Delhi High Court
Amritsar Sugar Mills Co. Ltd. vs Union Of India on 25 February, 2011
Author: Dipak Misra
Bench: Chief Justice, Sanjiv Khanna
13.
*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 25th February, 2011
+ LETTERS PATENT APPEAL NO. 192/2011
AMRITSAR SUGAR MILLS CO. LTD. ..... Appellant
Through Mr. Vinay Kumar Garg & Mr.
Fazal Ahmad, Advocates.
versus
UNION OF INDIA ..... Respondent
Through Mr. Sachin Datta, CGSC & Ms.
Gayatri Verma, Advocate for UOI.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJIV KHANNA
1. Whether Reporters of local papers may be allowed to see the judgment? YES
2. To be referred to the Reporter or not ? YES
3. Whether the judgment should be reported in the Digest ? YES
DIPAK MISRA, CJ
Calling in question the legal validity of the order dated 24th
January, 2011 passed by the learned single Judge in Writ
Petition (Civil) No. 3880/2010, the present intra-Court appeal
has been preferred.
2. The brief resume of facts are that Amritsar Oil Works
(Acquisition and transfer of Undertakings) Act, 1982 (for brevity,
„the Act‟), was brought into force for acquiring the undertaking of
the appellant. By notification dated 6th September, 1984, the
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Commissioner of Payments was appointed under the Act for
disbursing the amount payable. Under Section 7(1) of the Act a
sum of Rs. 64,48,944.65 was to be paid by the Central
Government to the appellant-company for transfer and vesting of
the undertaking in the Central Government. Section 17 enables
the person having a claim against the appellant company to file
claims before the Commissioner of Payments within thirty days
from the specified date. Section 19 of the Act stipulates that
after meeting of the claims of the secured and unsecured
creditors in terms of the priority set out in Section 16(2) of the
Act, the balance amount shall be paid to the company in
question.
3. As set forth, the final notice was published on 5th October,
1987 seeking claims from the appellant company under Section
19 of the Act by the Commissioner. No claim was received in
pursuance of the said notice and accordingly, the Office of the
Commissioner of Payments was wound up on 2nd January,
1989.
4. As manifest, the appellant moved the competent authority
of the Central Government under the provisions of the Right to
Information Act, 2005 to know why the amount which was due to
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it was not paid and to the said query it was replied that as on 1st
April, 1994 a sum of Rs.53,40,500/- was available in the Pay
and Accounts Office as determined under the Act after settling
the claims of the secured creditors.
5. A writ petition was filed in the Punjab and Haryana High
Court forming the subject matter being W.P. (C) No.
12811/2009, which was withdrawn with liberty to file a fresh
petition with more particulars. Thereafter, the petitioner invoked
the jurisdiction of this Court and the learned single Judge
rejected the contention that the Central Government was under
an obligation to tender the amount and held that the writ petition
was hit by doctrine of delay and laches. Being of this view, the
learned single Judge dismissed the writ petition.
6. Assailing the order, it is submitted by Mr. Vinay Garg,
learned counsel for the appellant that the learned single Judge
has fallen into error by applying the principle of delay and laches
to a case of this nature inasmuch as the undertaking was taken
over in the year 1982 and the notice was published in 1987 and
after determination of the amount payable to the creditors and
others, the amount was available with the Commissioner which
was due to the appellant. It is urged by him that the Central
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Government could not have kept the appellant‟s money in the
absence of any statutory prohibition to get back the money
solely on the ground that the appellant approached in a belated
manner. Learned counsel would further submit that there is no
warrant or justification on the part of the respondents to deny the
amount which is the amount that is due to him after making good
of all claims. It is further contended by him that the said act
tantamounts to confiscation of property and defeats the very
purpose enshrined under Article 300 A of the Constitution of
India.
7. Mr. Sachin Datta, learned counsel for Union of India has
submitted that it was obligatory on the part of the appellant to
give its response when the notice was published in the year
1987 and after the Office of the Commissioner was wound up,
he had no right to claim the amount. He has invited our
attention to Sections 19 and 20 of the Act to bolster the
contention that there is a statutory bar to grant the compensation
after a particular period and, therefore, the view expressed by
the learned single Judge is absolutely flawless.
