Gujarat High Court
Dhirubhai Ramchandra Patel vs Official Liquidator Of The ... on 21 October, 2022
Bench: Bhargav D. Karia
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/COMPANY APPLICATION NO. 294 of 2009
In
R/COMPANY PETITION NO. 205 of 1996
With
CIVIL APPLICATION (FOR JOINING PARTY) NO. 1 of 2022
In
R/COMPANY APPLICATION NO. 294 of 2009
In
R/COMPANY PETITION NO. 205 of 1996
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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DHIRUBHAI RAMCHANDRA PATEL
Versus
OFFICIAL LIQUIDATOR OF THE MARSDEN SPINNING
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Appearance:
MR MI HAVA(348) for the Applicant(s) No. 1,1.1,1.2
MR.CHANAKYA BHAVSAR(6316) for the Applicant(s) No. 1,1.1,1.2
MS PJ DAVAWALA(240) for the Respondent(s) No. 1
MR SN SHELAT, SENIOR ADVOCATE FOR MR M.G. NAGARKAR for the
Respondent.
==========================================================
CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Date : 21/10/2022
CAV JUDGMENT
1.Company Application No.294/2009 is filed by
the legal heir of original lessor of land
admeasuring 57870 sq. mtrs. situated at
survey nos.474 and 476 at Rakhial, District
Ahmedabad, Town Planning Scheme No.11, Final
Plot No. 15 (here-in-after referred to as
"the subject land").
2.One Ramji Harilal, the predecessor-in-title
of the applicant had executed a lease deed on
20.06.1919 through his aunt Ichaben Bapuji
Bajibhai, as he was minor at the relevant
time in respect of the subject land in favour
of Khushaldas Gokaldas.
3.It is the case of the applicant that
subsequent to the aforesaid transfer of land
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
in favour of Khushaldas Gokaldas, he executed
lease deed on 16.06.1920 in favour of M/s.
Marsden Spinning and Manufacturing Company
Limited in respect of the subject land as per
the same terms and conditions of the first
lease deed.
4.Thereafter, the said mill was taken into
winding up and in the year 1986, management
of the said mill was taken over by Gujarat
State Textile Corporation Limited (For short
"GSTC Ltd.") as per the provisions of the the
Gujarat Closed Textile Undertakings
(Nationalisation) Act, 1986 (for short
'Act,1986') enacted for revival of 16 sick
textile mills.
5.However, GSTC LTd. also could not achieve its
object of revival of sick textile mills and
was taken to Board For Industrial and
Financial Reconstruction (BIFR) for its
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
revival.
6.Thereafter, as per opinion of BIFR, GSTC Ltd.
was also ordered to be wound up by this Court
(Coram : Hon'ble Mr. Justice S.D. Pandit,J.
As His Lordship was then) vide order dated
6.02.1997 in Company Petition No.205 of 1996.
7.The applicant being a lessor of the land was
receiving lease rent of from lessee
Khushaldas Gokaldas and thereafter from his
legal heirs upto 1986. It is the case of the
applicant that after 1986, the applicant has
not received any lease rent from the lessee
or from the liquidator of GSTC Ltd.(In
Liquidation).
8.The applicant has therefore, filed this
application with a prayer to handover the
vacant and peaceful possession of the subject
land and has further prayed to direct the
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Official Liquidator to make the payment of
arrears of lease rent due and payable by GSTC
Ltd. (In Liquidation) in view of lease
agreement dated 20.06.1919. It was also
prayed to direct the Official Liquidator to
disclaim the subject land in favour of the
applicant. The other incidental prayer made
by the applicant is to direct the Official
Liquidator to clarify as to how the
advertisement at Annexure-D was published in
Gujarat Samachar newspaper to sell leasehold
rights in absence of any order of this
Court.
9.This Court (Coram : Hon'ble Mr. Justice
Jayant Patel, As His Lordship was then) by
order dated 24.07.2009 disposed of this
Company Application No.294 of 2009 applying
the decision in case of Legal Heirs of
Deceased Fakir Chand Ambaram Patel v.
Official Liquidator of Amruta Mills Ltd. &
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Ors. reported in 2002(3) GLH 367 as well as
the decision of Division Bench of this Court
in case of Jabal C. Lashkari & Ors. vs.
Official Liquidators & Ors rendered in OJ
Appeal No.66/2006 and allied matters vide
order dated 17.10.2008 and it was observed
that reliefs as prayed by the applicant
cannot be granted. It was pointed out on
behalf of the applicant before the Court that
the matter arising from OJ(Appeals) was
carried before the Supreme Court, however, in
absence of any application by the applicant
to move the Apex Court or the stay granted by
the Apex Court, the application was decided
rejecting such contention of the applicant.
10. With regard to the second prayer for
getting arrears of lease rent, the applicant
was directed to produce proof of the
succession of the original lessor along with
details of the outstanding rent to the
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Official Liquidator, if any, and Official
Liquidator was directed to examine the aspect
of entitlement of the applicant of the lease
rent after arriving at finding that the
applicant is one of the successor of original
lessor and then proportionate payment was
ordered to be made of the arrears of the rent
minus the liability, if any, to be borne by
the lessor.
11. With regard to the clarification for
issuance of advertisement, it was held by
this Court that the Official Liquidator may
examine the grievances of the applicant with
regard to his claim over the subject land. It
was further directed to the Official
Liquidator to confirm that the property of
the company in liquidation was not permitted
to be used without express leave of the
Court.
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
12. After passing of the order dated
24.07.2009, the applicant filed SLP (Civil)
No. 31354 of 2009 (Civil Appeal No.3168/2016)
challenging the said order which was tagged
with the pending matter arising out of
OJ(Appeals).
13. The State Government also filed Company
Application Nos. 450, 451, 452, 466 and 467
of 2009 seeking the possession of leasehold
land belonging to five textile undertakings
of GSTC Ltd.(In Liquidation) including the
subject land for the public purpose of
setting up a Garment Park. By common order
dated 22.07.2010 the learned Company Judge
directed the Official Liquidator to handover
the possession of the subject land to the
State Government.
14. Being aggrieved, the applicant filed
SLP(C)No.32445/2010(Civil Appeal No.3170/
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
2016) challenging the order dated 22.07.2010
in Company Application No.451 of 2009 before
the Hon'ble Supreme Court which was also
tagged with the pending matter arising out of
OJ(Appeals).
15. The applicant had also filed Company
Application No.266 of 2010 for joining party
in Company Application No.451/2009 which was
also rejected. The applicant therefore,
filed SLP(C) No.32444/2010 (Civil Appeal
No.3169/2016) challenging the order dated
22.07.2010 whereby the Company Application
No.266/2010 was rejected.
16. The applicant filed IA No.4/2013 in
SLP(C) No. 31354/2009 (Civil Appeal No.3168/
2016) seeking status-quo in respect of the
subject land because public advertisement
dated 25.08.2012 was issued whereby tenders
for selling the leasehold rights of the
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
subject land were invited by the GIDC. The
Hon'ble Supreme Court vide order dated
3.5.2013 granted ad interim stay which was
continued by order dated 23.08.2013.
17. The Hon'ble Supreme Court after hearing
all the Civil Appeals including the SLPs
converted into Civil Appeals filed by the
applicant upheld the order of this Court in
case of Jabal C. Lashkari & Ors.(supra) which
was the main matter deciding the issue of
legal rights of the lessor of the company in
liquidation on the basis of specific clauses
of the lease deed in the said matter.
However, the Apex Court while allowing such
appeals quashed and set aside the orders of
High Court impugned in each of the Civil
Appeals and remitted all other matters to the
High Court for fresh consideration in
accordance with the observations and
principles of law laid down in the said
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
judgment with a direction to examine specific
clauses of lease deed in each matter.
18. Hence, the judgment and order dated
24.07.2009 was also quashed and set aside and
this application is again restored to file to
be decided afresh as per the law laid down by
the Apex court after considering the specific
clauses of the lease deed in this
application.
19. The Official Liquidator has filed an
official report dated 2.08.2018 stating
chronology of events with regard to the
liquidation process of Marsden Mill, a unit
of GSTC Limited (In Liquidation) along with
copy of the order of the Apex Court in case
of Jabal C. Lashkari & Ors. v. Official
Liquidator & Ors. reported in 2016 (12) SCC
44, the same can be summarised as under:
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
1) By order dated 6.02.1997 passed in Company
Petition No.205/1996, this Court ordered to
wind up GSTC Ltd.(In Liquidation).
2) The Official Liquidator thereafter has
taken over the assets of the company in
liquidation i.e. 16 Textile units including
Marsden Mill.
3) The Sale Committee was constituted as per
order dated 22.07.1998 passed in Company
Application No.211/1997 filed by the Official
Liquidator.
4) In the meeting held on 26.11.2008 Sale
Committee decided to get the valuation of the
properties through Government Approved Valuer
and after obtaining the valuation report, the
Sale Committee decided on 1.04.2009 to sale
all the immovable properties of the company
in liquidation. The building structure and
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
movable assets (except records) of the
factory premises of M/s. Marsden Mill was put
up for sale for Rs. 5 Lakh as per the
Official Liquidator Report No.119/2009 which
was rejected by order dated 6.11.2009.
5) The Ex-Director of the company in
liquidation filed Statement of Affairs under
section 454 of the Companies Act, 1956 in
case of Marsden Mill disclosing the following
assets and properties of the said mill as on
6.02.1997 i.e. date of winding up order :
A. Freehold property,
Land & Building - Rs. 1,49,69,320/-
B. Liabilities of the Company
a. Preferential Creditors Rs.60,20,20/-
b. Unsecured Creditors Rs.21,19,472/-
c. Equity Shareholders Rs.1,12,78,907/-
6) The State Government through Deputy
Secretary, Industries and Mines department
filed Company Application No. 451/2009 and
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
other allied matters in case of five mills of
GSTC Ltd. (In Liquidation) for transfer and
handing over the possession of the immovable
assets and properties including the subject
land of Marsden Mill free from all
encumbrances, liabilities and charges under
section 457(l)(e) of the Companies Act, 1956.
7) As per the common order dated
22.07.2010, the official Liquidator was
directed to hand over the entire assets of
five units of GSTC Ltd. (In Liquidation) to
the State Government including the subject
land and transfer Rs. 50 Crore in the account
of the State Government after filing an
undertaking by the State Government before
this Court stating that in case in future if
any liability arises either from the
creditors or from the workers and for
discharge of such liability, if any amount is
required to be paid, the same shall be
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
remitted forthwith by the State Government.
8) The State Government filed an
undertaking on 4.08.2010 before this Court
stating that the Government of Gujarat will
discharge all the liabilities including the
workers and creditors dues that may arise in
future in respect of five units including
Marsden Mill.
9) Thereafter the Official Liquidator
handed over the possession of the entire
assets of five units of GSTC Ltd. (In
Liquidation) including the subject land on
4.09.2010 to the Government of Gujarat.
10) The Official Liquidators also transferred
amount of Rs. 50 Crore on 30.09.2010 for
discharging liability, if any, that may arise
in future.
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
11) The Official Liquidator has therefore,
prayed to direct the applicant to approach
State Government for redressal of any
grievance in respect of subject land as
possession of the same was already handed
over by the Official Liquidator on 04.09.2010
pursuant to order dated 22.07.2010 passed by
this Court. The Official Liquidator also
prayed to join the Under Secretary,
Industries and Mines department of the State
Government and Manager of GIDC as
respondents.
20. The Supreme Court has passed the order in
SLPs converted into Civil Appeals filed by
the applicant and other allied matters after
confirming the order passed in case of Jabal
C. Lashkari & Ors.(supra) as under:
"23. Though we have affirmed the
order dated 17.10.2008 of the
Gujarat High Court passed in O.J.
Appeal Nos. 65 of 2006, 66 of 2006
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
and 67 of 2006 and dismissed the
civil appeals arising out of SLP(C)
Nos. 29282-29284 of 2008 [Jabal C.
Lashkari & Ors. Vs. Official
Liquidator & Ors.], our decision to
affirm the said judgment of the High
Court is based on a consideration of
the specific clauses in the lease
deed between the parties to the
case. What would be the effect of
the principles of law underlying the
present order vis-a-vis the specific
clauses of the lease deed between
the parties in the other cases is a
question that has to be considered
by the High Court in each of the
cases. That apart whether the order
dated 17.07.2006 passed in Company
Application No. 250 of 2006 has
attained finality in law and
forecloses the question raised and
further whether constructions have
been raised on such land by the
State Government for the benefit of
the general public, as has been
submitted to dissuade us from
interfering with the order of the
High Court, are questions that would
require a full and complete
consideration by the High Court on
the materials available. To enable
the said exercise to be duly
performed, we set aside the order of
the High Court impugned in each of
the aforesaid civil appeals and
remit all the matters to the High
Court for a fresh consideration in
accordance with the observations and
principles of law contained in the
present order."
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
21. The Official Liquidator has also referred to
order dated 6.04.2018 passed by the Division
Bench in OJ Appeal No. 13/2007 in case of
Virendra Bhogilal Shah (HUF) v. O.L. of
Sarangpur Cotton Manufacturing Company
Limited.(unit of GSTC Ltd.) with regard to
the question of leasehold rights acquired by
the GSTC Ltd. (In Liquidation) pursuant to
provisions of the Act, 1986. It was,
therefore, prayed on behalf of the Official
Liquidator that the applicant is entitled to
get lease rent only and not possession of the
subject land.
22. In view of above facts, it would
therefore, be necessary to refer to and
analyse the relevant clauses of the lease
deed for which this matter is remanded back
by the Apex Court. English translation of
relevant clauses original lease deed dated
20.06.1919 in Gujarati is as under :
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
"1. In the said land the party of
the second part should construct the
houses, the party of the second part
should construct houses and get
construct for workshop of spinning
waiving etc and utilize of get it
utilized in every manner or to use
it for anything.
2. The party of the second part had
taken all such farms permanently
from the party of the first part
wherein the party of the second part
shall construct the houses for
spinning waiving or get it construct
or utilize it in any work and
utilize freely or to use for
anything, wherein the party of the
first part or the guardians, heirs
of the party of the first part
should not have to raise any
objection dispute.
5. There are trees in the said
farms, if it cause impediments to
the party of the second part than
the party of the second part shall
have to cut it and the woods thereof
should have been taken by the party
of the first part and except that,
whatever the trees are there and
whatever fruit, flowers produce from
it, that the party of the second
part shall have to take it
permanently. So the party of the
second part take it permanently and
the party of the first part should
not cause any interference to the
party of the second part and now
hereinafter cropped up new trees the
right to take its produce shall be
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
of the party of the second part and
guardians, heirs of the party of the
second part and the party of the
first part should not have to take
any objection and if any of the tree
dried up than the party of the first
part have no right to take its
woods, hence the dried up woods be
taken by the party of the second
part.
