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TMI Blog2012 (11) TMI 966X X X X Extracts X X X X X X X X Extracts X X X X ..... ding pending before the Sub-Divisional Land and Land Reforms Officer, Srirampur, Hooghly to the land of Rishra Steel Ltd. (In liquidation); b) The Official Liquidator, High Court Calcutta be directed to file a report before this Hon'ble Court pertaining to the status regarding marketability of the land of Rishra Steel Ltd. (In liquidation). c) The order dated 15.07.2011 passed by this Hon'ble Court be modified to the extent that the Applicant/Purchaser be granted time to deposit the balance sum of Rs.19.48 Crore in terms of the said order within 2(two) weeks from the date the Official Liquidator files status report regarding marketability of the said land to the satisfaction of this Hon'ble Court. d) Ad-interim order be made in terms of prayers (a) to (c) above." The relevant material facts of this case are stated hereunder. The Company viz. Rishra Steel Limited (In Liquidation) had gone into liquidation pursuant to the order of this High Court on 4th June, 1990. On 19th December, 1999 Allahabad Bank, a secured creditor filed a suit against the Company represented by the Official Liquidator for a decree for Rs.4,06,90,548 together with interest on 15th July, 1996 and a decree w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r considering submission of the learned counsel for the parties, we are granting this indulgence, by permitting the sale of the company as a 'going concern' with certain conditions only. The Official Liquidator for this purpose shall advertise the sale of the company in liquidation-judgment debtor as a 'going concern' as ordered by the High Court. Such publication shall indicate that the reserve price shall be the amount equal to the total decree including interest has accrued upto 31st December, 1999 in favour of the appellant-bank, and shall also has to pay the balance interest which accrues, till full payment is made. The publication shall also indicate that purchaser has also to pay the liabilities of other claimants in the proceeding for the liquidation of the company. Since all the parties are represented before us including the Official Liquidator, we grant total period of ten weeks from today, for concluding sale, with the aforesaid condition, including the period of advertisement, receiving offers etc. In case, it is not concluded within this period, the order of the High Court directing the sale of the company as a 'going concern' shall stand set aside. The Official Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas basis'. The Official Liquidator was also directed to give inspection of the goods both moveable and immovable property in question to the intending purchasers and thereafter the matter was directed to be placed before the Court on 5th June, 2011 at 2pm for holding auction in open Court. On 6th June, 2011, since the formality was not completed within the period as directed, the matter was directed to be placed before the Court on 7th July, 2011 at 2pm for holding auction in open Court. Pursuant to the aforesaid order sale notice was published on 16th June, 2011 in two daily newspaper viz. Telegraph and Dainik Viswamitra. The terms and conditions of the sale were also published. Item No.1 of the terms and conditions of sale reads as follows:- "The sale will be held on 7th July, 2011 at the time of hearing of the application being C.A. No.136 of 2009 before Hon'ble Justice Ashoke Kumar Dasadhikari (as per cause list) as per inventory list and/or Valuation Report made by the Valuer on "As Is Where Is And Whatever There Is" basis the Official Liquidator shall not provide any guarantee and/or warranty as to the quality, quantity or specification of the assets sold. The Offere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. However, the offers made by the intending purchasers were not acceptable and the Court wanted to hold auction again in open Court. Ultimately, on 15th July, 2011 the applicant Gourinandan Real Estate Private Limited offered 26 crores which was accepted by the Court and the sale was confirmed in favour of said Gourinandan Real Estate Private Limited on payment of Rs.6,42,00,000 in addition to a deposit of Rs.10 lakhs paid by them. However, the order of sale was questioned before the Hon'ble Appeal Court and the Hon'ble Appeal Court by its order dated 20th July, 2011 passed by the following order:- "The Court:- There will be an order in terms of prayer (a) of the Notice of Motion. Subject to deposit of a sum of Rs.60,000/- being the estimated cost of advertisement incurred by Official Liquidator for the sale which is challenged here by the appellant, in course of tomorrow, there will be an interim order to the effect that Official Liquidator shall obtain prior leave of this Court before execution and registration of the conveyance in favour of the purchaser and also handing over possession of the property. However, hearing of the appeal is expedited in the manner as follows:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... properties and the effects of the Company shall be deemed to be. I the custody of the Hon'ble Court as from the date of the order of the winding up of the Company. In view of the aforesaid statutory provisions you are requested not to proceed in the matter without the leave of the Hon'ble High Court, Calcutta. However, in the meantime the matter is being placed before the Hon'ble Court for direction." The applicant's apprehension is that in view of the aforementioned two notices the auctioned land being the subject matter of the sale is either in part or in its entirety encumbered under the provisions of the West Bengal Estate Acquisition Act, 1953 or other land laws of the state and as such questioned the marketability of the land. The applicant in this application stated that purchaser requires necessary time for making further enquiries relating to the land of the Company. Accordingly a direction upon the Official Liquidator was prayed for, thereby directing him to make further inquiries with regard to the proceedings pending before the Sub-Divisional Land and Land Reforms Officer, Serampore pertaining to the Rishra Steels Limited (in liquidation). Further direction was