8. At the very outset, we may refer to the communication
made to the petitioner when he applied under the Right to
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Information Act, 2005. The same reads as follows:-
" Kindly refer to your letter No. Nill
dated 23.07.2009 on the subject noted
above. As desired by you, it is informed
that claim of the Company being time
barred has been rejected vide letter of
even number of this office dated
16.06.2009.
2. As on 01.04.1994, an amount of
Rs.53,40,500/- was available in the Pay
and Accounts Office.
3. Interest on the amount would be
calculated by Pay and Accounts Office,
for which you request under RTI Act is
being forwarded to the Controller of
Accounts, whose address is as follows:
Controller of Accounts, Ministry of
Consumer Affairs, Food & Public
Distribution Department of Food &
Public Distribution, 1688 Kasturba
Gandhi Marg, Barracks, New Delhi-
110001."
9. On a careful perusal of the same, it is perceptible that a
sum of Rs.53,40,500/- was available in the Pay and Accounts
Office. The said communication was made on 5th August, 2009.
We have reproduced the said communication in entirety only to
highlight that there is no factual dispute with regard to the
quantum vis-à-vis the compensation which is payable to the
appellant. In view of the aforesaid background, two questions
LETTERS PATENT APPEAL NO. 192/2011 Page 5 of 19
that emerge for consideration are whether there is a statutory
bar or by virtue of the notice published on 18th September, 1987,
the right of the appellant company is totally smothered or
scuttled to get back the sum and whether the relief claimed is hit
by the doctrine of delay and laches.
10. First we would like to scan the statutory scheme. Section
7 of the Act occurs in Chapter III and deals with payment of
amount. The said Section, as is relevant for the present
purpose, reads as follows:-
"7. (1) For the transfer to any
vesting in the Central Government,
under Section 3 of the Amritsar Oil
Works and the right, title and interest of
the Amritsar Sugar Mills company in
relation that works, there shall be given
by the Central Government to the
Amritsar Sugar Mills Company, in cash
and in the manner specified in Chapter
VI, an amount equal to a sum of sixty
four lakhs, forty eight thousand nine
hundred and forty four rupees and sixty
five paisa.
(2) In addition to the amount specified
in sub-section (1), there shall also be
given to the Amritsar Sugar Mills
Company by the Central Government an
amount calculated at the rate of ten
thousand rupees per annum for the
deprivation of the Amritsar Sugar Mills
Company of the management of its
Amritsar Oil Works for the period
commencing on the date of taking over
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and ending with the appointed day.
(3) The amount specified in sub-
section (2) and the amount calculated in
accordance with the provisions of sub-
section (2) shall carry simple interest at
the rate of four per cent, per annum for
the period commencing on the
appointed day and ending on the date
on which payment of such amount is
made by the Central Government to the
Commissioner."
11. On a scrutiny of the said provision, it is clear to us that a
specified sum as compensation was payable with interest for
taking over the undertaking of the appellant company and the
modes of computation of payment towards interest are also
given. Section 14, which occurs in Chapter IV, deals with
Commissioner of Payments and the role of the Commissioner in
various fields. Section 17 of the Act deals with claimant who
had a claim over the undertaking owned by the appellant
company. The said provision is as follows:-
"17. Every person having a claim
against the Amritsar Sugar Mills
Company in relation to the Amritsar Oil
Works shall prefer to such claim before
the Commissioner within thirty days
from the specified date:
Provided that if the Commissioner
is satisfied that the proof claimant was
prevented by sufficient cause from
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preferring the claim within the said
period of thirty days, he may entertain
the claim within a further period of thirty
days, but not thereafter."
