M/S Jai Jute Industries Ltd. vs M/S State Of West Bengal & Anr.
2016 Latest Caselaw 5183 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                    Judgment Reserved on: July 13, 2016
                                   Judgment Delivered on: August 08, 2016

+                        W.P.(C) 12195/2015

      M/S JAI JUTE INDUSTRIES LTD.                       ..... Petitioner
                 Represented by: Mr.Ranako Banerjee, Senior
                                 Advocate instructed by Ms.Maneesha
                                 Dhir, Ms.Varsha Banerjee,
                                 Mr.Siddharth Sharma, Ms.Divya
                                 Krishnan and Ms.A.Das, Advocates

                                      versus

      M/S STATE OF WEST BENGAL & ANR              ..... Respondents
               Represented by: Mr.Soumitra G. Chaudhuri, Advocate
                               with Ms.Seema Sharma, Advocate for
                               R-1

CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MS. JUSTICE PRATIBHA RANI

PRADEEP NANDRAJOG, J.

1. The State of West Bengal : respondent No.1 in the writ petition filed an appeal against an order dated August 05, 2013 passed by BIFR. The appeal was filed on April 28, 2015 and was registered as Appeal No.53/2015. Concededly, as per SICA, 1985 the appeal had to be filed within a period of 45 days and it is apparent that the appeal was filed much after the period of 45 days had expired. As per the proviso to sub-Section 1 of Section 25 AAIFR can entertain an appeal filed after 45 days but not beyond 60 days and that too upon being satisfied that there was sufficient cause to do so.

2. The petitioner raised an objection to the maintainability of the appeal and questioned the same on the bar of limitation.

3. The respondent pleaded that it would be entitled to the benefit of either Section 14 of the Limitation Act, 1963 or application of its principles in the interest of justice and the State of West Bengal.

4. Vide impugned order dated November 09, 2015 AAIFR has dismissed the preliminary objection raised by the petitioner that the appeal was barred by limitation. AAIFR has held that the State of West Bengal would be entitled to the benefit of the principles embodied in Section 14 of the Limitation Act, 1963; and excluding such period which the State of West Bengal spent in pursuing a remedy of review before BIFR with respect to the order dated August 05, 2013, the appeal was maintainable as having been filed within the period of limitation.

5. The facts relevant to be noted on the issue concerning the State of West Bengal bona-fide pursuing a remedy of review before BIFR and BIFR holding that it had no power of review resulting in the claim of the State of West Bengal that it was bona-fide prosecuting a remedy before a wrong forum are that the petitioner company made a reference to BIFR for being declared a sick industrial company and a scheme for its rehabilitation to be sanctioned. The proceedings resulted in BIFR registering the reference upon recording a satisfaction that the net worth of the petitioner had turned negative. Various steps were taken to revive the petitioner and unfortunately, many failed. In the year 2005, the promoters of a company M/s.Bahubali Traders Pvt. Ltd. entered into an agreement with the promoters of the petitioner company to take over the petitioner and inject equity into the company. The new promoters sought permission from BIFR to formulate a rehabilitation proposal resulting in a show cause issued by

BIFR to the petitioner as to why it should not be wound up kept in abeyance.

6. Through its new promoters the petitioner company submitted a revival proposal on July 09, 2007 which, inter-alia, envisaged conversion of a parcel of land in possession of the petitioner from industrial to residential/commercial, including a permission to sell said land to generate capital to be in turn used to finance the revival package.

7. The State of West Bengal opposed the scheme pleading that possession of the land was given to the petitioner under Section 6(3) of the West Bengal Estates Acquisition Act, 1953, under which the ownership right and the right to alienate remained with the State of West Bengal. It also pleaded that the petitioner never submitted a viable project report and had failed to comply with the provisions of the West Bengal Estates Acquisition Act, 1953. It was also pleaded that the West Bengal Urban Land (Sealing and Regulation) Act, 1976 imposed sealing upon units holding such land. It was pleaded that the petitioner never acquired Raiyati interest in the land for purposes of Sections 2(10) and 4(1) of the West Bengal Land Reforms Act, 1955. It was pleaded that the petitioner never sought permission under the proviso to Section 14(Z)(1) of the West Bengal Land Reforms Act, 1955. It was also pleaded that the industrial policy of the State prohibited conversion of industrial land to any other use.

8. Brushing aside the objections, BIFR tentatively sanctioned the scheme vide order dated October 30, 2008 by directing that the State of West Bengal would grant permission to the petitioner company for sale of the surplus land upon the petitioner completing the necessary formalities. Relevant would it be to highlight that BIFR deleted the provision in the draft scheme for rehabilitation which contemplated conversion of the land used from industrial to commercial/residential, meaning thereby that the

permission granted by BIFR would have to be read as if the contemplated sale was to sell the surplus industrial land for an industrial purpose. BIFR also constituted an Assets Sales Committee to supervise the sale of the surplus land. Permission was accorded to sell 36926.6 square meters land. The petitioner filed an application praying to modify the scheme and permit it to sell only 18760 square meters land which was actually surplus. The scheme was modified and finalized accordingly on August 05, 2013, and surprisingly with a direction to the State of West Bengal to allow conversion of the surplus land for residential/commercial use.

9. Relevant would it be to highlight that in the order dated August 05, 2013 BIFR noted that the State of West Bengal was opposing the conversion of the surplus land from industrial use to a commercial/residential use on the ground that the same was contrary to law, and yet passed the direction for conversion. We further note that no order passed by BIFR has dealt with the merits of the objection of the State of West Bengal regarding the issue of conversion.