sough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduction of the explanation under Section 6(3) of the Estate Acquisition Act. Mr. Mukherjee, argued that Section 4(1) of the Land Reforms Act confers ownership on the raiyat but the explanation under Section 4(1) introduced with effect from 7th August, 1969 makes Sub-section 4(1) in applicable to a raiyat retaining land under Section 6(1)(g) read with Section 6(3) of the Estate Acquisition Act and, thus, makes such land non-transferable. Mr. Mukherjee, further argued that no clearance had been obtained under Urban Land Ceiling Act and under the provisions of the said Act the lands involved excluding an insignificant protion a vacant lands and only 500 square meters are retainable thereunder. Mr. Mukherjee also cited a decision that where there is a statutory bar even a Court sale is not permissible. Mr. Mukherjee also cited a judgment reported in 1990(67) Company Cases, Page 16 at Page 26 (Saknw Industries) and submitted that where a continuance of interest is uncertain and the property is not transferable even a Company Court does not direct a sale to be made. Learned Counsel for the Official Liquidator submitted that the order of winding up was passed on 4th June, 1990 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ratnagiri Engineering Pvt. Ltd. (Supra) is clearly applicable. He submits that under Paragraph 25 of the aforesaid judgment of the Hon'ble Supreme Court have decided as follows:- "In view of the above, while we do not agree with the view taken by the High Court in the impugned judgment, we also hold that once an order under the main part of Section 6(3) of 1953 Act is passed by the State Government, the power under the proviso to Section 6(3) of the 1953 Act cannot be exercised by the State Government by taking into consideration the events which occurred after the said order was passed." The auction purchaser was informed by the notice of the Official Liquidator that the property would be sold 'as is whereas basis' and the petitioner/purchaser was satisfied about the property and then offered highest price, therefore, the pleas taken by the purchaser are not at tenable in the eye of law. The judgments cited by Mr. Mukherjee are delivered on different set of facts which have no manner of application in the instant case. According to him the State Government cannot resume the land for the subsequent events after the order if at all there be any under Section 6(3) of the said Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6(1)(g) and Section 6(3) of the West Bengal Estate Acquisition Act must be running factory on the date of vesting. And the word factory of the aforementioned Act cannot be equated with the state of a pre-existing factory. If the factory is not in operation/closed, a structure of it could be covered under Section 6(1)(b) of the West Bengal Estate Acquisition Act in case the applies. He submitted that in view of the judgment of the Hon'ble Apex Court delivered in case of Ratnagiri Engineering Pvt. Ltd. (Supra) there is no scope for any resumption. The purported explanation which was added very recently long after the date of liquidation and the order of Hon'ble Supreme Court, cannot touch the finality of the matter specially when in view of the winding up order the Hon'ble Supreme Court directed to sale the assets of the Company on 26th September, 2000. He also submitted that the notification of the State Government dated 9th November, 2010 is not at all applicable in the instant case. He submitted that the explanation cannot override the main provision, nor can override the judgment of the Hon'ble Apex Court. He also submits that by way of adding explanation under the provision the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sub-Divisional Land and Land Reforms Officer, Serampore as admitted by him. The Official Liquidator replied to the said notice stating therein that the properties/assets of the Company is under the custody of the Hon'ble Court from the date of winding up of the Company. He also requested the SDLLRO not to proceed in the matter without leave of the Hon'ble Court. He also pointed out that the Company have gone in liquidation under the order dated 4th June, 1990 and since then the Official Liquidator was appointed. It appears that except the said two letters issued by the SDLLRO, there is no record relating to this case although it was claimed that there was a notification of 6th April, 1962. But no copy of such notification was produced. The concerned State respondents could not show the original status of the land in the land records on the date of alleged vesting. It was also not known whether the factory was in operation on the land on the date of vesting. It was also not known whether the land is within ceiling or who were the owners on that date. In spite of several adjournments granted by this Court Mr. Banerjee, Junior Standing Counsel could not show a scrap of paper as regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010 cannot override the provisions under Section 6(3) of the Estate Acquisition Act. There is nothing in record to show that the land in question was beyond ceiling limit either. Even if it is accepted, for the sake of argument, that there is an order under Section 6 (3) of the said Act in that event also the ratio of judgment delivered by the Hon'ble Appex Court in case of Ratnagiri Engineering Pvt. Ltd. (Supra) is applicable and, therefore, the power under the provisions to Section 6(3) of the 1953 Act cannot be exercised by the State Government taking in account the subsequent events which occurred after the said order under Section 6(3) was passed. The relevant paragraphs under the aforementioned judgment being Paragraphs 24, 25 and 26 reads as follows :- "Moreover, on a plain reading of Section 6(3) of the 1953 Act it can be seen that the State Government can revise an order passed under the main clause of Section 6(3) of the 1953 Act. The use of the word "revise" in the proviso also supports the view we are taking. In other words, only the facts as existing at the time when the order under the main part of Section 6(3) of the 1953 Act was passed by the State Government can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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