Madras High Court
M/S. Candid Industries Ltd vs The Tiic Ltd on 3 January, 2024
Author: P.D. Audikesavalu
Bench: P.D. Audikesavalu
W.P. No. 27978 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 03.01.2024
CORAM
THE HON'BLE MR. JUSTICE P.D. AUDIKESAVALU
W.P. No. 27978 of 2021
and
W.M.P. No. 29547 of 2021
M/s. Candid Industries Ltd.,
Formerly M/s. Future Tech Industries Ltd.,
Rep. By its Manager Mr. S. Rengaraj
S/o. Sundaramoorthy,
Plot No. B-21 (Part)
SIPCOT Industrial Estate,
Gummidipoondi 601 201. … Petitioner
-vs-
1. The TIIC Ltd.,
No. 692, Anna Salai,
Nandanam,
Chennai 600 035.
2. The Branch Manager,
TIIC Special Recovery Branch – Chennai,
No.692, Anna Salai,
Nandanam, Chennai 600 035.
3. SIPCOT,
Rep. By its Managing Director,
No. 19A, Rukmani Lakshmipathi Road,
Egmore, Chennai 600 008.
4. The Commissioner,
Commercial Taxes,
Ponneri Circle, Ponneri.
5. The Sub Registrar,
https://www.mhc.tn.gov.in/judis
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W.P. No. 27978 of 2021
C4G7 + QRC, Kayalarmedu,
Gummidipoondi,
Chennai 601 201. ... Respondents
Prayer:- Writ Petition filed under Article 226 of the Constitution of India,
1950, praying to issue a Writ of Mandamus, directing the 1 st respondent to
execute the transfer of lease hold right of the piece of land and building at Plot
No. B-21 (Part), SIPCOT Industrial Estate, Gummidipoondi – 601 201
measuring an extent of 0.82 acres and consequently direct the 3 rd respondent to
issue a fresh allotment for the residual lease hold to the Petitioner company.
For Petitioner : Mr. S.Kamalakannan
For Respondents : Mr. K.Mahesh (R1 and R2)
for Mr. B.Vijay
(Additional Government Pleader)
Mr. M.P. Rajavelayutham (R3)
Ms. K.Vasanthamala (R4)
ORDER
Heard Mr. S.Kamalakannan, Learned Counsel for the Petitioner, Mr. K.Mahesh, Learned Counsel for the First and Second Respondents, Mr. M.P. Rajavelayutham, Learned Counsel for the Third Respondent and Ms. K.Vasanthamala, Learned Counsel for the Fourth Respondent and perused the materials placed on record, apart from the pleadings of the parties. https://www.mhc.tn.gov.in/judis 2/11 W.P. No. 27978 of 2021
2. The lease hold rights of the Industrial Plot at Plot No. B-21 (Part), SIPCOT Industrial Estate, Gummidipoondi – 601201, measuring an extent of 0.82 acres was originally allotted by the Third Respondent to one M/s. Supreme Hydro Carbon Pvt. Ltd (hereinafter referred to as 'SHCPL' for short), who had obtained financial assistance from the First Respondent and had offered the said property as security for that borrowing. As there was default in the repayment of the loans obtained by SHCPL from the First Respondent, the entire unit of SHCPL was brought for sale on 27.08.2008 in public auction by the First Respondent, in which the Petitioner (earlier known as M/s. Future Tech Industries Ltd.,) was the successful bidder and had remitted the entire bid amount. However, as the First Respondent did not execute the transfer of lease hold right of the land and building in the industrial plot in favour of the Petitioner, and the Third Respondent did not issue a fresh allotment for the residual lease hold, the Petitioner has filed this Writ Petition.
3. The First and Second Respondents in the Counter-Affidavit dated 17.11.2023 and the Third Respondent in the Counter-Affidavit dated 22.08.2022 have denied their obligation to execute the aforesaid documents in favour of the Petitioner sought in the Writ Petition by contending that the previous owner of the industrial plot was in arrears of commercial tax dues in https://www.mhc.tn.gov.in/judis 3/11 W.P. No. 27978 of 2021 respect of which there is a first charge existing over that property and it is only after full discharge the Petitioner could claim for the execution of the said documents in this case. In this regard, a reference must be made to Clauses 17 to 19 of the terms and conditions for sale of the property of SHCPL, which read as follows:-
“17. The Successful bidder has to pay the Property Tax, Commercial Tax and other dues to the Government and other statutory and other liabilities, if any, in respect of the property sold.
18. In respect of SIDCO/SIPCOT/MMDA/Govt/ Co-operative Society Lands, Plots, sheds et., dues, if any, payable to such institutions as per their terms and conditions will have to be paid separately by the successful tenderer/bidder.
19. On confirmation of the bid, the highest bidder will have to pay Sales Tax at the applicable rates under the TNGST Act as determined by the Corporation on the machinery which had no earlier suffered TNGST as determined by the Corporation. Such tax shall be paid https://www.mhc.tn.gov.in/judis 4/11 W.P. No. 27978 of 2021 along with the balance 90% of the bid amount.”
