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SMT. LAXMI GARG & OTHERS versus SMT. SHEELA VARSHNEY, EX. DIRECTOR, M/S U.P.G.WORKS & OTHERS

High Court of Judicature at Allahabad

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Smt. Laxmi Garg & Others v. Smt. Sheela Varshney, Ex. Director, M/S U.P.G.Works & Others - SPECIAL APPEAL No. 1020 of 2006 [2006] RD-AH 15886 (12 September 2006)

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HIGH COURT OF JUDICATURE OF ALLAHABAD

CJ's Court

Special Appeal No.1020 of 2006

Smt. Laxmi Garg & Others

Vs.

Smt. Sheela Varshney and others

Counsel for the appellants: 1. Mr. Amit Saxena, Adv.

Counsel for the respondents: 2. Mr. Raj Nath Shukla, Adv.

~~~~~

Hon'ble Ajoy Nath Ray, CJ.

Hon'ble Ashok Bhushan, J.

The impugned order passed by the Hon'ble Single Judge as well as the root order (dates being 10.8.2006 and 25.4.2006) will remain stayed until further orders of Court. So far as Mr. Saxena's clients are concerned, who have purchased a part of plot 963 at an auction for recovery of the Company debt as part of land revenue in the year 1979, it appears prima facie that the property had gone out of the Company's reach 15 years before the liquidation was ordered in the year 1994. The fraudulent preference period was over, and in any event such question would not arise in a departmental auction sale.

The title dispute, if any, perhaps would have to be thrashed out as between the heirs of Rajpal Singh and Gulab Singh on the one hand and Mr. Saxena's clients on the other, in some Court other than the Company Court, as the property, i.e., part of plot 963 could not be said to be either owned or possessed by the Company at any material time at or near the point of time of liquidation.

Regarding balance part of plot 963, plot 947 and plot 870, it appears that the said heirs, who are representatives of the original mortgagor ratified the two leases granted by the heirs and legal representatives of the mortgagees Tula Ram and Het Ram in 1916 and 1920. The mortgagees' interest has been ruled as ex-tinguished by an opinion of the judicial committee (AIR 1940 Privy Council, 160).

The leases contained terms of reentry, if the Company went into liquidation. The Hon'ble Single Judge had also called for a report from the District Judge of Moradabad, which is on record. The problem is that if the Z.

A. Act, 1950 or the Urban Z.A. Act, 1952 applies, then and in that event, the leasehold interest of the Company might have ripened into full fledged title; in that event, the Official Liquidator will not return it to the said heirs of Rajpal Singh and Gulab Singh, but will sell hereafter for the benefit of the creditors and contributories.

Our orders and observations are without prejudice.

Let notice issue to the said heirs of Rajpal Singh and Gulab Singh, who had preferred claim applications before the Official Liquidator.

Office to issue notice.

The Official Liquidator to furnish the names, addresses etc. to the office within a week.

Let the matter be listed after four weeks.

The stay order will be operative in regard to all parts of the all the said four plots.

Dt/-12.9.2006

RKK/-

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