@JUDGMENTTAG-ORDER
S.N. Hussain, J.@mdashAll the aforesaid three writ petitions have been heard together and are being decided by this common order as the subject matters of both the writ petitions are the same, namely Motipur Sugar Factory Limited and the reliefs claimed by them are also similar in nature. The writ petitioners of CWJC No. 8840 of 2006 are the affected employees of the Motipur Sugar Factory, whereas writ petitioner of CWJC No. 427 of 2008 is the Motipur Sugar Factory Limited itself, and the petitioners of CWJC No. 710 of 2011 are the five wakf estates, which claim to be the share holders of the aforesaid company and hence their interest is common and the points involved and the facts raised are also similar. An interlocutory application bearing I.A. No. 2771 of 2011 was filed in CWJC No. 427 of 2008 by one Dr. Kumar Praveen for being impleaded as party respondent to the said writ petition and for grant of relief in his favour, namely directing the respondents to make payment of remuneration against acquisition to the intervener applicant claiming to be the Power of Attorney Holder of one Saiyed Amjad Hussain (successor of late Nanhi Begum). It is claimed by the intervener that on 20.4.1898 one Thomas Barkali executed a lease in favour of Mostt. Nanhi Begum whose heirs had been raising claim from 1898 to 2005 and finally intervener had filed Title Suit No. 553 of 2009 in Muzaffarpur Civil Court, which has not been taken up as yet. There is nothing to show that on the basis of the alleged deed of lease dated 20.4.1898 Mostt. Nanhi Begum or her heir had ever raised any such dispute with respect to the right and possession of Motipur Sugar Factory Limited or its co-sharers (petitioners of both the writ petitions) and it was only in the year 2009 that one Saiyed Amjad Hussain alongwith intervener filed Title Suit No. 553 of 2009 for declaration of title of plaintiff no. 1 and non-title of the defendants and for restoration of possession of plaintiff no. 1. The documents annexed to the interlocutory application are all of the subsequent period of 2010 and 2011 which prima facie do not appear to prove any right, title or possession of Mostt. Nanhi Begum or her heirs, including Saiyed Amjad Hussain. Moreover, this matter has to be considered by the title suit and unless an order/judgment is passed by the trial court on the basis of pleadings of the parties and materials produced by them, no authenticity can be legally attributed to the claim of the intervener by any court or authority. Accordingly, the aforesaid interlocutory application bearing I.A. No. 2771 of 2011 is rejected.
2. CWJC No. 8840 of 2006 was filed by the employees of the Motipur Sugar Factory Ltd. for the following relief:--
(i) For quashing the decision taken by the Bihar State Sugar Corporation as contained in public notice dated 3.6.2006 issued by the General Manager of the Motipur Unit of the Corporation inviting applications to settle the agriculture land of the undertaking in favour of strangers.
3. In the said writ petition bearing CWJC No. 8840 of 2006 the petitioners had filed I.A. No. 49 of 2012 for adding a few more reliefs to the writ petition. The said application was allowed by this Court on 15.2.2012 and the reliefs so added are as follows:--
(ii) To quash the letter of intent dated 30.8.2010 for Long Term Lease of sugar unit, Motipur, in favour of M/s Indian Potash Limited issued by the Principal Secretary to the Government of Bihar, in the Department of Sugarcane Industry, whereby the bid submitted by M/s Indian Potash Ltd., for a price of Rs. 56,20,00,000.00 (Fifty Six Crores Twenty Lacs) was accepted and Motipur unit was offered to it for developing industries based on sugarcane, and land measuring 66 acres alongwith farm land measuring 200 acres were also offered for a long term period of 60 years, further renewable for 30 years, as also all the assets of the unit on outright ownership basis.
(iii) To quash the Deed of Lease dated 12th January 2011, executed by Bihar State Sugar Corporation Ltd. (BSSCL), a body promoted by the State of Bihar, (G.O.B.), being a State Government Undertaking, having its office at C/o Principal Secretary, New Secretariat, Vikas Bhawan, 2nd Floor, Bailey Road, acting through its Managing Director, in favour of M/s Indian Potash Limited, whereby and whereunder the lands and assets of Motipur Sugar Factory unit have been leased out for a period of 60 years, renewable for a further period of 30 years.
(iv) To add Principal Secretary, to the Government of Bihar, in the Department of Sugarcane Industry, Government of Bihar, and M/s Indian Potash Limited, having its Registered Office at 727, Annasalai, Chennai, through its Regional Manager, Mr. Zafar Maqbool son of late Maqbool Ahmed, resident of Flat No. C-104, Block-C, Aradhana Enclave, Khajpura, P.S.-Shastri Nagar, Bailey Road, Patna as respondent nos. 6 and 7 respectively.
(v) To restrain the respondents from settling the excess land available with Motipur unit as per advertisement issued in the Times of India dated 24.9.2011.
4. CWJC No. 427 of 2008 was filed by Motipur Sugar Factory Limited for the following reliefs:--
(i) To issue an appropriate writ/order/direction in the nature of Mandamus restraining the respondents from acting upon the tender document issued pursuant to the prequalification notice as contained in Annexures-11 & 12.
(ii) To issue an appropriate writ/order/direction in the nature of Mandamus restraining the respondents to transfer/lease or hand over the possession and lease rights/ownership of the Motipur Sugar Factory situated in the district of Muzaffarpur, which in fact belonged to the petitioner prior to its being taken over by the Government under the provisions of the Bihar Sugar Undertaking (Acquisition) Act, 1985 to any other person, other than the petitioner company.
(iii) To issue an appropriate writ/orders/directions in the nature of Mandamus commanding the respondents to make over the industrial unit to the petitioner company after discharging all its current liabilities in full, which includes staff wages and salaries, provident fund, superannuation and gratuity dues as well as all cane price and other material cost and incidental arrears, electricity dues etc. incurred by them.
(iv) To stay all proceedings taken by the respondents in connection with leasing out/disposal/handing over of the aforesaid units to any other person other than the petitioner till the disposal of the present writ petition.
(v) To issue an appropriate writ/orders/directions, restraining the respondents from settling/leasing out, the agricultural lands of the sugar factory with any person and if already settled to cancel the lease/settlement and recover full possession thereof.
(vi) To issue an appropriate writ/orders/directions in the nature of Mandamus commanding the respondents to remove any encroachment made on the agricultural lands/factory premises of the petitioner company.
(vii) To issue an appropriate writ/orders/directions in the nature of Mandamus commanding the respondents not to reserve any of the traditional villages of the petitioner company as it existed in the pre-take over period in favour of any other sugar factory.
(viii) To any other relief or reliefs for which the petitioner is found entitled in the facts and circumstances of the case.
