Uttarakhand High Court
Khajan Chandra Joshi vs State Of Uttarakhand & Others on 24 May, 2019
Equivalent citations: AIRONLINE 2019 UTR 129
Bench: Ramesh Ranganathan, N.S. Dhanik
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
Special Appeal No. 450 of 2019
Khajan Chandra Joshi ...Appellant
Vs.
State of Uttarakhand & others ...Respondents
Present:
Mr. P.R. Mullick, learned counsel for the appellant.
Mr. Vikas Pande, learned Standing Counsel for the State of Uttarakhand.
Mr. Siddhartha Sah, learned counsel for the Dena Bank.
Dated: 24th May, 2019
Coram: Hon'ble Ramesh Ranganathan, C.J.
Hon'ble N.S. Dhanik, J.
Ramesh Ranganathan, C.J. (Oral) This appeal is preferred against the order passed by the learned Single Judge in WPMS No. 2661 of 2018 dated 26.03.2019.
2.. The appellant herein filed Writ Petition (M/S) No. 2661 of 2018 seeking a writ of mandamus directing respondent nos. 1 & 2 to take possession of the factories at Industrial Estate, Patal Devi, Almora, under their control, and oust Sri Jayesh Nothani (proprietor M/S Sagar Pharma of Ahmadabad) from the factory premises, till a decision is taken in the writ petition; a writ of certiorari to quash all further proceedings consequent on the publication dated 10.11.2016 in the Preliminary Information Memorandum issued by Dena Bank, Mumbai, and all further proceedings for e-sale of all the assets lying in the premises of Alps Pharmaceutical Pvt. Ltd, Industrial Estate, Patal Devi, Almora, and to hold that all proceedings for sale of assets by Dena Bank/Asset Reconstruction Companies are illegal; a writ of mandamus that all the statutory dues of 2 workmen, Provident Fund, Central Excise, Income Tax, GST etc. be provided and paid, and direct that they shall have priority over and above the dues of Dena Bank, against the mortgage/hypothecation of fixed and current assets; issue a writ or order in the nature of mandamus safeguarding the interests of the State Government in so far creation of mortgage by the Dena Bank on Khet No. 1908/1, Patal Devi, Almora is concerned; a writ of mandamus safeguarding the interest of the petitioner, in so far as the investment made by the petitioner upon Khet No. 1908/1, Patal Devi, Almora i.e. investment in buildings, plants, machineries and royalties etc. is concerned; and a writ of mandamus safeguarding the interest of small scale suppliers, who had supplied raw materials, consumables and packing materials to Jayesh K. Shukla in the past ten years.
3. It is the petitioner's case that, there are two different extents of lands, one in Khet No. 1908/1, Patal Devi, Almora of an extent of 05 Nalis with respect to which the State Government had granted lease in favour of the petitioner on 22.02.1976, which expired on 19.02.2006; another extent of 05 Nalis of land, located at Patal Devi, Almora (which the petitioner claims is distinct from the 05 Nalis of land in Khet No. 1908/1, Patal Devi, Almora), was given to the petitioner on 99 years lease commencing from 13.07.1993; he entered into a memorandum of understanding with the fifth respondent; and both of them carried on business together. The contents of the writ affidavit show that both of them fell out; and the fifth respondent had sub-leased the land, in Khet No. 1908/1, to the seventh respondent.
34. The fifth respondent is said to have mortgaged this extent of 05 Nalis of land in Khet No. 1908/1, Patal Devi, Almora in favour of the Dena Bank which, consequent upon the fifth respondent committing default in making payment, initiated proceedings under the SARFAESI Act for the sale of lease hold rights of both the extents of land i.e. land of 05 Nalis each (i.e. for which the petitioner claims a 30 years' lease was granted, and the other for which a 99 years' lease was granted). The petitioner invoked the jurisdiction of this Court contending that since the 30 year lease, over the 05 Nalis of land in Khet No. 1908/1, expired on 19.02.2006, the fifth respondent had no right of lease over the subject land thereafter, since he ceased to be a lessee on 19.02.2006; consequently, he could not have mortgaged the non-existent lease-hold rights, over the said property, in favour of Dena Bank; and the State Government was not safeguarding its interests over the subject property, and was turning a blind eye to the illegal acts of Dena Bank in putting the subject property to sale under the provisions of the SARFAESI Act and the rules made thereunder.
