Gujarat High Court
M/S Jaybanas Metals Pvt Ltd vs Taluka Land Revenue Officer on 28 December, 2016
Author: Abhilasha Kumari
Bench: Abhilasha Kumari
C/SCA/20675/2016 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 20675 of 2016
FOR APPROVAL AND SIGNATURE:
HONOURABLE SMT. JUSTICE ABHILASHA KUMARI
==========================================================
1 Whether Reporters of Local Papers may be allowed Yes to see the judgment ?
2 To be referred to the Reporter or not ? Yes 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 ? ========================================================== M/S JAYBANAS METALS PVT LTD....Petitioner(s) Versus TALUKA LAND REVENUE OFFICER....Respondent(s) ========================================================== Appearance:
MR TARAK DAMANI, ADVOCATE for the Petitioner MR HS MUNSHAW, ADVOCATE for the Respondent ========================================================== CORAM: HONOURABLE SMT. JUSTICE ABHILASHA KUMARI Date : 28/12/2016 C.A.V. JUDGMENT
1. Rule. Mr.H.S.Munshaw, learned advocate, waives service of notice of Rule on behalf of the respondent. On the facts and in the Page 1 of 28 HC-NIC Page 1 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT circumstances of the case and with the consent of learned counsel for the respective parties, the petition is being heard and finally decided.
2. By way of this petition under Article 226 of the Constitution of India, the petitioner, M/s.Jay Banas Metals Pvt. Ltd., has challenged the notices dated 28.11.2016 and 08.12.2016, issued by the respondent Taluka Land Revenue Officer, Taluka Panchayat Kalol, whereby, pursuant to the impugned notices, the factory premises of the petitioner have been sealed on 09.12.2016, in order to recover the dues of four workmen of the previous owner of the factory.
3. The petitioner is a Company incorporated under the Companies Act, 1956, having its registered office at the address mentioned in the memorandum of parties. The petitioner is engaged in the business of manufacturing Copper Pipes, Copper Roads, Copper Flats and Copper Alloys.
The products manufactured by the petitioner are sold in the local market and are also exported.
4. The premises now owned by the petitioner Page 2 of 28 HC-NIC Page 2 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT originally belonged to M/s.MultiFlex Cables Pvt. Ltd. who had constructed a factory, shed and building thereupon, after obtaining the requisite permission from the Chhatral Gram Panchayat. By a registered Sale Deed dated 05.01.1985, M/s.Flex Cables Pvt. Ltd. sold the premises to M/s.Nilkamal Poly Films Pvt. Ltd. The said M/s.Nilkamal Poly Films Pvt. Ltd. changed its name to M/s. Nilkamal Poly Packaging Ltd. and a fresh Certificate of Incorporation was issued by the Registrar of Companies. Thereafter, the name of M/s.Nilkamal Poly Packaging was again changed to M/s.Rotoflex Industries Ltd. and a fresh Certificate of Incorporation was issued by the Registrar of Companies.
5. From the year 1994, M/s.Rotoflex Industries Ltd.
was carrying on business on the said premises. M/s.Rotoflex Industries Ltd. had availed of financial assistance from the Gujarat State Financial Corporation ("GSFC") as well as the Gujarat Industrial Investment Corporation Ltd. ("GIIC"), for which the premises were duly Page 3 of 28 HC-NIC Page 3 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT mortgaged. M/s.Rotoflex Industries Ltd. cleared all the dues and the charge over the land in favour of GSFC and GIIC was released and there was no encumbrance on the property. The petitioner, being interested in purchasing the premises, had obtained a Title Clearance Certificate dated 31.07.2007 from an advocate. Thereafter, the Chhatral Gram Panchayat issued a No Dues Certificate in respect of the premises.
6. By a registered Sale Deed dated 29.08.2007, registered with the office of the Sub Registrar vide Registration No.5451, the petitioner purchased the said premises from M/s.Rotoflex Industries Ltd. after paying the full and final consideration. Upon such purchase, the name of the petitioner was mutated in the revenue records vide Mutation Entry No.5493. The name of the petitioner was also reflected in Village Form No.7/12.
