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2023 Supreme(Guj) 197

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SONIA GOKANI, HEMANT M. PRACHCHHAK, JJ.
The Legal Heirs Of Deceased Fakirchand Ambaram Patel & others – Appellants
Versus
O.L.of M/s.Shri Amruta Mills Ltd. & 1 Others – Respondents
R/O.J.APPEAL NO. 60 of 2003, R/COMPANY APPLICATION NO. 47 of 1993, COMPANY APPLICATION NO. 428 of 2008, CIVIL APPLICATION (OJ) NO. 1 of 2009, R/O.J.APPEAL NO. 13 of 2009
Decided on : 24-02-2023

Advocates:
Advocate Appeared:
For the Appellant : MR MI HAVA, MR MUKESH A PATEL, MR.CHANAKYA BHAVSAR
For the Respondent: MR DHAWAN M JAYSWAL, MR DS VASAVADA

Headnote:(A) Companies Act, 1956 - Sections 529 and 530 - Lease agreements and tenancy rights - The appellants contested the rejection of their claims for possession of land leased to a company in liquidation. The court emphasized that leasing rights must follow contract stipulations, asserting that non-payment of rent does not automatically revoke tenancy without due process. It ruled that leasehold rights are intangible assets and any claim of forfeiture must be substantiated by contract breaches and appropriate notice. (Paras 37-41, 6-7)

(B) Natural Justice - Jurisdiction of Official Liquidator - The appeal highlighted the need for notice to stakeholders affected by the liquidator's actions, emphasizing that the rights of lessors should not be undermined without due legal process. Findings underlined that lease rights remain protected until lawful revocation is established. (Paragraphs 12, 49)

(C) Land Revenue Recovery - The court also observed that revenue dues could not lead to unilateral liquidation of lease claims and must respect existing contractual obligations. (Paragraphs 18-21)

Findings of Court:
The learned Single Judge’s orders were upheld, reaffirming the necessity of established breaches and compliance with statutory and contractual obligations before any claim for forfeiture can be entertained.

Result: Appeals dismissed.

Table of Content
1. ownership and transfer of leasehold land. (Para 1 , 2 , 3)
2. judicial review on lease continuity and rights. (Para 4 , 19 , 20 , 21)
3. arguments regarding non-payment and lease termination. (Para 5 , 6 , 8)
4. legal determination and binding conditions of lease. (Para 9 , 11 , 18)
5. dismissal of appeals and order against possession. (Para 22 , 23)

JUDGMENT :

HEMANT M. PRACHCHHAK, J.

1. The O. J. Appeal No.60 of 2003 is filed challenging the impugned judgment and order dated 30.07.2002 passed by this Court (Coram: Hon’ble Mr.Justice D.A. Mehta) in Company Application No.47 of 1993 in Company Petition No.72 of 1991 whereby the learned Company Judge rejected the said application. The O. J. Appeal No.13 of 2009 is filed challenging the impugned judgment and order dated 17.11.2008 passed by this Court (Coram: Hon’ble Mr.Justice K. A. Puj) in Company Application No.428 of 2008.

2. Brief facts of O. J. Appeal No.60 of 2003 are in nutshell as under:-

2.1 That deceased Fakirchand Ambaram Patel and deceased Shakerbhai Boghabhai and deceased Channabhai Boghabhal were owners of the land bearing survey No. 46/3, 47, 50/1 and 46/2 and they were in possession of the said land. The predeceased had executed the lease deed in favour Shri Ramanlal Lallubhai vide survey no. 1788 dated 20.04.1928 and accordingly being legal heirs, the appellants have derived the interest and ownership of the land in question.

2.2 Pursuant to the lease deed, the possession of the land was transferred to lessee i.e. Ramantal Lallubhai and Ramanilal Lallubhai transferred his leasehold right to M/s Vikram Mills Ltd., and M/s Vikram Mills Ltd. transferred the land in question to the company in liquidation i.e. M/s. Shri Amruta Mills Limited and M/s. Shri Amruta Mills Limited has been lead into winding up process and the original appellant preferred Company Petition No.72 of 1991 and in pursuance of the order dated 22.11.1991 passed by learned Company Judge in the said company petition, the official liquidator has taken over the possession of the properties of company on 17.12.1991.

2.3 As there is arrears of the land revenue of the company in winding up, the lease deed is terminated and appellants are entitled to receive peaceful and vacant possession of the land in question. The notice came to be issued to the official liquidator on 09.03.1992, however, the official liquidator has not taken any action in that regard.

2.4 The land revenue authority has initiated the action and the Collector has issued notice for recovery of land revenue stating that if the land revenue is not paid, the land shall be attached and sold away by public auction.

2.5 The official liquidator had addressed a letter dated 09.03.1992 with regard to handing over the possession of land. The appellants preferred Company Application No.47 of 1993 before the Company Court. Thereafter, the learned Company Judge had passed an order on 07.10.1994 in Company Application No. 47 of 1993 and allied matters and against that order, the appellants and other persons had filed O.J. Appeal No. 48 of 1998 before this Court and this Court after hearing all the parties passed an order on 16.12.1999 by which the matter was remanded back for deciding a fresh and accordingly the order passed by learned Single Judge was set aside.

2.6 Thereafter, the appellants preferred Company Application No.47 of 1993, which came to be disposed of along with the group matters by this Court vide the impugned judgment and order dated 07.10.1994. Against the said order, the appellants preferred O.J. Appeal No.48 of 1998, which came to be disposed of by the Division Bench (Coram: Hon’ble Mr. Justice B. C. Patel and Hon’ble Mr. Justice K. M. Mehta) vide order dated 16.12.1999 by remanding back the matter for deciding afresh and after the order dated 07.10.1994, the respondent - Company failed to make payment of the rent and the Company is bound to take care of the land in question and it was obligatory on the part of the lessee th

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