Gujarat High Court
Shrijee Paper Mills Pvt. Ltd vs State Of Gujarat on 16 March, 2022
Author: J.B.Pardiwala
Bench: J.B.Pardiwala
C/SCA/5271/2022 JUDGMENT DATED: 16/03/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 5271 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
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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 NO
of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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SHRIJEE PAPER MILLS PVT. LTD.
Versus
STATE OF GUJARAT
==========================================================
Appearance:
UCHIT N SHETH(7336) for the Petitioner(s) No. 1
for the Respondent(s) No. 2,3,4
ADVANCE COPY SERVED TO GOVERNMENT PLEADER/PP for the
Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 16/03/2022
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) Page 1 of 11 Downloaded on : Sat Dec 24 13:02:19 IST 2022 C/SCA/5271/2022 JUDGMENT DATED: 16/03/2022
1. With the consent of the learned counsel appearing for the parties, the matter is taken up for final disposal.
2. Rule returnable forthwith. Mr. Sharma, the learned AGP waives service of notice of rule for and on behalf of the respondents.
3. By this writ-application under Article 226 of the Constitution of India, the writ-applicant has prayed for the following reliefs:-
"38(A) be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ or order directing the respondents to forthwith withdraw lien/charge on property located at survey numbers 72, 73, 78, 79 Village Punadara, Taluka Prantij, District Sabarkantha which was purchased by the petitioner through e-auction from the Official Liquidator of this Hon'ble Court;
(B) pending notice, admission and final hearing of this petition, be pleased to direct the respondent to forthwith withdraw lien/charge on property located at survey numbers 72, 73, 78, 79 village Punadara, Taluka Prantij, District Sabarkantha which was purchased by the petitioner through e-auction from the Official Liquidator of this Hon'ble Court;
(C) Ex-parte ad interim relief in terms of prayer B may kindly be granted;
(D) be pleased to direct the respondents to pay cost of this petition to the petitioner;
(E) such further relief(s) as deemed fit in the facts and circumstances of the case may kindly be granted in the interest of just for which act of kindness your petitioner shall forever pray."Page 2 of 11 Downloaded on : Sat Dec 24 13:02:19 IST 2022
C/SCA/5271/2022 JUDGMENT DATED: 16/03/2022
4. The facts giving rise to this writ-application may be summarized as under:-
4.1 The writ-applicant is a Private Limited Company having its place of business at Ahmedabad. It appears that a Company running in the name of M/s. Hari Raj Paper Mills Ltd. was ordered to be wounded-up by this High Court in the Company Petition No.351 of 2013, which came to be decided on 01.12.2017. The operative part of the order passed by this High Court dated 01.12.2017 in the Company Petition No.351 of 2013 reads thus:-
"15. Mr. Pahwa however submitted that as held by this Court in judgment dated 10.10.2006 in Company Petition No.234 of 2001, the opinion of the BIFR is always not binding to the High Court. It is true that the opinion of the BIFR may not bind this Court for winding of the company, however, if the company fails to satisfy this Court that it has become viable economically and financially, there is no reason not accept the opinion of the BIFR which was rendered after giving full opportunities to the company and after finding that the company was not viable for rehabilitation. As stated above the BIFR rendered its opinion before three years and there is no headway by the company to establish any viability before this Court. Simply because the company has made application under the scheme introduced by the Government for extending reliefs to the Sick Industries, such would not be a ground to defer making order for winding up of the company.
16. In view of the above, the Company - M/s. Hari Raj Paper Mills is ordered to be wound up. The Registry shall forward / intimate the present order of winding up to the Official Liquidator, the Registrar of the companies as also to the company within two weeks from today. On receipt of the order of winding up from the Registry of this Court, the Official Liquidator shall give the publication of winding up order in Gujarati daily Newspaper as also in English daily Newspaper within 14 days thereafter.
17. The Official Liquidator is appointed as liquidator of the company and is directed to take possession of the assets and Page 3 of 11 Downloaded on : Sat Dec 24 13:02:19 IST 2022 C/SCA/5271/2022 JUDGMENT DATED: 16/03/2022 properties of the company and to discharge all statutory functions as per the provisions made in the Companies Act, 1956."