7. From the month of February 2008, the petitioner started its industry on the said premises and has been regularly conducting its business Page 4 of 28 HC-NIC Page 4 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT activities without interruption, since then. To the shock and surprise of the petitioner, it received four notices dated 09.04.2015, titled "Final Property Attachment Notice" under Section 200 of the Gujarat Land Revenue Code, 1879 ("the Code"), directing the petitioner to pay the amount of the decree issued by the Labour Court, Kalol, in favour of four labourers of the erstwhile owner of the premises, M/s.Nilkamal Poly Packaging Ltd., failing which the property would be attached and sold. On 27.04.2015, the respondent issued another Final Property Attachment Notice under Section 200 of the Code, once again informing the petitioner that if it fails to pay the amount mentioned in the notice, the premises would be sealed by the respondent on 28.04.2015. The petitioner, by a written representation dated 28.04.2015, informed the respondent that it has nothing to do with M/s.Nilkamal Poly Packaging Ltd. and is a bona fide purchaser of the property by way of a registered Sale Deed, executed in the year 2007. By the said letter, the petitioner provided the Page 5 of 28 HC-NIC Page 5 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT new address of the Director of M/s.Nilkamal Poly Packaging Ltd. which, according to it, is a going concern. However, on 29.04.2015, the property of the petitioner was sealed and a Panchnama of the process was drawn up. Thereafter, finding some merit in the case of the petitioner that it had nothing to do with M/s.Nilkamal Poly Packaging, the seals were opened and the petitioner continued its manufacturing activities on the premises. Things were functioning smoothly until the respondent issued the impugned Notices on 28.11.2016 and 08.12.2016. The petitioner once again represented to the respondent, indicating that earlier, the premises had been sealed but later the seals had been removed. It reiterated that the petitioner was not liable to pay the dues of the labourers employed by the erstwhile owner. However, the respondent did pay no heed to the representation of the petitioner and proceeded to seal the factory premises on 09.12.2016, by drawing up a Panchnama. Aggrieved by the action of the respondent, the petitioner has approached Page 6 of 28 HC-NIC Page 6 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT this Court.
8. Mr.Tarak Damani, learned counsel for the petitioner, has submitted that the petitioner is not liable to pay the dues of the labourers of the erstwhile owner of the premises. There was no charge or encumbrance on the land when the petitioner purchased it, in the year 2007. Since then, the petitioner has been conducting its business peacefully. The four labourers appear to have approached the Labour Court in the year 2007. M/s.Nilkamal Poly Packaging Ltd. is still in existence and is functioning at a new address, which was informed by the petitioner to the respondent. The petitioner has purchased the premises and not the Company. As the erstwhile Company is still in existence in the record of the Registrar of Companies and is filing its balance sheets, the respondent ought to have taken steps to recover the dues from it.
9. It is contended by that the respondent has taken the action of sealing the premises, pursuant to notices issued under Section 200 of the Code, Page 7 of 28 HC-NIC Page 7 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT which provision does not empower the authority to seal the premises. The said provision only empowers a revenue officer to enter upon any land or premises for the purpose of measurement. No power of sealing has been contemplated in the said section, therefore the action of the respondent in sealing the premises under this provision, is without jurisdiction and illegal.
10. It is further submitted on behalf of the petitioner that as per Section 18(3)(c) of the Industrial Disputes Act, 1947 ("the I.D. Act"), the petitioner is neither the heir, assign or successor of the previous establishment, therefore it is not bound by the Award of the Labour Court that may have become enforceable. The petitioner has only purchased the factory premises and the erstwhile Company is still in existence. The Award of the Labour Court is rightfully required to be enforced against the erstwhile owner and employer of the labourers and not the petitioner.
11. Learned counsel for the petitioner has further Page 8 of 28 HC-NIC Page 8 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT submitted that the petitioner has received several orders, some of which are from foreign countries, worth more than rupees ten crores. It was in the process of fulfilling these orders when the premises were sealed by the respondent. The business of the petitioner has come to a standstill since 09.12.2016. If the petitioner does not fulfil its contractual obligations, it will not only lose business but also be embroiled in litigation, besides having to face penal action, for no fault of its own.
12. On the above grounds, it is strongly urged by learned counsel for the petitioner that the petition be allowed by granting the prayers made by the petitioner.
13. In support of the above submissions, learned counsel for the petitioner has placed reliance upon the following judgments:
(i) Rana Girders Limited v. Union of India And Others - (2013)10 SCC 746.
(ii) Haryana State Electricity Board v.
Hanuman Rice Mills, Dhanauri And Others - Page 9 of 28 HC-NIC Page 9 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT (2010)9 SCC 145.
