Amritsar Sugar Mills Co. Ltd. vs Union Of India
2011 Latest Caselaw 1145 Del

13.
*IN THE HIGH COURT OF DELHI AT NEW DELHI

%                      Judgment delivered on: 25th February, 2011

+     LETTERS PATENT APPEAL NO. 192/2011


      AMRITSAR SUGAR MILLS CO. LTD.       ..... Appellant
                  Through Mr. Vinay Kumar Garg & Mr.
                  Fazal Ahmad, Advocates.

                    versus

      UNION OF INDIA                       ..... Respondent

Through Mr. Sachin Datta, CGSC & Ms. Gayatri Verma, Advocate for UOI.

CORAM:

HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE SANJIV KHANNA

1. Whether Reporters of local papers may be allowed to see the judgment? YES

2. To be referred to the Reporter or not ? YES

3. Whether the judgment should be reported in the Digest ? YES

DIPAK MISRA, CJ

Calling in question the legal validity of the order dated 24th

January, 2011 passed by the learned single Judge in Writ

Petition (Civil) No. 3880/2010, the present intra-Court appeal

has been preferred.

2. The brief resume of facts are that Amritsar Oil Works

(Acquisition and transfer of Undertakings) Act, 1982 (for brevity,

„the Act‟), was brought into force for acquiring the undertaking of

the appellant. By notification dated 6th September, 1984, the

Commissioner of Payments was appointed under the Act for

disbursing the amount payable. Under Section 7(1) of the Act a

sum of Rs. 64,48,944.65 was to be paid by the Central

Government to the appellant-company for transfer and vesting of

the undertaking in the Central Government. Section 17 enables

the person having a claim against the appellant company to file

claims before the Commissioner of Payments within thirty days

from the specified date. Section 19 of the Act stipulates that

after meeting of the claims of the secured and unsecured

creditors in terms of the priority set out in Section 16(2) of the

Act, the balance amount shall be paid to the company in

question.

3. As set forth, the final notice was published on 5th October,

1987 seeking claims from the appellant company under Section

19 of the Act by the Commissioner. No claim was received in

pursuance of the said notice and accordingly, the Office of the

Commissioner of Payments was wound up on 2nd January,

1989.

4. As manifest, the appellant moved the competent authority

of the Central Government under the provisions of the Right to

Information Act, 2005 to know why the amount which was due to

it was not paid and to the said query it was replied that as on 1st

April, 1994 a sum of Rs.53,40,500/- was available in the Pay

and Accounts Office as determined under the Act after settling

the claims of the secured creditors.

5. A writ petition was filed in the Punjab and Haryana High

Court forming the subject matter being W.P. (C) No.

12811/2009, which was withdrawn with liberty to file a fresh

petition with more particulars. Thereafter, the petitioner invoked

the jurisdiction of this Court and the learned single Judge

rejected the contention that the Central Government was under

an obligation to tender the amount and held that the writ petition

was hit by doctrine of delay and laches. Being of this view, the

learned single Judge dismissed the writ petition.

6. Assailing the order, it is submitted by Mr. Vinay Garg,

learned counsel for the appellant that the learned single Judge

has fallen into error by applying the principle of delay and laches

to a case of this nature inasmuch as the undertaking was taken

over in the year 1982 and the notice was published in 1987 and

after determination of the amount payable to the creditors and

others, the amount was available with the Commissioner which

was due to the appellant. It is urged by him that the Central

Government could not have kept the appellant‟s money in the

absence of any statutory prohibition to get back the money

solely on the ground that the appellant approached in a belated

manner. Learned counsel would further submit that there is no

warrant or justification on the part of the respondents to deny the

amount which is the amount that is due to him after making good

of all claims. It is further contended by him that the said act

tantamounts to confiscation of property and defeats the very

purpose enshrined under Article 300 A of the Constitution of

India.

