In The Matter Of Tannary & Footwear ... vs Unknown
2011 Latest Caselaw 4174 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

?A.F.R.
 
No. - 10
 
Case :- MISC. COMPANY APPLICATION No. - 4 of 1995
 
Petitioner :- In The Matter Of Tannary & Footwear Corporation Of India Ltd
 
Petitioner Counsel :- Ashok Bhushan,A.K.Mishra, Ashok Mehta,O.L. U.L. Patole
 
Respondent Counsel :- A.K. Gupta,Ajay Kumar Shukla,Ankush Tandon,C.B. Gupta,Kush Saxena,Kushal Kant,Manish Tandon,Narendra Mohan,P.C.Jhingan,R.P. Agarwal,Ravi Kant,Rohit Agrawal,S.K.Mishra.,S.N.Gupta,Sandeep Saxena,Somesh Khare,Subhodh Kumar,V.M. Sharma,Vinay Khare,Vipin Sinha,Yashwant Verma
 

 
Order on Civil Misc. Application No. 108946 of 2009 along with Application Nos. 109599 of 2009, 109212 of 2009, 109606 of 2009, 109607 of 2009,109608 of 2009, 109609 of 2009, 109612 of 2009, 109614 of 2009, 109615 of 2009, 109593 of 2009, 109594 of 2009, 109597 of 2009, 109601 of 2009, 109603 of 2009, 109605 of 2009, 108924 of 2009, 108926 of 2009, 108932 of 2009, 108933 of 2009, 108935 of 2009, 108937 of 2009, 108941 of 2009, 108948 of 2009, 129374 of 2009, 220321 of 2011, 194048 of 2011, 237329 of 2010.
 
Hon. Arun Tandon, J.

All these applications have been filed by the similarly situate persons, who are in possession of official bugalow allotted to them in their capacity as officer of TAFCO, with the prayer that the order dated 05.02.2009 passed by the Company Court may be recalled and the applicant may not be evicted from the property in dispute and further the Official Liquidator may be directed to not to interfere with the peaceful possession of the applicant over the bungalow in question.

All these applications are being considered and decided by means of this common order, treating the facts in the application of Sri Iqbal Husain as leading one.

At the very outset the Court may record that the process of the Court has been abused by the present applicant, as would be apparent from the facts which shall be recorded herein under. He has to be dealt with in a manner so that the similarly situate employees do not endeavour in future to create such a situation.

TAFCO India Limited was directed to be wound up under the order of the Company Court as early as on 18.08.1998. Sri Iqbal Husain applicant was admittedly an officer of the said company. In his capacity as the Deputy Manager an allotment letter was issued by the TAFCO on 29.01.1987 allotting him bungalow adjacent to Cycle Stand with effect from 28.4.1986 (Bungalow No. 13/400). The allotment letter contained a specific recital that the allotment will remain valid so long as Sri Iqbal Husain continues in actual employment of Corporation. Copy of the allotment letter has been produced by Sri Rohit Agrawal, counsel for Sri Iqbal Husain, today in the Court, which is taken on record.

Sri Iqbal Husain is stated to have made an application opting for VRS after TAFCO was wound up. In terms of the conditions imposed he also gave an undertaking along with other 627 employees and 31 officers in form of affidavit to the effect that he shall vacate the official accommodation on 30th June, 1999 and handover vacant possession of the said premises to the TAFCO. It was further undertaken that in case of failure to vacate the bungalow by 30th June, 1999 he shall render himself liable to damages and further legal action including criminal for not vacating the house. It was further specifically stated that he shall have no lien on the said bungalow after 30.06.1999.

The averments made in respect of such undertaking of Sri Iqbal Husain is contained in paragraph 9 of the counter affidavit filed on behalf of the Official Liquidator to the present application and is being quoted herein below:

"9. That it is pertinent to mention here that between 1.11.1999 to 30.6.1999, 627 employees as well as 31 offices submitted declaration and gave undertaking to the effect that they will vacate the official accommodation on 30th June, 1999 and handover vacant possession of the said premises to the TAFCO and further undertook that in case of failure to vacate the bungalow by 30th June, 1999 they shall be liable to pay damages and further legal action including criminal for not vacating the house and shall be solely responsible for the damages and shall have no lien on the said bungalow after 30.6.1999."

