Saber Paper Limited vs State Of H.P. & Another on 5 May, 2016

[Cites 7, Cited by 3]

Himachal Pradesh High Court

Saber Paper Limited vs State Of H.P. & Another on 5 May, 2016

Collector, Una, District Una, H.P., passed an order in Case No.06A/2011, titled as State of Himachal Pradesh Versus M/S Saber Paper Limited (Annexure P-3), whereby the petitioner was found to have entered into a Benami transaction and thus contravened the provisions of Section 118 of the H.P. Tenancy and Land Reforms Act, 1972 (hereinafter referred to as the Act). Allegedly, the petitioner-company purchased land in the name of one Harbans Lal and then established its industrial unit in the State of Himachal Pradesh. According to the Collector, Harbans Lal , was only the Manager of the Company.

Whether reporters of the local papers may be allowed to see the judgment?

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2. Such order came to be assailed by the present petitioner before the Divisional Commissioner, Kangra at Dharamshala, and on motion, when appeal was taken up, .

following order came to be passed in Case No.10/2014, titled as Saber Papers Limited Versus State of H.P.:-

"Dharamshala 12-02-2014 Sh.Hoshiar Singh Thakur, Ld. Counsel for the of appellant has presented an appeal alongwith stay application today on 12-02-2014 for staying the operation of order dated 30-11-2013 passed by the Deputy rt Commissioner, Una in case no.06/A/2011. Heard in detail. Being an arguable case, ad-interim stay is granted till next date of hearing i.e. 14-03-2014. The case to come up on 14-03-2014 at camp Una. Meanwhile notice be issued to the respondent.

Announced."

(Emphasis supplied)

3. Record reveals that thereafter, matter could not be listed for hearing, only on account of non-availability of the Presiding Officer, who, for administrative reasons, could not hold Court. The position continued to remain as such till 29.09.2015, a significant date, and even thereafter. What was that administrative reason which prompted the Presiding Officer not to hold Court on six occasions between 14.03.2014 and 29.09.2015 is not evident. For more than 1 ½ years, for no fault of the petitioner, matter came to be adjourned repeatedly.

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4. However suddenly, on 19.01.2016, petitioner received a communication (Annexure P-12) that physical possession of his property would be taken over same day.

Such notice reads as under:-

"From:

Tehsildar-cum-Executive Magistrate, Haroli, Distt. Una (HP).

of To The Station House Officer, Police Station, Haroli.

                  rt  No.          Reader-I

                      Dated 19.1.2016

         Subject:-    Taking over physical possession of property of M/s

Saber Paper Mill, Gondpur Jaichand, Tehsil Haroli, Distt. Una(HP) Sir, You are informed that Physical possession of property of M/s Saber Paper Mill, Gondpur Jaichand, Tehsil haroli, Distt. Una (HP) is being taken today on 19.1.2015 at 2.00 PM. You are requested to depute some police personnel on the spot to assist in taking over the possession of the above property.

/ Executive Magistrate, Haroli, Distt. Una(HP).

         Endst.No.41-42/Reader-I                 Dated:
         Copy to:-

1. The Field Kanungo, Dulehar and Patwari Gondpur Jaichand with the direction to accompany the undersigned for taking the physical possession.

2. M/s Saber Paper Mill, Gondpur Jaichand, Tehsil Haroli, Distt. Una (HP) for information.

Sd/-

Executive Magistrate, Haroli, Distt. Una(HP)".

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5. Pursuant thereto, possession stands taken over same day. Such action is subject matter of challenge before this Court .

6. Right to property is a constitutional right. Article 300A of the Constitution of India reads as under:-

"300-A. Persons not to be deprived of property save by authority of law.--No person shall be deprived of his property save by authority of law of

7. No citizen can be deprived of such right, except in accordance with law.

8. A Constitution Bench of the Apex Court in Bishan Das and others Versus State of Punjab and others, AIR 1961 SC 1570, observed that by a mere executive fiat, the State cannot take over forcible possession of the property.

9. The Apex Court in Express Newspapers Pvt. Ltd.

and others Versus Union of India and others, (1986) 1 SCC 133, clarified that a person cannot be deprived of his property by the State, except in accordance with law and by following due process, which in the given facts and circumstances, was found to be by way of filing a civil suit.

The Court while taking into account its earlier decisions, observed that:-

"81.... ... ...

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The Court accordingly quashed the orders and issued a writ of mandamus directing restoration of the property. The Court felt its duty to pass strictures against the Government :

.

