Madras High Court
Kalpana Lamps And Components Private ... vs The Commissioner And Secretary To The ... on 2 December, 1986
Equivalent citations: (1987)1MLJ310
Author: V. Ramaswami
Bench: V. Ramaswami
ORDER V. Ramaswami, J.
1. M/S. Zenith Lamps & Electricals Ltd. were Ordered to be wound up in Company Petition No. 50 of 1971. As per the Orders of the court, the Official Liquidator brought the company for sale. The Petitioners' bid for purchase of the same for a consideration of Rs. 61,79,301 was accepted by the Court. There were certain directions relating to payment of the sale consideration which have been complied with. In Company Application No. 2586 of 1978 etc. while accepting the highest offer for purchase of the entire unit of the company, the petitioner-company was directed to obtain necessary clearance from the State Government under the Tamil Nadu Urban Land (Ceiling and Regulation) Act, 1978 (Tamil Nadu Act 24 of 1978)(herein after referred to as the Act). On the basis that the petitioner had complied with the conditions relating to payment of the sale consideration, the petitioner - company was put in possession of the unit on 15.2.1979 and the petitioner had been running the unit the name of Kalpana Lamps and Components (p) Ltd. with the same workers numbering about 300. In Company Application No. 16 of 1982, most of the title deeds relating to the property were directed to be handed over by an Order dated 12.2.1982. Having taken possession of the property, the petitioners filed an application under section 21 of the Act for exemption of the excess vacant land from the provisions of the Act, on the grand that the entire extent was needed for the industrial purposes of the company. By G.O.Ms. No. 248 Revenue dated 14.2.1983, the entire excess extent of 33,959 sq.metres comprised in Survey No. 840 and 841, etc. of Madhavaram Village was exempted from the provisions of Chapter III of the Act. The exemption was subject to certain conditions which need not be noted.
2. By an Order dated 3.2.1984 in Company Application No. 62 of 1984, the learned Company Judge directed the Official Liquidator to register the sale deed in favour of the petitioners on the ground that the petitioners had obtained exemption in respect of the excess holding from the provisions of the Act. As directed by the court earlier. On some mistaken impression, the Official Liquidator was seeking the Orders of the court on the ground that he is to get permission from the Government under Section 6 of the Act for executing the sale deed. The Court permitted the Official Liquidator to execute and register the sale on receipt of Orders from the competent authority under the Act. The Court further observed that in view of the pecuniary loss and disadvantage suffered by the intending purchaser, namely, Kalpana Lamps & Components (P) Ltd., it is desirable that the competent authority under, the Act should expeditiously pass Orders. Against this Order, the petitioner preferred an appeal in O.S.A. No. 45 of 1984 Kalpana Lamps Companants (P) Ltd. rep. by its General Manager Madras-18 v. The Official Liquidator High Court, Madras. It was argued before the Bench that on a proper construction of Sections 6 and 21 of the Act, no such permission under Section 6 was needed in view of the fact that the petitioner had already obtained an Order of exemption under Section 21. But the appeal was dismissed with an observation that this point was not raised before the learned Judge and that in fairness the matter should be brought before the learned single Judge again by way of a clarification application or otherwise and that if it was so done, the matter shall have to be dealt with by the learned Judge afresh on merits. Accordingly the matter was brought to the notice of the learned Company Judge.
3. In the meantime, on 8.3.1984 the Official Liquidator prayed for exemption under Section 21 of the Act after stating that though G.O.Ms. No. 248 Revenue dated 14.2.1983 has exempted the transfer company from the provisions of Chapter III of the Act and the purchasers are in possession of the property, it was felt that similar exemption for transfer of property has to be obtained by the company in liquidation represented by the Official Liquidator, High Court, Madras. When the matter came up for further Orders, the learned Judge was informed of the petition filed by the Official Liquidator. Therefore, the learned Judge simply directed the. Government to dispose of the application within eight weeks from 30.3.1984. When the petitioner found that the said request for exemption had not been considered or disposed of, the petitioner - company filed W.P. No. 7997 of 1984 praying for a writ of mandamus directing the first respondent to dispose of the application under Section 21 of the Act. It may be mentioned that though in this petition, the date of the application is stated to be 16.9.1978, it is really that application and the application dated 8.4.1984 that were sought to be disposed of because 19.6.1978 application is an earlier application filed by the Official Liquidator for the same relief under Section 21. In fact, in the petition dated 8.4.1984 he had brought to the notice of the Commissioner of Urban Land Tax the petition dated 16.9.19 78 and requested exemption under the Act. But, during the pendency of this writ petition, the first respondent passed an Order on 11.7. 1985 rejecting that application treating it as one failing under Section 6 and stating that the sale deed executed by the Official Liquidator is null and void as it has been done without express prior permission. It is to quash this Order dated 11.7.1985, Writ Petition No. 11249 of 1985 has been filed.
4. Since Writ Petition No. 7997 of 1984 is for a mandamus to dispose of the application, the said writ petition has become infructuous in view of the Order dated 11.7.1985 and the said writ petition is accordingly dismissed, as having become infructuous.