A rejoinder affidavit has been filed by Sri Iqbal Husain and the contents of paragraph 9 of the counter affidavit has been replied by means of paragraph 10 of the rejoinder affidavit, which reads as follows:

"10. That the contents of paragraph 9 of the affidavit are not admitted as stated and hence denied. It is stated that the undertaking given was in the capacity of employer-employee relationship and the same has nothing in relation to the dispute regarding the title of the property in dispute."

Today Sri Rohit Agrawal, Advocate, appearing on behalf of Sri Iqbal Husain, fairly stated that Sri Iqbal Husain was allotted the bungalow in his official capacity because of his being an officer of the TAFCO. Further in view of the winding up order passed by the Company Court in 1998 his engagement as an officer of TAFCO stood discharged in terms of the provisions of the Companies Act and Rules framed thereunder by operation of law. He could not dispute the fact that an undertaking in form of an affidavit had been filed for availing the V.R.S. by Iqbal Husain.

It is not in dispute that with the winding up order being issued by the Company Court, all the properties of the TAFCO stood vested in the Company Court, to be managed thereafter by the Official Liquidator.

Sri Iqbal Husain, contrary to the undertaking given, continues in actual possession of the bungalow even today. For the purpose of justifying his illegal occupation of the official accommodation even after 1999, a peculiar stand has been taken before this Court, namely that under Section 468 of the Company Act the Official Liquidator can take possession of such properties as are prima facie found to be of the company which has been directed for wound up.

Since the British India Corporation (BIC) has set up a claim qua the properties of TAFCO, including bungalow in dispute, the TAFCO cannot be said to have prima facie title. Secondly, in view of Section 535 of the Companies Act the Official Liquidator has to issue the declaimer, inasmuch as the property is covered by Section 535 Clause (c), as it is not salable because of dispute of title raised by the BIC.

On behalf of the applicant it is also contended that the Company Court vide order dated 18.08.1998, while directing winding up of the TAFCO, had observed that the company does not have the title deed in respect of the property in question and did not have any viable assets worth its name. In the balance sheet filed by the company in the year 2000 it has been admitted that the landed property has yet not been transferred in the name of TAFCO.

In view of the aforesaid facts, he submits that the company does not have title over the property in possession of Sri Iqbal Husain i. e. bungalow. Therefore, the Official Liquidator cannot take possession thereof nor can evict Sri Iqbal Husain therefrom.

For appreciating the objections raised, it would be worthwhile to refer to Section 468 and Section 535(c) of the Companies Act, which read as follows:

"468. Delivery of property to liquidator.- The Tribunal may, at any time after making a winding up order, require any contributory for the time being on the list of contributories, and any trustee, receiver, banker, agent, officer or other employee of the company, to pay, deliver, surrender or transfer forthwith or within such time as the Tribunal directs, to the liquidator, any money, property or books and papers in his custody or under his control to which the company is prima facie entitled.

535. Disclaimer of onerous property in case of a company which is being wound up.-(1) Where any part of the property of a company which is being wound up consists of-

(a) land of any tenure, burdened with onerous convenants;

(b) shares or stock in companies;

(c) any other property which is unsaleable or is not readily saleable, by reason of its binding the processor thereof either to the performance of any onerous act or to the payment of any sum of money; or

(d) unprofitable contracts,

the liquidator of the company, notwithstanding that he has endeavoured to sell or has taken possession of the property, or exercised any act of ownership in relation thereto, or done anything in pursuance of the contract, may, with the leave of the Tribunal and subject to the provisions of this section, by writing signed by him, at any time within twelve months after the commencement of the winding up or such extended period as may be allowed by the Tribunal, disclaim the property:"

From a simple reading of Section 468 it will be seen that only for the purposes of taking possession by Official Liquidator, after an order of winding up, only prima facie title of the company over the property under winding up is to be seen.

Sri Iqbal Husain cannot be permitted to question the title of the TAFCO over the bungalow, as it was actually allotted to him by TAFCO. Further he had given an undertaking in form of an affidavit for availing the V.R.S. that he shall deliver the possession of the bungalow to TAFCO on or before 30.06.1999. It is on this undertaking that money in terms of V.R.S. (running into lacs of rupees) was paid to him. Can Sri Iqbal Husain be now permitted to say that the TAFCO does not even have prima facie title over the bungalow. The answer has to be a big No.