(iii) New Horizon Sugar Mills Limited v. Ariyur Sugar Mills Staff Welfare Union And Others - (2009)17 SCC 487.
14. Mr.H.S.Munshaw, learned counsel appearing for the respondent has opposed the petition. He has referred to the affidavitinreply filed by the respondent and submitted that the Labour Court issued Recovery Certificates in favour of four labourers of M/s.Nilkamal Poly Packaging Pvt. Ltd. regarding which the Deputy District Development Officer, Gandhinagar District Panchayat, instructed the present respondent to take necessary action. Thereafter, the respondent issued several notices under Sections 152, 154 and 200 of the Code on M/s.Nilkamal Poly Packaging Pvt. Ltd. That the Talaticum Mantri of Chhatral Gram Panchayat informed the respondent that the present petitioner was the occupant of the premises, therefore, the recovery was made against the petitioner as arrears of land revenue. The property of the petitioner has, therefore, been sealed on Page 10 of 28 HC-NIC Page 10 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT 09.12.2016.
15. It is submitted by Mr.H.S.Munshaw that the petitioner is liable to make the payment of the dues, which he can recover from M/s.Nilkamal Poly Packaging Pvt. Ltd. or M/s.Rotoflex Industries Ltd. It is, therefore, prayed that the petition be rejected.
16. In the above background, this Court has heard learned counsel for the respective parties, perused the averments made in the petition, the affidavitinreply and other documents on record.
17. At this juncture, it would be pertinent to advert to the judgments relied upon by learned counsel for the petitioner.
18. In Rana Girders Limited v. Union of India And Others (supra), the Supreme Court was dealing with a case where the liability of Central excise dues, which constitute a Crown Debt, was foisted on the subsequent auction purchaser. The Supreme Court drew a distinction between a case Page 11 of 28 HC-NIC Page 11 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT where the entire business of the erstwhile owner is purchased by the subsequent purchaser and where there is a mere purchase of some of the properties. It was held that it is only where the entire business itself is purchased as an ongoing concern, is the purchaser responsible to discharge the liability of Central Excise dues. Mere purchase of some of the properties of a person who had outstanding dues in respect of excise duty does not make the subsequent purchaser liable therefor in the absence of a specific provision in the statute, creating a first charge over the property. The relevant extract of the judgment is reproduced below:
"20. Coming to the liability of the successor in interest, the Court clarified the legal position enunciated in Macson by observing that such a liability can be fastened on that person who had purchased the entire unit as an ongoing concern and not a person who had purchased land and building or the machinery of the erstwhile concern. This distinction is brought out and explained in para 19 and it would be useful for us to reproduce hereinbelow: (SICOM Ltd.Page 12 of 28
HC-NIC Page 12 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT case, SCC pp.13132, para 19)
"19. Reliance has also been placed by Ms.Rao on Macson Marbles (P) Ltd.
(supra) wherein the dues under Central Excise Act was held to be recoverable from an auctionpurchaser, stating:
(SCC pp.48384, paras 1011) "10. We are not impressed with the argument that the State Act is a special enactment and the same would prevail over the Central Excise Act. Each of them is a special enactment and unless in the operation of the same any conflict arises this aspect need not be examined. In [this] case, no such conflict arises between the corporation and the Excise Department. Hence it is unnecessary to examine this aspect of the matter.
11. The Department having initiated the proceedings under Section 11A of [this] Act adjudicated liability of Respondent 4 and held that respondent No.4 is also liable to pay penalty in a sum of Rs.3 lakhs while the Excise dues liable would be in the order of a lakh or so. It is difficult to conceive that the appellant had any opportunity to participate in the adjudication proceedings and contend against the levy of the penalty. Therefore, in the facts and circumstances of this case, we think it appropriate to direct that the said amount, if already paid, shall be refunded within a period of three months. In other respects, the order made by the High Court shall remain undisputed. The appeal Page 13 of 28 HC-NIC Page 13 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT is disposed of accordingly."
The decision, therefore, was rendered in the facts of that case. The issue with which we are directly concerned did not arise for consideration therein. The Court also did not notice the binding precedent of Dena Bank as also other decisions referred to hereinbefore."