5. In the said writ petition bearing CWJC No. 427 of 2008 the petitioner had filed I.A. No. 9096 of 2010 for adding two more reliefs to the writ petition. The said application was allowed by this Court on 11.10.2010 and the reliefs so added are as follows:--
(ix) To issue an appropriate writ/order/direction in the nature of certiorari for quashing Letter No. 1498 dated 30.8.2010 issued by Principal Secretary, Department of Sugarcane Industries, Government of. Bihar by which the Motipur Unit has been offered to M/s Indian Potash Ltd. on ownership basis on as is where is basis, for a long term lease of 60 years.
(x) To issue an appropriate writ/order/direction restraining the respondent-State of Bihar from entering into transfer agreement with M/s Indian Potash Limited and also to restrain the State of Bihar from handing over the Motipur Unit to M/s Indian Potash Limited.
6. In the said writ petition bearing CWJC No. 427 of 2008 the petitioner had also filed I.A. No. 1934 of 2011 for adding another relief to the writ petition. The said application was also allowed by this Court on 1.12.2011 and the relief so added is as follows:--
(xi) To issue an appropriate writ/order/direction in the nature of Certiorari for quashing lease deed dated 12.1.2011 between Bihar State Sugar Corporation Ltd. (BSSCL) and M/s Indian Potash Ltd. and the Asset Transfer Agreement dated 12.1.2011 between Bihar State Sugar Corporation Ltd. (BSSCL) and M/s Indian Potash Ltd.
7. On the other hand, CWJC No. 710 of 2011 has been filed by five wakf estates claiming to be the share holders of Motipur Sugar Factory Limited, for the following reliefs:--
(i) A direction to the respondents not to act in any manner prejudicial to the interest of the company Motipur Sugar Factory Limited or its share holders by leasing out or transferring the right/ownership of the assets/properties movable and immovable acquired by the Government of Bihar under the provisions of the Bihar Sugar Undertaking (Acquisition) Act, 1985 to any other person or persons, body corporate or any other authority or institution except the company or its share holders, who had vested right in the assets/properties of the company presently in occupation/possession of the Bihar State Sugar Corporation Limited.
(ii) A further direction to the respondents to determine the amount of compensation u/s 7 of the Act to which the petitioners had the ultimate right to receive being the share holders in proportion to the shares held by them.
(iii) In case for one reason or the other company is not found eligible or is unable to pursue the remedy then to issue mandamus directing the respondents to appoint prescribed authority under the Act in place of the prescribed authority earlier appointed and give effect to the judgment and order of this Court in case of United Bank of India vs. Member, Board of Revenue and Others passed on 1.7.2004 in CWJC No. 10661 of 1999 and direct the prescribed authority to determine the amount of compensation with interest at the market rate prevailing from time to time, excluding the current liabilities or such liability accrued or incurred by the respondents during the period when the management of the company with its undertaking were taken over pursuant to the provisions of Section 18AA of the Industrial Development and Regulation Act, 1951.
(iv) To stay further transfer agreement in terms of letter no. 1498 dated 30.8.2010 with M/s Indian Potash Limited issued by Principal Secretary, Department of Sugarcane Industry, Patna till such final determination and payment of compensation as prayed for in this writ petition and for other ancillary reliefs.
8. It transpires that I.A. No. 762 of 2008 was filed by the petitioner of CWJC No. 427 of 2008 for staying the tender settlement process initiated by the respondent authorities by virtue of prequalification notices issued in October-November 2007 (Annexures-11 & 12) in so far it related to the petitioner company and also for restraining the respondents from settling/leasing out the agricultural land of the factory with any person/company during the pendency of the writ petition. The said interlocutory application was dismissed by a Bench of this Court vide order dated 5.2.2008 on the ground that the matter required deeper consideration, which was not possible at that stage.
9. Against the said interim order petitioner filed L.P.A. No. 158 of 2008 Ed.--Reported in
10. The petitioner challenged the order of the Division Bench vide Civil Appeal No. 7082 of 2010, which was heard and disposed of on 26.8.2010 by the Apex Court holding that the Division Bench of the High Court ought not have dismissed the writ petition and hence that part of order of the Division Bench dismissing CWJC No. 427 of 2008 was set aside and the said writ petition was remitted to the Single Judge of this Court for deciding the writ petition afresh on merit without being influenced by any observation made by the Division Bench of this High Court. After receipt of the said order, steps were taken by this court for hearing the writ petition.
11. The claim of the petitioners was that Motipur Sugar Factory Limited was established in the year 1932 after purchase of the land in question from the owner I.B. Fraser by a registered document in the year 1932, whereafter the company was registered in the year 1933 under the Companies Act, 1913 and had its registered office at Motipur in the district of Muzaffarpur and thereafter it throughout functioned as an existing company over 1500 Bighas of land at Motipur within the meaning of the Companies Act, 1956 and it remained engaged in production of sugar till 1980 without any interference from the authorities.
12. It was further claimed that 33.72% of the shareholding of Motipur Sugar Factory Limited (petitioner of CWJC No. 427 of 2008) were dedicated to five different wakf estates (petitioners of CWJC No. 710 of 2011) which were duly registered with the Bengal Wakf Board. The dedicators of the said wakf were the co-sharers of the company and the shares bequeathed to them came to about 843 sharers out of total of 2500 shares i.e. 33.72% of the total shares of the company. Their details are as follows:--
(i) Haji Zakaria Oosman Kutchi Memon Wakf Estate (E.C. No. 12737) was created on 12.9.1950 by Haji Zakaria and bequeathed 100 shares of Motipur Sugar Factory Ltd. for religious and charitable purposes.
(ii) Oosmania Wakf Estate (E.C. No. 12738) was created on 27.6.1940 by Haji Abdul Rahim Oosman bequeathed 250 shares.
(iii) Haji Abdul Rahim Oosman Kutchi Memon Wakf Estate (E.C. No. 12733) was created on 1.2.1952 by Haji Adam Haji Abdul Rahim and Oosman Haji Abdul Rahim had jointly bequeathed 100 shares.
(iv) Haji Abu Bakar Oosman Kutchi Memon Wakf Estate (E.C. No. 12700) was created on 29.11.1948 by Haji Abdul Rahim Oosman and Haji Ibrahim Oosman bequeathed 300 shares.
(v) Rukia Bai Wakf (E.C. No. 12768) was created on 29.3.1949 by Rukia Bai bequeathed 93 shares by the said company.
13. It was also stated that on 13.12.1974 the Bihar State Sugar Corporation Limited (hereinafter referred to as ''the Corporation'' for the sake of brevity) was established to manage and operate those sugar undertakings, which were in financial difficulty or were non-operational. Immediately thereafter Bihar Sugar Undertaking (Acquisition) Act, 1976 was legislated to provide for acquisition and transfer of certain sugar undertakings in the State of Bihar and for matters connected therewith or incidental thereto in the interest of general people. The Ministry of Industry (Department of Industrial Development), Central Government issued its order dated 3.11.1980 in the Gazette of India, Extraordinary (Annexure-18) by which exercising the powers conferred by clause (a) of sub-section (1) of Section 18AA of the Industries (Development and Regulation) Act, 1951 it authorized the Bihar State Sugar Corporation Limited, Patna to take over the management of the whole of the said industrial undertaking, namely M/s Motipur Sugar Factory Limited, Motipur in the district of Muzaffarpur, Bihar on the following terms and conditions, namely:--
(i) The authorized person shall comply with all directions issued from time to time by the Central Government;
(ii) The authorized person shall hold office for a period of two years from the date of publication in the official gazette of this order;
(iii) The Central Government may terminate the appointment of the authorized person earlier if it considers necessary to do so.