5. Learned Counsel for the first respondent did not support the Order dated 11.7.1985 because that Order purported to treat the application by the Official Liquidator as one falling under Section 6 of the Act after the sale has been effected and treating the sale as null and void whereas actually the petition is one for exemption under Section 21. However the Learned Counsel for the respondent stated that the matter shall have to be remitted back to the Government to consider the petition of the Official Liquidator as one falling under Section 21 and to make an Order on that' basis. Learned Counsel for the petitioner, however, contended that straightaway this Court can Order grant of exemption in this case.
6. It is seen from Section 21 of the Act that any person holding vacant land in excess of the ceiling limit can apply for an Order of exemption of that land from the provisions of the Act, and if the Government is satisfied that having regard to the location of the land, the purpose for which such land is being or is proposed to be used and such other relevant factors as the circumstances of the case may require, it is necessary or expedient in the public interest so to do, may exempt whether prospectively or -retrospectively and subject to such conditions, if any, as may be specified in the Order, such vacant land from the provisions of Chapter III. The argument of the Learned Counsel for the petitioner is that when the petitioner applied for exemption under Section 21 and when the Government being satisfied that, all the conditions provided under that section are complied with and granted the exemption, it is not again necessary for the Official Liquidator to apply for another exemption under the same section and that in any case when the Official Liquidator applied, there could not be any different Order and automatically the Government shall grant the exemption to the Official Liquidator also, and therefore this Court should direct the first respondent to formally grant the exemption.
7. The relevant provision in Section 21(1)(a) of the Act reads as follows:
Section 21. Power to Exempt : (1) Notwithstanding anything contained in any of the foregoing provisions of this Chapter, - (a) where any person holds vacant land in excess of the ceiling limit and the State Government is satisfied, either on its own motion or otherwise, that, having regard to the location of such land, the purpose for which such land is being or is proposed to be used and such other relevant factors as the circumstances of the case may require, it is necessary or expedient in the public interest so to do, the State Government may, by Order, exempt whether prospectively or retrospectively subject to such conditions, if any, as may be specified in the Order, such vacant land from the provisions of this Chapter.
The phrase "to hold" is defined in Section 3(1) of the Act and it reads as follows:
Section 3(1) : "to hold" with its grammatical variations, in relation to any vacant land, means-
(i) to own such land; or
(ii) to possess such land as owner or as tenant or as mortgagee or under an irrevocable power of attorney or under a hire purchase agreement or partly in one of the said capacities and partly in any other of the said capacity or capacities.
Explanation I : For the purpose of this clause, "tenant" means any person who has paid or has agreed to pay rent or other consideration for his being allowed by another to enjoy the land of1 the latter under a tenancy agreement, express or implied, and includes-
(i) any such person who continues in possession of the land after the determination of the tenancy agreement;
(ii) the heirs, assignees, legal representatives of such person or persons deriving rights through such person.
Explanation I.A. - (a) A vacant land vested with an executor or an administrator under the Indian Succession Act, 1925 (Central Act XXXIX of 1925) shall be deemed to be held by such executor or administrator, for the purpose of this Act; and
(b) for the purpose of computing the ceiling limit of vacant land so deemed to be held by any person in the capacity of such executor or administrator, the vacant land held by such person in any other capacity shall be dealt with separately and the provisions of this Act shall apply accordingly.
Explanation II : Where the same vacant land is held by one person in one capacity and by another person in another capacity then, for the purposes of this Act, such land shall be deemed to be held by both such persons.
8. Reading Explanation II in the light of the main provisions, the Official Liquidator as also the petitioner who had paid the entire sale consideration and who was in full possession pending execution of the sale deed, shall be deemed to be holding the vacant land within the meaning of Section 3(1). The legal possession is vested in the Official Liquidator and actual or physical possession is with petitioner. The petitioner's possession is also not unauthorised. Therefore both were holding the vacant land within the meaning of the Act. The next question, therefore, for consideration is whether in such a case it is necessary for both the parties to apply or if one applies and obtains permission that will enure for both. The matter cannot be treated hyper-technically. When once the Government grants exemption under Section 21(1)(a) on an application filed by the petitioner, it is to be treated that the Government applied its mind and was satisfied that, having regard to the location of the land, the purpose for which such land is being or is proposed to be used and such other relevant factors as the circumstances of the case may require, it is necessary or expedient in the public interest, to exempt such land. The Government cannot now come to any conclusion different from the one already arrived at when the other person who is holding the property applies again for exemption. In fact, I consider that it may not be necessary at all for the purpose of execution of the sale deed by the Official Liquidator to apply, in view of the fact that on an earlier occasion, all these matters were considered by the Government and the petitioner was given the exemption under Section 21. In the circumstances therefore even if I remand the matter quashing the impugned Order, the Government could not come to a different conclusion from that they have arrived at in G.O.Ms. No. 248 Revenue dated 14.2.1983. In the circumstances, I direct the Government to issue the necessary exemption on the application filed by the Official Liquidator and for which purpose the matter is remanded to the Government. W.P. No. 11249 of 1985 is accordingly allowed and the impugned Order of the Government is set aside. In view of the fact that a large amount in lakhs has already been paid by the petitioner and the interest of the workers numbering more than 300 is involved and in fact I find from the letter of the Joint Secretary to Government addressed to the Andhra Bank that the property should not be sold piecemeal, I direct the Government to grant the exemption within a period of two months from the date of receipt of this Order. There will be no Order as to costs, in both the petitions.