TMI Blog1989 (4) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... n No. 25 of 1988 will not survive against these opponents. They are at Sl. Nos. 1, 2, 3, 4, 5, 21, 22, 23 and 24 at list "A" to Company Application No. 25 of 1988. Consequently, Company Application No. 25 of 1988 now survives against opponents Nos. 6 to 20 as listed at annexure "A" to that company application. So far as Company Application No. 43 of 1988 is concerned, as none of the opponents is regularised, it survives against all the 10 of them as mentioned in annexure "A" to that application. Now, it will be profitable to have a look at a few relevant facts leading to the present applications. By an order of this court (Coram: B.K. Mehta J.) dated December 27, 1978, January 16/22, 1979, in Company Petition No. 18 of 1978 with other cognate matters, the applicant-Court Committee was constituted for administering the assets of the company pursuant to a scheme of compromise and arrangement between the said company on the one hand and its creditors and members on the other. The said scheme was made under section 391 of the Companies Act, 1956. The original chairman of the Court Committee was Shri N.M. Miabhoy, a retired Chief Justice of this court and at present, the committee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ective portions of the land occupied by them by the doctrine of adverse possession ? (6)What order ? My answers to these issues are as follows: (1)In the affirmative. (2)The first part in the affirmative, the second part in the negative. (3)In the affirmative. (4)In the negative. (5)In the negative. (6)As per final order. Issue No. 1. So far as this issue is concerned, sections 391 and 392 of the Companies Act are relevant. As per section 391 of the said Act, where a compromise or arrangement is proposed between a company and its creditors or any class of them or between a company and its members or any class of them, the court may, on the application of the company or of the creditor or member of the company or in the case of a company which is being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be, and if, in such meetings, the majority in number representing three-fourths in value of the creditors or class of creditors, or members, or class of members, as the case may be, present and voting, approve such scheme of compromise or arrangement, the same should be sanctio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as got accepted by the court the offer of Unique Builders to purchase this property on "as is where is" basis and has to hand over vacant and peaceful possession thereof to Unique Builders and to complete their title on receipt of the balance of purchase price. It cannot also be disputed that this cannot be done unless those who are squatting on the land are cleared off the land and possession is handed over to Unique Builders. As these opponents are alleged to be squatting on the land without any right, title or interest therein, handing over of possession of the said colony to Unique Builders is held up and the balance of the purchase price is not paid by Unique Builders and the full amount of the said proceeds is uptil now not realised by the Court Committee for being disbursed to depositors. Thus, so far as the property in question is concerned, there is an impediment in the implementation of the scheme on account of the presence of the opponents on the spot. It is this impediment which is sought to be removed by way of the present company applications. The question is whether section 391 read with section 392(2)( a ) and ( b ) can permit such exercise and whether such an appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proper working of the compromise or arrangement. However, Mr. Bachani strongly relied on the decision of the court in K.N. Samant's case [1983] 1 GLR 44; [ 1984] 56 Comp. Cas. 487 . It is true that, in that case, B.K. Mehta J., while considering the powers of the court for issuing suitable directions in the case of this very company and in connection with this very court committee, laid down the scope and ambit of sections 391 and 392 of the Act in the following terms (headnote of GLR): "By section 392 of the Companies Act, the High Courts have been empowered to enforce compromises and arrangements sanctioned in respect of company under section 391. The nature of the power is, therefore, a power of superintendence so that the object of the compromise or arrangement is not allowed to be frustrated by any of its parties in implementation thereof. In course of that power of supervision, the court may either at the time of making such order according sanction, or at any time thereafter, issue such directions in regard to any matter or make such modification in the compromise or arrangement, as it may consider necessary, for the proper working of the compromise or arrangement. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmittee should file a substantive suit for specific performance. B.K. Mehta J. in para 11 of the report, while considering the amplitude of power under section 392(1)( b ) of the Act, in terms, observed as under (at page 495 of 56 Comp Cas): "No doubt, the power contained in section 392(1)( b ) of the Companies Act, 1956, is of wide amplitude, but it cannot be said that it is a power without any limitation. There is an inbuilt limitation on the power of the court in the section itself. The inbuilt limitation is that it can be invoked only for purposes of proper working of a compromise or arrangement. In exercise of that power, it cannot be doubted that the company court can issue necessary directions with a view to remove any impediment, difficulty or obstruction which may arise in the working of such scheme of compromise or arrangement. No straitjacket formula can be laid down so as to provide for all situations as to when that power can be invoked, or when the court can refuse to exercise such power. It is to be judged in the context of a given situation arising from time to time. The crux of the problem, whenever such power is invoked, is for the court to ask itself whether a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme qua that property and that property was to be first purchased by the Court Committee before it could be sold off by the Court Committee and the amount of purchase price could be disbursed amongst the creditors. The Court Committee was put in management of the admitted properties of the company. The property in question before B.K. Mehta J. was still to be acquired after the contract of purchase was specifically performed. Consequently, the third party was a genuine third party against whom no direction could be issued under section 392(1)( b ). Such is not the situation in the present case. In the present case, Rang Avadhut Colony at Sachin admittedly