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TMI Blog2018 (2) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... not inclined to grant reliefs of the applicant as claimed. This is so because, as noted, the superstructures were constructed by the company at its own cost and would therefore, be the property of the company. If the applicant seeks restoration of the possession, the applicant must pay the cost of such construction to the Official Liquidator which proceeds can be used for the purpose of discharging Company's remaining debts We pass the following order : 1) The Official Liquidator shall have the cost of construction standing on lands bearing survey nos. 340/2 and 340/3 assessed by a Government approved valuer. The construction is quite an old one. Value of such construction as on date therefore, shall have to be on the basis of the current cost of similar construction reduced by depreciation for the period between the completion of construction till date. We make it clear that the valuer shall not apply the rate of depreciation provided in the Incometax Act which is entirely for different purpose but actual reduction in value of construction with passage of time. 2) Such report shall be placed before the Court on the next date of hearing. SO to 21.3.2018. 3) The applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... properties given by the applicant in the said application is as follows : Sr. No. Survey No.. Measurement HRASq. Mtr 1. 167/1 01619 2. 167/2 91518 3. 168/1 01619 4. 168/2 01619 5. 169/1 02933 6. 170 02526 7. 171 03136 8. 340/3 02934 9. 340/2 02428 10. 340/1 03541 Total 23873 3. In the application, the applicant further averred that such properties being his private properties and not properties of the company, such properties must be returned to him. It was pointed out that the lands belonging to the company i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks of accounts. Under the circumstances, land bearing Survey No.340/1 with superstructure is required to be returned to the applicant and appropriate directions are required to be issued to cancel the sale deed in favour of Kanak Castors Products Private Ltd. 9. Similarly, on land bearing Survey No.340/2 admeasuring 2428 sq.mtrs. and land bearing Survey No.340/3 admeasuring 2934 sq.mtrs. On this also the present applicant had constructed certain quarters in the year 1996 before the liquidation petition was moved. So far as these lands are concerned, they are the personal properties of the deponent and the construction which was made there on was also personal construction and therefore, the construction which has been illegally sold of by the Official Liquidator in the sale effected by Exim Bank, is required to be set at naught and the superstructure of the land is required to be returned to the present deponent. The present deponent is trying to get the relevant documents with regard to his personal liability for costs of construction but apart from that, to the best of information, in the books of accounts of the company, this expenditure has not been debited at all. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rried out keeping the aforesaid, in view. Thus, the bids and their acceptance were kept in mind, keeping in view the substantial number of quarters of employees who were using them at the relevant point of time. It is denied that these quarters were built by the applicant. These quarters have been built by Minal Oil Agro Industries limited at their own expense. It is admitted even in the said application that the quarters stood there since 1996. It is submitted that right to use the quarters and to use the land independently in this regard is thus the right of the Company, even if one looks at the period of adverse possession. In such circumstances, there can be no reason whatsoever to pass any orders in this regard at this stage. 9. It is further submitted that the said quarters have regularly been used by the employees and labour of the Company since more than 15 years. Even as of date, they are being used for the residence of workers and labour of Kanak Castors. It is submitted that any claim for the said structure and the right to use the land is clearly barred by limitation as well as by principles of adverse possession. In these circumstances, there can be no questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Shri Chaitanya Joshi, Advocate is annexed herewith and marked as AnnexureB (colly) 5) In view of the above facts and circumstances, the land situate at Survey Nos. 167/1, 167/2, 168/1, 168/2, 169/1, 170, 171, 340/2 and 340/3 in all admeasuring about 20,332 sq. mtrs is property in the individual ownership of Shri Pramodbhai Kanjibhai Patel and not of company in liquidation i.e M/s. Minal Oil Agro Industries Pvt. Ltd (In Liquidation). 8. By the time, the order came to be passed by the learned Company Judge, the applicant had given up the claim of ownership qua land bearing survey no.340/1. The learned Company Judge by the impugned judgment allowed the Company Application of the applicant in part. Learned Judge placed heavy reliance on the averments made by the Official Liquidator in his report dated 12.12.2014 and held that the lands bearing survey nos. 167/1, 167/2, 168/1, 168/2, 169/1, 170, 171, 340/2 and 340/3 in all admeasuring around 20,332 sq mtrs are of the individual ownership of the applicant and not of the company. The Learned Judge was also of the opinion that in view of such conclusions, the Official Liquidator is required to handover the possession of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t No.3. 