10. Aggrieved by the order dated August 05, 2013, on September 11, 2013 the State of West Bengal sought a review/recall of the direction in the order dated August 05, 2013 to convert the land use from industrial to residential/commercial. A little later, on November 06, 2013 advised by its legal advisers, the State of West Bengal filed an appeal before AAIFR against the order dated August 05, 2013, but withdrew the appeal, once again on the advice of its legal advisers, informing AAIFR that since it had sought a review of the order dated August 05, 2013, it was withdrawing the appeal, but sought a permission from AAIFR to prosecute the review application before BIFR lest an objection was raised that having filed the appeal against the order dated August 05, 2013 the review could not be

prosecuted. The said appeal registered as No.35/2014 was permitted to be withdrawn by AAIFR on December 22, 2014.

11. Vide order dated February 12, 2015 BIFR dismissed the review application filed by the State of West Bengal observing : 'having considered the submissions made during the hearing and material on record, the Bench observed that the GoWB has simply written a letter dated 11.09.2013 to the Board for recalling the direction dated 05.08.2013 passed by the Board. This letter was not shared with any party nor even pressed by the GoWB in any of the Bench hearing. Writing a simple correspondence to the Board cannot be construed as a Miscellaneous Application as per the settled procedure of the Board. However, the Board cannot review its own order. Accordingly the Bench dismissed the MA No.58/2015 filed by GoWB as non maintainable since the prayer is beyond the jurisdiction of the Board.'

12. It is apparent that the aforenoted facts concerning review sought by the State of West Bengal before BIFR of the direction contained in its order dated August 05, 2013 and after nearly two years of entertaining the review application BIFR holding that it had no power of review, was pressed into aid by the State of West Bengal before AAIFR that having spent said time bona-fide litigating before a forum which had no jurisdiction, on the principles analogous to Section 14 of the Limitation Act, 1963 it would be entitled to have said period excluded while computing limitation.

13. As noted above the plea of the State of West Bengal has succeeded before AAIFR.

14. On the principle of law applied by AAIFR, we may profitably note the latest decision of the Supreme Court reported as (2015) 7 SCC 58 MP Steel Corporation Vs. Commissioner of Central Excise wherein, with reference to various decisions, explaining some and clarifying a few; noting

a discordant note struck by its decision reported as 1995 (5) SCC 5 Mukri Gopalan Vs. Cheppilat Puthanpurayil Aboobacker, the Supreme Court held that notwithstanding provisions of Section 14 of the Limitation Act, 1963 applying only to Courts as understood in the strict sense of being part of the judicial branch of the State, its principles could apply before adjudicatory fora including quasi judicial tribunals as long as there was nothing in the relevant statutory scheme of the act governing the adjudicatory fora or the quasi judicial tribunal against applying the principles underlying the Limitation Act, 1963. The Supreme Court clearly held that principles leaning in favour of advancing the cause of justice need to be applied where a clear case was made out for so doing since justice and reason is at the heart of all legislation.

15. It is thus clear that the principle of law applied by AAIFR is correct. To this extent we do not find any jurisdictional infirmity committed by AAIFR.

16. The next issue would be, whether the discretionary jurisdiction exercised by AAIFR conforms to the principle laid down i.e. whether there are sufficient facts to conclude that the State of West Bengal was bona fide prosecuting a remedy before a wrong forum.

17. As noted above, the delay in filing the appeal was on account of State of West Bengal seeking a review of the order dated August 05, 2013. The review was sought on September 11, 2013 and the application was entertained by BIFR. Had BIFR rejected the same there and then holding that it had no power of review, the appeal filed on November 06, 2013 against the order dated August 05, 2013 could have been prosecuted. Since BIFR started considering the application filed for review on merits, the State of West Bengal withdrew the appeal filed on November 06, 2013

seeking permission to continue with the review application filed before BIFR. It was only on February 12, 2015 that BIFR dismissed the application seeking review. If the specialized forum i.e. BIFR itself took around a year and half to decide that it had no jurisdiction to review its order, surely the State of West Bengal would be entitled to the view that it was bona fide prosecuting a remedy before BIFR. It also has to be kept in mind that the objection by the State of West Bengal, the nature whereof we have noted in para 7 above, merited a serious consideration and we are pained at the manner in which BIFR has (and if we may use the expression) sneaked into its order dated August 05, 2013 something which more than meets the eye. As noted in paragraph 8 above, the scheme proposed by the petitioner to sell the surplus land and for the State of West Bengal to sanction change of land use from industrial to residential/commercial was sanctioned on October 30, 2008 and BIFR deleted the clause in the scheme that the State of West Bengal would grant the approval to change the land use. In said order the objections raised by the State of West Bengal have been noted, but not been dealt with. Since finally said proposal was not accepted it is obvious that said part of the proposal was rejected. Thereafter, the petitioner filed an application praying to modify the scheme permitting it to sell only 18760 sq.mtr land and while dealing with the application and modifying the scheme as prayed for, surprisingly the direction was issued to the State of West Bengal to allow the conversion of surplus land for residential/commercial use.

18. The objections filed by the State of West Bengal having been insidiously negated by BIFR in the manner noted by us, the interest of justice warrants the periods spent by the State of West Bengal in prosecuting its review application before BIFR be excluded while

computing the period to determine whether appeal filed by the State of West Bengal before AAIFR was within limitation.

19. On the second aspect of the matter, we find no infirmity in the order passed by AAIFR and thus we dismiss the writ petition but without any order as to costs.

CM No.32378/2015 Dismissed as infructuous.

(PRADEEP NANDRAJOG) JUDGE

(PRATIBHA RANI) JUDGE AUGUST 08, 2016 mamta