6. That all such farms have been
taken by the party of the second
part from the party of the first
part for permanently but if the
party of the second part wants to
put it than giving the rent for a
year to the party of the first part,
the party of the second part put it
but if the party of the second part
wants to keep it than without paying
the payable rent it cannot be taken
from the party of the first part in
any manner but if the Government,
Municipality interfere to make the
houses etc than the party of the
second part should return such
numbers, for which the party of the
first part cannot take any
objection.
8. If the party of the second part
should keeping intact the
constructed houses and arranged
things in the said farms sold it to
others than keeping as it is all the
agreements of the said lease give it
so that, all the agreements of the
lease shall be acceptable to the
purchaser who take it on sell or in
any other manner from the party of
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
the second part."
23. Learned Senior Advocate Mr. S.N. Shelat
with learned advocate Mr. M.G.Nagarkar
submitted that Civil Application No.1 of 2022
in this application is filed to join the
State of Gujarat as a necessary and proper
party in this application in view of the fact
that the rights including leasehold rights,
title and interest of properties of
Marsden Spinning and Manufacturing Mills
vested with the Stated Government under the
Gujarat Closed Textile Undertakings
(Nationalisation) Ordinance 1985 which was
later replaced by the Gujarat Closed Textile
Undertakings (Nationalisation) Act, 1986 and
thereafter the same vested in GSTC Ltd. (In
Liquidation) free from any charges. It was
submitted that the State Government is having
100% shareholding in GSTC Ltd. (In
Liquidation) and is also a major creditor and
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
therefore, entitled to get the possession of
all the subject land.
23.1) It was therefore, submitted that
considering the various orders passed by this
Court qua the various textile units of GSTC
Ltd. (In Liquidation), leasehold rights qua
the subject land stood vested in Government
and possession of which was taken over by the
Government and was utilised for public
purposes like setting up of hospitals and
medical colleges, metro rails, etc.
23.2) It was submitted that once the
leasehold rights in the subject land vested
in Government, the Official Liquidator cannot
auction the said property or land in question
for paying the liability of the GSTC Ltd.
(In Liquidation) and/or dues of Marsden Mill.
It was therefore, submitted that the State
Government is required to be joined as
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
respondent party in Company Application
No.294/2009 and accordingly, Civil
Application No. 1/2022 is required to be
granted.
24. Learned advocate for the applicant Mr.
M.I. Hava raised objection with regard to
joining the State Government as the
respondent in the Company Application
No.294/2009 as the subject land cannot be
said to be vested in the State Government by
operation of law under the Act, 1986 and
handing over the possession of the subject
land for any other public purpose would
amount to acquisition other than for specific
purpose for reviving of closed textile mills.
It was therefore, submitted that the Company
in liquidation being the statutory tenant,
the applicant is entitled to get back the
possession and the State Government cannot be
joined as respondent as it is neither a
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
necessary nor a proper party in this
proceeding.
25. Considering the controversy which has
arisen in the Company Application No.
294/2009 and the contentions raised by
learned advocate Mr. Hava with regard to the
objection of the vesting of the land in the
State Government in view of provisions of the
Act, 1986, in my opinion, the State
Government is a necessary and proper party in
facts and circumstances of the case and
accordingly Civil Application No. 1/2022 is
allowed and the State Government is ordered
to be joined as respondent in Company
Application No. 294/2009 as a necessary
party. Civil Application is disposed of
accordingly.
26. Learned advocate Mr. Hava for the
applicant made the following submissions
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
distinguishing the facts and grounds from the
facts and grounds than those in case of Jabal
C. Lashkari & Ors.(supra):
1) The Lease of the subject land is not a
fixed term lease and the duration is
indefinite so long as the lessee goes on
paying rent whereas in case of Jabal C.
Lashkari & Ors.(supra), it was a fixed term
lease for 199 years and about 100 years
remained unexpired on the date of
liquidation.
2) The Official Liquidator was the
contractual lessee or tenant of first degree
in the case of Jabal C. Lashkari & Ors.
(supra) whereas in the present case, the
Official liquidator steps into the shoes of
GSTC Ltd.(In Liquidation) who is a statutory
tenant and not a contractual tenant as there
is no contractual assignment of leasehold
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
rights from Marsden Mills to GSTC Ltd.(In
Liquidation) but the leasehold rights have
vested in the State Government under section
3(1) of Act, 1986 and under section 3(2)
divested in GSTC Ltd.(In Liquidation).
Moreover, the assignment of leasehold rights
of the whole interest in the subject land
including reversionary rights of the original
lessee Khushaldas Gokaldas in favour of
Marsden Mills was in breach of clause (1)
read with clause 8 of the first lease,
however under Section 15(2) of the Bombay
Rent Act, the possession of Marsden Mills was
deemed to be valid and therefore it also
became a statutory tenant.
3) The lease deed of the subject land
specifically provides for the purpose of
construction of buildings or factories for
Spinning and Weaving Textile Mill, whereas
there was no purpose whatsoever stipulated in
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
the case of Jabal C. Lashkari & Ors.(supra).
4) The lease deed of the subject land, in
Clause 8 contains a restrictive covenant and
permits assignment thereof only with
buildings constructed thereon together with
Plant & Machinery duly installed and erected
there i.e. as a going concern and not an
assignment or transfer of open barren land.
There was no such restrictive covenant
contemplated under the lease in case of Jabal
C. Lashkari & Ors.(supra).
5) Clause 6 of the lease deed in question
provides that in the event of construction
thereon not being permitted either by the
Government or by the Local Authority, the
land should be returned back to the lessor.
No such provision is made in the lease in
case of Jabal C. Lashkari & Ors.(supra).
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
6) It was submitted that besides the terms
of the lease, the grounds urged before the
Supreme Court in the case of Jabal C.
Lashkari & Ors.(supra) are also distinct and
different from the facts of the present case.
It was submitted that it was urged before the
Supreme Court in case of Jabal C. Lashkari &
Ors.(supra) that the lease was granted to
Managing Agent of the Mill Company who had
assigned the same to Prasad Mills which went
into liquidation which argument was on the
strength that the assignment from Agent to
the Mill Company was in violation of the
lease as the lease permitted only sub-lease
and not assignment and hence liable to
eviction under Section 13(1)(e) of the Rent
Act. It was submitted that this ground is not
urged in the same context as that in case of
Jabal C. Lashkari & Ors.(supra) by the
applicant in the present case. It was
submitted that the applicant also does not
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
press the ground of non-payment of rent as
was the ground in case of Jabal C. Lashkari &
Ors.(supra). It was submitted that the ground
under section 13(1)(k) of the Rent Act, was
taken in the context of the Prasad Mills in
liquidation whereby the possession of the
land was in the hands of the liquidator
whereas admittedly in the present case, the
possession is not with the liquidator and the
same has been handed over to the State
Government pursuant to the order of this
Court in Company Application 451 of 2009,
which order despite being quashed and set
aside, the possession still admittedly
remains with the State Government. It was
submitted that the Supreme Court while
remitting the matters specifically
distinguished the matters relating to
Nationalization i.e., matters pursuant to
order dated 17.7.2006 and after hearing State
and GIDC at length, the Supreme Court has
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
specifically stated that such matters
pursuant to order dated 17.7.2006 have
unique facts and grounds distinct to the
facts and grounds in case of Jabal C.
Lashkari & Ors.(supra) and they require full
and complete consideration by this Court as
per the direction of the Apex Court.
26.1) Learned advocate Mr. Hava
thereafter, submitted that the judgment of
the Supreme Court in case of Jabal C.
Lashkari & Ors.(supra) is not applicable to
the facts of the case inasmuch as the lease
in question is not a fixed term lease and the
Official Liquidator who steps into the shoes
of GSTC Ltd. (In Liquidation) is not a
contractual tenant as there is no contractual
document executed by Marsden Mills Ltd. in
favour of GSTC Ltd. (In Liquidation) and GSTC
Ltd. acquired the possession of the land in
question under Section 3(2) of the Act, 1986
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
and by virtue of such vesting and divesting,
it became a statutory tenant in absence of a
contract whose possession is protected under
the Rent Act.
26.2) It was further submitted that the
rights of GSTC Ltd. (In Liquidation) are
creation of statute and not contract, in
other words GSTC Ltd. (In Liquidation)
derives rights under the statute as against
absence of contractual assignment by Marsden
Mills in favour of GSTC Ltd.(In Liquidation)
and, hence the rights of GSTC Ltd. (In
Liquidation) are statutory and by operation
of law pursuant to the Act, 1986 and vesting
of leasehold rights qua the subject land
thereunder.
26.3) It was submitted that the Official
Liquidator of GSTC Ltd. (In Liquidation)
cannot claim any right under the lease deed
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
of 1919 or the lease deed of 1920 as there is
no contractual transfer or assignment of
leasehold rights by the Marsden Mills Ltd and
thereby the Liquidator of GSTC Ltd. (In
Liquidation) is merely a statutory tenant. In
support of such submission reliance is placed
on decision in case of G Shridharmathy vs
Hindustan Petroleum Company reported in 1995
(6) SCC 605 and decision in case of
Subhashchandra and others vs BPCL reported in
2022 SCC 98 online.
26.4) It was submitted that the subject
land is a part of Gomtipur Village which is
covered under the Schedule of the Rent Act
and the Rent Act is applicable to the
premises and occupation thereof. It was
further submitted that insofar as statutory
tenant is concerned, only its possession is
protected and hence, official liquidator
cannot transfer or assign or part with
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
possession in any manner as the same cannot
be said to be a property of the Company in
liquidation, failing which, protection qua
possession is lost and liable for ejectment.
Reliance was also placed on decision in case
of Shree Chamundi Mopeds Ltd. v. Church of
South India Trust Association reported in
1992 (3) SCC 1 in support of his submissions.
26.5) Learned advocate Mr. Hava in the
alternative submitted that even if for the
sake of argument and without admitting and
without prejudice to the aforementioned
contentions, the Official Liquidator is
considered to be enjoying rights under the
lease by virtue of vesting under Section 3(2)
of the Act,1986 the lease of 1919 as well as
1920 provided for assignment only as a Going
concern together with constructions on the
subject land with Plant and Machinery duly
erected thereon. It was submitted that the
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
facts of the present case clearly
demonstrates that the original lessee in
defiance of the terms of the tenancy assigned
his whole interest in favour of Marsden Mills
without making any construction and
installing plant and Machinery for Mill
Company as was stipulated under the original
lease and consequently, the assignee was not
entitled to put any construction as he had no
right to construct on the land in question.
In support of such contention, reliance was
placed on decision in case of Shantibhai and
others Vs Dinkar Balkrishna Vaidya reported
in 1994 (4) SCC 85 and in case of Jaisingh
Morarji and others v. M/s. Sovani Pvt. Ltd
and others reported in 1973 (1) SCC 197. It
was further submitted that under Section
15(2) of the Rent Act, since Marsden Mill was
in possession of the premises in question in
1959, its possession of the premises came to
be validated and thereby also it became a
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
statutory tenant.
26.6) Learned advocate Mr. Hava further
submitted that the Official Liquidator has
demolished the construction and dismantled
the Plant and Machinery of the Marsdern Mills
and sold the same and now it is an open
barren land which cannot be sold, assigned or
transferred by the Liquidator neither under
the terms of the lease nor as a statutory
tenant or an ordinary tenant governed by Rent
Act and apart from the restrictions provided
under Sections 15 and 18, 19 of the Rent Act
which propounds the public policy of the
statute and for that reason also there is no
justification, legal or otherwise, for the
Liquidator to retain the possession of the
land which is not an asset for the purpose of
sale or distribution under the provisions of
the Companies Act, 1956. In support of such
contention, reliance was placed on the Full
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Bench Judgment of the Delhi High Court in
case of Official Liquidator of Globe
Associates vs H.P. Sharma reported in ILR
1971 1 Del 149.
26.7) It was further submitted even in
cases of permanent tenancy, such tenancy
would enure in respect of a living person
during his lifetime and it will come to an
end on his death, similarly in respect of
juristic person it will enure till the
juristic person/company lasts. Reference in
this regard was made to decision in case of
Bavasaheb Walad Mansursaheb Korti and another
v. West Patent Co. Ltd. and others reported
in AIR 1954 Bombay 257.
26.8) It was submitted that the said
judgment is holding the field till today and
has been referred to and approved in case of
Chapsibhai Dhanjibhai Danad v. Purshottam
reported in 1971 (2) SCC 205 and in case of
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Juthika Mullick vs Mahendra Yashwant Bal and
Others reported in 1995 (1) SCC 560.
26.9) Learned advocate Mr. Hava therefore,
submitted that the lease is indefinite having
certainty of tenure as clause 6 read with
clause 11, stipulates the words "so long as
the rent is paid" and therefore, on the true
interpretation of the clauses of lease deed
concerned, the same are only for the lifetime
of the juristic person.
26.10) It was submitted that in case of
ICICI Bank vs SIDCO reported in 2006 (10) SCC
452, the Hon'ble Apex Court has held that:
"Liquidation proceedings although are
collective enforcement mechanism for the
unsecured creditor, the question which
invariably arises is what would be the
meaning of Assets of the Company in the
Indian context. For the said purpose,
the Court has to bear in mind that the
Liquidation is also the occasion for
termination of Company's affairs. Asset
of the Company would include debenture
holder assets, free hold assets and
sometimes floating assets".
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
26.11) It was further submitted that the
leasehold rights being a frozen asset or non
transferable asset or an asset having
restrictions of the Rent Act, could not be an
asset of the Company in liquidation and
further in view of the substratum of the
company having been gone, there is certainty
for the very existence of the Company in
liquidation i.e. GSTC Ltd. (In liquidation)
to end.
26.12) It was therefore, submitted that in
view of the restrictions of the Rent Act,
there arises no question of the Liquidator
being permitted by this Court to further
transfer the leasehold rights in the subject
land.
26.13) Learned advocate Mr. Hava further
submitted that the leasehold premises
governed by the Rent Act, is also not an
asset in Liquidation available to the
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Liquidator for distribution amongst the
creditors under the Companies Act,1956 and
for that reason the Liquidator has no right
to retain the land in question and in the
facts of the case the Liquidator does not
require it any further even for beneficial
winding up as the Building and Machinery has
already been dismantled and sold.
26.14) It was submitted that the lease hold
rights in the subject land are governed by
the provisions of the Rent Act and the Rent
Act specifically prohibits sub-letting,
assignment or transfer under Section 15 and
further Sections 18 and 19 forbids the
landlord, tenant and any other person in
occupation from claiming and/or receiving any
consideration/premium for transferring/
assigning tenancy rights and or surrendering
the tenancy rights and for that reason the
Liquidator cannot claim or receive any
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
consideration for transferring, sub-letting
or assigning the leasehold rights in
question. In support of such contention,
reliance is placed on decision in case of
Ravindra Ishwardas Sethna vs Official
Liquidator reported in (1983) 4 SCC 269.
