2010 (4) TMI 962 - SC - Companies Law

Whether the appellant was denied reasonable opportunity to defend its cause? Whether the restriction contained in Section 154(1) is not attracted in a case involving transfer of land by Bhumidhar in favour of a company? Held that - Appeal is dismissed. Since the appellant has not approached the quasi judicial and judicial forums i.e. the Additional Commissioner the High Court and this Court with clean hands and succeeded in securing interim orders it is ordained to pay costs which is quantified at Rs.2 lacs. With a view to ensure that functionaries of the State Government may not connive with the appellant and compound the wrong already done we direct the Government of Uttar Pradesh not to renew the lease of the appellant at the end of 30 years period and deal with excess land in accordance with the provisions of the Act.

Summary

Issues Involved:
1. Refusal to quash the orders of the Collector and Additional Commissioner.
2. Legality of the purchase of 27.95 acres of land by the appellant.
3. Authority of Shri T.R. Sharma to make admissions or concessions on behalf of the appellant.
4. Applicability of Section 154 of the U.P. Zamindari Abolition and Land Reforms Act, 1950 to the appellant.
5. Post facto sanction for the purchase of excess land.
6. Direction to the Chief Secretary to take possession of the excess land.

Detailed Analysis:

1. Refusal to Quash Orders of the Collector and Additional Commissioner:
The appellant challenged the orders dated 24.5.1993 and 30.5.2001, which declared that the land purchased in excess of 12.50 acres would vest in the State Government. The Supreme Court upheld these orders, noting the appellant's failure to comply with Section 154 of the Act and the appellant's indirect admission of this violation.

2. Legality of the Purchase of 27.95 Acres of Land:
The appellant purchased 40.45 acres of land without waiting for the required permission under Section 154(2) of the Act. The Collector declared the purchase of land in excess of 12.50 acres illegal, and the Additional Commissioner upheld this decision. The Supreme Court agreed, emphasizing that the appellant's actions were in direct violation of the Act.

3. Authority of Shri T.R. Sharma:
The appellant argued that Shri T.R. Sharma, the General Manager, was not authorized to make any concessions or admissions regarding the land purchase. The Court found that Shri T.R. Sharma had the authority to act on behalf of the appellant, as per the resolution dated 14.10.1991. Moreover, the lease agreement signed by the appellant's Director and General Manager (Liaison) confirmed the admission of the violation of Section 154(1) and the vesting of excess land in the State Government.

4. Applicability of Section 154 of the Act:
The Court examined whether the restriction on land transfer under Section 154(1) applied to the appellant, a company. It was concluded that the term "person" in Section 154(1) includes companies, as per the definition in the Uttar Pradesh General Clauses Act, 1904. The Court emphasized that interpreting "person" to exclude companies would defeat the purpose of the legislation aimed at protecting poor farmers from economically affluent entities.

5. Post Facto Sanction for the Purchase of Excess Land:
The appellant sought a direction for post facto sanction of the excess land purchase under Section 154(3). The Court rejected this plea, noting the appellant's lack of clean hands and the absence of any factual foundation for such a request.

6. Direction to the Chief Secretary to Take Possession of the Excess Land:
The High Court directed the Chief Secretary to ensure possession of the excess land is taken without delay. The Supreme Court found no merit in the appellant's grievance against this direction, as the lease agreement had already granted the excess land to the appellant.

Conclusion:
The appeal was dismissed, and the appellant was ordered to pay costs of Rs.2 lacs. The Court directed the State Government not to renew the lease of the excess land at the end of the 30-year period and to deal with the land in accordance with the provisions of the Act. The judgment underscores the importance of compliance with statutory provisions and the consequences of failing to disclose material facts to the court.