However, the said order was directed to have effect for a period of two years commencing from the date of its publication in the official gazette.
14. Learned counsel for the petitioners submitted that the said order was issued by the Central Government on the assumption that the persons in-charge of the said industrial undertaking had, by diversion of funds, brought about a situation which was likely to affect the production of sugar produce in the said industrial undertaking and that immediate action was necessary to prevent such a situation, but there was no material at all nor any such material has been produced by the authorities in the instant case that the management of the petitioner undertaking had ever diverted the fund of the factory and in furtherance thereof no opportunity of prior hearing was provided to the owners of the factory in complete violation of principles of natural justice.
15. Learned counsel for the petitioners averred that although the order of the Central Government was of 3.11.1980 but its actual publication took place on 18.11.1980 as confirmed by the Controller of Publication, New Delhi but on paper the person authorized took over control and physical possession of Motipur Sugar Factory Limited on 3.11.1980. However, the said order being only for two years it was extended from time to time upto 30.6.1986 and in the meantime the State of Bihar promulgated the Bihar State Sugar Undertaking (Acquisition) Act, 1985 on 16.12.1985 repealing its earlier Bihar Sugar Undertaking (Acquisition) Ordinance, 1985 and the Bihar State Undertaking (Acquisition) Act, 1976 with certain savings.
16. Learned counsel for the petitioners asserted that according to Section 3 of the Bihar Sugar Undertaking (Acquisition) Act, 1985 the Governor of Bihar appointed Sri K.R. Paul the Secretary, Department of Industry as the prescribed authority by Notification No. S.O. 1264 dated 20.10.1986 and thereafter fresh advertisement was issued on 23.4.1987 by the said prescribed authority inviting applications for compensation within one month of publication of advertisement in press. In response thereto claim on behalf of the Motipur Sugar Factory Limited was filed on 20.5.1987 within the period prescribed claiming Rs. 15 crores as compensation under Sections 7 and 8 of the said Act of 1985 but till date neither any compensation case has been decided nor compensation as claimed has been determined by the authority concerned.
17. It was argued by teamed counsel for the petitioners that after acquisition, the condition of the sugar mill was very bad during the year 1996-1997, hence they became defunct and non-operational for all purposes and in addition to that the financial condition of the Corporation became so bad that winding up petition bearing Company Petition No. 9 of 2002 was filed in the High Court and workers'' union of the factory (petitioners of CWJC No. 8840 of 2006 and others) made representations to the Governor of the State for removal of the encroachers from the factory''s land and for payments etc. and the Hon''ble Governor considering the condition of the Union and its workers directed the Home Secretary, Government of Bihar vide letter dated 18.7.2005 to attend to the issue forthwith but in spite of that the said issue remained unattended till date.
18. Learned counsel for the petitioners further claimed that in spite of the aforesaid directions and the circumstances, the State Government started planning to re-open the sugar mills through new promoters and when the petitioner-Company came to know about that it filed representations on 10.4.2006 and 21.10.2006 (Annexures-4 & 5), whereafter the beneficiaries of the petitioners-wakf also filed their application dated 14.11.2006 (Annexure-6) before the authorities concerned and also made personal representation to the Chief Minister of Bihar. In response thereto the Cane Commissioner, Bihar vide letter dated 12.1.2007 (Annexure-7) asked the beneficiaries of the wakf to produce the documents in support of their claim and immediately thereafter the petitioners filed the relevant documents. The Chief Executive Officer, Board of Wakfs, West Bengal also sent letter dated 29.11.2007 (Annexure-8) to the Secretary of the Department requesting to look into the matter and to take up the issue with the Government of Bihar so that the interest of the wakf is safeguarded and lease is not granted to any other person.
19. It was also submitted by learned counsel for the petitioners that Company Petition No. 9 of 2002 filed by the Bihar State Sugar Corporation Limited with respect to the petitioner-Company, was dismissed as withdrawn on 1.11.2007 (Annexure-10) by the High Court in view of the decision of the State Government to revive the Corporation in terms of report of S.B.I., CAPS. Soon after withdrawal of the said winding up petition, the State Government issued prequalification notice dated 6.11.2007 (Annexure-11) inviting private ownerships for lease of the closed sugar factory of the Corporation through competitive bidding for a period of 60 years renewable for further 30 years and issued request for qualification document consequent thereto.
20. However, the Chairman, Joint Parliamentary Committee on Wakf represented before the Chief Minister of Bihar vide letter dated 6.12.2007 (Annexure-9) requesting to stay the proposed auction of Motipur Sugar Mill in Bihar as the West Bengal Wakf Board had not given its consent thereto. However, in spite of the aforesaid development, the Government of Bihar issued request for qualification document for settlement of long term lease of sugar units in Bihar in December, 2007 (Annexure-12). Hence, the petitioner-Company having no remedy filed CWJC No. 427 of 2008 for the reliefs mentioned above.
21. Learned counsel for the petitioners further asserted that when even Phase-II of the bidding process initiated by the Government of Bihar to privatize the Motipur Undertaking did not materialize, it initiated Phase-III bidding process and deviated further from the objects of the Bihar Sugar Undertakings Act and prequalification notice of the bidding process was issued on 10.5.2010 for revival of Motipur Sugar Undertaking inviting separate bids for the "excess land available" at the Motipur Undertaking for "other industrial purposes". Subsequently vide letter dated 30.8.2010 (Annexure-15) the State of Bihar offered unit to M/s Indian Potash Limited, a Non-Government Company on ownership basis on as is where is basis for a long term lease of 60 years renewable for another 30 years, whereafter lease deed dated 12.1.2011 (Annexure-22) was executed between the Bihar State Sugar Corporation Limited and M/s Indian Potash Limited and Asset Transfer Agreement dated 12.1.2011 (Annexure-23) was also executed between the said respondents. The said agreements had been challenged by the petitioners by way of filing interlocutory application bearing I.A. No. 1934 of 2011 in the aforesaid writ petition.