Reliance was also placed on the following
decisions:
i) Nirmala R. Bafna(Smt) /Kershi Shivax
Cambatta and othes reported in 1992 (2) SCC
322.
ii) Official Liquidator Of Globe Associates
Ltd. vs HP Sharma reported in 1971 SCC Online
Delhi 51
iii) M/s. Modella Wollens Ltd. Vs The
Official Liquidator and others reported in
2005 SCC online Bom 1170
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
iv) Devindrakumar Bajaj vs Pure Drinks
reported in 2000 SCC Online Delhi 815
26.15) It was therefore, submitted that in
view of the above submissions, the possession
of the land in question be handed over to the
petitioners as has been done by this Court in
similar fact situation in the following
cases:
i) Anilkumar Vaikunthlal Patel vs O.L. of
Abad Jubilee Spinning and Manufacturing Mills
Co. in Company Application No. 16/1999 vide
judgment dated 3.09.2021.
ii) Uttra Achyut Chinubhai Vs O.L. of
Nanikram Shobraj Mills in Company Application
nos. 370 of 2006; 318 of 2006, Judgment
dated 17.0.2009.
iii) Dhairyasinh P Rajda Vs Ahmedabad
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Manufacturing & Calico Mfg. Co. Ltd. in
Company Application no. 371 of 2009, judgment
dated 29.09.2015.
iv) Anil Pvt. Ltd. vs O. L. Of GSTC being
Company Application no. 174 of 2001, order
dated 10.05.2002.
26.16) It was further submitted that
Section 13(1)(a) of the Rent Act read with
Section 108(o) of the Transfer of Property
Act forbids the tenant from using or
permitting another to use the premises for
any other purpose other than the purpose for
which it was let. It was submitted that in
the facts of the present case, it is clear
that the purpose for which the premises have
been let stands defeated whereby the
substratum of the Mill Company has gone on
account of its closure, dismantling of Plant
and Machinery, demolition of buildings and
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
sale of all the moveable assets of the
company. It was submitted that there is no
scope of revival of the company at present
and even at the time of winding up in 1997
and before that when the matter was before
BIFR under SICA all attempts failed and the
whole purpose of enactment of the Act, 1986
stood frustrated and vanquished on account of
liquidation of the GSTC Ltd., and thus, the
Vehicle which was created for the sole
purpose of revival of the closed mills
failed. It was submitted that in any event,
the subject land is not being used for the
purpose of letting since the closure of the
mill company and that it has been about 25
years since the GSTC Ltd.(In liquidation) was
ordered to be wound up in 2009.
26.17) It was therefore submitted that the
Official Liquidator cannot in terms of
section 108(o) of the Transfer of Property
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Act allow or permit any other person
including the State Government to use the
subject land for any other purpose other than
the purpose of letting i.e., "Construction of
Factories for Spinning and Weaving" and
therefore, admittedly the Liquidator in
breach of above principle has permitted the
State Government to use the land for other
public purpose. In support of such contention
reliance is placed on decision in case of
Dashrath Baburao Sangale and others v.
Kashimath Bhaskar Data reported in 1994
Supp(1) SCC 504.
26.18) It was further submitted that
Official Liquidator cannot be permitted to
handover the possession of the leasehold
lands to the State Government allegedly for
the use of public purposes. It was pointed
out that such submission was made by the
State Government before the Supreme Court in
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
case of Jabal C. Lashkari & Ors.(supra),but
the same was not accepted by the Supreme
Court and the order dated 22.7.2010 handing
over possession to the State Government in
Company Application No.451/2009 and other
allied matters was quashed and set aside for
that reason.
26.19) It was submitted that the Official
Liquidator is now again changing the stand
and instead of opposing the handing over the
possession as was done before the High Court
and Supreme Court previously, is canvassing
for handing over the possession to the State
Government for utilizing it for public
purposes in flagrant violation of the Clause
8 of the lease deeds of 1919 and 1920 as well
as provisions of section 13(1)(a) of the Rent
Act read with Section 108(o) of the Transfer
of Property Act.
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
26.20) It was submitted that the purpose of
the lease has clearly been defined under
clauses 1 and 2 of the lease deed read with
clause 8 of lease deed of 1919 which is for
"Construction of Factories for Spinning and
Weaving" i.e. Textile Mills and the other
incidental uses permitted under the said
clauses are to be read as ejusdem generis
being incidental usages to fulfill the
primary or the dominant purpose or object of
the lease being that of factories for
spinning and weaving.
26.21) It was submitted that when a huge
parcel of land is let out for construction of
factories for Spinning and Weaving, there
would certainly be a requirement for some
land to be used for putting up houses for the
employees of the Mill company or for canteens
or for parking spaces etc. However all such
uses should be for fulfilling the dominant
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
purpose i.e. for Factories for Spinning and
Weaving. It was therefore, submitted that
under such circumstances the distinction
between purpose and usage is pertinent in
interpreting the purpose clause of the lease.
In this regard, reliance was placed on
decision in case of Precision Steel & Engg.
Works and another v. Prem Deva Niranjan Deva
Tayal reported in 2003 (2) SCC 236 and in
case of Allenbury Engineers Pvt.Ltd. v.
Ramkrishna Dalmia and others reported in 1973
(1) SCC 7.
26.22) Learned advocate Mr. Hava pointed
out that in case of Jabal C. Lashkari & Ors.
(supra), there was no defined purpose in the
lease and hence the ground under Section
13(1)(a) was not considered by the Court. It
was therefore, submitted that the Official
Liquidator and the State Government are
liable to be evicted under Section 13(1)(a)
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
of the Rent Act.
26.23) Learned advocate Mr. Hava further
submitted that Section 15 of the Rent Act
prevents the sub-letting, transfer or
assignment by the tenant and in breach
thereof the Liquidator had parted with
possession of the leasehold land in question
in favour of the State Government taking
shelter under the order dated 22.07.2010 of
this Court in Company Application 451 of
2009. It was submitted that although it was
done pursuant to an order of the Court as
submitted earlier, it was an act of voluntary
transfer by the Liquidator as against an
involuntary transfer by operation of law and
was in breach of provisions of Sections 15
and 19 of the Rent Act. It was further
submitted that it is a settled position of
law now that an act of a Liquidator despite
being an act in furtherance to an order of
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
the Court is a voluntary act and not an
involuntary act by operation of law. In
support of such contention, reliance was
placed on decision in case of M/s. Parasram
Harnanand Rao v. M/s. Shanti Prasad Narinder
Kumar Jain and another reported in 1980 (3)
SCC 565. It was therefore, submitted that
the said breach which was committed pursuant
to the order dated 22.7.2010 is still
persisting inasmuch as the Official
Liquidator has not taken any steps to get
back the possession nor has the State
Government bothered to handover the
possession to the Official Liquidator despite
the said order of possession being quashed
and set aside by the Supreme Court and not
only does the breach continue at behest of
State but the breach has further been
aggravated by GIDC issuing tender under PPP
model inviting bids from private developers
and acting as a freehold owner of the land in
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
the tender document denying the title of the
land owners and profiteering therefrom. It
was therefore, submitted that the breach of
Sections 15 and 19 of the Rent Act is
continuing as on today and hence, the
Official Liquidator and the State Government
are liable to be evicted under Section 13(1)
(e) of the Rent Act.
26.24) Learned advocate Mr. Hava submitted
that the transfer was made in favour of the
State Government in consideration of the
State Government having paid the dues of the
creditors and thereby in violation of the
provisions of Section 19 of the Rent Act, as
also provisions of the Companies Act, 1956 in
relation to winding up and the Official
Liquidator has rendered himself liable for
eviction on account of unlawful transfer in
favour of the State Government, particularly,
when the Court has stated in its judgment
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
dated 22.7.2010 at paragraph no. 17 regarding
the offer of the State Government in the
following words "Mr. Shelat further submitted
that the State Government would treat its due
as discharged to the extent of this Court
accepting the request of the State Government
to return the remaining assets of all these
five Textile Units as a creditor and as a
sole contributory of the company".
26.25) Learned advocate Mr. Hava further
referred to paragraph 34 of the said
judgment in Company application No.451 of
2009 wherein it is stated that "the Court is
of the view that since the State Government
has discharged the liability of the Mill
Companies towards secured creditors and
workers and there is still huge surplus fund
of about Rs. 81 Crore lying with the Official
Liquidator in the account of GSTC Ltd. and
since the State Government has still
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
undertaken to discharge the liabilities if
any that may arise in future, there shall not
be any objection on part of the Official
liquidator in handing over the possession of
the immovable properties of all five units in
question of GSTC to the State Government."
26.26) It was submitted that this
arrangement as approved by the Court and the
transfer of the subject land by the Official
Liquidator to the State Government pursuant
to the judgment dated 22.07.2010 amounts to
violation of Sections 19 and 15 of the Rent
Act.
26.27) It was submitted that clause 8 of
the lease deed provides only for transfer
along with Building and Machinery permanently
intact i.e., as a Going concern and that the
transfer of premises as open land by the
Official liquidator to the State Government
is in contravention to the provisions of the
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
lease deed and thereby the Official
Liquidator and the State Government are
liable for eviction under Section 13(1)(e) of
the Rent Act.
26.28) Learned advocate Mr. Hava further
submitted that in case of Jabal C. Lashkari &
Ors.(supra), the transfer in violation of
section 13(1)(e) of the Rent Act was repelled
observing that the unlawful assignment was in
the favour of Prasad Mill by the erstwhile
lessee and there was no contention as regards
any transfer being made by the Official
Liquidator, also the contention of violation
of Section 19 of the Rent Act was repelled
on the ground that the event is yet to occur
as the advertisement inviting offers was not
violative of provisions of Section 19 of the
Rent Act as no consideration had passed. It
was submitted that the pendency of Scheme of
Revival of the Mill Company weighed with the
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Supreme Court for denying the possession of
the land to the owner and the fixed term
lease of 199 years was yet to expire whereby
about 100 years were left. It was submitted
that in the present case, the Official
Liquidator has already committed the breach
of sections 15 and 19 of the Rent Act by
voluntarily transferring possession in favour
of State Government in consideration of the
State paying dues of the creditors and
undertaking to pay any outstanding
liabilities. It was therefore, submitted that
the Official Liquidator and the State are
liable to be evicted as per the provision of
Section 13(1)(e) of the Rent Act.
26.29) Learned advocate Mr. Hava submitted
that insofar as non-user of the premises for
purpose of letting apropos Section 13(1)(k)
of the Rent Act is concerned, after the
winding up order, the Official Liquidator has
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
already transferred the possession of the
leasehold premises in favour of the State
Government and the Official Liquidator is no
long holding possession of the leasehold
premises, whereas in case of Jabal C.
Lashkari & Ors.(supra), the Official
Liquidator was in possession and was not
using the same, however the Hon'ble Supreme
Court upheld the non user on account of
pendency of winding up proceedings. It was
submitted that in the facts of the present
case, the Official Liquidator has parted with
possession of the subject land as far back
as in 2010 and all along the same remained in
possession of the State Government despite
the order dated 22.07.2010 being quashed and
set aside by the Hon'ble Supreme Court vide
its judgment dated 29.03.2016. It was
submitted that more than six years have
passed since the order of the Supreme Court
and the Official Liquidator has blissfully
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
ignored and contumaciously disregarded the
order of the Supreme Court.
26.30) Learned advocate Mr. Hava therefore,
submitted that the petitioner is entitled to
eviction under Section 13(1)(K) of the Rent
Act. In support of his contention, reliance
is placed on the judgments of Supreme Court
in case of Vora Rahimbhai Haji Hasanbhai
Popat vs Vora Sunderlal Manilal & another
reported in 1985 (4) SCC 551 and in case of
Dunlop India Ltd. Vs A. A. Rahana & Anr
reported in 2011 (5) SCC 778. Reliance was
also placed on decision in case of National
Textile Corporation vs Radha Soami Charitable
Society reported in 2013 SCC Online P&H 25828
whereby the Punjab and Haryana High Court
granted eviction of a Nationalised
Undertaking which was in liquidation on the
ground of non-user and an SLP preferred from
this judgment was dismissed by the Supreme
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Court upholding the judgment of the High
Court in SLP no.1354 of 2014.
26.31) Learned advocate Mr. Hava submitted
that as regards the position of the State
Government, it had filed a similar
application to that of Company Application
No.451 of 2009 previously being Company
Application no. 348 of 1997 as also stated in
the Report of the Official Liquidator dated
2.3.2010. The said Company Application no.
348 of 1997 was disposed of by this Court
(Coram R. Balia J, As His Lordship was then)
vide order dated 22.7.199 granting permission
to withdraw the application with liberty to
file appropriate application proposing a
Scheme for Revival of the Company. It was
submitted that the State Government has
instead of filing a Scheme for Revival of the
company moved the Company Application No.451
of 2009 again which being similar to that of
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Company Application No.348 of 1997 deserves
to be rejected at the outset. It was
submitted that the Supreme Court has after
hearing all the parties, quashed and set
aside all the orders under Company
Application No. 451 of 2009 where again the
same grounds were raised by the State as in
the group of matters in case of Jabal C.
Lashkari & Ors.(supra) which were not
accepted by the Supreme Court and present
proceedings are the third round of litigation
where the State is reiterating the same
grounds which have time and again been
rejected by the hierarchy of Courts. It was
submitted that the State Government is merely
an ordinary creditor and is governed by
Section 530 of the Companies Act, 1956 whose
rights as regards assets of a company in
liquidation are limited and confined to that
of an ordinary creditor. It was submitted
that the plank of the State Government to
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
grab the land of the applicant without
compensation and without acquiring it under
the provisions of the Land Acquisition Act
under the guise of it being an ordinary
creditor under Companies Act is in flagrant
breach of the rights of the application under
Article 300A and Article 14 of the
Constitution of India which is further
aggravated by the GIDC floating tenders in
respect of the subject land as "Freehold
Land" and profiteering out of it by entering
into Public Private Partnership with Private
Developers which process was injuncted by the
Apex Court after hearing parties at length.
26.32) It was therefore, submitted that the
Official Liquidator being the statutory
tenant on account of vesting, the Liquidator
does not derive rights under the contracts of
lease as the possession of GSTC Ltd. (In
Liquidation) as tenant is creation of statute
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
and by operation of Law as against being a
creation of contract. It was submitted that
as a consequence, the Official Liquidator is
merely a statutory tenant whose tenancy is
protected merely by Rent Act. It was
submitted that the provisions of Rent Act
apply to all tenancies irrespective of the
fact that tenure and the land of Marsden
Mills is located in village Gomtipur which is
covered under the Schedule of the Rent Act.
It was submitted that the lease is indefinite
and is only for the lifetime of the Company
in liquidation and the lease has a covenant
permitting transfer of leasehold rights only
in case of assignment as a Going concern
along with Building and Machinery installed
thereon. It was submitted that the Building
and Machinery have already been dismantled
and sold and assignment or transfer of barren
open land is not permissible under the lease.