12. Section 18 deals with the procedural aspect which are
required to be adopted by the Commissioner for dealing and
disbursing of the claim. Section 19 provides how the payments
have to be made to the secured and unsecured creditors and
what should be done to the said amount qua the company. As
Mr. Sachin Datta has laid immense emphasis on the said
provision, it is seemly to reproduce the same:
"19. Where, after meeting the claims
admitted by him of secured creditors,
and unsecured creditors having priority
under sub-section (2) of section 16, the
total amount of the claims of other
unsecured creditors admitted by the
Commissioner does not exceed the
balance of the amount left after assisting
the liabilities referred to in sub-section
(1) and (2) of section 16, every admitted
claim of such other unsecured creditors,
shall rank equally among themselves
and be paid in full, and the balance, if
any, shall be paid to the Amritsar Sugar
Mills Company, but where such amount
is insufficient to meet in full the total
amount of such admitted claims, all
such claims shall abate in equal
proportions and be paid
accordingly."(emphasis added)
13. On a studied scrutiny of the said provision, it is
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demonstrable that after meeting the dues of the secured
creditors and the unsecured creditors having priority under sub-
section 2 of Section 16, and the admitted claim of such other un-
secured creditors shall be made good and thereafter the balance
amount has to be paid to the appellant and in case there is
insufficient amount to meet the full and the total amount of
admitted claims, all such claims shall abate in equal proportions
and be paid accordingly. Thus, in case of surplus, the same
would be payable to the appellant company. This is the
obligation and statutory duty of the respondents.
14. Section 20 has a different contour. It provides how the
amount is to be dealt with in case of unclaimed and undisbursed
amounts payable to the third parties, who had claims against the
appellant. Mr. Datta, learned Standing Counsel for Union of
India would contend that the interest of the company is totally
destroyed if the language of Section 20 is purposefully read. To
appreciate the said submission of Mr. Datta, we reproduce
Section 20 hereinbelow:
"20. Any money paid to the
Commissioner which remains un-
disbursed or unclaimed on the date
immediately preceding the date on
which the office of the Commissioner is
finally wound up, shall be paid by the
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Commissioner before his office is finally
wound up to the general revenue
account of the Central Government; but
a claim to any money so transferred
may be preferred to the Central
Government by the person entitled to
such payment and shall be dealt with as
if such transfer had not been made, and
the order, if any, for payment of the
claim being treated as an order for the
refund of the revenue."
15. On an x-ray of the aforesaid provision, it is quite vivid that
before the Office of the Commissioner is finally wound up, the
Commissioner has to transfer the unclaimed amount to general
revenue account of the Central Government and a claim to the
money transferred should be preferred to the Central
Government by the person entitled to such payment and the
said claim shall be dealt with as if such transfer has not been
made and an order for payment of the claim being treated as an
order for the refund of the revenue. The learned Standing
Counsel for the Union of India would submit that after the money
has been transferred to the general revenue account of the
Central Government, the claim of the appellant company
becomes extinct as the statutory provision refers to the person.
The word „person‟ definitely does not refer to the appellant
company but refers to a third party claimant. The very purpose
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of the legislature was to keep the third party claims alive despite
the winding up of the Office of the Commissioner. It had a
laudable purpose but by no stretch of imagination it can be
denounced that what has been stated in Section 19 of the Act
stands abrogated by the language employed in Section 20 to
destroy the right of the appellant over the balance
compensation. It becomes obligatory on the part of the Central
Government to pay it back to the appellant company because
that is the compensation.
16. The notice that was published on 18th September, 1987 in
the newspaper reads as follows:-
" Now after settling almost all the
claims of the creditors taking under
various categories, it is expected that
some balance amount would be
available with the Commissioner for
payment to the Amritsar Sugar Mills Co.
Ltd. The company is, therefore,
required to place a claim before the
Commissioner of Payments for the
balance amount within 30 days from the
issue of this notification. The person
claiming the amount on behalf of the
Amritsar Sugar Mills Co. Ltd. should be
duly authorized by the Company to
make such a claim.
It is noteworthy that at the time
when this office invited applications
under Section 17 of the Amritsar Oil
Works (Acquisition & Transfer of
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Undertakings) Act, 1982 from persons
having claims against Amritsar Sugar
Mills Co. Ltd., in relation to Amritsar Oil
Works, some shareholders of the
Company had also preferred their
claims for disbursement. While
acknowledging such applications each
shareholder was informed individually
that the claims of the shareholders do
not fall under Section 17 of the Act
because it was held that they could not
be the persons having claims against
the company being members of the
company. Now when the balance of the
compensation amount is being paid to
the company by virtue of Section 19 of
the Act, the shareholders can take
necessary steps to recover their dues
from the Company as per the provision
of Company Law.