7. Mr. Sachin Datta, learned counsel for Union of India has

submitted that it was obligatory on the part of the appellant to

give its response when the notice was published in the year

1987 and after the Office of the Commissioner was wound up,

he had no right to claim the amount. He has invited our

attention to Sections 19 and 20 of the Act to bolster the

contention that there is a statutory bar to grant the compensation

after a particular period and, therefore, the view expressed by

the learned single Judge is absolutely flawless.

8. At the very outset, we may refer to the communication

made to the petitioner when he applied under the Right to

Information Act, 2005. The same reads as follows:-

" Kindly refer to your letter No. Nill dated 23.07.2009 on the subject noted above. As desired by you, it is informed that claim of the Company being time barred has been rejected vide letter of even number of this office dated 16.06.2009.

2. As on 01.04.1994, an amount of Rs.53,40,500/- was available in the Pay and Accounts Office.

3. Interest on the amount would be calculated by Pay and Accounts Office, for which you request under RTI Act is being forwarded to the Controller of Accounts, whose address is as follows:

Controller of Accounts, Ministry of Consumer Affairs, Food & Public Distribution Department of Food & Public Distribution, 1688 Kasturba Gandhi Marg, Barracks, New Delhi- 110001."

9. On a careful perusal of the same, it is perceptible that a

sum of Rs.53,40,500/- was available in the Pay and Accounts

Office. The said communication was made on 5th August, 2009.

We have reproduced the said communication in entirety only to

highlight that there is no factual dispute with regard to the

quantum vis-à-vis the compensation which is payable to the

appellant. In view of the aforesaid background, two questions

that emerge for consideration are whether there is a statutory

bar or by virtue of the notice published on 18th September, 1987,

the right of the appellant company is totally smothered or

scuttled to get back the sum and whether the relief claimed is hit

by the doctrine of delay and laches.

10. First we would like to scan the statutory scheme. Section

7 of the Act occurs in Chapter III and deals with payment of

amount. The said Section, as is relevant for the present

purpose, reads as follows:-

"7. (1) For the transfer to any vesting in the Central Government, under Section 3 of the Amritsar Oil Works and the right, title and interest of the Amritsar Sugar Mills company in relation that works, there shall be given by the Central Government to the Amritsar Sugar Mills Company, in cash and in the manner specified in Chapter VI, an amount equal to a sum of sixty four lakhs, forty eight thousand nine hundred and forty four rupees and sixty five paisa.

(2) In addition to the amount specified in sub-section (1), there shall also be given to the Amritsar Sugar Mills Company by the Central Government an amount calculated at the rate of ten thousand rupees per annum for the deprivation of the Amritsar Sugar Mills Company of the management of its Amritsar Oil Works for the period commencing on the date of taking over

and ending with the appointed day.

(3) The amount specified in sub- section (2) and the amount calculated in accordance with the provisions of sub- section (2) shall carry simple interest at the rate of four per cent, per annum for the period commencing on the appointed day and ending on the date on which payment of such amount is made by the Central Government to the Commissioner."

11. On a scrutiny of the said provision, it is clear to us that a

specified sum as compensation was payable with interest for

taking over the undertaking of the appellant company and the

modes of computation of payment towards interest are also

given. Section 14, which occurs in Chapter IV, deals with

Commissioner of Payments and the role of the Commissioner in

various fields. Section 17 of the Act deals with claimant who

had a claim over the undertaking owned by the appellant

company. The said provision is as follows:-

"17. Every person having a claim against the Amritsar Sugar Mills Company in relation to the Amritsar Oil Works shall prefer to such claim before the Commissioner within thirty days from the specified date:

Provided that if the Commissioner is satisfied that the proof claimant was prevented by sufficient cause from

preferring the claim within the said period of thirty days, he may entertain the claim within a further period of thirty days, but not thereafter."