It was therefore, submitted that the Official
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Liquidator does not require the subject land
for beneficial winding up or for carrying out
the business of the Company and the rights of
the Liquidator are being governed by the
restrictions of the Rent Act being part of
Public Policy which do not permit the
Liquidator to sale or assign the leasehold
rights and further make penal provision in
respect of any transfer or assignment for any
consideration. It was submitted that the
Official Liquidator has already once
unlawfully and voluntarily transferred the
possession in favour of the State Government
for consideration, which breach continues
till date and the GIDC has further aggravated
the said breach by floating tenders and
claiming the premises in question to be
Freehold Land which process was injuncted by
the Apex Court after hearing the parties. It
was further submitted that tenancy rights of
a company in liquidation are not transferable
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
asset when governed by the restrictions of
the Rent Act and cannot be retained by the
Liquidator as the same are not required for
beneficial winding up of the company. It was
further submitted that the State cannot be
permitted to violate Articles 14 and 300A of
the Constitution by grabbing land of
applicant under the garb of alleged Public
Purpose without payment of compensation and
profiteering from it by entering into Public
Private Partnership with Private developers,
nor can the Court lend assistance to
Liquidator in giving any directions which may
be violative of statutory provisions of the
Rent Act, the Companies Act and in defiance
of the purpose and terms of the Lease.
26.33) Learned advocate Mr. Hava therefore,
submitted that the reliefs claimed in Company
Application No. 294 of 2009 may please be
granted and the Official Liquidator may
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
please be directed to take possession of the
subject land from the State Government and
handover the same to the applicants.
27. On the other hand learned Senior
Advocate Mr. S.N. Shelat submitted that on
perusal of the relevant clauses of lease deed
dated 20.06.1919, it is clear that it was a
permanent lease and therefore, the facts of
the present case are identical to that of
the case of Jabal C. Lashkari & Ors.(supra).
It was submitted that the decision of Apex
Court while upholding the decision of this
Court in case of Jabal C. Lashkari & Ors.
(supra) would be applicable as the Supreme
Court has considered all the submissions made
by the lessor in context of the Rent Act and
therefore, the facts which were tried to be
distinguished on behalf of the applicant is
not appearing from the bare perusal of the
covenants of the lease deed.
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
27.1) Learned Senior Advocate Mr.Shelat
invited the attention of the Court to clause
1 of the lease deed in question which
stipulates for utilising the land in every
manner or to use it for anything. It was
submitted that clause 2 of the lease deed
also provides that land can be used by lessee
freely or to use for anything wherein the
party of the first part or the guardians,
heirs of the party of the first part should
not have to raise any objection or dispute.
Similarly, it was further pointed out that
clause 5 of the lease deed provides that
lessee is entitled to transfer the right on
the same terms and conditions whereas clause
6 of the lease deed provides that lessor is
entitled to recover the arrears of rent
through available remedies. It was therefore,
submitted that considering the lease deed as
a whole, it cannot be said that same was for
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a limited period and land would revert back
to the original lessor in any circumstances.
It was submitted that facts of the present
case stand on a better footing as lease deed
in facts of the case is for permanent lease
whereas in facts of Jabal C. Lashkari & Ors.
(supra) it was for a fixed term for 199
years.
27.2) It was submitted that State
Government by provisions of the Act, 1986
acquired the sick textile mills which were
transferred to 100% owned GSTC Ltd. with an
objective to revive sick textile mills.
However, object could not be fulfilled and
ultimately, GSTC Ltd. (In Liquidation) on
failure of proceedings before the BIFR was
ordered to be wound up.
27.3) It was therefore, submitted that in
such peculiar facts, entire assets and
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
properties of GSTC Ltd. (In Liquidation) vest
in the State Government by virtue of
provisions of the Act, 1986 and also by the
fact that 100% shareholding is of the State
Government in GSTC Ltd. (In Liquidation).
27.4) Learned Senior Advocate Mr. Shelat
submitted that in the facts of the present
case, the leasehold rights of the land in
question also vest in the State Government
under sections 3(1) and 3(2) of the Act,
1986. Therefore, reliance placed by the
applicant on the relevant provisions of the
Rent Act would not be applicable in facts of
the case.
27.5) Learned Senior Advocate Mr. Shelat
relied upon decision of the Apex Court in
case of Harshad Govardhan Sondagar v.
International Assets Reconstruction Company
Ltd. and others reported in 2014 (6) SCC 1 in
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
which the Apex Court considering the status
of tenant under the provisions of the
Securitisation and Reconstruction of
Financial Assets and Enforcement of Security
Interest Act, 2002 (For short "SARFAESI Act")
has analysed the provisions of section 65A
and section 105 of the Transfer of Property
Act.
27.6) Learned Senior Advocate Mr.
S.N.Shelat also referred to and relied upon
the lease deed executed by Patel Khushaldas
Gokaldas on 16.06.1920 in favour of M/s.
Marsden Spinning and Manufacturing Company
Limited to point out that clause 1 of the
said lease deed also provides for
entitlement of lessee to use the land in any
manner whereas clause 2 stipulates that
lessor is prohibited to object use of land
in any manner by the lessee and clause 5
provides that lessee is entitled to transfer
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
the right on same terms and conditions and
clause 6 further provides that lessor is
entitled to recover arrears of rent through
available remedies. It was therefore,
submitted that both the lease deeds dated
20.06.1919 and 16.06.1920 are having similar
terms and conditions and there was no breach
of any terms and conditions of lease deed
dated 20.06.1919. It was therefore, submitted
that the order of the Apex Court in case of
Jabal C. Lashkari & Ors.(supra) would
squarely apply in the facts of the case and
reliance placed on behalf of the applicant
upon various provisions of the Rent Act would
not be applicable more particularly in view
of provisions of Act, 1986.
27.7) Learned Senior Advocate Mr. S.N.
Shelat also referred to and relied upon the
decision of Division Bench in case of
Virendra Bhogilal Shah (HUF) (supra) wherein
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Division Bench in similar facts of the said
case held that decision in case of Jabal C.
Lashkari & Ors.(supra) would be applicable
with full force and therefore, the applicant
was denied the relief of possession as
claimed/prayed. It was therefore, submitted
that in similar facts, Division Bench has
already decided the issue which are again
agitated on behalf of the applicant in this
application and therefore, the application
deserves to be dismissed.
27.8) It was submitted that this Court has
passed the following orders for handing over
the possession of the assets under lease hold
right to the State Government :
1) In Company Application No. 237/2004 vide
order dated 23.12.2005 in case of New
Jehangir Vakil Mills, Bhavnagar.
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
2) In Company Application No.562/2007 vide
order dated 05.03.2008 in case of
Priyalaxmi Mills Baroda.
3) In Company Application No.77/2008 vide
order dated 05.03.2008 in case of Monogram
Mills, Ahmedabad.
4) In Company Application No.250/2006 vide
order dated 17.07.2006 in case of Sarangpur
Cotton Mills, Ahmedabad and MCA No.126/2006
vide order dated 17.08.2006 in case of Silver
Cotton Mills, Ahmedabad.
5) In Company Petition No. 203/2004 vide
order dated 28.12.2006 in case of New
Swadeshi Mill, Ahmedabad and in case of
Bhalakia Mill, Ahmedabad.
27.9) It was submitted that considering
the fact that the State Government was having
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highest liability in various textile mills of
GSTC Ltd. (In Liquidation) and considering
the fact that State Government is 100% equity
shareholder of GSTC Ltd. (In Liquidation),
the entire assets and liabilities of the GSTC
Ltd. (In Liquidation) would vest in the State
Government. It was therefore, submitted that
leasehold rights of such textile mills also
would vest in the State Government and the
Official Liquidator therefore, would not be
required to exercise any rights under the
provisions of the Companies Act,1956.
27.10) With regard to payment of lease
rent, it was submitted that the Manager, GIDC
of GSTC Cell, Ahmedabad regularly paid the
lease rent of the subject land to one
Yogendra Ratilal Patel for the year 2021-2022
who is legal heir of Late Khushaldas
Gokaldas. It was also submitted that Yogendra
Ratilal Patel had sent the outstanding lease
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
rent to the applicant amounting to
Rs.29,016/- through RPAD letter on
20.08.2021, however, the same was not
accepted. It was submitted that one Arvind
Manilal Shah accepted the lease rent of Rs.
108/- for the period of one year from
1.7.2021 to 30.6.2022 sent by said Yogendra
Ratilal Patel. It was pointed out that
Yogendra Ratilal Patel informed GIDC about
the payment of outstanding lease rent which
was not accepted by the applicant. It was
therefore, submitted that lease rent is
regularly paid by the lessee to the lessor
and as such, there is no fault on part of
either Official Liquidator or the State
Government to make the payment of outstanding
lease rent and the State Government is always
ready and willing to make the payment of
lease rent to the lessor as per the lease
deed.
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
28. In rejoinder, learned advocate Mr. Hava
submitted that on account of the Act, 1986
the rights of Marsden Mill under lease dated
16.06.1920 as per section 3(1)(e) of the Act,
1986 vested in the State Government and as
per the provisions under section 3(2), the
same stood divested in GSTC Ltd.(In
Liquidation). It was therefore, submitted
there was no contractual transfer or
assignment of leasehold rights and it is
merely transfer by operation of law or
creation of rights of GSTC Ltd. (In
Liquidation) by operation of Law of Vesting
which amounts to diversification of rights by
GSTC Ltd. (In Liquidation) under the law. It
was therefore, submitted that once there is a
transfer by operation of law under a statute,
the provisions of Transfer of Property Act
are not applicable.
28.1) Reliance was placed on the decision
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
of the Supreme Court in case of Bharat
Petroleum v. P. Keshvan & Ors. reported in
2004 (9) SCC 772, wherein it is held that the
provisions of Transfer of Property Act, 1882
has no application in a case where transfer
of property takes place by operation of law.
28.2) It was therefore, submitted that as
per the provisions of section 23 of the Act,
1986, Nationalisation Act, being a special
Act would prevail over Transfer of Property
Act, which is general in nature.
28.3) Reliance was placed on the decision
of Apex Court in case of Subhash Chander and
Ors. v. Bharat Petroleum Corporation Ltd. &
Ors. reported in 2022 SCC Online SC 98
wherein the Apex Court considered such issue
and held that leasehold rights would come to
an end as such right stood transferred and
vested in the Government in view of
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
acquisition of Burmah Shell company. It was
therefore, submitted by learned advocate
Mr.Hava that in absence of the rights of GSTC
Ltd. (In Liquidation), being an inter vivos
transfer, the concept of Privity of Contract
which are applicable to inter vivos contracts
and those under the Transfer of Property Act
would not apply. It was submitted that the
leasehold rights of the sub-lessor i.e.,
Khushaldas Gokaldas stood abrogated and/or
extinguished on account of statutory vesting
in view of provisions of Act, 1986 whereby
all rights stood transferred and vested in
State Government/ GSTC Ltd. and it is only
the right of reversion of the applicant that
would survive under Nationalisation Act being
the original owners of land and such right
would remain intact and would not vest in the
State Government and/or GSTC Ltd. by
operation of law.
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
28.4) In support of his submission
reliance was placed on the decision of Apex
Court in case of Shantibai (Smt) and others
v. Dinkar Balkrishna Vaidya and others
reported in 1994 (4) SCC 85 wherein the Apex
Court has drawn distinction between the
transfer of ownership and transfer of
interest in the property.
28.5) It was submitted that the rights of
lessee Khushaldas Gokaldas under lease deed
dated 20.06.1919 stood determined and
terminated in law after assignment made by
him by executing lease deed dated 16.06.1920
and therefore, the applicant has rightly not
joined the legal heirs of Khushaldas Gokaldas
as the applicant is superior title holder
after the leasehold rights were transferred
in favour of Marsden Mills which in turn
vested in GSTC Ltd. (In Liquidation).
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
28.6) It was further submitted that the
right of the applicant as the owner of the
land have not been acquired and only right of
lessee to occupy and or possess land
belonging to Marsden mills have been vested.
Reliance was placed on decision of the Apex
Court in case of NTC Ltd. v. Nareshkumar B.
Jagad reported in 2011(12) SCC 695, wherein
the Apex Court after analysing the provisions
of sections 3(1) and 3(2) of the Textile
Undertakings (Nationalisation) Act, 1995
enacted by the Parliament held that what has
vested in Government was right, title and
interest of the lessee and nothing else. It
was therefore, submitted that vesting under
the Act, 1986 was for the specific purpose
of revival of the closed textile undertakings
as is evident from the Preamble of the Act,
and GSTC Ltd. (In Liquidation) was
incorporated by the State Government as the
vehicle for accomplishment of the said
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
objects and despite the State Government
contributed to the share capital of the GSTC
Ltd. (In Liquidation) and was also guarantor
to the secured creditors thereof, none of the
Textile Mills could be revived by GSTC Ltd.
(In Liquidation) and ultimately, it miserably
failed to comply with the objects of the Act
and was ordered to be wound up as per the
recommendation of BIFR as per the
observations of this Court by order dated
06.02.1997. It was therefore, submitted that
vesting was for the specific purpose which
failed and since no compensation has been
paid to the owners of land inspite of the
fact that their ownership rights have been
kept intact in the land, the applicant is
entitled to claim back the possession of the
land from the Official Liquidator as the same
is no longer required for either carrying on
business of the company in winding up or for
beneficial winding up of the Company.
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
28.7) It was submitted that the contention
of the State Government that the land is
required for using it for public purpose is
without any basis inasmuch as neither the
land is vested in the State Government nor
any compensation has been paid by the State
Government for acquisition of ownership
rights in land. Referring to the provisions
of section 15A of the Bombay Rent Act, it was
submitted that it starts with a non obstante
clause and provides that it shall not be
lawful for the Official Liquidator to grant
license to the State Government and hand over
the possession of the premises on license for
monetary consideration without the prior
permission of the landlord and such bar is
absolute. Learned advocate Mr. Hava also
referred to section 13(1)(ee) of the Rent Act
which provides that the tenant is liable to
be evicted and landlord is entitled to
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
recover possession of the premises if the
Court is satisfied that the tenant has after
commencement of the 1963 Amendment, Act has
parted with the whole or any part of the
premises on license for monetary
consideration to any person without previous
permission of the landlord. It was therefore,
submitted that the possession of the land
could not have been handed over to the State
Government without any compensation being
paid to the lessor-original owners of the
subject land.
28.8) With regard to various clauses of
lease deed, it was submitted that relevant
clauses being clauses 1, 2, 6 and 8 of the
lease deed dated 20.06.1919 are relevant for
ascertaining for the purpose and tenure of
lease. It was submitted that Clause 6 is
divided into three parts, the First Part
conveys that though the tenure is indefinite,
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the lessee may surrender tenancy at its
volition upon payment of rent for a year in
advance, the Second Part provides that the
lessee can retain possession so long as the
rent is paid, and the Third Part read with
the purpose of the lease provides that in
case the Government or relevant authority
does not permit construction of Mill Company
or construction of factories for spinning and
weaving then the lessee may return the said
land or part thereof for which the lessor
shall have no objection. It was therefore,
submitted that reading entire lease deed, as
a whole, it is not a permanent lease but
lease with various stipulation for
determination and termination of the lease by
virtue of action of vesting.
