiff on the basis of permanent lease in favour of the plaintiff. That the defendant does not have actual possession of the land, but number of huts have been constructed on the land and hence, the defendant is not in position to hand over actual possession of the land to the plaintiff; ( ii )the defendant has to pay Rs. 6,400 towards compensation of the land to the plaintiff for the period till date i.e., 18-12-1978 and for that purpose the defendant is required to pay Rs. 300 p.m. regularly from 18-12-1978, and if the defendant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said Shri Bhupatsingh Dhupsingh neither has any collection been made by him from respondent Nos. 2 to 61 nor have respondent Nos. 2 to 61 either deposited the amount every month nor shown willingness to make such deposit. The stand taken by respondent Nos. 2 to 61, as conveyed through the Compliance Affidavit dated 19-12-2003, that the amounts stated in Annexure-I to Misc. Civil Application No. 6 of 2002 are due and payable annually, is to say the least a dishonest attempt on part of respondent Nos. 2 to 61 acting in collusion with respondent Nos. 1/A to 1/F. The aforesaid order of 11-2-2004 clearly demonstrates this aspect and suffice it to state that Mr. P.J. Kanabar sought time to explain this situation but has not been able to place anything on record to show that such stand adopted by the respondents is in any manner supported by any evidence on record. There is one more aspect of the matter; on 3-12-2003 when this Court directed deposit of the amounts by respondent Nos. 2 to 61 the direction was to deposit "every month regularly"; respondent No. 1/F was directed to collect the amount "for each month by 10th day of the next month" and deposit with the Official Liquidator "by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since 1986 no compensation has been paid over by respondent Nos. 1/A to 1/F or the 61 persons even on an annual basis. This act itself goes to show that the aforesaid stand adopted by the said respondents is collusive in nature and does not reflect bona fides of respondent Nos. 1/A to 1/F and the 61 persons. It is not even stated by respondent Nos. 1/A to 1/F that 61 persons have not been paying compensation to them. 45. In so far as the contention raised on behalf of 61 persons paying tax to Ahmedabad Municipal Corporation is concerned, it is necessary to take note of the fact that in the entire bunch of copies of municipal bills produced on behalf of the said persons they are merely shown as occupiers while the property stands in the name of the Company (in liquidation). Thus, the said 61 persons have failed to show that they are having any valid title or right to occupy the property. It is trite law that the municipal authorities incorporate name of the occupiers of the premises only for the purpose of safeguarding the revenue in the event of the person who is primarily responsible for payment of Property Tax not being available. In fact, Property Tax by itself is a first ..... X X X X Extracts X X X X X X X X Extracts X X X X
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