4.2 The Official Liquidator took over the assets of the Company and tried to put the assets of the Company to auction. The Official Liquidator was initially not successful in putting the assets of the wounded-up company to auction. In such circumstances, the Official Liquidator filed a Report No.108 of 2018 before this Court. This Court took cognizance of the Report of the Official Liquidator and passed an order dated 22.11.2018 in the following terms.
"7.0. The record indicates that the Official Liquidator has also intimated the Ministry of Corporate Affairs about the decision taken in the Asset Sale Committee meeting held on 10 & 11 November, 2017. The Official Liquidator has further contended that the Government of India has emphasized to follow e-auction process from any agency after taking approval from this Court. Relying upon the order passed by this Court in the matter of M/ s Sparta Cement & Infra Limited dated 12.2.2018, the Official Liquidator has asserted that e-auction be carried out through impaneled M/s. E-procurement Technologies Limited and the said decision taken by the Official Liquidator has been unanimously approved by the Assets Sale Committee including terms and conditions for the same. The Official Liquidator has therefore, approached this Court for the prayers set out in this report. Considering the averments made in para 2 and 3 of this Report subject to terms and conditions as set out in Annexure-C collectively to this Report, present Official Liquidator Report deserves to be accepted as prayed for in para-4A to E. The Official Liquidator shall carry out the sale process as per following schedule.
Date of Advertisement 10.12.2018
Date of issuance of Tender Forms 14.12.2018
Date of Inspection of properties 28.12.2018 (between
11.30 a.m. to 4.30
p.m.)
Last date of receipt of Offer/Tender Forms E 16.1.2019 Auction The e-auction will be conducted on 21.1.2019 Page 4 of 11 Downloaded on : Sat Dec 24 13:02:19 IST 2022 C/SCA/5271/2022 JUDGMENT DATED: 16/03/2022 through website https: //ol.auctiontiger.net between 2.00 p.m. to 4 pm with auto time extension of 10 minutes each time if the bid is made in the last minutes before close of e- auction till sale is concluded, subject to approval of the Hon'ble High Court.
8.0. After e-auction is over, the same shall be placed before this Court for further order latest by 20.01.2019 by filing appropriate Report. With this, present Official Liquidator Report is disposed of."
4.3 Thus, this Court vide order dated 22.11.2018 asked the Official Liquidator to undertake the E-Auction.
4.4 It appears that the writ-applicant herein participated in the E- auction proceedings and was declared as the highest bidder. At this stage, it is apposite to consider Para-26 of the terms and conditions of the E-auction, which was uploaded on the web-site.
"26. The purchaser shall be liable to pay all local dues as well as statutory dues including GST, Income Tax, TDS if any, due and payable on the properties of the subject company for the period after the date of winding-up order. The payment of such dues for pre-liquidation period shall be settled as per the provisions of the Companies Act, 1956. However, dues, taxes, cess, if any, applicable on the sale of assets shall be paid by the purchaser."
4.5 Thus, the writ-applicant was made to understand that he would be liable to pay the tax dues only for the period after the date of winding-up order and in so far as the dues for pre- liquidation period is concerned, those were to be settled in accordance with the provisions of the Companies Act, 1956.
Page 5 of 11 Downloaded on : Sat Dec 24 13:02:19 IST 2022C/SCA/5271/2022 JUDGMENT DATED: 16/03/2022 4.6 It appears that the sale of the assets of the wounded-up company ultimately came to be approved by this Court vide order dated 01.10.2019 passed on the Official Liquidator Report No.6 of 2019.
4.7 The writ-applicant, thereafter, proceeded to make the necessary payment and was put into possession by the Official Liquidator.
4.8 The draft sale-deed prepared by the Official Liquidator was thereafter put before this Court and this Court vide order dated 05.11.2020 on the Official Liquidator Report No.6 of 2020 passed the following order:-
"1. This court, vide order dated 1.10.2019, has permitted the official liquidator to proceed with confirmation of sale in favour of Shrijee Paper Mills Pvt. Ltd. in accordance with law. The relevant extracts of the order dated 1.10.2019 passed by this court reads thus:
"Having heard the learned advocates appearing for the respective parties and having gone through the order dated 12.02.2019 passed by the coordinate Bench (Hon'ble Ms. Justice Sonia Gokani) of this Court in the present proceedings and considering the fact that Misc. Civil Application (For Recall) No.1/2019 in Official Liquidator Report No.108/2018 is disposed off vide order dated 12.02.2019 and the fact that property is purchased pursuant to the e-auction which has been recorded by the coordinate Bench (Hon'ble Mr. Justice R.M. Chhaya) vide order dated 22.11.2018 passed in Official Liquidator Report No.108/2018 in Company Petition No.351/2013, the present Official Liquidator Report is accepted.