21. A harmonious reading of the judgments in Macson and SICOM would tend us to conclude that it is only in those cases where the buyer had purchased the entire unit i.e. the entire business itself, that he would be responsible to discharge the liability of Central Excise as well. Otherwise, the subsequent purchaser cannot be fastened with the liability relating to the dues of the Government unless there is a specific provision in the Statute, claiming "first charge for the purchaser". As far as Central Excise Act is concerned, there was no such specific provision as noticed in SICOM as well. Proviso to Section 11 is now added by way of amendment in the Act only w.e.f. 10.9.2004. Therefore, we are eschewing our discussion regarding this proviso as that is not applicable in so far as present case is concerned. Accordingly, we thus, hold that in so far as legal position is concerned, UPFC being a secured creditor had priority over the excise dues. We further hold that Page 14 of 28 HC-NIC Page 14 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT since the appellant had not purchased the entire unit as a business, as per the statutory framework he was not liable for discharging the dues of the Excise Department."
(emphasis supplied)
19. This judgment would squarely apply to the facts of the present case, for two reasons. The first reason is that the present petitioner has not purchased the entire business of the erstwhile owner of the premises - Nilkamal Poly Packaging Pvt. Ltd. The said M/s.Nilkamal Poly Packaging Pvt. Ltd. which changed its name to Rotoflex Industries Ltd. is still carrying on business and is in existence, as per the records maintained by the Registrar of Companies, a copy of which has been submitted by learned counsel for the petitioner and taken on record. The address of the erstwhile company has changed and is reflected in the record. The petitioner has also supplied the address and names of the Directors of the erstwhile owner to the respondent. The Sale Deed, a copy of which is annexed to the petition, clearly reveals that it Page 15 of 28 HC-NIC Page 15 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT is only the factory premises that have been purchased by the petitioner and not the entire business, as a running concern. In this view of the matter, when the erstwhile owner of the land is still in existence as a going concern, there is no justification on the part of the respondent to have sealed the factory premises of the petitioner, for a liability that the erstwhile owner owes to its employees, with whom the petitioner never had a masterservant relationship.
20. The second reason why this judgment is squarely applicable, flows from a perusal of Section 18 of the I.D. Act. This provision specifies the persons on whom settlements and awards are binding. Clause (c) of subsection (3) of Section 18 is relevant and reads as below:
"18. Persons on whom settlements and awards are binding. (1) ... ... ...
(2) ... ... ...
(3) A settlement arrived at in the course Page 16 of 28 HC-NIC Page 16 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT of conciliation proceedings under this Act or an arbitration award in a case where a notification has been issued under sub section (3A) of section 10A] or an award of a Labour Court, Tribunal or National Tribunal] which has become enforceable] shall be binding on
(a) all parties to the industrial dispute;
(b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, arbitrator,] Labour Court, Tribunal or National Tribunal], as the case may be, records the opinion that they were so summoned without proper cause;
(c) where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates;
(d) where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part"
(emphasis supplied) Page 17 of 28 HC-NIC Page 17 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT
21. From the above provision of law, it is clear that even when there is an Award of the Labour Court, it is the employer, his heir, successors or assigns in respect of the establishment to which the dispute relates, who would be liable. In the present case, the petitioner is not the heir, successor or assign of the erstwhile Company, as he has purchased only the factory premises and not the entire business or Company. The erstwhile owner of the premises still exists as a going concern, though under a changed name. In this view of the matter, the sealing of the premises of the petitioners is wholly unjustified in law.
22. There is not an iota of evidence on record that the respondent ever took steps to recover the dues from the erstwhile owner. Merely because the petitioner is now occupying the premises as the purchaser of the property, does not mean it is liable to pay the dues when the erstwhile owner is still in existence.
23. In Haryana State Electricity Board v. Hanuman Page 18 of 28 HC-NIC Page 18 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT Rice Mills, Dhanauri And Others (supra), the Supreme Court held as below:
"11. In Paschimanchal Vidyut Vitran Nigam Ltd. v. DVS Steels & Alloys Pvt. Ltd. [2009 (1) SCC 210] this court held, while reiterating the principle that the electricity dues did not constitute a charge on the premises, that where the applicable rules requires such payment, the same will be binding on the purchaser. This court held: (SCC p.214, paras 1113) "11. .... A transferee of the premises or a subsequent occupant of a premises with whom the supplier has no privity of contract cannot obviously be asked to pay the dues of his predecessor in title or possession, as the amount payable towards supply of electricity does not constitute a `charge' on the premises. A purchaser of a premises, cannot be foisted with the electricity dues of any previous occupant, merely because he happens to be the current owner of the premises. ....