9. The learned Judge disposed of the Company Application with the following observations and directions : 25. Thus, in the facts and circumstances of the present case, this application is partly allowed. The Official Liquidator is hereby directed to handover the possession of the land bearing survey Nos. 167/1, 167/2, 168/1, 168/2, 169/1, 169/2, 170 and 171, situated at village Nandasan, Taluka: Kadi, District: Mehsana, to the applicant within a period of six weeks from the date of receipt of this order. However, so far as lands bearing survey nos. 340/2 and 340/3 with construction made thereon are concerned, as observed earlier, the same are in possession of respondent No.3 since 2004 and the present application is filed in the year 2010. In fact, as observed hereinabove, the applicant himself has constructed the quarters of workers in land bearing Survey Nos. 340/1 as well as survey nos. 340/2 and 340/3. Therefore, when the respondent No.3 had purchased the land bearing survey No.340/1 with superstructure thereon and when the superstructure made on survey nos. 340/2 and 340/3 is made in such a manner that it would be difficult to separate it, now the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 340/2 and 340/3 were part of such sale proceedings. On the basis of the valuation reports and the materials made available to the bidders, respondent no.3 had offered the highest price. He submitted that in the advertisement reference to the superstructures belonging to the company must include superstructures standing on land bearing survey nos. 340/2 and 340/3 also. 2) As per the records, the construction of superstructures standing on lands bearing survey nos. 340/2 and 340/3 was carried out by the company. The applicant had not borne the cost and was therefore, not the owner thereof. It was always open for the Official Liquidator therefore, to sale such assets of the company to realise the company's debts. 3) The application is barred by delay, laches and acquiescence. The staff quarters for the labourers of the company were constructed on such lands way back in the year 1996 by the company. At no point of time, the applicant raised any dispute nor possession of the lands was taken from the company. By way of law of adverse possession, the company's title would have been perfected by now. The applicant cannot seek eviction of lands after so many years. Reliance wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that father of the plaintiff throughout acted in relation to others as the owner of the property though the plaintiff was the real owner of the property. The father executed an agreement to sell the land in favour of defendant no.1. Such transaction was completed in presence of the plaintiff. The sale consideration was put in the hands of the plaintiff. In such background, the Supreme Court held that the plaintiff would be estopped from contesting the validity of sale on the ground that his father had no authority to sell the land. iii) Reliance was also placed on decision of Supreme Court in case of Unoin of India v. Ibrahim Uddin and another reported in (2012) 8 Supreme Court Cases 148 in which it was observed that no evidence is permissible to be taken on record in the absence of the pleadings in that respect and no party can be permitted to travel beyond its pleadings. 13. The Official Liquidator had no further inputs, except for abiding by the averments made in the multiple reports filed before the learned Company Judge. 14. Having heard the learned advocates for the parties and having perused the documents on record, we may recall, the appellant had filed the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e difficult to separate it, now the applicant at this belated stage cannot claim and is not entitled to get back the possession of land bearing survey Nos. 340/2 and 340/3. 17. We find two primary errors in the view expressed by the learned Company Judge. Firstly, as noted, with respect to the construction of the superstructures on lands bearing survey Nos. 340/2 and 340/3, learned Judge has made somewhat conflicting observations. Secondly, the learned Judge was of the opinion that since respondent no.3 has purchased the land bearing survey no. 340/1 with superstructure and when superstructures made on survey nos. 340/2 and 340/3 are not possible to be separated out, the applicant cannot claim the possession back of the lands bearing survey no. 340/2 and 340/3. Element of delay was also pressed in service. Whether delay would defeat the claim of the applicant would be commented upon a while later. However, merely because the superstructure is constructed in such a manner that it is difficult to separate out from the superstructure standing on land bearing survey no. 340/1 as against that portion standing on 340/2 and 340/3 cannot by itself be a ground to defeat the title of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i of District Mehasana along with the Buildings Constructions standing thereon admeasuring 17,173=50 sq mtrs and/or thereabout for a Sale consideration of ₹ 2,80,00,000/( Rupees Two Crores Eighty Lacs Only) 20. Thus crucially neither the lands bearing survey nos. 340/2 or 340/3 nor the superstructures standing on such lands were part of such sale deed. Same recitation is found in the body of the document at more places than one. For example, the recitation of the document begins with the following : WHEREAS : 1. The Non Agricultural land bearing the Survey No.173, 176/1, 176/2, 176/3, 177/1, 177/2, 178/2, 179(2)3, 179/1(4), 188, 189/2 and 340/1 admeasuring 31,719 sq. mtrs or thereabout of village Nandasan of Taluka Kadi of District Mehsana which hereinafter referred to as 'the Said land' along with its construction standing thereon which herein after referred to as 'the building/super structure' and the plant, machineries, vessels, tanks, gadgets, pumps etc. lying or attached/affixed which herein after referred to as the plant, machineries etc thereon are owned, possessed, seized and occupied by the Vendor. 