5. In the counter affidavit, filed on behalf of the State Government by the District Magistrate, Almora, it is stated that the lease deed with respect to land, ad-measuring 05 Nalis, was executed in favour of Alps Pharmaceutical Company Pvt. Ltd, Industrial Estate, Patal Devi, Almora, for a period of 30 years; the lease period expired on 11.02.2006; documents, seeking renewal of the lease, were submitted on 16.01.2006; he was intimated that, in terms of the provisions of the Government Order dated 19.03.1997, the subject lease deed was in violation of the Forest Conversation Act, 1980, and the lease could not be 4 renewed without prior permission of the Government of India; an application was submitted, thereafter, for renewal of the lease deed, in accordance with the provisions of Section 2 of the Forest Conversation Act, to the Government of India; the Regional Office, Ministry of Forest and Environment, Government of India, had renewed the lease deed, executed in favour of Alps Pharmaceutical Company Pvt. Ltd., Industrial Estate, Patal Devi, Almora for the next 30 years vide letter dated 25.07.2011; directions were sought from the Principal Secretary, Department of Forest and Environment, Government of Uttarakhand vide letter dated 10.07.2012; pursuant thereto, the Government of Uttarakhand had sought for a report from him; and, after examining it in accordance with the provisions of the Government Order dated 05.02.2014, he had submitted a report to the State Government vide his letter dated 16.12.2014.
6. The District Magistrate, Almora further stated that the petitioner had filed a complaint on 01.09.2017 pursuant to which a three member committee, headed by the Additional District Magistrate, was constituted; in paragraph 6 of the minutes of the meeting dated 02.1.2018 it was specifically mentioned that the lease granted in favour of Alps Pharmaceutical Company Pvt. Ltd. was mortgaged with the bank without prior approval/permission of the competent authority; it was also found that there was violation of the conditions of the lease deed; pursuant to the directions of the Committee, a notice was issued to Alps Pharmaceutical Company Pvt. Ltd. to deposit Rs. 66,704/-; and Alps Pharmaceutical Company Pvt. Ltd. had defaulted in payment of sales tax etc, and action has been initiated under Section 282 5 of the Z.A. and L.R. Act. It is again stated that the lease deed was renewed, for the next 30 years, in favour of Alps Pharmaceutical Company Pvt. Ltd by the Nodal Officer of the Government of India.
7. From the counter affidavit of the District Magistrate, Almora it is evident that, while a lease deed was initially granted for a period of 30 years which no doubt expired on 19.02.2006, the said lease was renewed, in favour of Alps Pharmaceuticals Company Pvt. Ltd, with the approval of the Government of India for a further period of 30 years; however, mortgage of the lease hold rights in favour of Dena Bank (a public sector Nationalised Bank) was without approval of the State Government; Alps Pharmaceuticals Company Pvt. Ltd had defaulted in payment of a huge amount as sales tax dues; and action had been initiated against them for its recovery.
8. In the order under appeal, the learned Single Judge observed that there was a dispute pertaining to the settlement of rights between two rival entities i.e. a firm called Alps Pharmaceutical Company (owned by the petitioner), and Alps Pharmaceutical Company Pvt. Ltd. (of which the fifth respondent was the Managing Director); it was also not in dispute that, as security for the loan advanced to them, the properties said to be vested with these two entities had been mortgaged with the Dena Bank, by creation of an equitable mortgage; independent proceedings had been instituted, under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, (the "Act" for short), for 6 sale of the security interest, and proceedings under the Insolvency and Bankruptcy Code were also contemplated.
9. The learned Single Judge dismissed the writ petition holding that the relief sought for therein was not amenable to the writ jurisdiction, as the nature of reliefs entailed appreciation of evidence of the respective parties which was not within the scope of inquiry in proceedings under Article 226 of the Constitution of India. The learned Single Judge, however, made it clear that the rights of the petitioner, to have his remedies by impleading himself in the proceedings instituted by the Dena Bank, would not be affected by the order passed by the Court.
10. Sri P.R. Mullick, learned counsel for the appellant- writ petitioner, would submit that the counter affidavit filed by the District Magistrate, Almora is merely an exercise in obfuscation; the issue relating to the grant of 99 years lease is sought to be mixed up with the issue of grant of the 30 years lease; while the 99 years lease was granted on 13.07.1993, the other lease was granted on 20.02.1976 for a period of 30 years; while the 99 years lease, granted on 13.07.1993, would continue to remain in force till 12.07.2092, the other lease granted on 20.02.1976 for a period of 30 years expired on 19.02.2006; the fifth respondent had no right to mortgage the lease hold rights of this extent of 05 Nalis of land with the Dena Bank, since the period of lease for 30 years had expired even prior to mortgage of the lease hold rights in 2012; the 30 year lease had not been renewed after the lease period expired on 19.02.2006; and this issue, relating to the expiry of the 30 years lease, was sought to 7 be mixed up with another extent of 05 Nalis of land in respect of which a 99 years lease was granted in favour of Alps Pharmaceutical Company Pvt. Ltd. which had surreptitiously mortgaged the lease hold rights, of both these extents of land, with the Dena Bank.