28.9) Reliance was placed on the decision
of this Court in case of Anilkumar
Vaikunthlal Patel vs Official Liquidator of
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Ahmedabad Jubilee Mills Ltd. in OJ. Appeal
No. 1 of 2003, wherein the Division bench of
this Court has considered and interpreted the
provisions of the lease deed of the said case
which are pari materia to the provisions of
the lease deed of 1919. It was submitted that
the clauses of the lease deed in the present
case are distinct from the clauses of lease
which have been interpreted by the Supreme
Court in the case of Jabal C. Lashkari & Ors.
(supra) and in case of Virendra Bhogilal
Shah (HUF)(supra), and therefore the facts of
the present case are distinct and not covered
by these decisions and have to be considered
fully and completely as per the direction of
the Supreme Court while remanding the matter.
28.10) Learned advocate Mr. Hava further
submitted that on perusal of clauses of the
lease deed in question, it cannot be said to
be a permanent lease. Reliance was placed on
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
the decision in case of Chapsibhai Dhanjibhai
Danad (supra), to submit that when leasehold
rights are not heritable and when the lease
was undoubtedly for an indefinite period,
which only means that it was to enure for the
lessee's lifetime and reference in it of the
heirs of the lessee is only for the limited
purpose and not for making the leasehold
interest heritable. It was therefore,
submitted that the leasehold rights of the
permanent lease cannot be said to be
heritable and would continue to vest in GSTC
Ltd. (In Liquidation) in any manner.
28.11) Learned advocate Mr.Hava referred to
and relied upon Clause 8 of the lease deed
of 1919 and clause 5 of the lease deed of
1920 which are pari materia to the clauses
which were considered in the case of
Anilkumar Vaikunthlal Patel (supra) whereby
upon interpreting the said clauses, the
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Division Bench held that clause which permits
transfer of the leasehold rights shows that
what the parties intended was transfer of the
subject property with building, plant and
machinery which were permanent in nature, and
not vacant land, and therefore, the intention
of the parties appears to be to permit
transfer of leasehold rights as a Going
concern. It was therefore, submitted that now
constructions being demolished and plant
machinery etc. dismantled, the Official
Liquidator cannot transfer leasehold rights
as a Going concern and the Official
Liquidator being a statutory tenant governed
by the provisions of the Rent Act, cannot
transfer the tenancy for consideration/
premium which is forbidden and is made an
offence under Sections 18 and 19 of the Rent
Act.
28.12) Reliance was placed on the decision
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
in case of Lodna Colliery Company Limited v.
Bepin Behary Bose reported in AIR 1920 Patna
383, wherein it is held that person who is
bound by covenant of the lease deed and
executes another lease deed then subsequent
sub-lessee is also bound by the covenant. It
was therefore submitted that the lease deed
executed in 1920 is bound by covenants of the
lease deed executed in the year 1919 and as
such, covenants of lease deed of 1919 can
provide for transfer of property and not the
vacant land and in such circumstances, the
Official Liquidator is bound to return the
possession of the land in question to the
applicant.
28.13) In support of above submission,
reliance was placed on decision in case of
Ravindra Ishwardas Sethna (supra) wherein it
is held that the Rent Act is no doubt enacted
for protecting the tenants, and indisputably
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
its provisions must receive such
interpretation as to advance the protection
and thwart the action of the landlord in
rendering tenants destitute. But this does
not imply that the Court should lend its aid
to flout the provisions of the Rent Act so as
to earn money by unfair and impermissible use
of the premises and it was therefore,
submitted that Official Liquidator is
intending to do the same and the Court should
not extend its help to the Liquidator and
should not permit holding on to possession of
the subject land, not needed for efficiently
carrying on winding up proceedings and the
only course open to the Court was to direct
the Liquidator to surrender possession to
landlords and save recurring liability to pay
rent.
28.14) It was submitted that the aforesaid
decision was considered by the Division Bench
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in case of Anilkumar Vaikunthlal Patel
(supra) and directed the Official Liquidator
to handover the possession to the original
owner/lessor as it would not be permissible
for the Official Liquidator to sub-let or to
assign the leasehold right and any direction
by this Court would be in violation of the
provisions of sub-section(1) of section 15
and sub-section(1) of section 19 of the Rent
Act. It was therefore, submitted that
application deserves to be allowed by
directing the Official Liquidator to handover
the possession of the subject land to the
applicant.
29. Having heard the learned advocates for
the respective parties and having gone
through the lease deeds as well as relevant
provisions of law and settled legal position
as per the various judgments cited by the
learned advocates, it appears that this
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application is filed by the persons who claim
to be the legal heirs of the original lessor
of the subject land. It is prayed by the
applicant to handover the vacant possession
of the subject land and also pay the
accumulated lease rent. From the facts
emerging from record, it is clear that the
order passed by this Court rejecting this
application was set at naught by the Apex
Court by judgment and order in case of Jabal
C. Lashkari & Ors.(supra) to consider
specific clauses of the lease deed between
the parties and whether the constructions
have been raised on the subject land by the
State Government for general public are kept
open so as to apply the principles of law
laid down by the Apex Court vis-a-vis the
specific clauses of the lease deed.
30. Therefore, specific clauses of the lease
deed are required to be considered to find
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out whether the principles of law laid down
by the Apex Court in the facts of the case
of Jabal C. Lashkari & Ors.(supra) are
applicable to the facts of the present case
also or not. The second issue which is
required to be considered is the effect of
use of the subject land by the State
Government for the benefit of the general
public in the facts of the case vis-a-vis
rights of the applicant, if any.
31. Before adverting to the specific clauses
of the lease deed in question in facts of the
case, it would be germane to refer to the
principles of law laid down by the Apex Court
in facts in case of Jabal C. Lashkari & Ors.
(supra).
32. The Apex Court has considered the
applicability of the provisions of Bombay
Rent Act and the liability of the Liquidator
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and has held that mere fact that the company
has been ordered to be wound up cannot be a
ground to direct the Official Liquidator to
handover the possession of the land to the
owner inasmuch as the company in liquidation
continues to maintain its corporate existence
until it stands dissolved upon completion of
liquidation proceedings in the manner
contemplated under the Companies Act. After
considering the provisions of sections 12,
13(2) read with section 12(3)(b), 13(1)(e),
13(l) and section 15 of the Bombay Rent Act,
the Apex Court considered the provisions of
section 118(o) of the Transfer of Property
Act vis-a-vis the specific contents of clause
7 of the lease deed in question in case of
Jabal C. Lashkari & Ors.(supra). The Apex
Court after considering the aforesaid
provisions and specific clauses of the lease
deed in the said case held as under :
"17. Section 12 of the Rent Act
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confers protection on a tenant who
is regularly paying or is ready and
willing to pay the rent. In the
present case while there is no doubt
that rent has not been paid,
equally, there is no doubt that the
secured creditors including the
State Bank of India had all along
been ready and willing to pay the
rent and the reasons for nonpayment
appears to be (para 43 of the
impugned order of the High Court)
lack of communication by the
official liquidator to the SBI of
the precise amount of rent due.
While there can be no doubt that
mere readiness and willingness to
pay without actual payment cannot
enure to the benefit of the tenant
in perpetuity what is required under
Sub-section (2) of Section 12 is a
notice in writing by the landlord
raising a demand of rent and only on
the failure of the tenant to comply
with such notice within a period of
one month that the filing of a suit
for recovery of possession is
contemplated. The service of notice
giving an opportunity to the tenant
to pay the unpaid rent is the first
chance/opportunity that the Rent Act
contemplates as a legal necessity
incumbent on the landlord to afford
to the tenant. Admittedly, in the
present case, no such notice as
contemplated by Section 13 (2) has
been issued by the landlord; at
least none has been brought to our
notice. In such a situation, the
readiness and willingness of the
tenant to pay the rent, though may
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
have continued for a fairly long
time without actual payment, will
not deprive the tenant of the
protection under the Rent Act.
Though the order of the High Court
in para 43 of the impugned judgment
has been placed before the Court as
an order under Section 12(3)(b) of
the Rent Act we do not find the said
order to be of the kind contemplated
by Section 12(3)(b) inasmuch as not
only the order does not mention any
specific rent which has to be
tendered in Court but what is
encompassed therein is a direction
to the official liquidator to let
the State Bank of India know the
precise amount that is required to
be paid on account of rent and,
thereafter, to pay the same to the
official liquidator whereafter it
has been left open for the lessors
to withdraw the said amount from the
official liquidator. Such an order
by no stretch of reasoning would be
one contemplated under Section 12(3)
(b). In the aforesaid situation, the
finding of the High Court that the
landlord is not entitled to seek
eviction on the ground of nonpayment
of rent under Section 12 of the
Bombay Rent Act cannot be said to be
so inherently infirm so as to
require the interference of this
Court.
18. This will bring the Court to a
consideration of the liability of
the official liquidator to a decree
of eviction on the ground
contemplated under Section 13(1)(e)
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of the Bombay Rent Act. As already
discussed in a preceding paragraph
of the present order, the non
obstante clause of Section 13 (1)
overrides only the other provisions
of the Bombay Rent Act and is also
subject to the provisions of Section
15. Section 15 which deals with sub-
letting and transfer, though
overrides the provisions contained
in any other law, is subject to any
contract to the contrary. Though in
the present case the lease deed
(clause 7) is capable of being read
as permitting sub-letting and not
assignment what has been held in the
present case by the High Court, by
virtue of the decision of this Court
in Laxmidas Bapudas Darbar vs.
Rudravva (supra), is that in view of
the limited operation of the non
obstante clause in Section 15 of the
Bombay Rent Act, unlike Section 21
of the Karnataka Act, the provisions
of the Transfer of Property Act
[Section 118 (o)] will not become
irrelevant to the relationship
between the parties in which event
assignment may also be permissible
notwithstanding the specific content
of clause 7 of the lease deed in
question. However, we need not dwell
on this issue at any length or would
also be required to consider the
efficacy of the arguments of the
learned Additional Solicitor General
on the strength of the two Privy
Council decisions mentioned above
i.e. Hans Raj vs. Bejoy Lal Sel and
Ram Kinkar Banerjee vs. Satya Charan
Srimani (supra) inasmuch as from
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Company Application No. 34 of 2004,
which deals with the claim of the
appellants for eviction of the
official liquidator from the leased
property, what is clear and evident
is that the case of sub-letting of
the leased premises on which basis
eviction has been prayed for is not
sub-letting/assignment by the
official liquidator but assignment
of the leased premises to Prasad
Mills by the original managing
agents in whose favour the initial
lease was executed by the
predecessors of the present owners.
The ground of unauthorized and
impermissible assignment by the
official liquidator on the strength
of the notice/advertisement for
disposal of the leased land thereby
making the said authority liable for
eviction is an argument advanced
only at the hearing of the appeals
before us. That apart the said
argument overlooks the fact that the
assignment was only sought to be
made by the advertisement/notice
issued and did not amount to a
completed action on the part of the
official liquidator so as to attract
the relevant provisions of the
Bombay Rent Act dealing with the
consequential liability for
eviction. Such argument also belies
the injunctive/prohibitory relief
sought for in the Company
Applications, as already noticed,
insofar as the contemplated
sale/transfer/assignment of the
leased property by the official
liquidator is concerned. The
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arguments advanced on the strength
of the provisions of Section 19 of
the Bombay Rent Act would also stand
answered on the above basis.
19. Insofar as liability under
Section 13(1)(k) of the Bombay Rent
Act is concerned what is to be
noticed is the requirement of
unjustified non-user for a period
exceeding 6 months which evidently
is not be attracted to the present
case in view of the pendency of the
liquidation proceedings. That apart,
Clause 5 of the lease deed which
deals with non-user of the leased
land does not contemplate eviction
on account of such non-user but
merely entitles the lessor to
receive rent for the period of such
non-user of the land.
20. The mere fact that the company
has been ordered to be wound up
cannot be a ground to direct the
official liquidator to handover
possession of the land to the owners
inasmuch as the company in
liquidation continues to maintain
its corporate existence until it
stands dissolved upon completion of
the liquidation proceedings in the
manner contemplated by the Companies
Act. In the present case it has been
repeatedly submitted before this
Court by both sides that presently
revival of Prasad Mills is a live
issue pending before the Gujarat
High Court, a fact which cannot be
ignored by this Court in deciding
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the above issue against the
appellants."
33. Relevant clauses of the lease deed are
already extracted here-in-above. On perusal
of the clauses 1 and 2 of the lease deed in
question, it is apparent that the lease deed
dated 18.06.1919 is in the nature of
permanent lease. Clause 5 of the said lease
deed also reiterates that the lease deed was
executed for an indefinite time and permanent
in nature as no fixed term is stipulated in
any of the clauses of the lease deed.
Similarly clause 8 also indicates that lease
deed executed was for permanent lease.
34. Clause 12 of the lease deed provides
that the ownership and possession of the
step-well and well on the subject land also
was given permanently to the lessee. An
attempt was made on behalf of the applicant
by learned advocate Mr.Hava to distinguish
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the lease deed to contend that clause 8 of
the lease deed indicates that the
construction made on the land to be kept as
it is if it is to be sold by lessee to some
other person, however same cannot be accepted
because lease deed has to be read as a whole
and considering the terms of the lease deed,
there is no doubt that the lease was
permanent in nature. Therefore, on conjoint
reading of clauses 1, 2, 5,6 and 8, it
emerges that lessee is entitled to the land
in any manner whereas lessor was prohibited
to object the use of land in any manner by
the lessee. Lessee was entitled to transfer
the rights on same terms and conditions and
the lessor was entitled to recover the
arrears of rent through available remedies.
35. Similarly, the distinction sought to be
drawn between the lease deed in question and
lease deed in case of Jabal C. Lashkari &
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Ors.(supra) is to the effect that lease in
the facts of the case though it is for
indefinite period so long as lessee goes on
paying the rent whereas in case of Jabal C.
Lashkari & Ors.(supra), it was a fixed period
of 199 years.
36. Reliance placed on behalf of the
applicant on the provisions of section 3(1)
of the Act, 1986 to canvas the contention
that the Official Liquidator has stepped into
the shoes of the GSTC Ltd.(In Liquidation)
who is a statutory tenant and not contractual
tenant as there is no contractual assignment
of leasehold rights from Marsden Mills in
favour of GSTC Ltd. (In Liquidation) but
such leasehold rights vested under section
3(1) of the Act, 1986 in the State Government
which in turn as per the provisions of
section 3(2) of the Act, 1986 divested in
GSTC Ltd. (In liquidation) and therefore, the
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facts of the case are different than that of
contractual lease in case of Jabal C.
Lashkari & Ors.(supra), though appears very
attractive at first blush but on closer
scrutiny of the facts, it appears that the
specific clauses of the lease deed in the
present case as well as in case of Jabal C.
Lashkari & Ors.(supra) are similar.