22. Learned counsel for the petitioners further asserted that at the instance of the petitioners the Information Commissioner, Central Information Commission (CIC), New Delhi vide order dated 9.6.2011 passed in RTI Final Appeal directed CPIO, Ministry of Commerce & Industries, Department of Industrial Policy & Promotion, New Delhi to locate the file and disclose the reasons for take over of Motipur Sugar Factory u/s 18AA of the IDR Act vide notification dated 3.11.1980 issued by the Ministry. In response to the said letter CPIO, Ministry of Commerce & Industries, Department of Industrial Policy & Promotion, Government of India replied on 21.9.2011 that the requisite information had been sought from the Bihar State Sugar Corporation Limited, but no compliance of order of the Information Commissioner, Central Information Commission had been made up-to-date and hence the authorities illegally withheld the information sought as to the reasons for take over of the management of the Industrial Undertaking of Motipur Sugar Factory under IDR Act and in the meantime the Government of Bihar issued another advertisement dated 26.10.2011 inviting separate bids, for "excess land available" at the Motipur Sugar Undertaking for "other industrial purposes" in the Economic Times Kolkata.
23. On the other hand, learned counsel for the respondents State of Bihar and its authorities in both the writ petitions stated that vide order dated 3.11.1980 (Annexure-19 to petitioners'' rejoinder in CWJC No. 427 of 2008) the Government of India directed the Corporation to take over management of the whole of the said industrial undertaking, namely M/s Motipur Sugar Factory Limited on certain terms and conditions and on its basis the Corporation issued office order dated 11.11.1980 (Annexure-19 series of petitioners'' rejoinder in CWJC No. 427 of 2008) for taking over management of M/s Motipur Sugar Factory Limited as a whole notifying services of certain officers and the period granted in the said office order was extended for two years from time to time till 30.6.1986.
24. Learned counsel for the respondents-State of Bihar and its authorities further submitted that the acts of the petitioners were detrimental to the growth of sugar industries in the State and hence the matter came directly within the purview of the Bihar Sugar Undertaking (Acquisition) Act, 1985 as its preamble shows that it is an Act to provide for the acquisition and transfer of the right, title and interest in respect of the sugar mills and the ancillary or subsidiary mills appertaining to such sugar mills specified in the first Schedule annexed hereto with a view to put them on sound economy to ensure the continued manufacture of sugar and other goods essential to the needs of the country and to safeguard the interest of the sugarcane growing farmers and labourers engaged in the mills and for re-organizing and reconstructing the said milts so as to ensure their rational co-ordinated and scientific development to best subserve the common good and for the matters connected therewith or incidental thereto. He also referred to Sections 2(a), 2(h) and 3 of the Act, which defined appointed day and scheduled undertaking as well as the provision of vesting on the appointed day i.e. on the date on which the Act came into force.
25. Learned counsel for the respondents-State of Bihar and its authorities averred that in neither of the aforesaid two writ petitions the validity of the Act 1985 or any of its provisions had been challenged and in any view of the matter the Hon''ble Apex Court had upheld the validity of the said Act in case of
26. Learned counsel for the respondents-State of Bihar and its authorities asserted that no prayer has been made in these writ petitions for payment of compensation rather the reliefs are only with respect to challenging the right of the State Authorities to lease out the undertaking to M/s Indian Potash Limited without mentioning any legal right of the petitioners for seeking such reliefs. It was further asserted that after coming into force of the Act of 1985 sugar undertaking entirely vested in the State Government and hence the petitioners could only claim compensation u/s 7 of the Act and no other claim and hence the petitioners cannot raise the issues, which they have raised in these writ petitions because if they cannot raise any claim directly they cannot be allowed to claim it indirectly trying to make the Act of 1985 unworkable. Learned counsel for the respondents-State of Bihar and its authorities submitted that the petitioners had relied upon order dated 1.7.2004 passed in CWJC No. 10661 of 1999, but the fourth paragraph of the said order shows that the petitioner of that case had led his claim as provided u/s 7 of the Act and after hearing the matter by various prescribed authorities from time to time ultimately order dated 15.4.1999 was passed by the prescribed authority declining to adjudicate the claim of that petitioner, but gave liberty to the petitioner to pursue the matter before the Debts Recovery Tribunal.
27. However, the said Bench of the High Court had set aside the impugned order and remitted the matter back to the prescribed authority for consideration in accordance with law. He also claimed that a Division Bench of this Court while considering the claim of the instant petitioner in L.P.A. No. 158 of 2008 vide order dated 26.2.2008 had found that although the petitioner had earlier filed its claim to compensation before the State Government in 1987 but no claim to such compensation has been raised in the writ petition. In the said circumstances he avers that the petitioner can only claim compensation and not the claim raised in these writ petitions and according to the provisions of the Act 1985 the claim to compensation has to be raised before the prescribed authority u/s 8 of the Act. Hence, he averred that the claim of the petitioner is de hors to the statutory provision of the Act 1985 affirmed by the Apex Court and accordingly these writ petitions are fit to be dismissed.
28. Learned counsel for the respondents-State of Bihar and its authorities further averred that if any liability is upon the petitioners, they can merely pay the same from the compensation received as held by this Court in order dated 1.7.2004 passed in CWJC No. 10661 of 1999 annexed at page 47 of petitioner''s rejoinder to the counter affidavit and hence the petitioner has to take appropriate steps before the prescribed authority for payment of compensation etc., if they are entitled to it.
29. Learned counsel for the respondents-State of Bihar and its authorities also claimed that since the company vested wholly under the Act in the State of Bihar, it had full authority to issue global tenders in response to which several applicants submitted their tenders out of whom M/s Indian Potash Limited was the highest bidder and was selected after completing all the formalities in accordance with law. However, the procedures of selection have not been challenged by the petitioners rather the authority of the respondent State of Bihar for issuance of such tenders is under challenge in these writ petitions, but from the abovementioned facts it is quite apparent that the claims of the petitioners are absolutely frivolous and misconceived and are fit to be rejected.
30. Learned counsel for the respondents Bihar State Sugar Corporation and its authorities in both the writ petitions adopted the arguments raised by learned counsel for the State of Bihar and its authorities. However, so far the Union of India and its authorities are concerned they did not file any counter affidavit nor their learned counsel contested the claim of the petitioners in either of the two writ petitions.
31. Learned counsel for M/s Indian Potash Limited adopted the arguments raised by learned counsel for the State of Bihar and its authorities and in furtherance thereof stated that the claim of the petitioners to hand over Motipur Sugar Factory Limited to them is absolutely frivolous as this issue has already been decided and settled by Hon''ble Apex Court in case of
32. Learned counsel for M/s Indian Potash Limited submitted that the Government and Corporation have not divested the property (Motipur Sugar Factory Limited) rather it has been given on long term lease to M/s Indian Potash Limited and by the said act of the authorities the right, title and interest of the undertaking has not been vested to M/s Indian Potash Limited rather it is a mere lease for certain period not violating the provision of Section 3(2) of the Act of 1985 which does not prohibit the Government and the Corporation to lease out the undertaking in question for achieving the main object of the Act i.e. to ensure continued manufacture of sugar and other goods essential to the needs of the country and to safeguard the interest of the sugarcane growing farmers.