12. ... When the purchaser of a premises approaches the distributor seeking a fresh electricity connection to its premises for supply of electricity, the distributor can stipulate the terms subject to which it would supply electricity. It can stipulate as one of the conditions for supply, that the arrears due in regard to the supply of electricity made to the premises when it was in the Page 19 of 28 HC-NIC Page 19 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT occupation of the previous owner/occupant, should be cleared before the electricity supply is restored to the premises or a fresh connection is provided to the premises.
If any statutory rules govern the conditions relating to sanction of a connection or supply of electricity, the distributor can insist upon fulfillment of the requirements of such rules and regulations. If the rules are silent, it can stipulate such terms and conditions as it deems fit and proper, to regulate its transactions and dealings. So long as such rules and regulations or the terms and conditions are not arbitrary and unreasonable, courts will not interfere with them.
13. A stipulation by the distributor that the dues in regard to the electricity supplied to the premises should be cleared before electricity supply is restored or a new connection is given to a premises, cannot be termed as unreasonable or arbitrary. In the absence of such a stipulation, an unscrupulous consumer may commit defaults with impunity, and when the electricity supply is disconnected for nonpayment, may sell away the property and move on to another property, thereby making it difficult, if not impossible for the distributor to recover the dues..... Provisions similar to Clause 4.3(g) and (h) of Electricity Supply Code are necessary to safeguard the interests of the distributor."
12. The position therefore can may be summarized thus :
(i) Electricity arrears do not constitute a charge over the property.Page 20 of 28
HC-NIC Page 20 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT Therefore in general law, a transferee of a premises cannot be made liable for the dues of the previous owner/occupier.
(ii) Where the statutory rules or terms and conditions of supply which are statutory in character, authorise the supplier of electricity, to demand from the purchaser of a property claiming reconnection or fresh connection of electricity, the arrears due by the previous owner/occupier in regard to supply of electricity to such premises, the supplier can recover the arrears from a purchaser."
24. Further, in New Horizon Sugar Mills Limited v. Ariyur Sugar Mills Staff Welfare Union And Others (supra), it is held:
"6. By the said judgment, W.A. No. 1788/2005 filed by EID Parry and W.A. No. 1209/2006 filed by New Horizon were dismissed. The order of the learned single Judge dated 7.12.2005 directing quantification of the amount due to the employees and further direction for earmarking Rs. six crores for meeting the employees' dues was upheld. The Division Bench, however, directed that the quantification should be done by Commissioner of Labour, Puducherry (instead of by the retired Judge appointed by the Page 21 of 28 HC-NIC Page 21 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT learned Single Judge). Feeling aggrieved by the dismissal of W.A. No.1209/2006, and W.A. No. 1788/2005, New Horizon and EID Parry have filed these appeals by special leave. The common issue involved in these two appeals is who should be made liable to pay the compensation under Section 25FF of the Industrial Disputes Act, 1947, to the employees of New Horizon whose services were deemed to have been terminated.
7. After the matter was argued for some time, Mr. S. Ganesh, learned senior counsel appearing for New Horizon fairly conceded that having regard to the wording of Section 25FF of the said Act and the settled legal position under several decisions of this Court starting from Anakapalla Cooperative Agricultural and Industrial Society v. Workmen, the liability to pay its workmen would be on New Horizon. Therefore, it follows that the amount due to the workers will have to be paid from out of the sale proceeds which are lying with the Indian Bank. The purchaser EID Parry, who has already paid the sale price, will have no liability."
(emphasis supplied)
25. That was also a case involving the payment of the dues of the workmen of the erstwhile Page 22 of 28 HC-NIC Page 22 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT establishment. It was held that the auction purchaser, who had already paid the sale price, would not be liable for such dues.
26. It may be noted that when the petitioner purchased the property, there was no charge upon it. The Sale Deed clearly stipulates that the property is sold free from all encumbrances. There was no masterservant relationship of the petitioner with the employees of the erstwhile owner. The erstwhile owner has sold only the premises to the petitioner and not its entire business. The erstwhile owner is still in existence as per the records of the Registrar of Companies. It was the erstwhile owner of the premises, who had employed the labourers and is, therefore, responsible for the dues of the workmen. The petitioner is not the heir, successor or assign of the erstwhile owner and cannot be held liable under Section 18(3)(c) of the I.D.Act. The respondent ought to have recovered the dues from the erstwhile owner instead of sealing the factory premises of the petitioner.