We feel it our duty to say that the executive action taken in this case by the State and its officers is destructive of the basic principle of the rule of law. The fact and the position in law thus clearly are (1) that the buildings constructed on this piece of Government land did not belong to of Government, (2) that the petitioners were in possession and occupation of the buildings and (3) that by virtue of enactments binding on the rt Government, the petitioners could be dispossessed, if at all, only in pursuance of a decree of a Civil Court obtained in proceedings properly initiated. In these circumstances the action of the Government in taking the law into their hands and dispossessing the petitioners by the display of force, exhibits a callous disregard of the normal requirements of the rule of law apart from what might legitimately and reasonably be expected from a Government functioning in a society governed by a Constitution which guarantees to its citizens against arbitrary invasion by the executive of peaceful possession of property.

The court also adverted to the earlier decision in Wazir Chand Versus State of H.P., AIR 1954 SC 415, where it was held that the State or its executive officers cannot interfere with the rights of others unless they can point to some specific rule of law which authorizes their acts, and to Ram Prasad Narayan Sahi Versus State of Bihar, AIR 1953 SC 215, where the Court said that nothing is more likely to drain the vitality from the rule of law than legislation ::: Downloaded on - 15/04/2017 20:16:55 :::HCHP 6 which singles out a particular individual from his fellow subjects and visits him with a disability which is not imposed upon the others, and concluded :

We have here a highly discriminatory and .

autocratic act which deprives a person of the possession of property without reference to any law or legal authority. Even if the property was trust property it is difficult to see how the Municipal Committee, Barnala, can step in as trustee on an executive determination only. The reasons given for this extraordinary action are, to quote what we of said in Sahi Case (AIR 1953 SC 215) remarkable for their disturbing implications.

               82.
                 rt        In the later case of State of Orissa Versus
               Ram     Chandra       Dev,       AIR      1964         SC      685,

Gajendragadkar, J. delivering the judgment of the Constitution Bench observed:

Ordinarily, where property has been granted by the State on conditions which make the grant resumable, after resumption it is the grantee who moves the court for appropriate relief, and that proceeds on the basis that the grantor State which has reserved to itself the right to resume may, after exercising its right, seek to recover possession of the property without filing a suit."

10. Even subsequently the Apex Court in State of W.B. and others Versus Vishnunarayan & Associates (P) Ltd.

and another, (2002) 4 SCC 134, deprecated the action of the State in forcibly taking over possession of the property, belonging of the Company by observing that:-

"20. In the absence of specific statutory provision can a person, on the ground of public interest, be ::: Downloaded on - 15/04/2017 20:16:55 :::HCHP 7 evicted by force by the State or its executive officers without following due course of law? In view of the ratio laid down in Bishan Das Versus State of Punjab, .

AIR 1961 SC 1570 and State of U.P. Versus Maharaja Dharmander Prasad Singh, (1989) 2 SCC 505, we hold that such an action of eviction by force cannot be justified in law and for taking possession, action has to be taken in accordance with the law."

of (Emphasis supplied)

11. Hence by an executive fiat State cannot take rt over property, without following due process, much less by use of Police Force. For dealing with cases of the likes of petitioner, law does provide for certain procedures. I proceed to examine the same.

12. Section 118 of the Act reads as under:-

"118. Transfer of land to non-agriculturists barred.- (1) Notwithstanding anything to the contrary contained in any law, contract, agreement, custom or usage for the time being in force, but save as otherwise provided in this Chapter, no transfer of land (including transfer by a decree of a civil court or for recovery of arrears of land revenue) by way of sale, gift, will, exchange, lease, mortgage with possession, creation of a tenancy or in any other manner shall be valid in favour of a person who is not an agriculturist.

Explanation.- For the purpose of this sub-section, the expression "transfer of land" shall not include.-

(i) transfer by way of inheritance;

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(ii) transfer by way of gift made or will executed, in favour of any or all legal heirs of the donor or the testator, as the case may be;

(iii) transfer by way of lease of land or building in a municipal area;

but shall include-

(a) a benami transaction in which land is transferred to an agriculturist for a consideration paid or provided by a non-agriculturist; and

(b) an authorization made by the owner by way of special or general power of attorney or by an of agreement with the intention to put non-agriculturist in possession of the land and allow him to deal with the land in the like manner as if he is a real owner of rt that land. ... ... ...

