Letters Patent Appeal No. 1938 of 2010 · Patna High Court
Case Details
IN THE HIGH COURT OF JUDICATURE AT PATNA Letters Patent Appeal No.1938 of 2010 In Civil Writ Jurisdiction Case No. 3561 of 2001 ====================================================== 1. Bihar State Financial Corporation having its office at Fraser Road, Police Station Gandhi Maidan, Town and District Patna through its Managing Director. 2. Managing Director, Bihar State Financial Corporation, Fraser Road, Patna. 3. Assistant General Manager (Z-1), Bihar State Financial Corporation Fraser Road, Patna. 4. Branch Manager, Bihar State Financial Corporation, Motihari Branch having its office at Bhawanipur Zarath, Motihari at Police Station and District- Motihari. .... .... Appellant/s Versus 1. M/S Shyam Cold Storage,Ghorasahan, at and Police Station Ghorasahan, District- East Champaran through Hiralal Gadia, son of Late Ramanand Gadia, resident of town and police station Ghorasahan, district East Champaran. 2. Hiralal Gadia, son of late Ramanand Gadia. 3. Siddhi Nath Gadia, son of Late Ramanand Gadia both Sl. Nos.2 and 3 are residents of town and Police Station Ghorasahan, District East Champaran. 4. Anil Kumar Sinha, son of Late Gauri Shankar Sinha. 5. Pradeep Kumar Sinha, son of Late Gauri Shankar Sinha. 6. Most. Bela Sinha, wife of Late Dilip Kumar Sinha. 7. Smt. Anju Sinha, wife of Dr. Sarat Chandra Prasad, all Sl. Nos.4 to 7 are residents of village and P.O. Bagaha, Police Station Ghorasahan, District East Champaran. .... .... Respondent/s ====================================================== Appearance : For the Appellant/s : Mr. Partha Sarthy, Adv. For the Respondent/s : Mr. ====================================================== CORAM: HONOURABLE MR. JUSTICE NAVIN SINHA and HONOURABLE MR. JUSTICE VIKASH JAIN ORAL ORDER (Per: HONOURABLE MR. JUSTICE NAVIN SINHA) 6 23-09-2013 We have heard learned counsel for the appellants, Respondent Nos.1 to 3 as also Respondent Nos.5 to 7, the substituted heirs of the original auction purchaser late Gauri Shankar Sinha.
Legal Reasoning
Patna High Court LPA No.1938 of 2010 (6) dt.23-09-2013 2 The present appeal arises from order dated 28.9.2010 allowing C.W.J.C. No.3561/01 preferred by Respondent Nos.1 to 3. The learned Single Judge set aside the auction sale orders dated 17.7.1997 and 29.11.2000 of the industrial unit made in favour of late Gauri Shankar Sinha. It was held that the auction sale was conducted contrary to the law laid down in 2004(2) P.L.J.R. 171 (S.C.) (M/s. S.J.S. Business Enterprises (P) Ltd. Vs. State of Bihar). The original advertisement under Section-29 of the State Finance Corporation Act was made by the appellants on 30.7.1995. None of the offers were found acceptable including that of Late Gauri Shankar Sinha. No fresh advertisement was made thereafter. Sale by private negotiation was then done in favour of late Gauri Shankar Sinha in 1997. It was held to be contrary to the law laid down in AIR 2000 Patna 300 (Santu Lal Gupta vs. Bihar State Financial Corporation). The value of the assets on 30.7.1995 was assessed by the Corporation at Rs.28.65 lacs. Arbitrarily, it was brought down to Rs.16 lacs in a period of two years only in 1997. There was no explanation forthcoming for this rather unsual course of events. Discrimination had been practiced in making the matching offer to Respondent Nos.1 to 3 before the auction sale. The sale was held to be not bona fide. On 12.5.2004, interim orders had been passed which reads:- “Under such circumstances, as prayed for, this Patna High Court LPA No.1938 of 2010 (6) dt.23-09-2013 3 Court directs the parties to maintain status quo as of today in respect of the property in question during the pendency of this writ application…….” On 13.7.2010, the appellants had filed a second supplementary counter affidavit before the learned Single Judge. It was stated that Respondent No.5, (late Gauri Shankar Sinha), the auction purchaser, also defaulted in payment of the balance of the total amount of Rs.16 lacs. To realize the due amount, the Corporation initiated afresh to
Legal Reasoning
sell the unit for Rs.48 lacs to Shri Vishwanath Prasad and Shri Chandan Jaiswal. On 4.5.2005 orders were issued under the signature of the Managing Director of the Corporation stating that the sale with the new purchasers was subject to the final approval of the Board of Directors. The sale order also stated that it was without prejudice to the orders that may be passed by the Court in the pending writ application. No consideration money had been received from the purchaser and no legal agreement had been executed with them by the Corporation and neither had physical possession been handed over. In our opinion, these subsequent events render the issue regarding fonafides of the Appellant for sale in favour of Late Gauri Shankar Sinha infructuous. Learned Senior Counsel for the appellants submitted that after the original auction purchaser (late Gauri Shankar Sinha) also defaulted, matters were Patna High Court LPA No.1938 of 2010 (6) dt.23-09-2013 4 appropriately brought to the attention of the Court on affidavit. If, as contended on behalf of Respondent Nos.1 to 3, the appellants violated the order for status quo by fresh auction proceedings on 4.5.2005, an appropriate action for willful disobedience ought to have been preferred. The Court also did not consider it to be flouting the order of status quo as in that event it may have also taken suo motu notice. In view of the fresh sale made to the new purchasers, the order of the learned Single Judge warrants interference as the Corporation must be permitted to sell the auctioned unit for the maximum price possible for recovery of public money. Reliance was placed on 1987 Suppl. SCC 394 (Bharat Cooking Coal Limited vs. State of Bihar) and 1994 2 SCC 266 (Satyabrat Biswas vs. Kalyan Kumar Kisku) in support of the submission that there had been no violation of the order for status quo passed earlier. Learned counsel for Respondent Nos.1 to 3 submitted that the entire issue had become academic as the challenge originally