The Official Liquidator shall proceed with the confirmation of sale in favour of Shrijee Paper Mills Private Limited in accordance with law."
2. Apropos the orders dated 12.2.2019 and 1.10.2019, the sale came to be confirmed. The sale consideration of Rs.8,77,15,000/- has been received from the respondent, i.e. M/s. Shrijee Paper Page 6 of 11 Downloaded on : Sat Dec 24 13:02:19 IST 2022 C/SCA/5271/2022 JUDGMENT DATED: 16/03/2022 Mills Pvt. Ltd. and upon receipt of the full sale consideration amount from the respondent, the official liquidator has handed over the possession of the assets and properties of the company in liquidation, situated at Survey Nos.72, 73, 78, 79 to the respondent on 13.11.2019. Subsequently, the draft sale deed on behalf of the respondent has been prepared and submitted before this court, seeking permission to approve the sale deed at Annexure-B.
3. Heard Mr. Aftabhusen Ansari, learned advocate for the applicant through video conferencing.
4. Having heard the learned advocates appearing for the respective parties and having gone through the documents placed on record, so also draft of the sale deed; the official liquidator is permitted to execute the sale deed as per the draft, subject to the condition that stamp duty, registration charges and all other expenses incidental to the execution and registration of the sale deed shall be borne and paid by the respondent, i.e. M/s. Shrijee Paper Mills Pvt. Ltd.
5. The present Official Liquidator Report is accepted accordingly."
4.9 Thus, as on date, the writ-applicant is the lawful owner of the assets, which he purchased in the E-auction. The writ-applicant is here before this Court redressing the grievance that its being almost more than two years that the sale has been finalized, still the lien in the Form No.7/12 revenue record on the property, which was put to auction has not been removed. To put it in other words, even as on date in the revenue record, the name of M/s. Hari Raj Paper Mills Ltd. [Liquidated Company] figures as the owner of the assets.
5. Mr. Uchit Sheth, the learned counsel appearing for the writ- applicant invited the attention of this Court to Page-69, Annexure- R. It is a letter addressed by the Official Liquidator, High Court of Gujarat to the Chief Commissioner of Commercial Tax, Ahmedabad Page 7 of 11 Downloaded on : Sat Dec 24 13:02:19 IST 2022 C/SCA/5271/2022 JUDGMENT DATED: 16/03/2022 as well as to the State Tax Officer, Ghatak-29, Pratij, District- Sabarkantha. The letter reads thus:-
Telephone No.:26581912 E Mail: [email protected] Government of India Ministry of Corporate Affairs Office of the Official Liquidator, High Court of Gujarat Corporate Bhawan 3rd Floor, B/H. Zydus Hospital, S.G. Highway, Thaltej, Ahmedabad Ref.No.OL/Hari-Raj Paper Mills/1727/2020 Date:28.09.2020 To,
1) Shri P.K. Pandya, State Tax Officer, Ghatak-29 Pratij, Opp.
Bhakhriya Bus Stand, Pratij, Dist. Sabarkantha.
2) The Chief Commissioner of Commercial Tax, 'Rajya Kar Vera Bhavan, Nr. Times of India Building, Ashram Road, Navrangpura, Ahmedabad-380009.
Sub: In the matter of M/s. Shree Hari-Raj Paper Mills Ltd. (In Liquidator) Sir, With reference to you letter dated 20.08.2020 alongwith claim Form No.66 dated 10.08.2020 submitted to this office, which is taken on record by this office under the provision of section 530 of Companies Act, 1956. I have to state that this office is in the process of adjudication of claims of Company in liquidation. It is further stated that the land and factory premises of the aforesaid company situtated at Revenue Survey Nos.72, 73, 78, 79, Village : Punadara, Taluka :
Prantij, Dist. Sabarkantha, has been sold by this office in favour of M/s. Shrijee Paper Mills Pvt. Ltd. in terms of orders dated 12-02-2019 and 01-10-2019 passed by the Hon'ble High Court of Gujarat in Official Liquidator's Report No.6 of 2019 and on receipt of full sale consideration amount from aforesaid auction purchaser M/s. Shrijee Paper Mills Pvt. Ltd., the Official Liquidator has handed over physical possession of the said land and factory premises to aforesaid auction purchaser M/s. Shrijee Paper Mills Pvt. Ltd. on 13-11-2019.