4. Having due regard to the rival contentions, it is evident that the sale of the property by the First Respondent in favour of the Petitioner was clearly subject to the commercial tax dues, which have to be discharged by the Petitioner. In the absence of the Petitioner carrying out the said obligation, which it was aware at the time of participating in the auction for sale of the property, it cannot be entitled to the relief claimed in the Writ Petition. In this backdrop, reference may be made to the ruling of the Hon'ble Supreme Court of India in Director of Settlements, A.P. -vs- M.R. Apparao [(2002) 4 SCC 638], wherein it has been expounded as follows:-
"17. ....One of the conditions for exercising power under Article 226 for issuance of a mandamus is that the Court must come to the conclusion that the aggrieved person has a legal right, which entitles him to any of the rights and that such right has been infringed. In other words, existence of a legal right of a citizen and performance of any corresponding legal duty by the State or any public authority, could be enforced by issuance of a writ of mandamus. “Mandamus” means a https://www.mhc.tn.gov.in/judis 5/11 W.P. No. 27978 of 2021 command. It differs from the writs of prohibition or certiorari in its demand for some activity on the part of the body or person to whom it is addressed. Mandamus is a command issued to direct any person, corporation, inferior courts or Government, requiring him or them to do some particular thing therein specified which appertains to his or their office and is in the nature of a public duty. A mandamus is available against any public authority including administrative and local bodies, and it would lie to any person who is under a duty imposed by a statute or by the common law to do a particular act. In order to obtain a writ or order in the nature of mandamus, the applicant has to satisfy that he has a legal right to the performance of a legal duty by the party against whom the mandamus is sought and such right must be subsisting on the date of the petition (Kalyan Singh -vs- State of U.P. (AIR 1962 SC 1183) ). The duty that may be enjoined by mandamus may be one imposed by the Constitution, a statute, common law or by rules or orders having the force of law...."
https://www.mhc.tn.gov.in/judis 6/11 W.P. No. 27978 of 2021 As such the Petitioner cannot be entitled to the relief sought in the Writ Petition.
5. Learned Counsel appearing for the Petitioner relied on the decision of the Division Bench Judgment of this Court in Jai Logistics -vs- Authorized Officer, Syndicate Bank (Order dated 12.07.2010 in W.P. No. 27079 of 2009) in support of his contentions that the Petitioner would not be liable to pay the commercial tax dues. It is evident on the reading of the said decision that the existence of the statutory liability had not been disclosed in that case and it was in that context, it had been held that the auction purchaser wold not liable to pay the statutory dues, but in the present case when the terms and conditions of the public auction conducted by the First Respondent clearly mentioned that it was subject to the discharge of the liability towards the commercial tax dues of SHCPL, the Petitioner cannot wriggle out of the same. In this backdrop, it must be recapitulated that the Hon'ble Supreme Court of India in Regional Manager
-vs- Pawan Kumar Dubey [(1976) 3 SCC 334] has highlighted that it is the rule deducible from the application of law to the facts and circumstances of a case which constitutes its ratio decidendi and not some conclusion based upon facts which may appear to be similar. One additional or different fact can make a world of difference between conclusions in two cases even when the same principles are applied in each case to similar facts. The Constitution Bench of https://www.mhc.tn.gov.in/judis 7/11 W.P. No. 27978 of 2021 the Hon'ble Supreme Court of India in Padma Sundara Rao (Dead) -vs- State of Tamil Nadu [(2002) 3 SCC 533] has aptly ruled in this regard as follows:-
“Courts should not place reliance on decisions without discussing as to how the factual situations fits in with the fact situation of the decision on which reliance is placed. There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case, said Lord Morris in Herrington
-vs- British Railways Board [(1972) 2 WLR 537]. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases.” In the result, the Writ Petition, which is devoid of merits, is dismissed. Consequently, the connected Miscellaneous Petition is closed. No costs.
03.01.2024 Index: Yes/No NCC: Yes/No Note: Issue order copy by 22.05.2024.
https://www.mhc.tn.gov.in/judis 8/11 W.P. No. 27978 of 2021 gsa https://www.mhc.tn.gov.in/judis 9/11 W.P. No. 27978 of 2021 To
1. The TIIC Ltd., No. 692, Anna Salai, Nandanam, Chennai 600 035.
2. The Branch Manager, TIIC Special Recovery Branch – Chennai, No.692, Anna Salai, Nandanam, Chennai 600 035.
3. SIPCOT, Rep. By its Managing Director, No. 19A, Rukmani Lakshmipathi Road, Egmore, Chennai 600 008.
4. The Commissioner, Commercial Taxes, Ponneri Circle, Ponneri.
5. The Sub Registrar, C4G7 + QRC, Kayalarmedu, Gummidipoondi, Chennai 601 201.
https://www.mhc.tn.gov.in/judis 10/11 W.P. No. 27978 of 2021 P.D. AUDIKESAVALU, J.
gsa W.P. No. 27978 of 2021 03.01.2024 https://www.mhc.tn.gov.in/judis 11/11