Oja No. 71 of 2002 · Gujarat High Court

CORAM : HONOURABLE MR. JUSTICE MOHIT S. SHAH HONOURABLE MR.JUSTICE K.A.PUJ Date : 23/10/2008 CAV JUDGMENT (Per : HONOURABLE MR.JUSTICE K.A.PUJ)

The appellant has filed this appeal against the order and judgment of the learned Company Judge dated 30.07.2002 passed in Company Application No.338 of 2001 rejecting the prayer made by the applicant for handing over the possession of the land in question to the applicant.

This Court has admitted the appeal on 08.07.2003.

Heard learned Counsels appearing for the parties and perused the documents as well as their respective pleadings.

The land in question was originally given on rent to New Swadeshi Mills which had gone into liquidation. The management of the Company was taken over by Gujarat State Textile Corporation, a Government Company incorporated on

30.11.1968. The Government of Gujarat passed an Ordinance being Ordinance No. 18 of 1985 i.e. Gujarat Closed Textile Undertakings (Nationalization) Ordinance, 1985. The said Ordinance was subsequently substituted by the Gujarat Act, X of 1986 i.e. Gujarat Closed Textile Undertakings (Nationalization) Act, 1986. Under the said Ordinance, specified textile undertakings were nationalised under Section 3 thereof and the said specified textile undertakings stood transferred to and vested absolutely in the State OJA/71/2002 JUDGMENT Government. New Swadeshi Mills was specified textile undertaking. Under the provisions of the said Act, the said specified textile undertaking vested and transferred in the Gujarat State Textile Corporation, which is a Government of Gujarat Company, and the Gujarat Government being the sole contributory and shareholder of the Company.

At the relevant time, there were 17 textile Mills of GSTC as per the annual report and accounts for the year 1994 – 95. On account of stringent crisis in the textile industry in the whole of the State of Gujarat and other relevant reasons, GSTC could not do well and, therefore, GSTC approached the Board for Industrial & Financial Reconstruction (for short 'BIFR') for revival and reconstruction of the Company. BIFR, after hearing the parties concerned, found that it was not possible to meet the losses suffered by the GSTC within a reasonable time and there was no likelihood of the GSTC being revived in future and, therefore, opinion was forwarded by BIFR to this Court under Section 20 of Sick Industrial Companies (Special Provisions) Act, 1985 (for short 'SICA') for winding up of GSTC. That opinion was registered as Company Petition No.205 of 1996 in the registry of this Court and the notices were issued upon the Banks, labour Union and other financial institutions. Ultimately, after hearing the concerned parties, this Court vide its order dated 06.02.1997, has passed an order to wind up GSTC and the Official Liquidator attached to this Court was appointed to take over the charge of all assets and properties of the GSTC including possession thereof and Gujarat Industrial Development Corporation (for short 'GIDC') was appointed as an Agent of Official Liquidator under Section 457 (2) (v) of the Companies Act, 1956 for the purpose of protection, preservation and OJA/71/2002 JUDGMENT disposal of the properties and the said Agent GIDC was to act under the instructions of the Official Liquidator.

It is in the above background of the matter, the applicant has filed application for handing over the possession of the land in question which was given on lease to the Company in liquidation.

The buildings and machineries of the Company in winding up were sold. When it came to sell of the leasehold rights of the Company in liquidation over the land, the applicant claiming to be lessor challenge the right and power of the Official Liquidator to sell the leasehold rights of the Company in winding up and had contended that upon winding up order having been passed, the lessors were entitled to get back possession of lands.

By judgment dated 30.07.2002, the learned Company Judge rejected the above claim and held that the lease was a long term lease and the leasehold rights over the land of the Company in winding up is the assets of the Company which was put up for sale by the Official Liquidator.

This Court vide order dated 28.12.2006 passed in Company Application No.203 of 2003 moved by the State Government directed the Official Liquidator to hand over possession of the immovable properties to the State Government. Hence, the question of putting this property on sale does not arise. The contentions raised on behalf of the lessors in the present appeal were also raised in OJ Appeal Nos.65 to 67 of 2006. OJA/71/2002 JUDGMENT By our judgment dated 17.10.2008, we have rejected the contentions and dismissed the appeals of the lessors.

Following the aforesaid decision, the present appeal also deserves to be dismissed. Accordingly, the appeal is dismissed. Interim relief, if any, stands vacated. Sd/- Sd/- [M. S. SHAH, J.] [K. A. PUJ, J.] Savariya