It may be recorded that deliberately Sri Iqbal Husain had not disclosed the factum of the undertaking given by him at the time of availing the V.R.S. in the present application and with the help of such concealment of fact he succeeded in obtaining an interim order on the application which permitted him to deposit a sum of Rs. 10,000/- only and in turn had the effect of staying his eviction.

At least for the period after 30th June, 1999 till date i. e. for more than 12 years Sri Iqbal Husain has paid a sum of Rs. 10,000/- only towards use and occupation of the bungalow, which would work out to Rs. 833/- per year i. e. Rs. 69/- per month, which on the face of it shocks the conscious of the Court.

The dispute between BIC and TAFCO in respect of the property is still to be adjudicated by the Company Court qua which Sri Iqbal Husain can have no say. It is admitted to Sri Iqbal Husain that he was handed over possession of bungalow at the behest of TAFCO and not de hors the title claimed thereon by TAFCO.

The observations made in the winding up order dated 18.08.1998 qua the company having no viable assets or the title having not been transferred in favour of TAFCO is of not much consequence so far as the consideration of the present application is concerned. BIC can at best raise a grievance in respect of the money which was payable to it and having not been paid by the TAFCO qua the property. The prima facie title of TAFCO over the bungalow in question cannot be disputed by the petitioner.

The judgments relied upon by the counsel for the applicant in the cases of A. Luis and another vs. M.P. Ramamurti and others, 2007 (14) SCC 87, D. Satya Narain vs. P. Jagdish; 1987 (4) SCC 424, Kamakshi Builders vs. Ambedkar Educational Society and others; 2007 (12) SCC 27 and Damodardas Jain vs. Krishna Charan Chakraborty and another; Company Cases (67) 564. are clearly distinguishable in the facts of the case.

The Apex Court in the case of Bhavnagar University v. Pitiola Sugar Mills 2003 (2) SCC 111 followed in the case of Dr. Raghuvir Singh reported in AIR SCC Weekly 5817 has explained that a little difference in the facts of the case will make a lost of difference in the precedential value of the decision.

Reference to Section 535(c) of the Companies Act is totally out of context, inasmuch as the Official Liquidator has not issued any such disclaimer nor it is so required to be issued at this stage.

This Court has no hesitation to hold that the person like Sri Iqbal Husain are not entitled to any sympathy of the Court. He has unauthorizedly retained the possession of the bungalow spread over more than 200 square yard, situate in the heart of Kanpur City, for 12 years even after the company having been wound up and even after his having filed an undertaking in the form of affidavit that he shall vacate and deliver the possession of the premises to TAFCO by 30.06.1999.

Because of such uncalled for proceeding being initiated before Company Court, the disposal of the properties of TAFCO has been withheld for decades together, which in turn result in denial of money to the creditors. The application filed by Sri Iqbal Husain is held to be an abuse of process of the Court.

In the facts of the case this Court directs that the Official Liquidator shall dispossess all the applicants from the premises in question within two weeks from today, if they themselves do not vacate the same within this period, in any case by 15th September, 2011. District Magistrate and Senior Superintendent of Police, Kanpur Nagar are directed to provide all assistance to the Official Liquidator for the purpose. There should be no complaint to the court that the Official Liquidator could not take possession of the bungalow because of inaction on the part of the said district authorities.

For the use and occupation of the premises unauthorizedly for the period between 01.07.1999 to 30.08.2011, the applicants are further directed to pay a sum of Rs. 5,000/- (Five Thousand) per month through a bank draft drawn in the name of Official Liquidator of this Court by 31.09.2011, failing which the District Magistrate shall ensure recovery of the said damages as arrears of land revenue. The aforesaid exercise must be completed within two months from today.

The applicants are further called upon to show cause as to why contempt proceedings/proceedings under Section 195 read with Section 340 Cr.P.C. be not initiated against then for concealing material facts in the application filed before this Court.

For the purpose three weeks' time is prayed for by Sri Rohit Agrawal, Advocate.

Let matter be listed for the purpose again on 26th September, 2011.

A copy of this order be issued to the Chief Standing Counsel free of cost for being forwarded to the District Magistrate and Senior Superintendent of Police, Kanpur Nagar for necessary compliance.

29.08.2011

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