21. The sale deed also co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er with the buildings and other structures, erections and godowns and movable plant and machinery, equipments, appliances, furniture, machinery, spares and stores, tools and accessories. When this advertisement therefore, referred to the buildings and other structures and erections and godowns, together with the land, same must be understood in relation to the lands of the company under sale which were specified by giving survey numbers, total area of which came to 31,719 sq mtrs. If there was any intention to put for sale any of the superstructures without the lands, the same would have been so stated in the advertisement itself. It is not unknown but not very common that only superstructure is up for sale without the land underneath such superstructure. Even in such a case, nature of the company's right to use and occupy the land would be relevant and ordinarily stated in the advertisement. If for some reason, therefore, the Official Liquidator claimed that the company was the owner of the superstructures, but not the lands, which superstructures were to be sold for realisation of debts of the company, the same would have definitely found specific mention in the advertisement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the claim of adverse possession. In case of Karnataka Board of Wakf v. Union of India reported in (2004) 10 Supreme Court Cases 779, the Supreme Court observed as under : 11. In the eye of law, an owner would be deemed to be in possession of a property so long as there is no intrusion. Nonuse of the property by the owner even for a long time won't affect his title. But the position will be altered when another person takes possession of the property and asserts a right over it. Adverse possession is a hostile possession by clearly asserting hostile title in denial of the title of true owner. It is a wellsettled principle that a party claiming adverse possession must prove that his possession is 'nec vi, nec clam, nec precario', that is, peaceful, open and continuous. The possession must be adequate in continuity, in publicity and in extent to show that their possession is adverse to the true owner. It must start with a wrongful disposition of the rightful owner and be actual, visible, exclusive, hostile and continued over the statutory period. (See : S M Karim v. Bibi Sakinal AIR 1964 SC 1254, Parsinni v. Sukhi ( 1993) 4 SCC 375 and D N Venkataraya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f delay raised by respondent no.3 is also not valid. There is nothing on record to suggest that in the Court assisted sale, the properties in question were transferred to respondent no.3 or that the same was to the knowledge of the applicant. It was only when in the year 2006, advertisement came to be issued for sale of the properties for the dues of the company, that the applicant made efforts to segregate his properties from those of the company. He thereafter, filed the Company Application. Even if there was some timegap in moving the application, that by itself would not defeat the ownership and title rights of the applicant. Any such delay on his part would not defeat his rights without reference to the period of limitation. 28. The issue can be looked from a slightly different angle. The respondent no.3 claim to have purchased the superstructure standing on the lands being Survey No.340/2 and 340/2 without the lands. Such superstructure is attached to earth and cannot be bought and sold without reference to the right of the user or occupier to use and occupy the same. Under which condition the company under liquidation was allowed to occupy the land for constructing the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s therein without following due process of law. Learned advocate Shri M.B. Gandhi for the appellant agreed that the applicant will pay the assessed cost of construction. 31. On such basis, we pass the following order : 1) The Official Liquidator shall have the cost of construction standing on lands bearing survey nos. 340/2 and 340/3 assessed by a Government approved valuer. The construction is quite an old one. Value of such construction as on date therefore, shall have to be on the basis of the current cost of similar construction reduced by depreciation for the period between the completion of construction till date. We make it clear that the valuer shall not apply the rate of depreciation provided in the Incometax Act which is entirely for different purpose but actual reduction in value of construction with passage of time. 2) Such report shall be placed before the Court on the next date of hearing. SO to 21.3.2018. 3) The applicant shall deposit an adhoc sum of ₹ 50,000/with the Official Liquidator towards the possible cost of such valuation subject to adjustments in future latest by 5.2.2018. 32. At this stage, learned counsel for the respondent no.3 pray ..... X X X X Extracts X X X X X X X X Extracts X X X X
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