11. The aforesaid submissions urged by Sri P.R. Mullick, learned counsel for the appellant-writ petitioner, notwithstanding, the fact remains that the petitioner did not file a rejoinder affidavit, in reply to the counter affidavit filed on behalf of the State Government. In his counter affidavit the District Magistrate, Almora has stated that the lease of 05 Nalis granted for a period of 30 years, which period expired on 19.02.2006, was renewed by the Government of India. The case of the respondents is only that mortgage of the lease hold rights, in favour of Dena Bank, was without approval of the State Government. This specific assertion, in the counter affidavit regarding the lease having been renewed, has not been denied by the petitioner by way of a rejoinder affidavit, and yet it is contended on their behalf that the non-extension of the 30 years lease, for 5 nalis of land, was sought to be mixed up with the 99 years lease granted with respect to another extent of 5 nalis of land which is still in force. Even according to Mr. P.R. Mullick, learned counsel for the appellant-writ petitioner, the 99 years lease granted on 13.07.1993 would expire only on 12.07.2092. It is evident, therefore, that the question of renewal of the said 99 years lease does not arise since the period of said lease would expire only seventy years hence. The only other lease which could have been renewed is the 30 year lease 8 granted on 20.02.1976, the lease period of which had expired on 19.02.2006.
12. The assertion in the counter affidavit of the District Magistrate, Almora, that the lease had been renewed pursuant to the approval of the Government of India, can relate only to the 30 years lease granted by the State Government on 20.02.1976. Since renewal of the said lease has been granted for a further period of 30 years, and it is stated by Sri Siddhartha Sah, learned counsel for Dena Bank, that what was mortgaged in favour of the Bank was only the lease hold rights of the property, it is clear that the State Government has neither parted with its property nor has it ignored the alleged fraud committed by Alps Pharmaceutical Company Pvt. Ltd. On the contrary, it has initiated proceedings for recovery of its statutory dues.
13. A learned Single Judge of this Court had, by way of an interim order passed in Writ Petition (M/S) No. 2661 of 2018 dated 05.09.2018, directed the parties to maintain status-quo. On a vacate stay application being filed, the learned Single Judge, by his order dated 13.02.2019, directed the State Government to take possession of the property, and vacated the earlier interim order of status-quo. The interlocutory order dated 13.02.2019, directing the State Government to take possession of the land, was evidently passed on the premise that the 30 years lease, which expired on 20.02.2006, had not been renewed. The said order of this Court dated 13.02.2019 disabled Dena Bank from continuing with the proceedings, initiated by it under the SARFAESI Act and the SARFAESI 9 Rules, for recovery of the amounts due to it from Alps Pharmaceuticals Company Pvt. Ltd, by sale of the security interest since the leasehold rights could be put to sale only after taking possession of the property, and in view of the order dated 13.02.2019 possession could not be taken by Dena Bank, as the State Government had been directed to take possession of the subject property. It is only after the writ petition was dismissed by the learned Single Judge on 26.03.2019, is the Dena Bank now in a position to take steps to initiate proceedings afresh under the SARFAESI Act to recover its dues on the sale of the leasehold rights of the mortgaged properties. But for the interlocutory order dated 13.02.2019, Dena Bank would have continued its efforts to recover its dues from Alps Pharmaceuticals Company Pvt. Ltd. They have been made to suffer substantial injury because of these writ proceedings initiated by the petitioner, to settle scores with the fifth respondent, though Dena Bank is in no way concerned with these inter-se disputes between the petitioner and the fifth respondent.
14. Since the specific averment in the counter affidavit filed by the District Magistrate, Almora, that the lease of 30 years was renewed on the orders passed by the Government of India dated 25.07.2011, has not been rebutted by the appellant- writ petitioner by filing a rejoinder affidavit, we see no reason to disbelieve the assertion of the District Magistrate, Almora, in his counter affidavit, that the 30 years lease has been renewed.
15. The appellant-writ petitioner, has abused the process of law in not only instituting writ proceedings but in preferring the present special appeal after the writ petition was 10 dismissed. The purpose of filing this appeal, couched as an effort to protect public property, is not only to settle personal scores with the fifth respondent, but also to prevent the respondent-Bank from putting the leasehold rights of the mortgaged properties to sale, resulting in the Bank being deprived of its right to recover its enormous dues from Alps Pharmaceuticals Company Pvt. Ltd and others.
16. We are in agreement with the opinion expressed by the learned Single Judge that this Court would not, ordinarily, examine disputed question of fact in proceedings under Article 226 of the Constitution of India. We are also satisfied that the portals of this Court have been misused by the appellant-writ petitioner, and has been made a platform to settle his private scores with the fifth respondent. In this personal tussle between the appellant-writ petitioner on the other hand, and the fifth respondent on the other, it is the Dena Bank which has been caught in the cross fire for no fault of theirs, and has been prevented from putting the leasehold rights of the mortgaged properties to sale for recovery of the amounts due to it from Alps Pharmaceuticals Company Pvt. Ltd and others.
17. We consider it appropriate, in such circumstances, to dismiss this Special Appeal with exemplary costs, which we quantify as Rs. 2.5 lacs (Rupees Two and Half Lakhs Only). The appellant-writ petitioner shall pay this amount to Dena Bank within four weeks from today, failing which it is open to Dena Bank to recover the said amount, from the appellant-writ petitioner, in accordance with law.
(N.S. Dhanik, J.) (Ramesh Ranganathan, C.J.) 24.05.2019 A.kaur/Shiksha