Take notice that in default of
receipt of any such claims from the
authorized person of the company within
the stipulated time, the available amount
shall be deposited with the Central
Government under Section 20 of the
Act."
17. On a perusal of the said publication, it only becomes
further clear that in case the claims are not made, the amount
shall be deposited with the Central Government under Section
20 of the Act. From the aforesaid statutory provisions and the
paper publication, it is clear as crystal that there is a distinction
between a third party claimant qua undertaking of the company
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that had been taken over, and the company. That apart, the
company cannot be equated with a claimant neither under the
statute nor under the notice published. In fact, the publication
clearly postulates that when the balance of compensation
amount was being paid to the company by virtue of Section 19
of the Act, the shareholders can take necessary steps to recover
their dues from the company under the provisions of the
company law but further clarified that the shareholders have
been given a different status apart from the said third party. In
any case, the claim of the company by virtue of any kind of
statutory provision has not been smothered. Thus, the doctrine
of delay and laches would not defeat the amount due and
payable to the company. Mr. Garg, learned counsel for the
appellant has invited our attention to a two-Judge Bench
decision in State of U.P. and Others versus Manohar, (2005)
2 SCC 126. In the said case, there was acquisition of land in the
year 1955. A writ petition was filed before the Allahabad High
Court in the year 1991 that no compensation was paid. The
High Court repelled the plea and the stand that the claim was
absolutely belated, and came to hold that the State should
gracefully accept its mistake and promptly pay the
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compensation. In that context their Lordships further opined
thus:
"7. Ours is a constitutional democracy
and the rights available to the citizens
are declared by the Constitution.
Although Article 19(I)(f) was deleted by
the Forty-fourth Amendment to the
Constitution, Article 300-A has been
placed in the Constitution, which reads
as follows:
"300-A. Persons not to be
deprived of property save by
authority of law- No person shall
be deprived of his property save
by authority of law."
8. This is a case where we find utter
lack of legal authority for deprivation of
the respondent`s property by the
appellants who are State authorities. In
our view, this case was an eminently fit
one for exercising the writ jurisdiction of
the High Court under Article 226 of the
Constitution. In our view, the High Court
was somewhat liberal in not imposing
exemplary costs on the appellants. We
would have perhaps followed suit, but
for the intransigence displayed before
us."
18. In Vimalben Ajitbhai Patel versus Vatslabeen
Ashokbhai Patel and Others, (2008) 4 SCC 694, the Apex
Court has held thus:
"42. The right to property is no longer a
fundamental right. But still it is a
constitutional right. Apart from
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constitutional right it is also a human
right. The procedures laid down for
deprivation thereof must be scrupulously
complied with (See Devinder Singh and
Ors. v. State of Punjab and Ors. (2008)
1 SCC 728)."
19. In Karnataka State Financial Corporation versus N.
Narasimahaiah and Others, (2008) 5 SCC 176, their Lordships
have expressed as follows:
"40. Right of property, although no
longer a fundamental right, is still a
constitutional right. It is also human
right. In absence of any provision either
expressly or by necessary implication,
depriving a person therefrom, the court
shall not construe a provision leaning in
favour of such deprivation........"
20. In P.T. Munichikkanna Reddy versus Revamma and
Others, AIR 2007 SC 1753, it has been ruled as under:
"15. There is another aspect of the
matter, which cannot be lost sight of.
The right of property is now considered
to be not only a constitutional or
statutory right but also a human right.
16. Declaration of the Rights of Man
and of the Citizen, 1789 enunciates right
to property under Article 17:
"Since the right to property is
inviolable and sacred, no-one may
be deprived thereof, unless public
necessity, legally ascertained,
obviously requires it and just and
prior indemnity has been paid."