33. Learned counsel for M/s Indian Potash Limited claimed that M/s Indian Potash Limited is not a private company rather the documents attached to the supplementary counter affidavit dated 20.12.2001 clearly establish that it is directly under the control of the Ministry of Chemicals & Fertilizers, Government of India through its Board of Directors in which at least four are serving I.A.S. Officers and 90.76% of the shares of M/s Indian Potash Limited have been held by Government Co-operative. Sector and Public Sector Companies and the administrative responsibility of M/s Indian Potash Limited is also vested in the Government of India under the Ministry of Chemicals & Fertilizers.
34. Learned counsel for M/s Indian Potash Limited also argued that the writ petitions are designed to get back property which has vested in the State Government/Corporation as far back as in the year 1985, which relief cannot be legally granted to the petitioner in view of the aforesaid legal position and only the claim to which the petitioner can be entitled is with respect to compensation u/s 7 of the Act but M/s Indian Potash Limited has got no concern with the said matter as the issue of compensation lies between the petitioners and the authorities of the State and the Corporation and for that purpose Government of Bihar has already appointed Member, Board of Revenue as ''the Prescribed Authority'' vide notification dated 6.5.1995. Hence, he submitted that both the writ petitions are fit to be dismissed.
35. Although elaborate and lengthy arguments have been raised on behalf of learned counsel for the parties, especially learned counsel for the petitioners of both the aforesaid writ petitions, but from their pleadings and materials on record it is quite apparent that the issues involved in these cases revolve around the provisions of the Industries (Development and Regulation) Act, 1951, the Sugar Undertakings (Taking Over of Management) Act, 1978 as well as the Bihar Sugar Undertaking (Acquisition) Act, 1985, out of whom the first two statutes are Central Act, whereas the third is a State enactment.
36. The Industries (Development and Regulation) Act, 1951 was promulgated to provide the Central Government with the means of implementing their industrial policy which was announced in their Resolution No. 1(3)-44 (13) 48, dated 6th April, 1948 and was approved by the Central Legislature for bringing under Central control the development, production and regulation of a number of important industries, detailed in the first Schedule thereof, including Sugar Industries and also for taking over the control and management of any such industrial concern. Section 18AA of the said Act provides as follows:--
18-AA. Power to take over industrial undertakings without investigation under certain circumstances.--(1) Without prejudice to any other provision of this Act, if, from the documentary or other evidence in its possession, the Central Government is satisfied, in relation to an industrial undertaking, that--
(a) the persons in charge of such industrial undertaking have, by reckless investments or creation of encumbrances on the assets of the industrial undertaking, or by diversion of funds, brought about a situation which is likely to affect the production of articles manufactured or produced in the industrial undertaking, and that immediate action is necessary to prevent such a situation; or
(b) it has been closed for a period of not less than three months (whether by reason of the voluntary winding-up of the company owing the industrial undertaking or for any other reason) and such closure is prejudicial to the concerned scheduled industry and that the financial condition of the company owing the industrial undertaking and the condition of the plant and machinery of such undertaking are such that it is possible to re-start the undertaking and such re-starting is necessary in the interests of the general public,
it may, by a notified order, authorize any person or body of persons (hereafter referred to as the "authorized person") to take over the management of the whole or any part of the industrial undertaking or to exercise in respect of the whole or any part of the undertaking such functions of control as may be specified in the order.
(2) The provisions of sub-section (2) of Sec. 18-A shall, as far as may be, apply to a notified order made under sub-section (1) as they apply to a notified order made under sub-section (1) of Sec. Industrial Development and Regulation.
(3) Nothing contained in sub-section (1) and sub-section (2) shall apply to an industrial undertaking owned by a company which is being wound up by or under the supervision of the Court.
(4) Where any notified order has been made under sub-section (1), the person or body of persons having for the time being, charge of the management or control of the industrial undertaking, whether by or under the orders of any Court or any contract, instrument or otherwise, shall, notwithstanding anything contained in such order, contract, instrument or other arrangements forthwith make over the charge of management or control, as the case may be, of the industrial undertaking to the authorized person.
(5) The provisions of Secs. 18-B to 18-E (both inclusive) shall, as far as may be, apply to, or in relation to, the industrial undertaking, in respect of which a notified order has been made under sub-section (1), as they apply to an industrial undertaking in relation to which a notified order has been issued under Sec. 18-A.
37. The Sugar Undertaking (Taking Over of Management) Act, 1978 was promulgated to provide the Central Government with the means to provide for the temporary taking over, in the public interest, of the management of certain Sugar Undertakings under certain circumstances, for maintaining the continuity of production of sugar, for avoiding undue hardship to cane producing farmers and to best subserve the interests of all the people concerned and for that reason to provide for the taking over for a limited period the management of every sugar undertaking which fails or ceases to manufacture sugar or which fails to pay promptly amounts due for the cane acquired for the purposes of the undertaking. Section 3 of the aforesaid Act provides as follows:--
3. Vesting of management of a sugar undertaking in Central Government.--(1) Where the Central Government is satisfied--
(a) that any sugar undertaking has in any sugar year failed to commence the manufacture of sugar on or before the appointed day in respect of that year, or having started the manufacture of sugar on or before that day ceased to manufacture sugar before the expiry of the average period of manufacture of sugar in relation to that undertaking; or
(b) that on any date in any sugar year any sugar undertaking has, in relation to the cane [purchased at any time (whether in that sugar year or in any earlier sugar year or sugar years and whether before or after the commencement of this Act), before that date] for the purposes of the undertaking, arrears of cane dues to the extent of more than ten per cent, of the total price of the cane purchased for the purposes of the undertaking during the immediately preceding sugar year; and
(c) that in either case the effective functioning of the undertaking is necessary for the purposes of this Act,
the Central Government may issue a notice in such form and in such manner as may be prescribed to the owner or the manager of such sugar undertaking calling upon such owner or manager to report in writing within such time, not being less than five days, as may be specified in the notice, the circumstances under which such undertaking has so failed to commence or ceased to manufacture sugar or, as the case may be, clear the said arrears of cane dues and to show cause as to why the management of such undertaking should not be taken over by the Central Government under this Act.
(2) As soon as may be, after the receipt of the report under sub-sec. (1) from the sugar undertaking, or where the sugar undertaking has failed to make such report within the time specified in the notice to that undertaking under sub-section (1), after the expiry of such time, the Central Government may make such further inquiry (if any) as it may deem fit, and--
(a) if the Central Government is satisfied that having regard to all the circumstances of the case and the purposes of this Act that it would be expedient to give further time to the undertaking to enable it to commence or resume production of sugar or, as the case may be, clear the arrears of cane dues, it may, by order in writing, specify the date on or before which and the manner in which such undertaking shall commence or resume production of sugar or, as the case may be, clear the said arrears of cane dues; or
(b) if the Central Government is not satisfied as provided in clause (a), declare by notification that the management of such undertaking shall vest in the Central Government on and from such date as may be specified in such notification.
(3) If a sugar undertaking has failed to comply with an order made under clause (a) of sub-section (2), or having commenced or resumed the production of sugar on or before the date specified in such order, ceased to manufacture sugar before the expiry of the average period of manufacture of sugar in relation to that undertaking, and the Central Government is satisfied that it is necessary so to do for the purposes of this Act, it may, by notification declare that the management of such sugar undertaking shall vest in the Central Government on and from such date as may be specified in such notification.