37. Distinction sought to be drawn by the
applicant between the lease deed executed in
facts of the case on the ground that whole
interest including the reversionary interest
of the lessee Khushaldas Gokaldas was
assigned in favour of Marsden Mills was in
breach of clause 1 read with clause 8 of the
lease deed and by virtue of the provisions of
section 15(2) of the Rent Act, possession of
the Marsden Mills was deemed to be valid,
and therefore, also Marsden Mills became
statutory tenant, is not tenable because the
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concept of statutory tenant and the
applicability of the Rent Act though argued
at length by learned advocate Mr. Hava again
to distinguish the facts in case of Jabal C.
Lashkari & Ors.(supra) cannot be accepted
more particularly, when the Apex Court after
considering the provisions of the Rent Act in
case of Jabal C. Lashkari & Ors.(supra)
confirmed the order passed by the Company
Judge as well as the Division Bench in OJ
Appeal No. 66/2006.
38. The Division Bench of this Court in
similar facts in case of Virendra Bhogilal
Shah (HUF)(supra) has considered the decision
of the Apex Court in case of Jabal C.
Lashkari & Ors.(supra) in detail and as such,
the issue with regard to the applicability of
the said decision of the Apex Court if the
specific clauses of the lease deed are
similar, the same is required to be applied.
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The Division Bench in case of Virendra
Bhogilal Shah (HUF)(supra) in OJ Appeal No.
13/2007 after considering the provisions of
Act, 1986 held as under :
"[8.0] Heard the learned
Counsel appearing on behalf
of the respective parties at
length.
At the outset it is required to be
noted that possession of the land in
question has been handed over to the
State Government earlier for the
purpose of using the same
for Apparel Park (pursuant to
the order passed by the learned
Company Court dated 17.07.2006
passed in Company Application
No.250/2006) and now the
possession is handed over to MEGA to
use it for public purpose of
Metro Rail between Gandhinagar
and Ahmedabad. Thus, it is not in
dispute that the land in question is
to be used for public purpose. Even
the learned Counsel for the
appellant has also not disputed
the above that the land in
question is required, needed and
to be used for public purpose.
[8.1] It is required to be noted
that earlier the Division Bench of
this Court dismissed the present
appeal following the decision of
this Court in the case of Legal
Heirs of Deceased Fakir Chand
Ambaram Patel (Supra) and
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
consequently confirmed the
order passed by the learned Company
Court dated 13.10.2005 passed in
Company Application No.211/2001
rejecting the prayer of the
appellant to hand over the vacant
and peaceful possession of the land
which was in possession of
the Company in liquidation.
However, pursuant to the decision of
the Hon'ble Supreme Court in the
case of Jabal C. Lashkari (Supra),
the Hon'ble Supreme Court has
remanded the present appeal to this
Court to consider the appeal in
light of the observation that the
decision in the case of Jabal C.
Lashkari (Supra) in SLP (C)
Nos.2928284 of 2008 and for
consideration of the specific
clauses in the lease deed
and to consider what would
be the effect of the
principles of law underlying in
the case of Jabal C. Lashkari
(Supra) visavis specific clauses of
the lease deed between the parties.
Therefore, while considering the
present appeal, observations made by
the Hon'ble Supreme Court in
the case of Jabal C.
Lashkari (Supra) are required
to be considered including the
relevant clauses of the lease deed
in the case of Jabal C. Lashkari
(Supra).
[8.2] In the case before the Hon'ble
Supreme Court in the case of Jabal
C. Lashkari (Supra), one Durgaprasad
Lashkari had leased out land
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admeasuring 35772 sq. meter in favor
of one Bechardas Spinning and
Weaving Mills Ltd. (subsequently
known as Prasad Mills Ltd.) for
the period of 199 years by
a lease deed dated 10.12.1916.
A secured creditor of the Prasad
Mills Ltd. in the year 1984 filed
a company petition seeking
the winding up of the
aforesaid Prasad Mills Ltd.
While the company petition
was pending, some of the legal heirs
of Durgaprasad Lashkari had filed a
suit in the Small Causes Court
seeking permanent injunction against
the sale of assets of company more
particularly the sale of the leased
property. An order was passed by the
learned Company Judge directing
the winding up of Prasad
Mills Ltd. and the appointment
of an official liquidator. That the
official liquidator took the charge
and possession of all the assets of
the company. An application was
filed by another heir of Durgaprasad
Lashkari in the winding up petition
seeking direction to further
prosecute the suit pending before
the Small Causes Court. The learned
Company Judge ordered that the
suit may be withdrawn and
instead directions may be sought
from the Company Court for return of
the leased property. Pursuant
thereto a Company Application was
filed by some of the heirs of
Durgaprasad Lashkari for return of
the leased property and also
for orders restraining the
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official liquidator from
selling/transferring the leased
property. It appears that return of
the leased land was sought on the
twin grounds that in view of the
winding up order, the Company no
longer required the land and
furthermore default in payment of
rent had occurred. For the second
relief sought it was urged that the
official liquidator was not
authorised to transfer/alienate the
leased property in view of the
provisions of the Bombay Rents,
Hotel and Lodging House Rates
Control Act, 1947. While the above
Company Application was pending, the
building, superstructure, plant and
machinery of the company was sold in
a public auction. An advertisement
was issued by the official
liquidator for the sale of the
leased property. As against the
aforesaid advertisement, Jabal
C. Lashkari and others - heirs
of Durgaprasad Lashkari filed
Company Application No.33 of 2004
for a declaration that the official
liquidator had no right to sell
the leased property. The
grounds urged were principally
on the basis of lack of any such
empowerment in the lease agreement
and in view of the bar/restriction
contained in Section 15 of the
Bombay Rent Act. Another Company
Application i.e. C.A. No.34 of
2004 was filed seeking
permission from the Company
Court to file a suit
before the appropriate court
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for eviction of the official
liquidator from the leased property.
Eviction of the official liquidator
was claimed, inter alia, on the
following grounds:
(i) the occupant Company i.e.
Prasad Mills had no document in its
favour entitling it to be in
possession of the demised land;
(ii) admitted non payment of rent
for a period of over 15 years
rendering the company and now
the official liquidator liable
to eviction under Section 12
of the Bombay Rent Act;
(iii) admitted non user of the land
for a period of over 6 years
attracting Section 13(1)(k) of the
Rent Act;
(iv) subletting in favour of
the company, Prasad Mills, in
violation of Section 13(1)(e) of the
Rent Act.
[8.3] That the learned Company
Judge vide order dated
13.10.2004 rejected all the three
company applications. Jabal C.
Lashkari and other legal heirs of
Durgaprasad Lashkari filed three
separate appeals before the Division
Bench of this Court. The High Court
by a detailed judgment and order
reported in 2008 (3) GLH 528
dismissed the aforesaid
appeals. By a decision
reported in (2016) 12 SCC 44, the
Hon'ble Supreme Court has dismissed
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the SLPs and has confirmed the
decision of the Division Bench of
this Court in the case of Jabal C.
Lashkari reported in 2008 (3) GLH
528. That the Hon'ble
Supreme Court considered the
relevant provisions of the Bombay
Rent Act and also considered the
relevant clauses of the lease deed.
In the case before the Hon'ble
Supreme Court in the case of Jabal
C. Lashkari (Supra), the terms of
the lease deed were as follows:
"............;And whereas the
above mentioned three
pieces of land are owned by the
First Party, and the Second
Party has rented the same from
First Party;
And whereas the rent is fixed at
Rs.350100 - Rupees three
thousand five hundred and one.
for one year of 12 months to be
paid to First Party, by the
Second Party; as rent on the
following conditions :
(1) The said rent will be given
to First Party, by Second Party
every year and if the Second
Party does not pay the rent due
to them every year, the First
Party will give registered
notice for recovery of rent; and
in spite of such notice the
Second Party or their
successors, heirs or
administrators do not pay the
rent, First Party or their
successors, heirs, attorneys or
administrators are entitled to
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obtain possession of the land
with buildings, either by
mutual understanding or
through government.
(2) This rent note is valid for
199, in words one hundred ninety
nine years, agreed by Second
Party and on expiry of the said
period, we, the Second
Party will vacate the
land, resurface it and will give
it to the First Party or their
successor with any amount of
rent due, by the Second Party or
their successors or
administrators, whosoever would
be, and while giving back the
possession, Second Party will
not raise any dispute or
objection, and even if raised
will not be admissible by virtue
of this agreement.
(3) The First Party, or their
successors, heir, are not
entitled to sale or pledge, or
give possession of these pieces
of land, to any other party, and
even if they do so, it will be
void by virtue of this
agreement.
(4) In case the government needs
this land and/or if the
government purchase some part of
this land; then the right to
receive compensation for
such acquisition is of
First Party; however, interest
at the rate of one percent per
hundred of whatever amount the
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
First Party thus receive. will
be adjusted by the Second Party
from the rent payable, or the
Second Party will give such
reduced rent to First Party
after adjusting the said amount,
in the following years; and the
First Party will have no right
to any objection or dispute, and
even if they raise any dispute
it will be not
sustainable by virtue of
this agreement.
(5) In case the Second
Party, or their
successors, attorneys.
administrators, assinee or
executors do not stay, or do not
make use of, or do not store
material, on the land; or
vacate the land and give
possession to the First Party,
before the specified period,
then the First Party is entitled
to receive rent till the date of
possession so given; and the
First Party has no right to
claim rent for the remaining
period.
(6) The municipal tax for the
land is Rs.50000 per year which
will be paid by the Second
Party; and the Second Party will
give rent of Rs.3501/ to First
Party every year. However, the
Second Party do not pay the
municipal tax of Rs.500/ and
the same has to be paid by the
First Party, then the Second
Party, or their successors will
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reimburse such amount with six
percent interest per hundred per
year thereon.
(7) The First Party will not
object upto 199 years, if the
Second Party, or their
successors, heirs or
administrators, construct
buildings with necessary
government permission, or use a
free land or the Second Party
give on rent or on lease, and
the First Party is entitled to
take possession of the land
immediately on expiry of 199
years.
(8) The First Party, or
their successors, heirs,
administrators or attorneys are
entitled to take possession of
the land before the expiry of
rent period, if the Second Party
fail to pay rent to First Party
every year.
(9) The government tax on this
land is to be paid by we, First
Party; but if some
additional tax is levied
because of construction on the
land, it will be borne by the
Second Party. Municipal tax
is Rs.500/ per year at
present. However, hereafter if
municipality levies some
additional tax on First Party
or on Second Party; or the
government decide to levy some
new tax; then all such taxes
will be borne by the Second
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Party, and will not claim it
from First Party; nor will
adjust it against rent payable
to the First Party; and the
First Party has no right to take
possession of the land before
expiry of 199 years, but the
First Party has right to receive
amount of rent till the above
period.
(10) The First Party and the
Second Party and their
successors, heirs,
administrators, attorneys and
assignees, are accepting the
terms and conditions set out in
this agreement.
Thus the Second Party has rented
the pieces of land, from the
First Party under the terms set
out in this agreement, at our
will, and signed and sealed this
agreement."
[8.4] After considering various
other decisions of the
Hon'ble Supreme Court, the
Hon'ble Supreme Court
confirmed the reasoning and the
conclusion arrived at by the
Division Bench that the Rent Act do
not obliterate the effect of
provisions of Section 108(j) of the
Transfer of Property Act, which vest
right in the lessee not only to
sublet but also to assign the
subject matter of lease granted to
him by the original lessor. The
Hon'ble Supreme Court also did not
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
accept the contention on behalf of
the appellants that as the Company
has been wound up it no longer
required the leased land for its
use. The Hon'ble Supreme Court
confirmed the conclusion arrived
at by the Division Bench with the
liability/obligation to pay rent for
the leased land by observing that it
does not constitute an onerous
obligation on the company in
liquidation so as to justify
surrender of the leased land
by the Official Liquidator or
any direction to the said effect
under Section 525 of the Companies
Act. That thereafter the Hon'ble
Supreme Court has dismissed the SLPs
and confirmed the judgment and order
passed by the Division Bench of this
Court in the case of Jabal C.
Lashkari by observing and holding in
paras 17 to 22 as under:
"17. The main plank on which the
appellants have based their
case, as already noticed,
is the operation of
Sections 12 (default), 13(1)
(e) (unauthorized assignment)
and 13(1)(k) (non user of the
leased land). We may now take up
the aforesaid issues in
seriatim.
18. Section 12 of the Rent Act
confers protection on a tenant
who is regularly paying or is
ready and willing to pay the
rent. In the present case while
there is no doubt that rent has
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not been paid, equally, there is
no doubt that the secured
creditors including the State
Bank of India had all along been
ready and willing to pay the
rent and the reasons for non
payment appears to be (para 43
of the impugned order of the
High Court) lack of
communication by the official
liquidator to the SBI of the
precise amount of rent due.
While there can be no doubt that
mere readiness and willingness
to pay without actual
payment cannot enure to
the benefit of the tenant
in perpetuity what is
required under Subsection
(2) of Section 12 is a notice
in writing by the landlord
raising a demand of rent and
only on the failure of the
tenant to comply with such
notice within a period of one
month that the filing of a suit
for recovery of possession is
contemplated. The service
of notice giving an
opportunity to the tenant
to pay the unpaid rent
is the first
chance/opportunity that the
Rent Act contemplates as
a legal necessity incumbent
on the landlord to
afford to the tenant.
Admittedly, in the present case,
no such notice as contemplated
by Section 13 (2) has been
issued by the landlord; at least
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none has been brought to our
notice. In such a situation, the
readiness and willingness of
the tenant to pay the
rent, though may have
continued for a fairly long time
without actual payment, will not
deprive the tenant of the
protection under the Rent Act.
Though the order of the High
Court in para 43 of the impugned
judgment has been placed before
the Court as an order under
Section 12(3)(b) of the Rent
Act we do not find the
said order to be of
the kind contemplated by
Section 12(3)(b) inasmuch as not
only the order does not mention
any specific rent which has to
be tendered in Court but what is
encompassed therein is a
direction to the official
liquidator to let the State Bank
of India know the precise amount
that is required to be paid on
account of rent and, thereafter,
to pay the same to the official
liquidator whereafter it has
been left open for the
lessors to withdraw the
said amount from the
official liquidator. Such an
order by no stretch of reasoning
would be one contemplated under
Section 12(3)(b). In the
aforesaid situation, the finding
of the High Court that the
landlord is not entitled to seek
eviction on the ground of non
payment of rent under Section 12
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of the Bombay Rent Act cannot be
said to be so inherently infirm
so as to require the
interference of this Court.
19. This will bring the Court to
a consideration of the liability
of the official liquidator
to a decree of eviction
on the ground contemplated
under Section 13(1)(e) of the
Bombay Rent Act. As already
discussed in a preceding
paragraph of the present order,
the non obstante clause of
Section 13 (1) overrides
only the other provisions
of the Bombay Rent Act
and is also subject to
the provisions of Section 15.