12. Section 18 deals with the procedural aspect which are

required to be adopted by the Commissioner for dealing and

disbursing of the claim. Section 19 provides how the payments

have to be made to the secured and unsecured creditors and

what should be done to the said amount qua the company. As

Mr. Sachin Datta has laid immense emphasis on the said

provision, it is seemly to reproduce the same:

"19. Where, after meeting the claims admitted by him of secured creditors, and unsecured creditors having priority under sub-section (2) of section 16, the total amount of the claims of other unsecured creditors admitted by the Commissioner does not exceed the balance of the amount left after assisting the liabilities referred to in sub-section (1) and (2) of section 16, every admitted claim of such other unsecured creditors, shall rank equally among themselves and be paid in full, and the balance, if any, shall be paid to the Amritsar Sugar Mills Company, but where such amount is insufficient to meet in full the total amount of such admitted claims, all such claims shall abate in equal proportions and be paid accordingly."(emphasis added)

13. On a studied scrutiny of the said provision, it is

demonstrable that after meeting the dues of the secured

creditors and the unsecured creditors having priority under sub-

section 2 of Section 16, and the admitted claim of such other un-

secured creditors shall be made good and thereafter the balance

amount has to be paid to the appellant and in case there is

insufficient amount to meet the full and the total amount of

admitted claims, all such claims shall abate in equal proportions

and be paid accordingly. Thus, in case of surplus, the same

would be payable to the appellant company. This is the

obligation and statutory duty of the respondents.

14. Section 20 has a different contour. It provides how the

amount is to be dealt with in case of unclaimed and undisbursed

amounts payable to the third parties, who had claims against the

appellant. Mr. Datta, learned Standing Counsel for Union of

India would contend that the interest of the company is totally

destroyed if the language of Section 20 is purposefully read. To

appreciate the said submission of Mr. Datta, we reproduce

Section 20 hereinbelow:

"20. Any money paid to the Commissioner which remains un-

disbursed or unclaimed on the date immediately preceding the date on which the office of the Commissioner is finally wound up, shall be paid by the

Commissioner before his office is finally wound up to the general revenue account of the Central Government; but a claim to any money so transferred may be preferred to the Central Government by the person entitled to such payment and shall be dealt with as if such transfer had not been made, and the order, if any, for payment of the claim being treated as an order for the refund of the revenue."

15. On an x-ray of the aforesaid provision, it is quite vivid that

before the Office of the Commissioner is finally wound up, the

Commissioner has to transfer the unclaimed amount to general

revenue account of the Central Government and a claim to the

money transferred should be preferred to the Central

Government by the person entitled to such payment and the

said claim shall be dealt with as if such transfer has not been

made and an order for payment of the claim being treated as an

order for the refund of the revenue. The learned Standing

Counsel for the Union of India would submit that after the money

has been transferred to the general revenue account of the

Central Government, the claim of the appellant company

becomes extinct as the statutory provision refers to the person.

The word „person‟ definitely does not refer to the appellant

company but refers to a third party claimant. The very purpose

of the legislature was to keep the third party claims alive despite

the winding up of the Office of the Commissioner. It had a

laudable purpose but by no stretch of imagination it can be

denounced that what has been stated in Section 19 of the Act

stands abrogated by the language employed in Section 20 to

destroy the right of the appellant over the balance

compensation. It becomes obligatory on the part of the Central

Government to pay it back to the appellant company because

that is the compensation.

16. The notice that was published on 18th September, 1987 in

the newspaper reads as follows:-

" Now after settling almost all the claims of the creditors taking under various categories, it is expected that some balance amount would be available with the Commissioner for payment to the Amritsar Sugar Mills Co.

Ltd. The company is, therefore, required to place a claim before the Commissioner of Payments for the balance amount within 30 days from the issue of this notification. The person claiming the amount on behalf of the Amritsar Sugar Mills Co. Ltd. should be duly authorized by the Company to make such a claim.

