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TMI Blog2010 (11) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010. Also heard Mr. J. Roy, advocate for M/s. Scrapt Traders, petitioner in M. C. No. 1466 of 2010. 3. A prefatory recital of the facts in bare essential is an indispensable necessity impelled by the chequered backdrop of the lingering ruction. 4. A plot of land measuring approximately 40460.456 square meters owned by the appellant herein (hereinafter for short referred to as the Port Trust) and located within the Haldia Dock Complex was leased out to one M/s. HIM Containers Ltd. (for short also referred to as the Lessee) for a period of 30 years with effect from December 22, 1982 by a lease deed dated May 2, 1983. The lease inter alia, stipulated the lease rent payable and the norms governing the same. In terms thereof in the event of any default in the payment of the agreed lease rent or the lessee slipping into liquidation, the lease would stand determined and the lessor, i.e., the Port Trust would have a right of re-entry on the land. According to the Port Trust, the lessee was in continuous default in the payment of lease rent. Incidentally, by order dated September 1, 2000, passed by this court, the lessee company was ordered to be wound up and consequently the official l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The amount offered having been deposited in full with the official liquidator, the assets of the lessee including the lease hold land were handed over to the M/s. Scrapt Traders on September 13, 2004. 7. The Port Trust in the above premise, filed Company Application No. 6 of 2004, claiming rent of the lease hold land for the period of possession thereof by the official liquidator, contending, inter alia, that the rent payable, must be deemed to be within the process of liquidation expenses to be accorded priority over other debts payable by the lessee on its liquidation. A direction for reversion of the lease hold land to it was also prayed for. 8. The auction purchaser M/s. Scrap Traders as well, filed an interim application being M. C. No. 382 of 2005 for a direction to the Port Trust to effect renewal/transfer of the lease in its favour. Company Application No. 6 of 2004 and M. C. No. 382 of 2005 were disposed of on March 21, 2005 holding in essence the following : (i)The rent payable by the official liquidator for his possession of the lease hold land must be construed to be a part of the expenses incurred in the winding up proceeding. (ii)The rent payable by the official ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of rent and escalation charges at the enhanced rate fixed by the schedule to the notification published in the Gazette of India dated December 2, 1999 under section 49 of the Major Port Trusts Act, 1963 for the period from July 16, 2001 to March 31, .2005. 10. Exchange of communications followed between the official liquidator and the Port Trust for a bid to work out the actual amount payable by way of lease rent in course of which it was pointed out by the latter that vide the notification published in the Gazette of India dated December 2, 1999 in exercise of the powers under section 49 of the Major Port Trusts Act, 1963 (for short hereafter referred to as "the Port Act") meanwhile, the rates have been revised. The Port Trust, amongst others, in its letter dated July 21, 2005, while asserting that the lessee had not paid rent for over five years before the determination of the lease in the year, 2000, mentioned that rent bills up to March 31, 2001 had been raised at the rate of Rs. 435 per hundred square meter, i.e., Rs. 1,76,003.00 per month computed on the basis of rates as per the notification to that effect prior to the one dated December 2, 1999. It further mentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our to espouse the cause of M/s. Scrapt Traders as above. They endorsed the effort of M/s. Scrapt Traders to this effect to be a wholesome endeavour to restart the operation of the lessee company to facilitate employment and accommodation to its erstwhile employees. 14. The learned single judge on a scrutiny of the pleadings and the documents on record, sustained the decision of the official liquidator to reject the Port Trust's claim for lease rent to the extent of Rs. 98,42,469.45 essentially on the ground that his possession of the lease hold land was not for a commercial purpose and, therefore, he enjoyed a discretion to fix the quantum of rent payable for the relevant period. 15. The learned single judge concluded that the power envisaged in section 49 of the Port Act, equipped the board of trustees to frame scale/schedule of rates for the use of the property belonging to the Port Trust in situation where the same was let out for the use for different commercial/business purposes. Referring to sections 51, 52 and 53 of the Port Act, it was observed that this statute did not attach any sacrosanctity to the rates fixed under section 49 thereof. As the official liquidator was i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Port Act under Chapter VI thereof, the very foundation of the sustenance of the decision of the official liquidator being erroneous, the same ought to be interfered with, he insisted. Learned senior counsel, additionally, argued that the official liquidator having adopted the rates fixed by the appellant Port Trust in the lease deed between it and M/s. HIM Containers Ltd., the winding up of the latter, notwithstanding, he had no discretion or authority to fix a lesser lease rent. 18. Not only, the official liquidator who admittedly had been in possession of the lease hold land with effect from July 16, 2001, in spite of the order dated March 21, 2005 of this court had committed a misconduct by not handing over the vacant physical possession thereof to the appellant-Port Trust till date, he could by no means depart from the stipulations in the lease deed relatable to the rate of lease rent agreed to between the parties thereto, he urged. Referring to a chart detailing with the particulars in support of the claim of lease rent made by the appellant-Port Trust till July 31, 2010, Mr. Roy Choudhury has pleaded that having regard to the priority of its claim over the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f arrear dues of the workers of the wound up company now employed by the purchaser. 