LETTERS PATENT APPEAL NO. 192/2011 Page 15 of 19
17. Moreover, Universal Declaration of
Human rights, 1948 under Section 17(i)
and 17(ii) also recognizes right to
property:
"17(i) Everyone has the right to
own property alone as well as in
association with others. (ii) No-
one shall be arbitrarily deprived of
his property."
18. Human rights have been
historically considered in the realm of
individual rights such as, right to health,
right to livelihood, right to shelter and
employment etc. but now human rights
are gaining a multifaceted dimension.
Right to property is also considered very
much a part of the new dimension.
Therefore, even claim of adverse
possession has to be read in that
context. The activist approach of the
English Courts is quite visible from the
Judgment of Beaulane Properties Ltd. v.
Palmer 2005 (3) WLR 554: 2005 EWHC
817 (Ch.) and JA Pye (Oxford) Ltd v.
United Kingdom [2005] ECHR 921:
[2005] 49 ERG 90, [2005] ECHR 921,
the court herein tried to read the Human
Rights position in the context of adverse
possession. But what is commendable
is that the dimensions of human rights
has widened so much that now property
dispute issues are also being raised
within the contours of human rights."
21. At this juncture, we may reproduce a passage from State
of Kerala and Another versus Peoples Union for Civil
Liberties Kerala State Unit and Others, (2009) 8 SCC 46
LETTERS PATENT APPEAL NO. 192/2011 Page 16 of 19
wherein it has been held:-
"88. When a person acquires an
indefeasible right, he can be deprived
therefrom only by taking recourse to the
doctrine of imminent domain. If a person
is sought to be deprived of an
indefeasible right acquired by him, he
should be paid an amount of
compensation. In a case of this nature,
therefore, where an amount of
compensation has not actually been
tendered, the vendees of the land could
not be deprived of their right to be
dispossessed. In that view of the matter,
a distinction must be made between a
case where an amount of compensation
has been paid and in a case where it
has not been."
22. In this context, we may usefully refer to the decision in
Ram Chand and Others versus Union of India and Others,
(1994) 1 SCC 44 wherein a three-Judge Bench of the Apex
Court, after referring to the decision in Ramjas Foundation and
Others versus Union of India and Others, AIR 1993 SC 852,
has opined that the question of delay in invoking the jurisdiction
under Article 226 of the Constitution of India has to be
considered along with the communication on the part of the
authority who are to perform their statutory duty. When the
statutory authorities fail to take action within a reasonable time,
they cannot take defence of the plea of laches. In the said case,
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again the question of compensation arose and their Lordships
posed the question whether the respondents, viz., Union of India
and its functionaries be not directed to compensate the
petitioner who were small cultivators holding land within and
around Delhi for the injury caused to them not by the provisions
of the Act but because of the non-exercise of the power of the
authorities under the Act within a reasonable time and eventually
the writ petition and the civil appeals were allowed and the
compensation was granted.
23. We have referred to the aforesaid decisions only to
highlight that getting compensation qua one‟s own property is
sacrosanct.
24. Keeping in view the aforesaid enunciation of law and the
scheme of the Act, we are inclined to think that when the amount
has been kept in the central revenue fund and intimation was
sent to the petitioner in 2009, the right of the appellant company
to get the compensation of the balance amount should not be
denied. As is manifest, a sum of Rs.53,40,500/- was available in
the Pay and Accounts Office as on 1st April, 1994 and again by
communication dated 26th/28th April, 2010 the authorities
informed him that there has been no reconciliation of the
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balance amount along with interest. Regard being had to the
said communication, the cumulative effect of the statutory
provisions and the pronouncements in the field, we are unable to
concur with the view of the learned single Judge that the claim
put forth by the appellant-petitioner was hit by delay and laches.
25. In view of the aforesaid analysis, we allow the appeal and
set aside the order passed by the learned single Judge and
direct the respondents to refund the balance amount due to the
company within a period of three months. There shall be no
order as to costs.
CHIEF JUSTICE
SANJIV KHANNA, J.
FEBRUARY 25, 2011 VKR LETTERS PATENT APPEAL NO. 192/2011 Page 19 of 19