was to auction sale of the unit in favour of the original Respondent No.5 (late Gauri Shankar Sinha). On his inability to purchase the auctioned unit on agreed terms and conditions, the entire process of sale got frustrated. In view of the order for status quo, the appellants could not have taken any steps whatsoever for fresh sale of the unit unless and until the order for status quo was varied Patna High Court LPA No.1938 of 2010 (6) dt.23-09-2013 5 and/or modified. Any action contrary to the order of the Court was null and void and no cause of action can be based on such an illegal course of conduct. We are of the opinion that after the auction purchaser, late Gauri Shankar Sinha, failed to abide by the terms of the sale in auction leading to cancellation of the same by the Corporation, issues regarding the auction under challenge became academic and infructuous. Undoubtedly, the appellants could have proceeded for a fresh sale preceded by fresh advertisement inviting fresh offers. But, that was not permissible for them in view of the order for status quo passed on 12.5.2004. The language of the interim order is unambiguous, and widely worded with no exceptions. If the status quo was confined to the issue of possession or limited in any other manner, permitting leeway, as was contended on behalf of the appellants, nothing prevented the Court from specifying it in the order. Simultaneously, if the appellants were under any impression of ambiguity in the order, being a State under Article-12 of the Constitution of India, a position largely distinct from a private litigant, requirement for fairness in action being writ large regarding its conduct, the proper course of action for it was to seek modification, clarification or for vacating the interim order. We have already extracted the manner in which the appellants proceeded after the auction purchaser defaulted. Patna High Court LPA No.1938 of 2010 (6) dt.23-09-2013 6 We are constrained to observe that the appellants acted in complete derogation of the interim order when it issued orders under Section-29 in favour of Shri Vishwanath Prasad and Shri Chandan Jaiswal on 4.5.2010. It was fully conscious of the meaning and tenor of the interim order and therefore incorporated Clause-9 in the letter that the sale was without prejudice to the orders of the Court. Stress has been laid on the observations in Bharat Cooking Coal Limited (Supra) that the expression “status quo” was itself a term of ambiguity and gives rise to doubt and difficulty. It implies the existing state of things at any given point of time. It only re-enforces the fact that the broad order for status quo in the present case was all encompassing restraining the parties from dealing with the auction property in any manner including taking any steps for fresh sale by publication of an advertisement without the leave of the Court. The interpretation being given that status quo only prohibited handing over of possession is unacceptable. Satyabrat Viswas (Supra) relied upon by the appellants is of no benefit to them in view of the observations at paragraph- 23 which reads as follows:- “23. Apart from the fact whether A. K. Ghosh had a legal authority to sub-lease or not it was not open to him to grant a sub-lease in violation of the order. It is no use contending as Mr. Chidambaram, learned counsel for the respondents does, that there was a bar to such a sub-lease under the terms of the status quo order. It has the effect of violating the preservation of status of the property. This will all the more be so when this was done without the leave of the Court to Patna High Court LPA No.1938 of 2010 (6) dt.23-09-2013 7 disturb the state of things as they then stood. It would amount to violation of the order. The principle contained in the maxim: ’Actus Curiae Neminem Gravabit’ has no application at all to the facts of this case when in violation of status quo order a sub- tenancy has been created. Equally, the contention that even a trespasser cannot be evicted without recourse to law is without merit, because the state of affairs in relation to property as on 15-9-1988 is what the Court is concerned with. Such an order cannot be circumvented by parties with impunity and expect the Court to confer its blessings. It does not matter that to the contempt proceedings Somani Builders was not a party. It cannot gain an advantage in derogation of the rights of the parties, who were litigating originally. If the right of sub-tenancy is recognised, how is status quo as of 15-9-1988 maintained? Hence, the grant of sub-lease is contrary to the order of status quo. Any act done on the teeth of the order of status quo is clearly illegal. All actions including the grant of sub- lease are clearly illegal.” Appropriately, it was the appellants who were required to seek modification and/or clarification for vacating the interim order if it desired to proceed further. We find it very difficult to accept that in absence of any challenge to the fresh sale by the unit owner i.e. Respondent Nos.1 to 3 or the Court not having taken suo motu action, the violation stood condoned and subsequent actions justified. The submission on behalf of the appellants that they had mentioned the factum of the fresh sale in a second supplementary counter affidavit can be of no avail to them. We have already noticed the pleadings. They were only statement of facts without seeking any relief based on the same from the Court. Neither the pleadings in the supplementary counter affidavit nor the submissions as Patna High Court LPA No.1938 of 2010 (6) dt.23-09-2013 8 noticed in the order-sheet reveal that at any point of time the appellants pressed for appropriate relief in view of the changed circumstances. A person who acts in violation of an interim order of the Court, not only makes his actions null and void, but he pollutes the stream of justice. A proceeding in contempt is not the only answer. Those who fail to respect the law cannot seek the protection of the law.
Decision
The appeal is dismissed. (Navin Sinha, J) (Vikash Jain, J) K.C.jha/-