Gujarat High Court
Vrushti Industries - Through ... vs Gujarat Industrial ... on 25 September, 2017
Equivalent citations: AIR 2018 GUJARAT 53
Author: N.V.Anjaria
Bench: N.V.Anjaria
C/SCA/3361/2013 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 3361 of 2013
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE N.V.ANJARIA
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1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of No
the judgment ?
4 Whether this case involves a substantial question of No
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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VRUSHTI INDUSTRIES - THROUGH PROPREITOR NARESH RAICHAND
SHAH....Petitioner(s)
Versus
GUJARAT INDUSTRIAL DEVELOPMENTCORPORATION THRO MANAGING
& 1....Respondent(s)
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Appearance:
MR YN RAVANI, ADVOCATE for the Petitioner(s) No. 1
MR RD DAVE, ADVOCATE for the Respondent(s) No. 1 - 2
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CORAM: HONOURABLE MR.JUSTICE N.V.ANJARIA
Date :25 /09/2017
CAV JUDGMENT
Heard learned advocate Mr. Y. N. Ravani for the petitioner and learned advocate Mr. R. D. Dave for the respondents.
Page 1 of 12HC-NIC Page 1 of 12 Created On Mon Oct 02 04:53:16 IST 2017 C/SCA/3361/2013 CAV JUDGMENT
2. By filing this petition under Article 226 of the Constitution, the petitioner has prayed to issue a direction to command the respondentGujarat Industrial Development Corporation to issue "No Due Certificate"
in favour of the petitioner in respect of shed/plot No. A2/2411 at GIDC Estate, Ankleshwar.
3. It is stated and pleaded by the petitioner that said shed/plot No. A2/2411 admeasuring 1850 sq. mtrs. situated at GIDC Estate, Ankleshwar was previously alloted to one said M/s. Manish Group of Industries on 27.04.1984 and the agreement was executed on 27.04.2004. As said allottee failed to repay the financial assistance obtained by it from the Gujarat State Financial Corporation Limited, the GSFC held a public auction on 19.04.2010. The petitioner participated in the said auction and purchased the said plot/shed being the highest bidder.
3.1 The sale certificate came to be issued to the petitioner on 13.07.2010 and simultaneously, a deed of assignment was executed in favour of the petitioner on 23.08.2010. According to the petitioner, the transaction lawfully concluded in favour of the petitioner and order dated 29.09.2012 was passed by the respondentGujarat Industrial Development Corporation stipulating certain terms & conditions to be observed by the petitioner in respect of the said plot.
3.2 The petitioner applied for transfer of the plot in its favour which was allowed by order dated Page 2 of 12 HC-NIC Page 2 of 12 Created On Mon Oct 02 04:53:16 IST 2017 C/SCA/3361/2013 CAV JUDGMENT 23.10.2012 by the respondentGujarat Industrial Development Corporation. It is the case of the petitioner that the petitioner cleared all the dues as indicated by the Corporation for the period from 13.07.2010 to 31.03.2012. Various charges like drainage connection charges, notified area tax, transfer fees etc., were also paid to the Corporation. It is stated that the transfer fees of Rs.5,77,200/on the basis of current land price was paid. It is stated that thus, all the payments were made under the different heads in connection with the plot and that the petitioner became lawful owner.
3.3 The petitioner requested the Corporation on 23.01.2013 to issue "No Due Certificate". The denial of "No Due Certificate" was for the reason and on the ground that the dues of the previous allottee in respect of water and drainage charges to the extent of Rs.35,24,481/ were not paid. As "No Due Certificate"
was refused, the present petition is filed seeking a direction as aforesaid.
4. According to the submissions on behalf of the petitioner, the respondent Corporation is a statutory Corporation falling within the ambit of Article 12 of the Constitution which requires to conduct itself in just and fair manner. It was submitted that in respect of the shed/plot in question, though all the payments were made and all the formalities were completed, the Corporation was estopped from raising any plea for not issuing "No Due Certificate". It was submitted that Page 3 of 12 HC-NIC Page 3 of 12 Created On Mon Oct 02 04:53:16 IST 2017 C/SCA/3361/2013 CAV JUDGMENT not only all the payments were made by the petitioner, the Corporation itself had also completed substantial part of the formalities for transfer of the plot in the name of the petitioner who had completed the terms & conditions.