Section 15 which deals with sub-
letting and transfer, though
overrides the provisions
contained in any other law, is
subject to any contract to the
contrary. Though in the present
case the lease deed (clause 7)
is capable of being read as
permitting subletting and not
assignment what has been held in
the present case by the High
Court, by virtue of the decision
of this Court in Laxmidas
Bapudas Darbar vs. Rudravva
(supra), is that in view of the
limited operation of the non
obstante clause in Section 15 of
the Bombay Rent Act,
unlike Section 21 of the
Karnataka Act, the
provisions of the Transfer of
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Property Act [Section 118 (o)]
will not become irrelevant to
the relationship between the
parties in which event
assignment may also be
permissible notwithstanding
the specific content of clause 7
of the lease deed in question.
However, we need not dwell on
this issue at any length or
would also be required to
consider the efficacy of the
arguments of the learned
Additional Solicitor General on
the strength of the two Privy
Council decisions mentioned
above i.e. Hans Raj vs. Bejoy
Lal Sel and Ram Kinkar Banerjee
vs. Satya Charan Srimani (supra)
inasmuch as from Company
Application No. 34 of 2004,
which deals with the claim of
the appellants for eviction of
the official liquidator from the
leased property, what is clear
and evident is that the case of
subletting of the leased
premises on which basis eviction
has been prayed for is not sub-
letting/assignment by the
official liquidator but
assignment of the leased
premises to Prasad Mills by the
original managing agents in
whose favour the initial
lease was executed by
the predecessors of the present
owners. The ground of
unauthorized and impermissible
assignment by the official
liquidator on the strength
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of the notice/advertisement for
disposal of the leased land
thereby making the said
authority liable for eviction is
an argument advanced only at the
hearing of the appeals before
us. That apart the said argument
overlooks the fact that the
assignment was only sought to be
made by the advertisement/notice
issued and did not amount to a
completed action on the part of
the official liquidator so as to
attract the relevant provisions
of the Bombay Rent Act dealing
with the consequential
liability for eviction. Such
argument also belies the
injunctive/prohibitory relief
sought for in the Company
Applications, as already
noticed, insofar as the
contemplated
sale/transfer/assignment of
the leased property by
the official liquidator is
concerned. The arguments
advanced on the strength of the
provisions of Section 19 of the
Bombay Rent Act would also stand
answered on the above basis.
20. Insofar as liability under
Section 13(1)(k) of the Bombay
Rent Act is concerned what is to
be noticed is the requirement of
unjustified nonuser for a
period exceeding 6 months
which evidently is not be
attracted to the present
case in view of the pendency
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
of the liquidation proceedings.
That apart, Clause 5 of the
lease deed which deals with non-
user of the leased land does not
contemplate eviction on
account of such nonuser
but merely entitles the lessor
to receive rent for the period
of such nonuser of the land.
21. The mere fact that the
company has been ordered to be
wound up cannot be a ground to
direct the official liquidator
to handover possession of the
land to the owners inasmuch as
the company in liquidation
continues to maintain its
corporate existence until it
stands dissolved upon
completion of the
liquidation proceedings in the
manner contemplated by the
Companies Act. In the present
case it has been repeatedly
submitted before this Court by
both sides that presently
revival of Prasad Mills is a
live issue pending before the
Gujarat High Court, a fact
which cannot be ignored by
this Court in deciding
the above issue against
the appellants.
22. For the aforesaid reasons we
affirm the order of the High
Court dated 17.10.2008 in O.J.
Appeal Nos. 65 of 2006, 66 of
2006 and 67 of 2006 and dismiss
the civil appeals arising out of
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
SLP (C) Nos. 2928229284 of
2008 wherein the said
order is under challenge."
As observed hereinabove, the appeals
have been remanded to this Court to
consider the relevant clauses of the
lease deed in the present case
visavis the observations made
by the Hon'ble Supreme Court in
the case of Jabal C. Lashkari
(Supra).
[8.5] It is required to be noted
that in the present case in the
application before the learned
Company Court, the appellant herein
claiming to be the assignee of the
rights of the original
owner/successor sought the
reliefs restraining the
Official Liquidator and/or its
agents, or servants from selling,
mortgaging, alienating or
transfering in any manner whatsoever
to any person the land in question
and to direct the Official
Liquidator to hand over the
vacant and peaceful possession of
the land admeasuring 33500 sq. meter
bearing Survey No.542 and 543, Final
Plot No.56 of T.P. Scheme No.9
situated at Mouje Raipur -
Hirpur, District Ahmedabad City on
the ground of arrears of rent; non-
use of the land in question by the
lessee and also on the ground of
bonafide requirements. Thus, as
such the appellant herein -
original applicant sought the
aforesaid reliefs basically
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
invoking the provisions of the
Bombay Rent Act. As observed
hereinabove, it is also the case
on behalf of the appellant
now that delivery of handing
over the possession to the GIDC for
Apparel Park and thereafter to MEGA
for Metro Rail, it can be said to be
subletting by the Official
Liquidator and even the same can be
said to be implied surrender and
therefore, the appellant is entitled
to the possession of the lands in
question. However, at this stage it
is required to be noted that the
learned Counsel appearing on behalf
of the appellant has stated at the
Bar that in view of the fact that
the possession is handed over to
MEGA now, it is to be used now for
the public purpose, the appellant is
not insisting for relief of
possession, however the
appellant may be awarded the
compensation.
[8.6] While considering the issue
involved in the present appeal, the
relevant clauses of the lease deed
are required to be referred to and
considered. The English translation
of the lease deed is as under:
"The land situated within
four khuts, as per
original boundary of the
agricultural field including
fence border, trees, border
of agricultural field,
well, has been leased
permanently by the first party
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to the second party . The
details of the agreement
thereof;
That the amount of Rs. 1801/ (in
words Eighteen Hundred and One
Rupees) has been paid against
the rent of the said land
annually and the same shall be
paid by the second party to
the first party. We
shall not cause any hurdle
or create any interest,
and if any obstruction
is created, the same shall be
recovered by way of filing a law
suit. Further, until the amount
of rent against the said land is
paid by the second party every
year in advance to the first
party, they shall not take over
the possession by way of
vacating this land. The first
party shall not create any kind
of obstacle or obstruction in
the way we keep the said land as
a waste land or rent to somebody
or use it casually or use it at
our will.
(4) As and when we, the
second party, release the
possession at our will,
the erected construction of
the building will be removed and
the possession of the land shall
be handed over to you, the first
party by clearing the land and
making it cultivable as per the
present area.
(5) We, the second party,
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erect constructions of the
building as per the rule and
permission of the Government on
the said land or use it as per
our willingness. The first party
or their guardian shall not
create any obstruction and if
we, the second party, do any act
against the rule and without
obtaining permission of the
Government, the second party
shall be responsible for it.
Therefore, if any loss caused to
the tilling right of the first
party, the second party shall be
held accountable for it.
(6) Whatever cess or tax is
required to be paid in the
Government against the
construction erected on the said
land or whichever Government tax
is required to be paid shall be
the liability of the second
party and the same shall be paid
in the name of first party as
land holder and as occupant.
(7) Trees like mango trees,
tamarind trees are existing on
the said land. If out of these
trees, any tree is creating
obstruction to the second party
and they are required to be cut,
we, the first party shall not
create any dispute in this
regard. If they dry and fall
down, the first party has right
to collect their wood and the
second party has right to
collect yield of the said tree.
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(8) The rent against the said
land shall be paid by the second
party to the first party every
year by way of issuance of
receipt by the first party and
no dispute shall be created on
this issue. Therefore, it
remains the dispute of second
party.
(9) It shall be the liability of
the second party to pay whatever
amount of Municipal tax or local
fund in respect of construction
on the said land is required to
be paid.
(10) The first party or their
guardians, heirs, executors,
assignees, etc. shall not create
any obstruction, if the second
party sells the buildings
constructed over the said land
or give right of lease or assign
or alienate in any other manner
or they are sold as per the
agreement of the lease
condition.
(11) At the time of erecting
construction on the said land by
the second party if any
application is required to be
made for obtaining permission
from the Government or any
agreement is required to
be entered into with the
Government in this regard or any
receipt is required to be given,
the same shall be done by us as
land occupier or as an occupant
on behalf of the second party.
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(12) We, the second party, have
taken the said land on rent from
the first party. The rent
against it is accrued from 13th
June, 1927, but trees like mango
tree, etc. existing on this
agricultural land are not
connected with this
agricultural land. Nobody holds
any kind of share therein.
(13) We, the second party, have
taken this land on lease
permanently from the first
party. Wherever it is written
second party shall be construed
as the agents, assignees,
executors of the party of the
second part at the relevant time
and the same is agreed
upon by the first party,
their guardians, heirs,
administrators, executors, etc.
(14) We, the first party, do
hereby alienate the said land in
the name of the second party."
Thus, considering the relevant terms
/clauses of the lease deed
referred to herein above, it
appears that the lease was
permanent in nature viz. permanent
lease; lessor was entitled to
Rs.1801 p.a. from the lessee; till
the lessee pays and/or ready and
willing to the lease rent i.e.
Rs.1801 p.a. the lessor is not
entitled to get back the possession;
the lessee is entitled to use the
land in question as it likes and
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even if the leased property is kept
padtar and/or given on lease to
others, lessor shall not restrain
the lessee; the lessee can even put
up the construction as it likes and
the lessor shall not obstruct the
lessee; even the construction put up
on the land by the lessee is sold
and/or leased and/or assigned to any
other person, the lessee shall not
obstruct and/or interfere with the
same. Thus, considering the clauses
of the lease, the lease can be said
to be permanent lease and all rights
are assigned to the lessee as if the
land is owned by the lessee and that
the lessor shall be entitled to
Rs.1801 p.a. only by way of lease
rent.
[8.7] Considering the terms of the
lease deed it appears that the
landlord / lessor has carved out
absolute transferable interest in
favour of the lessee in the
perpetual lease. There is no
forfeiture clause. There is no right
to reentry and therefore, the
passage relief upon from Transfer of
Property Act Mulla, page 771 shall
not be useful and/or of any
assistance to the appellant.
[8.8] Applying the law laid down by
the Hon'ble Supreme Court in the
case of Jabal C. Lashkari (Supra) to
the facts of the case on hand more
particularly with respect to the
terms of the lease deed referred to
hereinabove, the decision of the
Hon'ble Supreme Court in the case of
Jabal C. Lashkari (Supra) shall be
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
applicable with full force to the
facts of the case on hand. Applying
the law laid down by the Hon'ble
Supreme Court in the case of Jabal
C. Lashkari (Supra) to the facts of
the case on hand more particularly
terms of the lease deed, the
provisions of the Bombay Rent Act
shall not be applicable and
therefore as such appellant
herein - original applicant
shall not be entitled to the
possession on the ground set out in
the application before the learned
Company Court i.e. on the ground
of (1) arrears of rent;
(2) nonuser and (3) bonafide
requirement. As observed by the
Division Bench of this Court in the
case of Jabal C. Lashkari
(Supra), confirmed by the
Hon'ble Supreme Court, the
parties to the lease
agreement shall be governed by
the terms of the lease deed agreed
between the parties and that the
enactment of the Rent Act is not
intended to restrict/curtail the
rights of the tenant under the
provisions of Transfer of Property
Act or ordinary law relating
to inheritance. Thus,
considering the terms of the
lease deed, when the lease
is a permanent lease and under the
lease deed the only right available
to the lessor is the rent at Rs.1801
p.a. and considering other terms of
the lease deed referred to
herein above and as observed
hereinabove, the provisions of the
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Bombay Rent Act shall not be
applicable and therefore, the
appellant shall not be entitled to
the possession on the grounds set
out in the Company Application viz.
(1) arrears of rent; (2) nonuser and
(3) bonafide requirement. We are of
the opinion that the learned
Company Court has rightly rejected
the prayer of the appellant for
possession.
[8.9] Now, so far as the submission
on behalf of the appellant that as
the company / lessee has been wound
up and therefore, the land is not
needed and/or to be used by the
lessee and/or by transfer of leased
property in favour of the State
Government / now MEGA would
tantamount to subletting is
concerned, considering the
aforesaid terms of the lease deed
referred to hereinabove, the same
has no substance. Considering the
terms of the lease the lessee is
authorised and/or permitted to
lease and/or give on rent
the property to any other person and
even if leased property is not used
and is kept padtar in that case also
the lessor is not entitled to get
back the possession. The only right
under the lease deed is to get the
rent at the rate of Rs.1801 p.a. and
the lease is a permanent lease the
lessor has no other right and/or
interest in the leased property in
question. Therefore, as such
the subletting / subleasing is
also permissible. Under the
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circumstances, the submission on
behalf of the appellant that by
transfer there is an implied
surrender and therefore, the
appellant is entitled to the
possession has no substance and is
required to be rejected outright.
At this stage it is
required to be noted that
as such the possession of the
leased property in question has been
handed over initially to State
Government for Apparel Park and
thereafter to MEGA for Metro Rail
pursuant to the order passed by the
learned Company Court and the order
passed by the learned Company Court
directing the Official Liquidator to
hand over the possession to the
State Government initially for
Apparel Park and thereafter to MEGA
has attained the finality.
Therefore, none of the decisions
relied upon by the learned Counsel
appearing on behalf of the appellant
on implied surrender shall be
applicable to the facts of the case
on hand.
[8.10] It is also required to be
noted at this stage that after the
lessee - Sarangpur Cotton Mills Co.
Ltd. was ordered to be wound up, the
same was taken over by the GSTC
under the provisions of the Act,
1986. Even the GSTC also ordered to
be wound up and Official
Liquidator was appointed.
Thus, the Official Liquidator
became the custodian of the
properties of the Company owned by
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
the GSTC. Considering the provisions
of the Act, 1986 the leasehold
rights of the lessee of the
specified textile undertaking vest
in the State Government. All
encumbrances are extinguished and
even any decree of the Court cannot
be executed. After the order for
liquidation of GSTC, the
leasehold rights of the GSTC
would continue to vest in the GSTC
(in liquidation). Pursuant to the
order passed by the learned Company
Judge in Company Application
No.250/2006, the possession of the
leased property belonging to the
Company has been directed to be
handed over for use of public
purpose. That the appellant
is neither the creditor nor
the contributory. The State
Government is the sole
creditor / shareholder.
[8.11] The Gujarat Closed Textile
Undertaking Nationalized Ordinance,
1985 came to be promulgated in the
year 1985. The said Ordinance
was repealed and replaced by
Gujarat Closed Textile Undertaking
Nationalized Act, 1986. It appears
that under the provisions of the
said Act, leasehold rights of the
Company came to be acquired.