22. We have extended our thoughtful consideration to the rival contentions. The afore recited facts evidencing the progression of the associated events is not in dispute. Following the liquidation of HIM Containers Ltd., the then lessee of the appellant-Port Trust, the leasehold land came to be possessed by the official liquidator on and from July 16, 2001. Prior thereto, the lease was terminated by the appellant-Port Trust vide notice dated September 25, 2000. By its order dated December 11, 2002, this court in Company Application No. 5 of 2002 preferred by the appellant-Port Trust recognised its entitlement for rent for the period of possession of the leasehold land by the official liquidator. Pursuant to a sale notice dated February 17, 2004, in the proceedings that followed the highest offer of M/s. Scrapt Traders was accepted and the assets of the company in liquidation including the leasehold land were handed over to the auction purchaser on September 13, 2004. The state of affairs vis-a-vis the leasehold land continues to be so as on date and M/s. Scrapt Traders is in occupation thereof sinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the official liquidator on behalf of the court. The official liquidator was thus directed to hand over the legal possession of the land to the appellant-Port Trust. 27. In the impugned judgment and order, in response to the grievance of the appellant-Port Trust qua offer of symbolic possession of the land, the learned company judge reiterated the direction to the official liquidator to hand over vacant physical possession of the leasehold land to it within a period of three months. Admittedly, as on date, the possession has not yet been handed over to the appellant-Port Trust and M/s. Scrapt Traders is in unauthorised occupation of the land. This is in the face of an unambiguous rejection by the learned company judge of the claim of M/s. Scrapt Traders made in Miscellaneous Case No. 382 of 2005 that the balance period of the lease was one of the assets sold to it thus vesting it with the right to transfer/renewal of the lease. The conclusion of the learned company judge in the said order that the possession of the leasehold land of M/s. Scrapt Traders is illegal and the rejection of its request for renewal/grant of lease in its favour by the board of trustees renders its posses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he various sub-clauses of section 48(1) to be performed either by the Board or any other person authorised by it at or in relation to the Port or the Port approaches. The possession of the leasehold land by the official liquidator, in our comprehension, is beyond the ken of the eventualities for which the scales of rates are envisaged. Having regard to the nature of the possession of the land by the official liquidator and the legally ordained objectives to be secured by him, the overall enterprise can by no means be equated with the services envisioned in section 48 (1) of the Act. The observation of the learned company judge regarding the sanctity of such rates having regard to the exemptions contemplated in section 51, 53 and 54 of the Act, however appear to be omnibus in nature. This, notwithstanding, the finding distinguishing the nature of the possession of the official liquidator from the one contemplated in section 48(1) of the Act for the applicability of the scale of rates commends for acceptance. 30. The decision in the Board of Trustees of Port of Bombay v. Indian Goods Supplying Co., AIR 1977 SC 1622, has been pressed into service to emphasise that the scale of rates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interim order(s), which was registered as M. C. No. 2340 of 2008. This court by order dated August 27, 2008 after hearing the parties allowed, the official liquidator to disburse the amount of sale proceeds of the company in liquidation, less the sum of Rs.1.5 crores as claimed by the appellant-Port Trust. The appellant-Port Trust however by its interim application, M. C. No. 629 of 2009 having sought for restoration of the interim interdiction of the official liquidator on disbursement, this court by order dated May 16, 2009 directed the official liquidator not to make any further disbursement of money lying with him. The appellant-Port Trust returned with M. C. No. 3080 of 2009 complaining persistent default on the part of M/s. Scrapt Traders in complying with the prescribed pre-conditions contained in the order dated September 24, 2007 passed in Miscellaneous Case No. 3629 of 2007 directing maintenance of status quo of its possession on stipulations of making payments therefor. A Division Bench of this court vide order dated March 26, 2010, being convinced about the repeated and inexplicable defaults of M/s. Scrapt Traders to comply with the orders dated September 24, 2007 and A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interim order(s) of this court as a pre-requisite for the arrangement of keeping in abeyance the directions contained in the impugned judgment and order, ordering delivery of possession of the land to appellant-Port Trust. 37. The cause shown in the interim applications for condonation of delay, i.e., M. C. No. 3625 of 2007 and 3590 of 2007 on a scrutiny of the rival pleadings is construed as wholly inadequate and unconvincing. The delay as such is not condoned. The connected appeals are accordingly dismissed. 38. In this view of the matter, there is, therefore no legal impediment in handing over of the actual vacant possession of the land by the official liquidator to the appellant-Port Trust as, to reiterate, M/s. Scrapt Traders, as on date, has no right in law to hold on to the said land. In the face of the categorical finding of the court that the rent payable by the official liquidator must be disbursed before discharging any debts of the company in liquidation, the plea based on section 529A by M/s. Scrapt Traders is also of no avail. The official liquidator would forthwith deliver vacant physical possession of the land to the appellant-Port Trust and would simultaneously q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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