In view of aforesaid facts and circumstances, you are further requested to remove the lien in Form No.7X12 of Revenue Record on the aforesaid property of the Company M/s. Shree Hari-Raj Paper Mills Page 8 of 11 Downloaded on : Sat Dec 24 13:02:19 IST 2022 C/SCA/5271/2022 JUDGMENT DATED: 16/03/2022 Ltd. (In Liqn.) at the earliest.
Yours faithfully, R.C. Mishra (ICLS) Official Liquidator High Court of Gujarat Copy for information and necessary action. M/s. Shrijee Paper Mills Pvt. Ltd., A/48, Pushparaj Industrial Estate, Near City Gold Cinema, Anil Starch Road, Saraspur, Ahmedabad - 380018, Gujarat.
6. Mr. Sheth, also invited the attention of this Court to the letter addressed by his client dated 04.06.2020 in the aforesaid regard, which reads thus:-
Annexure-O Shrijee Paper Mills Pvt. Ltd.
A/48, Pushparaj Industrial Estate, Near City Gold Cinema, Anil Starch Road, Saraspur,Ahmedabad-380018 Gujarat CIN:U21000GJ2019PTC106078 Dt:26/05/2020 4/6/2020 To, The Officer, Office of the Commercial Tax, Prantij.
Subject : To remove encumbrance from the land. Reference: Land- Property vide survey no.72, 73, 78, 79 situated at village Punadara, Taluka- Prantij Respected Sir, It is to state that we, Shrijee Paper Mills Pvt. Ltd. have purchased the property vide survey no.72, 73, 78, 79 situated at village Punadara, Taluka- Prantij which belonged to Shri Hariraj Paper Mills Ltd. by auction through the Hon'ble High Court of Gujarat. The Hon'ble High Court of Gujarat has passed order in that regard on 01/10/2019. In connection to this order, we have been assigned possession of the said land on 13/11/2019 by the Official Liquidator appointed by the Hon'ble High Court of Gujarat.
The aforesaid property was registered in the name of Shri Hariraj Paper Mills Ltd. and encumbrance of the office of the Page 9 of 11 Downloaded on : Sat Dec 24 13:02:19 IST 2022 C/SCA/5271/2022 JUDGMENT DATED: 16/03/2022 Commercial Tax was recorded on the said property. As per the rules of the auction of the Hon'ble High Court of Gujarat, we are not liable for the dues of the said property before auction. Hence, you are requested to pass order at the earliest to remove the encumbrance from the land vide survey no.72, 73, 78 and
79.
The copy of the order of the Hon'ble High Court of Gujarat dated 01/10/2019, copy of the possession receipt and the copy of the previous order passed by the Hon'ble High Court of Gujarat to remove encumbrance, are appended herewith for your reference.
Expecting your co-operation.
Sd/- (illegible) Shrijee Paper Mills Pvt. Ltd.
7. It appears that neither the State Tax Officer paid any heed to the aforesaid nor the Chief Commissioner of Commercial Tax has done anything in the matter.
8. We also heard Mr. Utkarsh Sharma, the learned AGP for the respondents. Mr. Sharma submitted that this writ-application may be disposed of by issuing appropriate directions to both the State Tax Officer, Ghatak-29, Pratij, District-Sabarkantha as well as to the Chief Commissioner of Commercial Tax, Ahmedabad.
9. We dispose of this writ-application directing the respondents nos.2 and 3 respectively to immediately look into the letter dated 28.09.2020 of the Official Liquidator, Annexure-R, Page-69 and ensure that the lien over the assets put to auction in the Form No.7/12 is removed within a period of two weeks from the date of receipt of the writ of this order.
Direct service is permitted.
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10. One copy of this order shall be furnished to Mr. Utkarsh Sharma, the learned AGP for its onward communication.
We request Mr. Sharma, the learned AGP to forward this order passed today with a letter to the concerned respondents to take necessary action at the earliest.
(J. B. PARDIWALA, J) (NISHA M. THAKORE,J) A. B. VAGHELA Page 11 of 11 Downloaded on : Sat Dec 24 13:02:19 IST 2022