4.1 Learned advocate for the petitioner also submitted that once the Corporation had charged the transfer fees, "No Due Certificate" was required to be issued. It was next contended that no charge was created by the GIDC. It was further submitted the dues of somebody else could not have been asked to be paid and recovered. It was submitted that in the proceedings before the Debts Recovery TribunalII, Mumbai, the GIDC had not objected. It was submitted that the relief may be granted.
4.2 Learned advocate for the petitioner relied on the decision in Isha Marbles vs. Bihar State Electricity Board & Anr. [(1995) 2 SCC 648] which was under the Electricity Act, 2010, in which it was held that the auction purchaser would not be liable to pay the electricity dues of the erstwhile owner. The decisions in Dena Bank vs. Bhikhabhai Prabhudas Parikh & Co. [(2000) 5 SCC 694] and Mancon Marbles Pvt. Ltd. vs. Union of India [2003 (158) ELT 424(SC)] were pressed into service to contend the similar proposition and further to contend that when the transfer of the industrial unit takes place, the recovery of dues of the previous owner in respect of liability to pay excise dues etc., was not liable to be paid by the Page 4 of 12 HC-NIC Page 4 of 12 Created On Mon Oct 02 04:53:16 IST 2017 C/SCA/3361/2013 CAV JUDGMENT transferee. In order to buttress the contention and to press and support the relief claimed, learned advocate relied on the decision of the Supreme Court in State of Karnataka and anr. vs. Shreyas Papers (P) Ltd. And anr. [(2006) 1 SCC 615]; he relied on the decision of this Court in Rana Griders Ltd. vs. Union of India [(2013) (326) ELT 746]; he also relied on the decisions of this Court in ANI Elastic Industries vs. Union of India [2008 (222) ELT 340 (Guj.)], Lamifab AB Industries vs. Union of India [2015(326) ELT 674 (Guj)] and Shreejikrupa Spinners Pvt. Ltd. vs. Union of India [2016(332) ELT 601(Guj.)].
4.3 He lastly relied on the decision of the Supreme in Southern Power Distribution Company of Telengana Ltd. through its CMD and ors. vs. Gopal Agarwal and ors. being Civil Appeal No. 1918 of 2016 decided on 27.07.2017.
4.4 The petition was contested by the respondent Corporation by filing affidavitinreply in which it was inter alia stated thus, "the plot in question is situated at GIDC, Ankleshwar being Shed/Plot No.A2/2411 and was earlier occupied by M/s. Manish Group of Industries, accordingly an agreement was also executed on 27.04.2004. However on account of fact that the said M/s. Manish Group of Industries could not repay its debts to Dena Bank where the current plot was mortgaged, the same resulted into filing of proceedings against it in Debts Recovery TribunalII at Mumbai. It is further submitted that pursuant to the initiation of proceedings by Dena Bank, the present answering respondent herein, informed the court receiver, bank of India about the pending dues of the present answering respondent Corporation as having first charge on Page 5 of 12 HC-NIC Page 5 of 12 Created On Mon Oct 02 04:53:16 IST 2017 C/SCA/3361/2013 CAV JUDGMENT leasehold premises."
4.5 It was contended that the Recovery Officer issued public advertisement in local newspaper on 14.02.2009 for auctioning the property in which it was indicated that the claim of any third party was "not known". The Corporation, it is stated, informed the Recovery Officer by letter dated 17.02.2009 about the pending dues of the Corporation and further requested to drop the action proceedings. It is contended that despite the said letter, the auction went ahead and was held on 19.04.2010. The sale became final in favour of the petitioner and the sale certificate came to be issued on 13.07.2010. Deed of assignment was also executed in favour of the petitioner on 23.08.2010 and further transfer order was passed on 23.10.2012.
4.6 As per the say of the Corporation, though the petitioner had requested for issuance of "No Due Certificate" on 22.01.2013, since the petitioner did not clear the dues of the earlier unit M/s. Manish Group of Industries to the extent of Rs.37,45,927/, "No Due Certificate' could not be issued.