belonged to Divya Vasundhara Financiers P. Ltd. As seen above, the scheme of compromise and arrangement does cover this property and enjoins on the Court Committee to sell out the same on "as is where is" basis and realise the sale price for disbursing the amount amongst the depositors of the company. It is this admitted property of the company which is allegedly encroached upon by the opponents whose presence has created an obstacle in the smooth functioning of the scheme qua that property and this impediment is sought to be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision can be said to be cutting across the powers conferred on the company court under section 392(1)( b ) of the Act if occasion demands such exercise of powers. If a person is dispossessed of his immovable property, he, of course, has to follow the procedure of section 6 of the said Act or if he relies on his title, he may file a substantive suit on the strength of his title. But so far as the Court Committee is concerned, it is functioning on behalf of the court and is implementing the scheme sanctioned by the court. The court, in its supervisory capacity, has to see to it that any impediment in the smooth running of the scheme is removed. So far as the power of the court is concerned, it flows from the scheme of sections 391 and 392 of the Act. This is in no way whittled down by the provisions of section 6 of the Specific Relief Act. Even assuming that the Court Committee could have filed such suits, it cannot be urged with any emphasis that, instead of taking that course, the Court Committee has illegally followed the procedure as contemplated by section 392(1)( b ). Mr. Bachani would have been right if the powers under section 392(1)( b ) would have been subject to the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( b ) of the Companies Act is a procedure established by law and if that procedure is available, article 21 would not get violated. Similarly, reliance placed on the decision in the case of Ramshree Mahavir v. Girdharilal Bholanath Agarwal [1970] 11 GLR 971 cannot be of any avail to the opponents, as the opponents are not sought to be thrown out by muscle power or by taking law into their hands. On the contrary, the present proceedings which are judicial proceedings are being resorted to by the Court Committee. Reliance placed on the decision in the case of Yeshwant Singh v. Rao Jagdish Singh, AIR 1968 SC 620, also cannot be of any avail to the opponents as there is no question of "picking and choosing" against the opponents. The proceedings under section 392(2)( b ) are sought to be invoked uniformly against all the opponents by the Court Committee and no one from the same class is sought to be given a more favourable treatment. Reliance placed by Mr. Bachani on the decisions in T. Cajee v. U. Jormanik Siem, AIR 1961 SC 276, Bishan Das v. State of Punjab, AIR 1961 SC 1570, State of Patiala v. Mohinder Singh Natha Singh, AIR 1958 Punj 325 and Yar Muhammad v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o far as the rest of the opponents were concerned, they were not to be found on the spot, meaning thereby, they seem to have entered the land after 1985. So far as the aforesaid opponents who were found to be in possession since 1977 are concerned they also do not claim any title to the land in their own right by any legal document but they claim only adverse possession. In my view, on the evidence on record, there is nothing to indicate that these opponents have perfected their ownership of the land by adverse possession, and that though they appear to be rank trespassers, having no right to remain in the land on account of the fact that they have no title to the land, they have not completed their title by adverse possession. It is now well-settled that a very heavy burden lies on the person putting forward plea of adverse possession. Even in the case of a suit for possession of immovable property based on title, as per article 65 of the Limitation Act, such claim would be defeated after 12 years when possession of the defendant becomes adverse to the plaintiff. In such a case, the defendant has to show how he has become owner by adverse possession, before he can successfully g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who has given this certificate is not examined by the opponents and strictly speaking, the certificate remains unproved. But this apart, even assuming that it can be looked into, all that it states is that some of the opponents are staying in huts on the land of Divya Vasundhara Financiers Private Limited. There is no dispute about it between the parties. Similar is the position with respect to the affidavits filed by Balubhai Sukhabhai Patel, Ishwarlal Ramanlal Tailor, Dhirubhai Dahyabhai Desai, Husainben Majibhai Shaikh, Dahiben Chhaganbhai Dhamar, Amirbhai Kumjibhai and Bhanumatiben Dattatraiyao. All these deponents have stated that some of the opponents are staying in huts in the land in question for a number of years. To the extent that these deponents have stated that these deponents are staying there, their version is not disputed by the Court Committee. But so far as the averment that these opponents are staying for more than 12 years is concerned, it does not appear to be fully borne out. As I have already shown earlier, only some of the opponents whose names are mentioned in the report given by the Court Officer in 1985 are shown to be staying there since 1977. Rest of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 1988. Therefore, I need not dilate on them any more. The entire bunch of documentary evidence as aforesaid only indicates that the opponents are staying in the premises in question for some years and some of them, as per the report of Mr. D.H. Desai, the Court Officer, are there since 1977. But the most important question is under what right are they staying there ? It is not in dispute that none of them claims any independent title to the land under the concerned hut. All of them admit that the land belongs to Divya Vasundhara Financiers Private Ltd. but their contention is that they have become owners by adverse possession. So far as this plea is concerned, as a heavy burden lies on the opponents, they should have entered the witness box to show how they claim a hostile title to this land and what was the extent of their hostile acts which they had exercised openly and for how many years ? So far as this aspect is concerned, there is a total blank so far as the evidence led by the opponents is concerned. As stated earlier, none of the opponents has come to the witness box. They have examined only one witness Dhirubhai Dahyabhai Desai at exhibit 2 in Company Application No. 25 o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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