... ... ...(3) No Registrar or the Sub-Registrar appointed under the Indian Registration Act,1908 shall register any document pertaining to a transfer of land, which is in contravention of sub-section (1):

Provided that the Registrar or the Sub-Registrar may register any transfer-

(i) Where the lease is made in relation to a part or whole of a building; or

(ii) Where the mortgage is made for procuring the loans for construction or improvements over the land either from the Government or from any other financial institution constituted or established under any Page 4 of 35 law for the time being in force or recognized by the State Government. (3A) Where-

(a) the Registrar or the Sub-Registrar, appointed under the Indian Registration Act, 1908, before whom any document pertaining to transfer of land is presented for registration comes to know or has reason to believe that the transfer of land is in contravention of sub-section (1); or ::: Downloaded on - 15/04/2017 20:16:55 :::HCHP 9

(b) a Revenue Officer either on an application made to him or on receipt of any information from any source comes to know or has reason to believe that any land has been transferred or is being transferred in contravention of the provisions of .

sub-section (1);

such Sub-Registrar, the Registrar or the Revenue Officer, as the case may be, shall make reference to the Collector of the District, in which land or any part thereof is situate, and the Collector, on receipt of such reference or where the Revenue Officer of happens to be the Collector of the District himself, he either on an application made to him or on receipt of any information from any source comes rt to know or has reason to believe that any land has been transferred or is being transferred in contravention of the provisions of sub-section (1), shall after affording to the persons who are parties to the transfer, a reasonable opportunity of being heard and holding an enquiry, determine whether the transfer of land is or, is not in contravention of sub-section (1) and he shall, within six months from the date of receipt of reference made to him or such longer period as the Divisional Commissioner may allow for reasons to be recorded in writing record his decision thereon and intimate the findings to the Registrar, Sub-Registrar or the Revenue Officer concerned.

(3B) The person aggrieved by the findings recorded by the Collector that a particular transfer of land is in contravent ion of the provisions of sub-section (1), may within a period of 30 days from the date on which the order recording such findings is made by the Collector or such longer period as the Divisional commissioner may allow for reasons to be recorded in writing file an appeal to the Divisional Commissioner, to whom such Collector is ::: Downloaded on - 15/04/2017 20:16:55 :::HCHP 10 subordinate, and the Divisional Commissioner may, after giving the parties an opportunity of being heard of the case from the Collector reverse, alter or confirm the order made by the collector and the order made by the Divisional Commissioner shall be .

final and conclusive.

(3-C) (a) The Financial commissioner may, either on a report of a Revenue Officer or on an application or of his own motion, call for the record of any proceedings which are pending before, or have been disposed of by, any Revenue Officer of subordinate to him and in which no appeal lies thereto, for the purpose of satisfying himself as to the legality or propriety of such proceedings or rt order made therein and may pass such order in relation thereto as he may think fit.

(b) No order shall be passed under this sub-section which adversely effects any person unless such person has been given a reasonable opportunity of being heard;

(3D) Where the Collector of the District under sub-

section (3A), in case an appeal is not made within the prescribed period or the Divisional Commissioner in appeal under sub-section (3B) or the Financial Commissioner in revision, under subsection (3C), decides that the transfer of land is in contravention of the provisions of sub-section (1), such transfer shall be void abinitio and the land involved in such transfer together with structures, buildings or other attachments, if any, shall in the prescribed manner, vest in the State Government free from all encumbrances; and (4) It shall be lawful for the State Government to make use of the land which is vested or may be vested in it under sub-section (2) or sub-section (3D) for such purposes as it may deem fit to do so.

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Explanation-I. For the purpose of this section, the expression "land" shall include-

(i) land recorded as "Gair-mumkin", "Gair-mumkin makan" or any other Gair-mumkin land, by whatever name called in the revenue records, and .

(ii) land which is a site of a building in a town or a village and is occupied or left out not for agricultural purposes or purposes subservient to agriculture, but shall not include a built up area in a municipal area;

Explanation-II. - For the purpose of this section the of expression "municipal area" means the territorial area of a Nagar Panchayat, Cantonment Board, Municipal Council or a Municipal Corporation rt constituted under any law for the time being in force."

(Emphasis supplied)

13. No doubt in terms of the order passed by the Collector, though property would have automatically vested in the State, but then before taking possession, one had to wait for the proceedings in the appeal to be over.

14. In any case, due process had to be followed before taking over possession. Now what is that procedure, established by law , which was required to be followed?

15. At the Bar, it stands explained by the State that one has to resort to the Himachal Pradesh Tenancy of Land Reforms Rules, 1975 (hereinafter referred to as the Rules), so amended from time to time. The Rule in question reads as under:-

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"38-B Execution of orders for vestment of land:-

The District Collector within his jurisdiction shall pass an order regarding vestment of land/buildings together with structures or other .

attachments, if any, under sub-section (2) or sub-

section (3D) of section 118 of the Act, as the case may be, in the State Government, and, -

(i) The order of such vestment and delivery of possession of immovable property shall be executed in the same manner as provided in the of Code of Civil Procedure for the time being in force in respect of the execution of a decree whereby a Civil Court has adjudged ejectment from or delivery rt of possession of such property; and

(ii) in execution of these order the Revenue Officer shall have all the powers in regard to contempts, resistance and the like which is a Civil Court may exercise in the execution of a decree of the description mentioned in clause (i) supra."