4.7 By filing rejoinder affidavit, the petitioner reiterated the submission that on 23.10.2012, an order of transfer was passed by the Corporation and that 20% of the current valuation of the land being Rs. 5,77,200/ was paid and notified area tax for the relevant period to the extent of Rs.66,535/ was also paid to the Corporation. It was contended that the Page 6 of 12 HC-NIC Page 6 of 12 Created On Mon Oct 02 04:53:16 IST 2017 C/SCA/3361/2013 CAV JUDGMENT petitioner was not liable to pay the dues of the earlier owner.
4.8 By filing additional affidavit, the respondent Corporation produced the original record of the proceedings in respect of Recovery Application No. 698 of 2004 before the Debts Recovery TribunalIi, Mumbai between Dena Bank and said M/s. Manish Group of Industries to submit that at the time of auctioning of the plot, all the bidders were required to accept the terms & conditions of the property under sale.
5. Now, it is a fact not disputable that the respondent GIDC had as back as on 03.08.1994 addressed a communication in relation to the Civil Suit No. 624 of 1989 which appears to have been filed by the Dena Bank against M/s. Manish Group of Industries. In the said letter, the GIDC had registered its claim for recovery of Rs. 13,99,623/ due from M/s. Manish Group of Companies. The recovery was asked by pointing out that there was always first charge of the Corporation and the dues were required to be paid. This communication is placed on record by the GIDC along with its affidavit (page 41 Annexure R1).
5.1 Even at the stage of public auction, the Recovery Officer, Debt Recovery TribunalII was addressed letter dated 17.02.2009 pointing out that said M/s. Manish Group of Industries was in arrear of Rs.35,24,481/ and the Corporation was entitled to be paid the amount as per the agreement. The Recovery Officer was requested to stop the public auction and Page 7 of 12 HC-NIC Page 7 of 12 Created On Mon Oct 02 04:53:16 IST 2017 C/SCA/3361/2013 CAV JUDGMENT safeguard the interest of the Corporation. The said letter dated 17.02.2009 is reproduced herein being Annexure R3, "GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION (a GOVT. OF GUJARAT UNDERTAKING) Plot No. 624/B, GIDC, Ankleshwar, Dist. Bharuch Administrative Office Building Phone:02646221351, 221451, 221403 Email address:[email protected].
_______________________________________________ No. GIDC/DM(CG)ANK/ Date:1722009 To The Recovery Officer Debts Recovery TribunalII 5th Floor, Scindia House, Narottam Morarji Marg, Ballard Estate Mumbai 400 038.
Sub: Public auction of property bearing No. A22411 GIDC Ankleshwar.
Dear Sir, Your kind attention is drawn in regard to public action notice published in daily newspaper of shed No.A22411 area admeasuring 1500 sq. mtrs. situated at Ankleshwar Industrial Estate. The said shed is allotted to M/s. Manish Group Industries at Ankleshwar on lease hold basis and this party is in arrears of outstanding dues Rs.35,24,481/ and also outstanding dues of water charges and drainage. This is the lease hold property and first right is remains with the Gujarat Industrial Development Corporation as per the agreement. You are requested to stop the public auction and safe guard our interest.
Thanking you, Yours faithfully, Divisional Manager (CG) GIDC Ankleshwar Copy to:
The General Manager (Law) Page 8 of 12 HC-NIC Page 8 of 12 Created On Mon Oct 02 04:53:16 IST 2017 C/SCA/3361/2013 CAV JUDGMENT GIDC Gandhinagar ....alongwith the copy of public notice and do the needful action in the matter." 5.2 Therefore, at the time of auction, there was a clear intimation about the dues payable to the GIDC from the said allottee M/s. Manish Group of Industries. Despite this, the auction notice appears to be showing any other claim putforward as "non known". In any view, this would not absolve the petitioner from the liability to pay the dues of the Corporation. The auction took place on "as is where is and what is basis". The plot was purchased by the petitioner on "as is where is and what is basis".
5.3 The undisputed facts are thus that the plot in question was previously alloted to M/s. Manish Group of Industries, which came to be auctioned and the petitioner purchased the same in auction. The tender indicating terms & conditions for auction is produced along with the petition. From the record of the Debts Recovery TribunalII, Mumbai, it could be seen that the properties were sold "as is where is and what is basis".