In the year 1997 the
Official Liquidator became the
custodian of the properties of the
company owned by the GSTC. The
Government of Gujarat is the largest
creditor of the company in
liquidation to the extent of
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Rs.827.31 Crore. The Government
of Gujarat also was the only
contributory of the GSTC. Even
considering the relevant provisions
of the GSTC Act, 1986 more
particularly sections 2(1)(f)(i), 3
and 4, the leasehold rights of the
lessee of the Specified Textile
Undertaking - respondent Company
vests in the State Government. At
this stage it is required to be
noted that pursuant to the earlier
order dated 17.07.2006 passed by
this Court in Company Application
No.250/2006, the possession of the
land in question was handed over to
the State Government / GIDC for
public purpose - for use of public
purpose and thereafter now the same
is handed over to MEGA for Metro
Rail which is also a
public purpose. It appears
that the State Government
claimed its right because the State
Government is the only secured
creditor and only contributory and
on liquidation of the company the
State Government would be entitled
to possession of surplus assets of
the company towards its claim as the
largest secured creditor and only
contributory. As observed herein
above, the only right the lessor /
original landlord possesses is the
right to recover the lease rent at
Rs.1801/ per annum. Therefore also,
the appellant shall not be
entitled to the possession
of the leased property which as
observed herein above was a
permanent lease. The aforesaid
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observations are made over and
above, as observed herein above,
considering the relevant clauses of
the lease deed. The decision of the
Hon'ble Supreme Court in the case of
Jabal C. Lashkari (Supra) shall be
applicable with full force and
therefore also, the appellant shall
not be entitled to the relief of
possession as claimed / prayed.
[8.12] Now, so far as the
alternative submission on behalf of
the appellant to award the
compensation for the land in
question is concerned, at the outset
it is required to be noted and as
observed hereinabove the only right
available to the lessor as per the
lease deed is to receive the rent at
Rs.1801 p.a. only. The appellant
seems to be the assignee
under the Deed of
Assignment. The appellant and the
subsequent purchaser who is alleged
to have purchased the land in
question in a Court auction as an
assignee, the appellant cannot have
any better right than the original
lessor / original owner. Under the
circumstances, the appellant shall
not be entitled to even the
compensation for the land in
question. Whatever the appellant
would be entitled to, the appellant
would be entitled to under the
provisions of the Act, 1986 and from
the amount, if any deposited
by the State Government,
under the provisions of the Act,
1986. However, in any case the
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
appellant shall not be entitled to
even compensation in respect of the
land in question even under
the provisions of the Right
to Fair Compensation and
Transparency in Land Acquisition
Rehabilitation and Resettlement Act,
2015."
39. Thus as held by the Division Bench in
similar facts both the questions which are
arising in this application have been
answered against the original lessor by
considering in detail the same arguments as
canvassed by learned advocate Mr. Hava before
this Court.
40. Learned advocate Mr.Hava has heavily
relied upon the decision of Division Bench in
case of Anilkumar Vaikunthlal Patel (supra)
wherein the Division Bench after considering
the facts of the said case and considering in
detail all the judgments which are relied
upon by learned advocate Mr. Hava before this
Court has held in favour of lessor and held
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
as under :
"99. To summarise: - While the duration
of the lease deed dated 4th August,
1911 is indefinite, it is not permanent
in nature.
The lease of 1911 cannot be said to be
a periodic lease inasmuch as in case of
a periodic lease the contract is
determinable by notice to quit on the
part of either lessor or lessee,
whereas in the facts of the present
case, the lessor has no right to issue
a notice to quit except in the case of
non-payment of rent.
The agreement of 1983 being an
unregistered document, cannot be
considered to be valid for a lease
exceeding one year and has to be
considered to be for a lease for a
period less than one year as
contemplated under second part of
Section 107 of the Transfer of Property
Act. The agreement of 1983 is,
therefore, deemed to create a month-to-
month tenancy, termination whereof is
governed by section 106 of the Transfer
of Property Act.
The unregistered agreement dated 26th
April, 1983 is not a valid document and
none of its clauses, including the
clause whereby the leasehold rights of
Calico Limited are transferred to it
can be read in evidence.
Once the agreement of 1983 cannot be
admitted in evidence, the lease deed of
1911 cannot be looked into as the
rights under the lease deed of 1911 are
claimed by the Official Liquidator
under the agreement of 1983. Hence,
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
neither can the agreement of 1983 nor
the lease deed of 1911 be read in
evidence.
Since the document of transfer of
leasehold rights exceeding one year
requires a document to be registered,
the agreement of 1983 cannot be looked
into for the purpose of establishing
such right inasmuch as it cannot be
said to be a collateral transaction.
In the absence of the tenancy being
governed by the conditions of any
contract, the tenancy is a statutory
one and would be solely governed by the
provisions of the Rent Act.
The controversy involved in the case of
ICICI Limited v. Official Liquidator
(supra) is confined to the parties to
the said dispute and is not a judgment
in rem. The rights decided in that case
were between ICICI Limited claiming
through Calico Limited and Jubilee
Mills and hence, the said decision does
not in any manner affect the rights of
the applicant.
The doctrine of part performance under
section 53A of the Transfer of Property
Act would be applicable to the parties
to the agreement and those claiming
under them. In the present case, the
applicant does not claim any right in
the subject property through either the
transferor or transferee, and hence,
the provisions of section 53A would not
be applicable. The Official Liquidator,
therefore, cannot press into service
the right to protect possession against
Calico Limited against the applicant
herein.
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Sub-section (1) section 13 of the Rent
Act does not employ the expression
'only' and therefore, does not limit
eviction under the said Act to the
grounds mentioned thereunder.
Therefore, sub-section (1) of section
13 cannot be read to mean that eviction
under the Rent Act can be only on the
grounds stated down therein. While
invocation of section 13 of the Rent
Act may be restricted to the grounds
specifically provided thereunder, it
would still be permissible for a
landlord to seek eviction of the tenant
under section 12 of the Rent Act, if
the requirements of sub-section (2)
thereof are satisfied.
Calico Limited falls within the ambit
of the expression "tenant" as defined
in section 5(11) of the Rent Act.
Since under the agreement of 1941,
Calico Limited was assigned the
leasehold rights over the subject
property under the lease deed of 1911,
which contained a clause permitting
transfer of the subject property, the
transfer from Calico Limited to Jubilee
Mills, is not violative of the
provisions of sub-section (1) of
section 15 of the Rent Act.
In the absence of any condition
prescribing the purpose for which the
premises are to be used or for eviction
on the ground of non user, the
provisions of clause (k) of section 13
(1) of the Rent Act cannot be invoked.
No ground for eviction has been made
out by the applicant for recovery of
possession under any of the grounds
envisaged under section 13 of the
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Bombay Rent Act.
In this case no notice under sub-
section (2) of section 12 of the Rent
Act has been issued by the applicant to
the Official Liquidator of Jubilee
Mills prior to filing either of the two
applications. Consequently, in the
absence of the requirements of sub-
section (2) of section 12 of the Rent
Act being satisfied, the applicant is
not entitled to seek eviction of the
Official Liquidator by taking recourse
to the said sub-section.
In the present case there is no
contract to the contrary as envisaged
under section (1) of section 15 of the
Rent Act. Consequently, in view of the
provisions of sub-section (1) of
section 15 of the Rent Act, it shall
not be lawful for the Official
Liquidator to sublet the whole or any
part of the premises let to the company
in liquidation or to assign or transfer
in any manner his interest therein;
In terms of the notification issued
under the proviso to sub-section (1) of
section 15 of the Rent Act, the
leasehold premises can be sold as a
going concern; whereas in the facts of
the present case, the buildings and
plant and machinery have been removed
from the subject property which is now
comprised of vacant lands, therefore,
the said notification would have no
applicability to the facts of the
present case.
In the absence of a contract to the
contrary, subletting of the subject
property is barred by sub-section (1)
of section 15 of the Rent Act; sub-
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letting of any premises in violation of
section 15(1) of the Rent Act is
unlawful under sub-section (1) of
section 19 and is an offence punishable
with imprisonment and fine under sub-
section (2) thereof. Therefore, in any
event, the Official Liquidator cannot
sublet or transfer the tenancy rights
in the subject property for a
consideration as a condition of such
transfer of the tenancy rights of
Jubilee Mills in the subject property.
Since it is not permissible for the
Official Liquidator to sublet or assign
the leasehold land, any direction
issued by this court empowering the
Official Liquidator to transfer the
leasehold rights for consideration and
comply with the provisions of section
529 of 529A of the Companies Act would
be in violation of the provisions of
sub-section (1) of section 15 and sub-
section (1) of section 19 of the Rent
Act, which is also an offence under
punishable under sub-section (2) of
section 19.
Since the Official Liquidator neither
needs the subject property for
efficiently carrying on winding-up
proceedings, nor is he in a position to
sub-let or transfer the subject
property for consideration, as held by
the Supreme Court in Rajendra Ishwardas
Sethna v. Official Liquidator (supra),
the only course open to this court is
to direct the Official Liquidator to
surrender possession of the subject
property to the applicant and save
recurring liability to pay rent.
100. In the light of above discussion,
the applications succeed and are
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accordingly allowed to the following
extent. It is hereby ordered that the
Official Liquidator of the Ahmedabad
Jubilee Spinning and Manufacturing
Company Limited be deleted and in place
thereof, the name of the Official
Liquidator of Ahmedabad Jubilee Mills
Limited (in liquidation) be
substituted. The Official Liquidator is
directed to hand over peaceful and
vacant possession of the lands bearing
Survey No.53 admeasuring 4 acres 16
acres 16 gunthas of Village Dariapur-
Kazipur of Town Planning Scheme No.14
bearing Final Plot No.41, District and
Sub-District Ahmedabad to the applicant
within a period of four months from the
date of receipt of a copy of this
judgment. Insofar as the payment of
arrears of rent is concerned, such
amount has already been paid during the
pendency of these proceedings. Insofar
as payment of monthly taxes, mesne
profit, etc. is concerned, the
applicant may claim the same in the
winding up proceedings."
41. The Division Bench in case of Anilkumar
Vaikunthlal Patel (supra) has come to the
aforesaid conclusion in the facts of the said
case wherein the lease was held to be not
permanent in nature, whereas in the facts of
the present case and on perusal of the
various clauses of the lease deed, there is
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no doubt that the lease is permanent in
nature.
42. Moreover, in the facts of the case
before Division Bench in case of Anilkumar
Vaikunthlal Patel (supra), the question with
regard to the vesting of the subject land in
the State Government and thereafter in GSTC
(In Liquidation) was not arising. In the said
case, facts were with regard to the execution
of lease deed in the year 1911 and the effect
of such leasehold rights in winding up
proceedings.
43. In facts of the said case, the learned
Company Judge passed the judgment and order
dated 30.07.2002 in Company Application
No.16/1999 by a common judgment whereby it
was held as follows:
"40. To summarise : [a] Leasehold
interest is an intangible asset,
which is valuable in nature though
the valuation may differ from case
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to case depending upon the unexpired
period of lease. [b] Such an asset
is transferable subject to the same
terms and conditions as may be
stipulated in the lease deed. [c]
Once there is a contract which has
not been determined, the
relationship of the parties to the
contract continues to subsist till
the period for which the contract is
in existence subject to an express
condition to the contrary. [d] There
is a distinction between the point
of time when an order of winding up
is made and at the point of time
when an order of dissolution is
made, the company continues to exist
between the two terminii. [e] A
condition in the lease deed
permitting a lessee to give back the
possession as and when the lessee
chooses to do so cannot be converted
into an obligation entitling the
lessor to seek possession. [f] A
condition in the lease deed by way
of requirement to pay rent, per se,
does not create an onerous covenant,
once readiness and willingness is
shown by the lessee, or on its
behalf, to discharge such
obligation. 41. In light of what is
stated hereinbefore, it is not
possible to accept the case of the
applicants. The possession of the
land in question cannot be directed
to be handed over to the applicant
landlords for the various reasons
stated hereinbefore. The
applications are therefore rejected.
There shall be no order as to
costs."
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44. Against the aforesaid judgment, OJ
Appeal Nos. 65 to 67 of 2006 were preferred
and ultimately, the said appeals were
dismissed and the Supreme Court confirmed the
same by judgment and order dated 29.03.2016
in case of Jabal C. Lashkari.
45. The contentions raised by learned
advocate Mr. Hava for the applicant are
similar to the contentions raised before the
Division Bench in case of Anilkumar
Vaikunthlal Patel (supra). However, such
contentions raised by Mr.Hava relies upon the
provisions of the Rent Act and the attempt
made to draw similarity between the clauses
of the lease deed of the present case with
those referred to in the said decision, is
not tenable because in the facts of the
present case, the clauses of the lease deed
are similar to those in the cases of
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
Virendra Bhogilal Shah (HUF)(supra) and Jabal
C. Lashkari(supra). Therefore, the decision
of Division Bench in case of Virendra
Bhogilal Shah (HUF)(supra) would be
applicable in facts of the present case and
not the decision in case of Anilkumar
Vaikunthlal Patel (supra) as sought to be
canvassed by learned advocate Mr. Hava.
46. The alternative contention of the
learned advocate Mr. Hava with regard to
compensation for the subject land if used for
general public purpose is concerned, it would
be pertinent to note that by provisions of
sections 3(1) and 3(2) of the Act, 1986, the
leasehold rights in the subject land vested
in the State Government and thereafter, the
same divested in GSTC Ltd. (In Liquidation)
which is now ordered to be wound up. It is
also not in dispute that the State Government
is having 100% shareholding of the shares of
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
the GSTC Ltd. (In Liquidation) and has also
undertaken before this Court to pay any
liability which may arise. The Official
Liquidator has also paid Rs. 50 Crore to the
State Government for the said purpose under
the order of this Court. Therefore, in effect
when the State Government has taken over the
entire liability of the GSTC Ltd. (In
Liquidation), there would not be any further
requirement to pass any separate order for
the purpose of entitlement of the applicant
to claim the compensation for use of the
subject land by the State Government.
47. The Official Liquidator has also
disclosed and pointed out before this Court
that a separate application is filed for
completion of winding up process of the GSTC
Ltd. (In Liquidation) under section 481 of
the Companies Act, 1956 and therefore, the
applicant is entitled to raise its claim with
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
regard to the subject land before the State
Government.
48. In view of decision in case of Virendra
Bhogilal Shah (HUF)(supra) as the specific
clauses of the lease deed are similar to that
in case of Jabal C. Lashkari (supra) as well
as in facts of the case before Division Bench
which is considered in detail by the Division
Bench as reproduced here in above, the same
is not repeated for the sake of brevity and
following the same reasonings, this
application is ordered to be dismissed with
liberty to the applicant to approach the
State Government for redressal of the
grievances with regard to the recovery of the
outstanding lease rent as well as further
entitlement under the provisions of the
applicable laws for the use of the subject
land by the Government for any other purpose
than for which the original lease was
C/COMA/294/2009 CAV JUDGMENT DATED: 21/10/2022
granted, which may be considered in
accordance with law.
49. In view of forgoing reasons, Civil
Application No. 1 of 2022 to join the State
Government is allowed and Company application
No.294 of 2009 is dismissed accordingly.
There shall be no order as to cost.
(BHARGAV D. KARIA, J)
RAGHUNATH R NAIR