(4) Any failure on the part of the owner or manager of the sugar undertaking to utilize the undertaking for the manufacture of sugar during any period shall not be taken into account for the purpose of issuing a notification in respect of that undertaking under clause (b) of sub-section (2) or sub-section (3) where such failure is attributable to any circumstances (other than financial difficulties) beyond his control.
(5) Every notification issued under sub-section (2) or sub-section (3) for vesting the management of a sugar undertaking in the Central Government shall be in force for such period not exceeding three years from the date of vesting as may be specified in the notification but if the Central Government is of opinion that it is expedient in the public interest that the management of the sugar undertaking should continue to vest in the Central Government after the expiry of the period so specified, it may, from time, issue, by notification, directions for such continuance for such further period as may be specified in the directions:
Provided that the total period for which the management of the undertaking may remain vested in the Central Government shall in no case exceed seven years from the date of vesting.
(6) For the purposes of this section--
(a) "cane dues", in relation to any cane purchased by a sugar undertaking, means the price payable in accordance with the agreement (whether express or implied) or arrangement relating to such purchase and where there is no such agreement or arrangement, the price as determined in accordance with the law applicable to such purchase;
(b) any cane dues being the price payable for any cane acquired for the purposes of a sugar undertaking shall not be deemed to be in arrears at any time before the expiry of fourteen days from the date of delivery of such cane to the undertaking;
(c) the average period of manufacture of sugar in relation to any sugar undertaking with respect to any sugar year (hereafter in this clause referred to as the current sugar year) shall be calculated by dividing the total number of calendar days during which the undertaking manufactured sugar during the period of three sugar years immediately preceding the current sugar year by the number of sugar years in which the undertaking manufactured sugar during the said period of three years.
38. It is apparent from the provisions of the aforesaid two Central enactments that they are meant to provide the Central Government to take over only the control and management of such an industrial unit for implementing its industrial policy and to temporarily manage the industries to ensure continuity of production of sugar and to sub-serve the interests of all sections of the people concerned. None of the said two enactments provide for acquisition or transfer of right, title and interest of the Sugar Mills or vesting of the Sugar Mills and their properties into the State. Hence, the Ministry of Industries (Department of Industrial Development), Govt. of India was quite justified in issuing order dated 3.11.1980 in the Gazette of India Extra-ordinary authorizing the Bihar State Sugar Corporation Ltd. to take over the management of the said industrial unit, namely Motipur Sugar Factory Ltd., under the provisions of Clause (a) of sub-section (1) of Section 18-AA of the Central Act, 1951 for a period of two years which was extended from time to time till 30.6.1986. However, the said order was not challenged by the petitioners or anyone else and from 1980 till the aforesaid extended date the management of the petitioners'' Sugar Factory remained with Corporation under the authorization of the Central Government under the Central Act of 1951.
39. However, the Bihar Sugar Undertaking (Acquisition) Act, 1985 was promulgated with effect from 16th December, 1985 by the State Legislature to provide for the acquisition and transfer of the right, title and interest in respect of Sugar Mills and the Ancillary or Subsidiary Mills appertaining to such Sugar Mills specified in the first schedule annexed to the Act (including petitioner) with a view to put them on sound economy and to ensure the continued manufacture to sugar and other goods essential to the needs of the country and to safeguard the interest of the sugarcane growing farmers and labourers engaged in the mills and for re-organising and re-constructing the said mills so as to ensure their rational co-ordinated and scientific development to best subserve the common good and for the matters connected therewith or incidental thereto. Sections 3 and 4 of the said Act provides as follows:--
3. Vesting on the appointed day.--(1) On the appointed day the scheduled undertakings specified in the First Schedule shall stand and be deemed to have stood transferred to and vest and be deemed to have vested in the State of Bihar free from all encumbrances together with all the assets, rights leaseholds, powers authorities and privileges, all property moveable and immoveable, including lands, buildings workshops, stores, instrument, machinery and equipments, cash balance, cash in hand, reserve funds and investments pertaining to the undertaking and all other rights and interest in or arising out of such property as were immediately before the appointed day in the ownership, possession power or control of the undertakings whether within or outside Bihar and all books of accounts, Registers and other documents of whatever nature relating thereto and shall vest absolutely free from all encumbrances.
(2) Notwithstanding anything contained in sub-section (1) the State Government may, if it is satisfied, that Corporation or a Government Company is willing to comply or has complied, with such terms and conditions as that Government may think fit to impose, direct, by an order in writing, that the right, title and interest instead of continuing to vest in the State Government, vest in the Corporation Company or either on the date of publication of the directions or on such earlier or later date (not being a date earlier than the appointed day), as may be specified in the direction.
4 Certain consequences of vesting.--Notwithstanding anything contained in any other law for the time being in force and except as otherwise provide in this Act on the appointed day--
(1) All properties as aforesaid which have vested in the State Government Corporation u/s 3 shall by force of such vesting, be freed and discharged from any trust, obligation, mortgage, charge, lien and all other encumbrances affecting it and any attachment, injunction or decree or order of any Court or other authority restricting the use of such properties in any manner or appointing any receiver in respect of the whole or any part of such properties shall be deemed to have been withdrawn;
(2) Every mortgagee of any property which has vested under this Act in the State Government Corporation and every person holding any charge, lien or other interest in, or in relation to any such property shall give, within such time and in such manner as may be prescribed, an intimation to the prescribed authority of such mortgage, charge lien or other interest;
(3) For the removal of doubts, it is hereby declared that the mortgagee of any property referred to in sub-section (2) or any other person holding any charge, lien or other interest in, or in relation to any such property shall be entitled to claim in accordance with his rights and interest, payment of the mortgage money or other dues in whole or in part, out of the amount determined u/s 7, but no such mortgage charge, lien or other interest shall be enforceable against any property which has vested in the State Government Corporation as the case may be;
(4)(i) Every liability of the scheduled undertaking in respect of any period prior to the appointed day shall be liability of the respective company owning the scheduled undertaking and shall be enforceable against such Company and not against the State Government Corporation.
(ii) For removal of doubts, it is hereby declared that, save as otherwise expressly provided in this section or in any other section of this Act--
(a) No liability of the scheduled undertaking in respect of any period prior to the appointment day, shall be enforceable against the State Government Corporation as the case may be;
(b) No award, decree or order of any Court, Tribunal or other authority in relation to the scheduled undertaking, passed after the appointed day in respect of any matter, claim or dispute which arose before the appointed day shall be enforceable against the State Government Corporation;
(c) No liability incurred before the appointed day by the scheduled undertaking for contravention of any provision of law for the time being in force shall be enforceable against the State Government Corporation as the case may be;
(d) Every shareholder of the vested scheduled undertaking shall cease to have any claim to the assets for the sugar undertaking concerned from the date of vesting or acquisition except compensation to the extent of his share out of the compensation determined under this Act;
(e) Notwithstanding any provision in any other law, ail the transfer disposition of properties moveable or immoveable either in part or in whole made after 29th October, 1978 of the scheduled undertaking shall be invalid and stand annulled. The Collector shall take possession of such properties with the properties of the undertaking.