5.4 The petitioner purchased the said plot in auction for Rs.19 Lacs as per the certificate of sale produced on record. A deed of assignment dated 03.07.2010 which was executed in favour of the petitioner is also on record. Therefrom, following was inter alia stipulated, "The Assignor doth hereby sell, grant, release, convey and transfer property i.e. shed No. A2/2411, GIDC, Ankleshwar - 393 002. (hereinafter referred as "THE SAID PROPERTY" for the sake of brevity) Page 9 of 12 HC-NIC Page 9 of 12 Created On Mon Oct 02 04:53:16 IST 2017 C/SCA/3361/2013 CAV JUDGMENT assure upto the Purchase all that the said property more particularly described in the Schedule hereunder written with all and singular, courtyards, compounds sewers, ditches, fences, trees, drains, wells, water sources, Paths, Lights, liberties, privileges, easements, profits, advantage, right, members and appurtenances, whatsoever, to the said property or any part thereof belonging to or an any way appertaining to or with the same or any part thereof or at any time hereto for usually held, used occupied enjoyed herewith or reputed or known as part of member thereof or be appurtenant thereof and the said property or any part thereof and the estates, right, easement, paths, land title, interest use, inheritance, property, possession, benefit, claim and demand whatsoever both at law and in equity of the said Assignors upto the said property or any part thereof TO HAVE AND HOLD ALL and singular the said property hereby granted, released, conveyed any assured or intended so to the with their appurtenance upto and to the use and benefit of the purchaser subject to payment of all rents, taxes, rates, assessments, rates & duties and dues upon the same or which may hereafter become payable in respect thereof to the state of Gujarat or to the municipal corporation or any other body in respect thereof and the assignor doth hereby for himself is successor(s) in office and /or assigns covenant with the purchasers".
(emphasis supplied) 5.5 From the above, it is to be noticed that the property was conveyed to the purchaser subject to payment of all rents, taxes, rates, assessments, rates & duties etc., which included the dues remained to be paid or which may subsequently become payable.
6. The Full Bench of this Court in Champaklal Dahyabhai Natali vs. Saraswatiben w/o. Shambhubhai Atmaram Mehta [18 GLR 186] considered the issue as to whether the arrears of rent due in respect of the property could be transferred to the buyer. The present is not the case where the lessor has transferred all his rights in the property. The entire Page 10 of 12 HC-NIC Page 10 of 12 Created On Mon Oct 02 04:53:16 IST 2017 C/SCA/3361/2013 CAV JUDGMENT property along with total interest therein came to be transferred to the petitioner when he purchased the same in an auction. The assignment deed clearly stipulated that the transfer was subject to payment of all rents, taxes, rates, assessments and duties upon the same. This shows that it was transferred with the encumbrances and the amount dues from M/s. Manish Group of Industries to the GIDC. It was with clear stipulation that the petitioner purchased the plot in question from auction. The petitioner therefore was bound by the terms & conditions which it agreed upon. Therefore, in this view, the Corporation was justified in seeking to recover the amount from the petitioner and refusing to part with "No Due Certificate".
6.1 The decisions relied upon by learned advocate for the petitioner would not apply in the facts of the case. The arrears of rent remain attached with the property and would travel with the property. When the property with its conferred rights and instances was transferred to the petitioner who became the owner, the petitioner was bound by the terms & conditions upon which the transfer took place upon the auction. As stated above, the property included the payment of all rents etc., upon the property to be paid by the petitioner. When the petitioner has not paid the said amount to the Corporation, the Corporation was justified in refusing to issue "No Due Certificate" to the petitioner.
7. For the foregoing reasons and discussion, the Page 11 of 12 HC-NIC Page 11 of 12 Created On Mon Oct 02 04:53:16 IST 2017 C/SCA/3361/2013 CAV JUDGMENT prayer cannot be granted. The petition fails and the same is hereby dismissed. Rule is discharged. No costs.
(N.V.ANJARIA, J.) chandrashekhar Page 12 of 12 HC-NIC Page 12 of 12 Created On Mon Oct 02 04:53:16 IST 2017