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27. Having taken note of the above legal position emerging from the judicial precedents of the Supreme Court as applicable to the facts of the case, the submissions advanced on behalf of the petitioner may now be examined.
28. It has been submitted on behalf of the petitioner that the provisions of Section 200 of the Code do not vest the respondent with power to seal the property of the petitioner.
29. Section 200 of the Code reads as below:
"200. Power of revenue officer to enter upon any lands or premises for purposes of measurement, etc.: It shall be lawful for any revenue officer at any time, and from time to time, to enter, when necessary, for the purposes of measurement, fixing, or inspecting boundaries, classification of soil, or assessment, or for any other purpose connected with the lawful exercise of his office under the provisions of this Act, or of any other law for the time being in force relating to land revenue, any lands or premises, whether belonging to [the [Government]] or to private individuals, and whether fully assessed to the land revenue or partially or wholly exempt from the same:
Proviso: Provided always that no building used as a human dwelling shall be entered, unless with the consent of the occupier thereof, without a notice having been served at the said building not less than seven days before such entry; and provided also Page 24 of 28 HC-NIC Page 24 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT that in the cases of buildings of all descriptions, due regard shall be paid to the social and religious prejudices of the occupiers."
30. As rightly submitted by learned counsel for the petitioner, from a perusal of Section 200 of the Code, it transpire that its scope and ambit extends only to permitting a revenue officer to enter upon any lands or premises for the purposes of measurement, fixing or inspecting boundaries, classification of soil, assessment for any other purpose relating to revenue. The Section does not empower the revenue officer to seal the premises so entered. To enter a property for any of the above purposes specified in Section 200 is one thing and sealing the premises is a different thing altogether. The impugned notices issued to the petitioner are all under Section 200 of the Code. It is pursuant to these notices that the respondent has sealed the factory premises of the petitioner. As is clear from its language, Section 200 of the Code does not provide for the sealing of the premises at all. The action of the respondent in sealing the premises of the Page 25 of 28 HC-NIC Page 25 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT petitioner under this provision is in excess of the jurisdiction vested by the said Section and is, therefore, unsustainable in law.
31. Any action taken by a revenue officer, especially an action as drastic as sealing the factory premises of the petitioner, ought to be supported by the full sanction of law. In the present case, the action of the respondent in sealing the factory premises of the petitioner falls short of this requirement and cannot be sustained.
32. By sealing the factory premises, the respondent has caused great hardship, loss and prejudice to the petitioner, whose entire business has come to an abrupt and grinding halt. It has been submitted on behalf of the petitioner that the petitioner was in the process of fulfilling several local and foreign orders, worth approximately rupees ten crores, when the premises were sealed. Undoubtedly, the petitioner would face penal consequences for default and may even lose business and goodwill Page 26 of 28 HC-NIC Page 26 of 28 Created On Thu Dec 29 00:09:15 IST 2016 C/SCA/20675/2016 CAV JUDGMENT in the market if it fails to meet with its business obligations. Its reputation would also be tarnished. Would it be fair to allow the petitioner to suffer such serious consequences for no fault of its own? Justice and fairness dictate that the answer is in the negative.
33. The respondent does not appear to have taken any steps to recover the dues from the erstwhile owner who is legally liable to pay them. Instead, the respondent has taken the easy way out and sealed the premises of the petitioner. The respondent is well aware that the labourers were never employed by the petitioner and that the erstwhile owner is still in existence, as the petitioner has informed the respondent of the new address. The respondent still proceeded to seal the factory premises for no fault of the petitioner. Would the respondent compensate the petitioner for the loss of business caused to it due to the sealing of the premises in such a casual fashion? This question begs an answer from the respondent.
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34. Considered from all angles, this Court is of the view that the case of the petitioner has considerable merit. Therefore, for the reasons stated hereinabove, the petition is allowed. The Notices dated 28.11.2016 and 08.12.2016, issued by the respondent, are quashed and set aside. The respondent is directed to open the seals affixed on the premises of the petitioner, forthwith.
35. Rule is made absolute. There shall be no orders as to costs.
(SMT. ABHILASHA KUMARI, J.) sunil Page 28 of 28 HC-NIC Page 28 of 28 Created On Thu Dec 29 00:09:15 IST 2016