It is noteworthy that at the time when this office invited applications under Section 17 of the Amritsar Oil Works (Acquisition & Transfer of

Undertakings) Act, 1982 from persons having claims against Amritsar Sugar Mills Co. Ltd., in relation to Amritsar Oil Works, some shareholders of the Company had also preferred their claims for disbursement. While acknowledging such applications each shareholder was informed individually that the claims of the shareholders do not fall under Section 17 of the Act because it was held that they could not be the persons having claims against the company being members of the company. Now when the balance of the compensation amount is being paid to the company by virtue of Section 19 of the Act, the shareholders can take necessary steps to recover their dues from the Company as per the provision of Company Law.

Take notice that in default of receipt of any such claims from the authorized person of the company within the stipulated time, the available amount shall be deposited with the Central Government under Section 20 of the Act."

17. On a perusal of the said publication, it only becomes

further clear that in case the claims are not made, the amount

shall be deposited with the Central Government under Section

20 of the Act. From the aforesaid statutory provisions and the

paper publication, it is clear as crystal that there is a distinction

between a third party claimant qua undertaking of the company

that had been taken over, and the company. That apart, the

company cannot be equated with a claimant neither under the

statute nor under the notice published. In fact, the publication

clearly postulates that when the balance of compensation

amount was being paid to the company by virtue of Section 19

of the Act, the shareholders can take necessary steps to recover

their dues from the company under the provisions of the

company law but further clarified that the shareholders have

been given a different status apart from the said third party. In

any case, the claim of the company by virtue of any kind of

statutory provision has not been smothered. Thus, the doctrine

of delay and laches would not defeat the amount due and

payable to the company. Mr. Garg, learned counsel for the

appellant has invited our attention to a two-Judge Bench

decision in State of U.P. and Others versus Manohar, (2005)

2 SCC 126. In the said case, there was acquisition of land in the

year 1955. A writ petition was filed before the Allahabad High

Court in the year 1991 that no compensation was paid. The

High Court repelled the plea and the stand that the claim was

absolutely belated, and came to hold that the State should

gracefully accept its mistake and promptly pay the

compensation. In that context their Lordships further opined

thus:

"7. Ours is a constitutional democracy and the rights available to the citizens are declared by the Constitution. Although Article 19(I)(f) was deleted by the Forty-fourth Amendment to the Constitution, Article 300-A has been placed in the Constitution, which reads as follows:

"300-A. Persons not to be deprived of property save by authority of law- No person shall be deprived of his property save by authority of law."

8. This is a case where we find utter lack of legal authority for deprivation of the respondent`s property by the appellants who are State authorities. In our view, this case was an eminently fit one for exercising the writ jurisdiction of the High Court under Article 226 of the Constitution. In our view, the High Court was somewhat liberal in not imposing exemplary costs on the appellants. We would have perhaps followed suit, but for the intransigence displayed before us."

18. In Vimalben Ajitbhai Patel versus Vatslabeen

Ashokbhai Patel and Others, (2008) 4 SCC 694, the Apex

Court has held thus:

"42. The right to property is no longer a fundamental right. But still it is a constitutional right. Apart from

constitutional right it is also a human right. The procedures laid down for deprivation thereof must be scrupulously complied with (See Devinder Singh and Ors. v. State of Punjab and Ors. (2008) 1 SCC 728)."

19. In Karnataka State Financial Corporation versus N.

Narasimahaiah and Others, (2008) 5 SCC 176, their Lordships

have expressed as follows:

"40. Right of property, although no longer a fundamental right, is still a constitutional right. It is also human right. In absence of any provision either expressly or by necessary implication, depriving a person therefrom, the court shall not construe a provision leaning in favour of such deprivation........"

20. In P.T. Munichikkanna Reddy versus Revamma and

Others, AIR 2007 SC 1753, it has been ruled as under:

"15. There is another aspect of the matter, which cannot be lost sight of. The right of property is now considered to be not only a constitutional or statutory right but also a human right.