40. Learned counsel for the respondents-State of Bihar as well as learned counsel for the Corporation have relied upon a decision of the Supreme Court in case of
(1) That the impugned enactment is beyond the legislative competence of the State of Bihar since the industries covered by the enactment fall under Entry 52 of List-I to the Seventh Schedule to the Constitution.
(2) That the decision in
(3) Inclusion of alcohol industries in the list of scheduled industries in the Industries (Development and Regulation) Act, 1951 detracts legislative power of the States to acquire distilleries.
(4) Entry 42 of List-III to the Seventh Schedule to the Constitution provides for acquisition of property and does not deal with takeover of industries under Entry 24 of List-II to the Seventh Schedule to the Constitution, which are subject to the provision of Entry 57 of List-I to the Seventh Schedule to the Constitution.
(5) The Act has failed and, therefore, must be declared to be invalid.
41. Although the said case appears to be with respect to distilleries of S.K.G. Sugar Limited, but the said petitioner had challenged the entire Act of 1985 which was for acquisition of five undertakings including the said petitioner and the instant petitioner factory. The said case was finally dismissed by the said decision and the Hon''ble Apex Court upheld the provisions of the Act of 1985 and held the challenge to the said provisions to be not sustainable in law.
42. In any view of the matter, the provisions of the Act of 1995 are not under challenge in the instant two writ petitions, rather the reliefs sought for are merely to restrain the respondents from transferring, leasing or handing over the right, title or possession of the petitioner''s factory to anyone else and to hand over the industrial unit to the petitioner-company after discharging all its current liabilities. Furthermore, reliefs are sought for restraining the respondents from transferring or entering into any agreement with M/s Indian Potash Limited and to determine the amount of compensation u/s 7 of the Act, 1985 to which the petitioners had ultimate right.
43. Section 4(1) of the Act of 1985 provides that all properties which have vested in the State Government Corporation u/s 3 of the Act shall by force of such vesting be freed and discharged from any encumbrances such as trust, obligation, mortgage, charge or lien etc. and any attachment, injunction or decree or order of any Court or other authority restricting the use of such property in any manner or appointing any receiver in respect of the whole or any part of such properties shall be deemed to have been withdrawn. In the said circumstances, the properties of the petitioner Motipur Sugar Factory Limited having vested in the State Government/Corporation it has been automatically freed and discharged from any encumbrances like trust, obligation, mortgage, charge, lien, attachment, injunction etc. But the Wakf (petitioner of the second writ petition) created much earlier out of the properties of the Motipur Sugar Factory Limited cannot be legally held to be any such encumbrances, rather the subject matters of the Wakfs which were earlier part of the Motipur Sugar Factory Limited are absolute dedication to God by way of transfer. Hence, the properties already transferred to the said Wakfs much prior to 1985, to be precise in 1940-1952, cannot be affected by the provisions of the Bihar Sugar Undertaking (Acquisition) Act, which came into force in 1985 as in the year 1985 the Motipur Sugar Factory Limited had no right or interest left in the properties dedicated to the said Wakfs which had been duly registered in the Board of Wakfs, West Bengal much earlier and the said Board had written letter to that effect to the Secretary of the Department on 29.11.2007 (Annexure-8), whereafter the Chairman of the Joint Parliamentary Committee on Wakfs had also sent letter dated 6.12.2007 to the Chief Minister of Bihar apprising him of the entire matter and requesting him to stay the proposed auction of the petitioner factory, but the said matter was absolutely ignored by the authorities concerned, although the properties dedicated to the said Wakfs cannot legally come under the purview of the Act of 1985, nor can it be alienated or encumbered without the consent of the Board under the Wakf Act.
44. So far the question of transferring, leasing or handing over petitioner''s factory to M/s Indian Potash Limited is concerned, Section 3(1) of the Act of 1985 specifically provides that on the appointed day, the Scheduled Undertakings shall stand and be deemed to have stood transferred to and vested in the State of Bihar free from all encumbrances together with all the assets, rights, properties. Section 3(2) of the said Act provides that the State Government may, if it is satisfied, that the Corporation or a Government Company is willing to comply such terms and conditions as the Government thinks fit to impose, direct by an order in writing, that the right, title and interest instead of continuing to vest in the State Government, vest in the Corporation or the Company. From the aforesaid provisions of the Act, it is quite apparent that either the State Government may by an order in writing transfer right, title and interest to be vested in a Corporation or a Government Company. The objections of the petitioners are twofold in that regard. Firstly, that M/s Indian Potash Limited is not a Government Company and secondly that no transfer as provided in Section 3(2) of the Act has been made in favour of M/s Indian Potash Limited.
45. So far the first objection is concerned, M/s Indian Potash Limited had asserted before this Court through its counsel that it is not a private company, rather it is directly under the control of Ministry of Chemicals & Fertilizers, Government of India having four I.A.S. Officers in its Board of Directors. But the requirement as has been specified in Section 3 of the Act is that the Government can vest the acquired properties either in the Corporation or in a Government Company. However, there is no material at all to show that M/s Indian Potash Limited has ever been declared as a Government Company as defined in and required by Sections 617 to 619-B of the Companies Act, 1956.
46. So far the second objection is concerned, it is quite apparent from a plain reading of Section 3 of the Act that the State Government immediately after vesting may direct that the acquired factory is vested either in the Corporation or in a Government Company. Hence, when at the time of vesting the Government directed the petitioner Undertaking to be vested in the Corporation with all its right, title and possession, there was no occasion again for transferring the said properties to even any Government Company as there is no such provision in the Act empowering the State or the Corporation to take such decision. Once the undertaking has been transferred to the Corporation, there can be no second transfer to any Company either by the State or by the Corporation. It may be noted in this regard that the Corporation is itself a company and hence legally there should not have been any further transfer to another company. Reference in this regard may be made to a decision of the Supreme Court in case of
47. Furthermore, M/s Indian Potash Limited has claimed that the Government or the Corporation have not divested the properties of the petitioner, rather it has been given on long term lease to M/s Indian Potash Limited and by the said act of the authorities, the right, title and interest of the Undertaking has not been vested to M/s Indian Potash Limited, rather it is a mere lease for certain period without violating any provision of law. However, from the scheme of the Act of 1985 it is quite apparent that the purpose of the legislature in enacting the said law was to ensure the continued manufacture of sugar and other goods essential to the needs of the country and to safeguard the interest of sugarcane growing farmers and labourers engaged in the factory and for that purpose the properties were to be vested either in the Government or in the Corporation or in a Government Company with all the right, title and interest in the Undertaking and the said authority, namely the State or the Corporation or the Government Company were expected to fulfill the object of the Act. In the said circumstances, ail the steps for the said purposes had to be taken either by the Government or by the Corporation or by the Government Company to which the properties of the Undertaking had vested. There is no provision in the Act enabling either the Government or the Corporation to merely lease the property of the Undertaking to any such person such as M/s Indian Potash Limited for any specific period.