(Emphasis supplied)

16. The procedure for taking over possession of immovable property, which vests with the State in terms of sub-section (3D) of Section 118 of the Act, is required to be taken over in terms of Rule 38-B, which provides that order of vestment shall be executed in the manner provided in the Code of Civil Procedure. In effect, order of vestment is to be executed as a decree as that of a Civil Court.

17. A Constitution Bench of the Apex Court in K.T. Plantation Private Limited and another Versus State of Karnataka, (2011) 9 SCC 1 , has further observed that:-

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"217. The rule of law as a principle contains no explicit substantive component like eminent domain but has many shades and colours. Violation of principle of natural justice may undermine the rule of .

law resulting in arbitrariness, unreasonableness, etc., but such violations may not undermine the rule of law so as to invalidate a statute. Violation must be of such a serious nature which undermines the very basic structure of our Constitution and our democratic principles. But once the court finds, a of statute undermines the rule of law which has the status of a constitutional principle like the basic structure, the above grounds are also available and rt not vice versa. Any law which, in the opinion of the court, is not just, fair and reasonable, is not a ground to strik e down a statute because such an approach would always be subjective, not the will of the people, because there is always a presumption of constitutionality for a statute.

218. The rule of law as a principle, it may be mentioned, is not an absolute means of achieving equality, human rights, justice, freedom and even democracy and it all depends upon the nature of the legislation and the seriousness of the violation. The rule of law as an overarching principle can be applied by the constitutional courts, in the rarest of rare cases, in situations, we have referred to earlier and can undo laws which are tyrannical, violate the basic structure of our Constitution, and our cherished norms of law and justice.

219. One of the fundamental principles of a democratic society inherent in all the provisions of the Constitution is that any interference with the ::: Downloaded on - 15/04/2017 20:16:55 :::HCHP 14 peaceful enjoyment of possession should be lawful. Let the message, therefore, be loud and clear, that the rule of law exists in this country even when we interpret a statute, which has the blessings of Article .

300-A."

(Emphasis supplied)

18. In the instant case, order of vestment was passed on 30.11.2013 and the first step taken for taking over possession of the land was the issuance of of communication dated 19.01.2016. This, notwithstanding the pendency of the appeal. Upon examining the provisions rt of Order 21 CPC, one finds that for execution of a decree of an immovable property, Decree Holder is required to move an application in writing. Rule 22 of the said Order, mandates that where such application is made after a period of two years from the date of passing of the decree, notice thereof, is required to be issued and served upon the Judgment Debtor. Even for that there is a procedure prescribed as Rule 23 is evidently clear. Process for execution is required to be issued, which in common legal parlance is known as "Warrants". Further sub-Rule 3 of Rule 35 requires that only where free access is obstructed by the Judgment Debtor, the Court can direct removal of such obstruction of breaking open of locks.

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19. Now in the instant case, no such steps were ever taken by the District Magistrate, who under the Act , is a Decree Holder. Neither any application in writing was .

moved before him by the functionaries of the State, nor was any process ever issued to the Judgment Debtor. In the absence thereof, there was no question of any obstruction to the execution of the decree. Hence where was the of question of using police force.

20. Taking over forcible possession without following rt due process of law is nothing but destruct ion of the basic principle of rules of law and an autocratic act of the State.

The Constitution does not countenance such an eventuality.

Action of the State is nothing but an act of highhandedness.

It has caused serious prejudice to the petitioner. It is arbitrary and unilateral, more so, when proceedings pending were inordinately delayed without any fault attributable to the petitioner.

21. Petitioner had set up its industry. Whether the fittings, fixtures, plant, machinery or the moveable assets of the Company were also the property of the State, was an issue, which required prior determination. Hence the action of the State in taking over possession without following due process is bad in law.

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22. The action actually smacks of malafides, undue haste, arbitrariness and disregard for judicial process. What prompted the State to suddenly take over possession and .

that too by use of police force remains unexplained on record.

23. A Constitution Bench in Suraj Mall Mohta and Co., Versus A. V. Visvanatha Sastri and another, AIR 1954 SC of 545, has held proceedings before the Income Tax Officer to be in the nature of judicial proceedings and there cannot be rt any doubt that the appeal in the instant case was in the nature of judicial proceedings.