16. Declaration of the Rights of Man and of the Citizen, 1789 enunciates right to property under Article 17:

"Since the right to property is inviolable and sacred, no-one may be deprived thereof, unless public necessity, legally ascertained, obviously requires it and just and prior indemnity has been paid."

17. Moreover, Universal Declaration of Human rights, 1948 under Section 17(i) and 17(ii) also recognizes right to property:

"17(i) Everyone has the right to own property alone as well as in association with others. (ii) No- one shall be arbitrarily deprived of his property."

18. Human rights have been historically considered in the realm of individual rights such as, right to health, right to livelihood, right to shelter and employment etc. but now human rights are gaining a multifaceted dimension. Right to property is also considered very much a part of the new dimension. Therefore, even claim of adverse possession has to be read in that context. The activist approach of the English Courts is quite visible from the Judgment of Beaulane Properties Ltd. v. Palmer 2005 (3) WLR 554: 2005 EWHC 817 (Ch.) and JA Pye (Oxford) Ltd v. United Kingdom [2005] ECHR 921: [2005] 49 ERG 90, [2005] ECHR 921, the court herein tried to read the Human Rights position in the context of adverse possession. But what is commendable is that the dimensions of human rights has widened so much that now property dispute issues are also being raised within the contours of human rights."

21. At this juncture, we may reproduce a passage from State

of Kerala and Another versus Peoples Union for Civil

Liberties Kerala State Unit and Others, (2009) 8 SCC 46

wherein it has been held:-

"88. When a person acquires an indefeasible right, he can be deprived therefrom only by taking recourse to the doctrine of imminent domain. If a person is sought to be deprived of an indefeasible right acquired by him, he should be paid an amount of compensation. In a case of this nature, therefore, where an amount of compensation has not actually been tendered, the vendees of the land could not be deprived of their right to be dispossessed. In that view of the matter, a distinction must be made between a case where an amount of compensation has been paid and in a case where it has not been."

22. In this context, we may usefully refer to the decision in

Ram Chand and Others versus Union of India and Others,

(1994) 1 SCC 44 wherein a three-Judge Bench of the Apex

Court, after referring to the decision in Ramjas Foundation and

Others versus Union of India and Others, AIR 1993 SC 852,

has opined that the question of delay in invoking the jurisdiction

under Article 226 of the Constitution of India has to be

considered along with the communication on the part of the

authority who are to perform their statutory duty. When the

statutory authorities fail to take action within a reasonable time,

they cannot take defence of the plea of laches. In the said case,

again the question of compensation arose and their Lordships

posed the question whether the respondents, viz., Union of India

and its functionaries be not directed to compensate the

petitioner who were small cultivators holding land within and

around Delhi for the injury caused to them not by the provisions

of the Act but because of the non-exercise of the power of the

authorities under the Act within a reasonable time and eventually

the writ petition and the civil appeals were allowed and the

compensation was granted.

23. We have referred to the aforesaid decisions only to

highlight that getting compensation qua one‟s own property is

sacrosanct.

24. Keeping in view the aforesaid enunciation of law and the

scheme of the Act, we are inclined to think that when the amount

has been kept in the central revenue fund and intimation was

sent to the petitioner in 2009, the right of the appellant company

to get the compensation of the balance amount should not be

denied. As is manifest, a sum of Rs.53,40,500/- was available in

the Pay and Accounts Office as on 1st April, 1994 and again by

communication dated 26th/28th April, 2010 the authorities

informed him that there has been no reconciliation of the

balance amount along with interest. Regard being had to the

said communication, the cumulative effect of the statutory

provisions and the pronouncements in the field, we are unable to

concur with the view of the learned single Judge that the claim

put forth by the appellant-petitioner was hit by delay and laches.

25. In view of the aforesaid analysis, we allow the appeal and

set aside the order passed by the learned single Judge and

direct the respondents to refund the balance amount due to the

company within a period of three months. There shall be no

order as to costs.

CHIEF JUSTICE

SANJIV KHANNA, J.

FEBRUARY 25, 2011 VKR