48. Furthermore, the terms and conditions of the lease made by the authorities in favour of M/s Indian Potash Limited, as mentioned in its various clauses, show that the lease had been made for 60 years renewable for a further period of 30 years and the rent fixed is only Re. 1.00 per annum for hundreds of acres of land of the petitioner, including their factory premises and other assets. Thus, it is quite apparent that such lease etc. cannot be held to be in accordance with law especially when the public purpose for acquisition specified in the object of the Act of 1985 vanished the moment the authorities of the State of Bihar and the Corporation started using the properties for purposes other than the purposes of acquisition.
49. From the facts of these cases, it is quite apparent that the authorities of the State and the Corporation had played fraud on legislation by making such an illegal transfer in favour of M/s Indian Potash Limited. The impugned lease is an unregistered tease which does not even fulfill the requirement of Sections 105, 106 and 107 of the Transfer of Property Act, 1882 or the provision of Section 17(1)(d) of the Registration Act, 1908 or even the provision of Section 3 of the Indian Stamp Act, 1899. Reference in this regard may be made to a decision of the Apex Court in case of
50. According to the provisions of the Act, the vesting of the Undertaking and its properties has to be in favour of the State Government or on the direction of the Government in favour of the Corporation or a Government Company for achieving the objective of the Act. In the instant case at the time of acquisition of the petitioner factory and its properties under the Act of 1985, it vested in the Corporation at the instance of the State Government, and it remained with them for more than two decades, but even after the passage of such long period they failed to achieve the desired objective under the Act of 1985, rather there is no material to show that they had taken any step in that regard. Due to their abject failure in that regard the Corporation had to file Company Petition No. 9 of 2002 in the High Court with respect to the petitioner factory, but that too was withdrawn on 1.11.2007.
51. In the said circumstances, when the Government or the Corporation to which the Undertaking and the properties of the petitioner had vested under the Act could not achieve the desired object of the Act for more than two decades, it was for the authorities of the State and the Corporation to assess as to whether they were able to achieve the purposes and objects of the Act and if they felt themselves to be incapable of achieving the purposes and object of the Act they had no right either to continue with the right, title and possession of the said properties or to give it on lease to anyone else which was against the specific provisions of law and the only option left for the said authorities was to divest themselves with respect to the properties of the undertaking in favour of its erstwhile owner, namely the petitioner to restart its factory.
52. No doubt the Act of 1985 had been upheld by the Apex Court as a good law in case of Shri Krishna Gyanoday Sugar Ltd. (supra) and has not been challenged in the instant writ petitions, but the point does not rest there in these cases. Whenever a special Act, like the aforesaid Act of 1985, is legislated for a section of the society, it may be at the cost of another section, but bringing into force such enactment may be necessary in the larger interest of the society as a whole. But when the desired object of the said Act for the welfare of society is not achieved, whereas loss to the adversely affected section of the society continues, rather increases due to the indifferences and ignorances of the authorities concerned, who start giving unwarranted largess and windfall to a third person, the continuance of acquisition becomes arbitrary, undermining the authority of law, which cannot be held to be reasonable and tolerated by a court of law. Reference in this regard may be made to a decision of the Apex Court in case of
53. The purpose of the enactment, namely Act of 1985, may be noble and for the welfare of the people, but its implementation must also be with justice otherwise the entire purpose would fail. Here from the above facts regarding subsequent events it is clear that justice does not appear to have been done. The Apex Court has always asserted primacy to the adherence to the principle of natural justice in all adjudications. Furthermore, in the instant case certain obligations were cast by the Act of 1985 on the authorities of the State Government and the Corporation, but they committed breach of such obligations and are taking advantage of the situation. The law is well settled that a person cannot be permitted to take unfair advantage of his own wrong to gain favourable interpretation of law and hence a wrongdoer cannot be allowed to make a profit of his own violation of the object of the Act. Reference in this regard may be made to two decisions of the Apex Court in case of
54. It has also been settled by a series of decisions of the Supreme Court that expropriatory legislation must be strictly construed, because when the properties of a citizen are compulsorily acquired by a State or its instrumentality in exercise of its power of eminent domain, the essential ingredients, thereof, namely existence of public purpose and payment of compensation are principal requisites thereof. The proposition of eminent domain cannot be overstretched to legitimize a patently illegal and fraudulent exercise undertaken to deprive the owners of their constitutional right to property with a view to favour a third party. Reference in this regard may be made to two decisions of the Apex Court in case of
55. So far the question of compensation to the petitioner is concerned, Section 7 of the Act of 1985 specifically provides that the State Government shall by way of compensation of acquisition of the scheduled Undertaking pay the amount by which book value of the assets of the Undertaking as determined by the "Prescribed Authority" appointed by the Government exceeds its depreciation and the specific procedure for getting the said compensation has been provided therein. It has also come into light that the Government of Bihar has already appointed the Member, Board of Revenue as the "Prescribed Authority" vide notification dated 6.5.1995 for deciding the matter with respect to such compensation u/s 7 of the Act before the "Prescribed Authority". If such an application is filed by the petitioner, the prescribed authority will have to consider the same on merits considering the delay caused due to the pendency of the writ petition and shall see that the amount due in accordance with law is paid to the petitioner without much delay as the petitioners had been deprived of their properties for over three decades for which not a single farthing has been paid to them. All such payments have to be made as per the market value of the properties in question with interest and other payments in accordance with law. In the aforesaid facts and circumstances, all these three writ petitions are allowed and public notice dated 3.6.2006 (Annexure-1 of the first writ petition) issued by the authorities of the Corporation, letter of intent issued by the authorities of the State of Bihar dated 30.8.2010 (Annexure-14 of the second writ petition), lease dead in favour of M/s Indian Potash Limited dated 12.1.2011 (Annexure-22) and the agreement between them dated 12.1.2011 (Annexure-23) are hereby quashed and respondent-M/s Indian Potash Limited is directed to return all the assets, properties, including the concerned amounts to the Bihar State Sugar Corporation Limited immediately, not later than two months from the date of receipt/production of a copy of this order. However, the respondents-authorities of the State of Bihar and the Corporation are also directed to receive all the assets and properties including the concerned amount from M/s Indian Potash Limited and take necessary steps for divesting itself of the acquired properties in favour of the petitioner Motipur Sugar Factory Ltd. as per the directions given in the foregoing paragraphs nos. 44 to 55 and to pay all the legitimate dues of the workers of the undertaking, for the period it remained acquired with the respondents, in accordance with the provisions of law as well as the principles of law settled by various judicial pronouncements, without any further delay and in any case not beyond six months from the date of receipt/production of a copy of this order.