24. The Seven Judge Bench of Hon'ble Supreme Court of India in The State of West Bengal Versus Anwar Ali Sarkar and another, AIR (39) 1952 SC 75, has further held that the Statute giving discretionary powers to the Administrative Agency is a good ground for testing its constitutionality under Articles 14 and 19 of the Constitution of India.

25. Interim order dated 12.02.2014, speaks for itself.

The Appellate Authority had found the case to be "arguable". Having heard "in detail", ad-interim order of injunction was granted though "till next date of hearing", which never took place, for the authority was "busy" for ::: Downloaded on - 15/04/2017 20:16:55 :::HCHP 17 "some administrative circumstances". Is this how quasi judicial or judicial proceedings are required to be conducted by the State? the answer can never be in the affirmative.

Further hearing had to be effective, with proper application of mind by the officer. Which, in the instant case was none.

Hence the interim order was deemed to be in operation.

26. Respondents ought to have maintained judicial of discipline and shown regard to an authority discharging judicial functions rather than resorting to such illegality and rt mis-adventurism . It could have moved an application seeking modification of the order or sought clarification, which it failed to do so. The District Magistrate cannot act as a gun trotting cowboy in a wild west.

27. Now what prompted the Executive Magistrate to take such a drastic and draconian action is evidently not clear. Why is it that the said Magistrate did not check the record of the proceedings, pending in the appeal, and take permission before initiating such action, is not clear. Also no explanation is forthcoming now. It is not that the said Officer was not aware of the proceedings pending before the Appellate Court. In fact, it was order of his superior, which was subject matter of challenge in the appeal, operation of which came to be stayed on 12.02.2014, ::: Downloaded on - 15/04/2017 20:16:55 :::HCHP 18 though till next date of hearing, which was to be held on 14.03.2014. The undue haste shown by the Executive Magistrate, in seeking police assistance only smacks of .

malafides; total non-application of mind and arbitrariness.

It is no doubt true that the factory set up by the petitioner was shutdown sometime in December 2015, but then, the State, till and so long, proceedings were pending before the of Appellate Court, in which interim order came to be passed, could not have taken over possession thereof more so in a rt manner contrary to law.

28. Right to property is a constitutional right and none can be deprived of the same, more so by the State, in utter disregard of law. Due process had to be followed. It is a matter of record that interim order dated 12.02.2014 never came to be vacated or clarified. Also there was no sitting on any date, after passing of such interim order.

29. One may only observe that in the given facts and circumstances, the Apex Court in Ashok Kumar and others Versus State of Haryana and others, (2007) 3 SCC 470, had the occasion to deal with a case where interim order continued to be extended, till the next date of hearing, as it was only for a particular date and not thereafter.

Contention that such order continued to remain in operation ::: Downloaded on - 15/04/2017 20:16:55 :::HCHP 19 till such time, it came to be specifically vacated, despite there being no extension thereof, was found untenable in law. But then, the Court was not specifically dealing with .

the fact situation, where after passing of the interim order, no proceedings on account of non-availability of the Authority/Judicial Officer could be hel d.

30. In a different context the Apex Court has defined of the word "hearing" under Order 41 Rule 22 CPC (Mahadev Govind Gharge and others Versus Special Land Acquisition rt Officer, Upper Krishna Project, Jamkhandi, Karnataka, (2011) 6 SCC 321).

31. The Apex Court in Kanwar Singh Saini v. High Court of Delhi, (2012) 4 SCC 307, has also held that the first day of hearing has to be the date on which the Court applies its mind.

32. The action of the State being illegal, without authority of law, opposed to the cardinal principle and constitutional guarantees, needs to be set aside and the property restored to the petitioner till and so long the appeal is heard and decided on merits.

33. Hence, the present petition is disposed of with the following directions:

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(a) Communication dated 19.1.2016 issu ed by the Executive Magistrate, Haroli, District Una, H.P., and taking over possession of the .

property in question, pursuant thereto is held to be void, illegal and, hence, quashed and set aside.

(b) State is directed to forthwith restore of possession of the suit property to the petitioner.

(c) Proceedings pending before the Appellate Authority are expedited, with a direction to the Divisional Commissioner, Kangra at Dharamshala, District Kangra, Himachal Pradesh, to decide the same not later than three months.

(d) The petitioner shall be entitled to the costs of `25,000/-.

Pending application(s), if any, also stand disposed of accordingly.




                                                          (Sanjay Karol),
    May 5, 2016                                               Judge.
       (Purohit)




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