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In The Matter Of M/S U.P.State Cement Corporation Ltd. - MISC. COMPANY APPLICATION No. 4 of 1997  RD-AH 17213 (5 October 2006)
Court No. 30
MISC. COMPANY APPLICATION NO. 4 OF 1997
In the matter of
U.P. State Cement Corporation Ltd. ( In Liq.)
application no. nil of 2006 filed by Rakesh Kumar Srivastava and 22 others and application no. nil of 2006 filed by Ram Soorat and 38 others
Hon'ble Sunil Ambwani, J.
1. Heard Shri Govind Saran and Shri S.S. Srivastava for applicants.
2. The 23 applicants, in company application filed on behalf of Shri Rakesh Kumar Srivastava and others claiming to be tenants of Nagar Panchayat Churk Bazar and the 39 applicants, in company application filed on behalf of Shri Ram Soorat and others occupying open land for the purposes of running a market and paying ''teh bazari' to Nagar Nigam Churk, have filed these applications in the liquidation proceedings of the U.P. State Cement Corporation Limited (In Liq.) with a prayer to restrain District Magistrate, Sonbhadra and his agents from demolition and eviction from the shops allotted to them and places occupied by them for which they are paying ''teh bazari'.
3. The U.P. State Cement Corporation (In Liq.) was wound up on 8.12.1999 on the recommendation of Board of Industrial and Financial Reconstruction under Section 20 (1) of the Sick Industrial Companies (Special Provisions) Act 1985. The Official Liquidator was appointed as liquidator of the company and he has taken over possession of the assets on 25.7.2001. On 30.8.2001 the entire asset of the factory spread over more than 80 Km including mines areas, factories and residential was given in the supurgi of District Magistrates, Mirzapur and Sonbhadra.
4. The application filed by the State Government for sale of the assets to M/s Grasim Industries Ltd. was rejected and orders were passed to form Asset Sale Committee and to invite tenders. Special Appeal was dismissed and that after long drawn proceedings of sale the assets could invite attention of four bidders and higher bid of M/s Jaiprakash Associates Ltd was accepted for Rs. 459 crores. About 3/4th of the sale amounts have been deposited and that the bank guarantee has been submitted for the last instalment of Rs. 1.50 crores to be deposited on 11.10.2006. Under the Companies Act 1956 and Companies (Court) Rules 1959 on the confirmation of sale the Official Liquidator has to hand over the vacant possession of the assets to the purchaser.
5. During the pendency of the winding up and liquidation proceedings a large number of unauthorized constructions were raised on the company properties. Various houses, jhugi and jhopari and that large number of houses are being occupied by the government servants. In the circumstances pending deposit of instalment the court initiated proceedings and issued directions in July 2006 giving notice to all the unauthorized occupants to hand over the vacant possession of the properties occupied by them. The eviction of only ex workmen and authorized tenants of the company properties was stayed until their claims are settled.
6. Various notices were published in newspapers including notice dated 17.7.2006 to hand over vacant possession. After a lot persuasion the District Magistrate initiated the drive to get the company properties vacated.
7. The 30 applicants in the application of Rakesh Kumar Srivastava and other submit that they were occupying the land on plot no. 439 village Churk district Sonbhadra. The Nagar Panchayat constructed the shops with the permission of the District Magistrate and has allotted them as tenants in 1992-93. It is contended that the applicants are bonafide tenants of Nagar Panchayat and thus they should not be evicted by the District Magistrate in the drive to remove the unauthorized occupants.
8. In other application, Ram Soorat and others have prayed for staying their eviction as they are paying ''teh bazari' to the Nagar Panchayat.
9. The Official Liquidator submits that plot no. 439 is recorded as a property of the company in khatauni of the year 1494, annexed with the affidavit of Shri Ramesh Chandra filed on behalf of Jaiprakash Associates Ltd, the highest bidder. It is contended that the land belongs to the company and most of the allotments except 02 were made in the year 2001. In some cases the allotments have been made in March 2006 and premium was deposited. The Official Liquidator contends that under statutory provisions and confirmation of sale the possession has to be handed over to the highest bidder. He submits that 6000 workmen and creditors are awaiting payment of their dues.
10. Shri Ashok Mehta appearing for Official Liquidator states that repeated opportunities have been given to the unauthorized occupants to remove their occupations. The court has also passed orders staying demolitions. However, the drive eviction of unauthorized occupants must be carried out to conclude the sale proceedings. He submits that applicants have unauthorizedly occupied of the company properties.
11. Shri Yashwant Verma states that the highest bidder is not in a position to negotiate for settlement as the sale is not confirmed. It is only after the payment of last instalment that the highest bidder will get any legal status. He, however, is not in a position to give any commitment of settling the properties with the applicants.
12. Prima facie the certified copy of the khatauni clearly demonstrates that plot no. 439 is recorded as company property. The circumstances, in which Nagar Panchayat constructed the shops, are not known. The Nagar Panchayat, in any case, had no right to make any constructions on the company properties without seeking approval of the Official Liquidator. Under the Companies Act 1956 the Official Liquidator manages the properties but he has not been given any right to permit permanent constructions, creating fresh rights to defeat the liquidation proceedings.
13. It is necessary to evict all unathorised occupants from the company properties to secure payment to more than 6000 workmen awaiting their dues since last six years and to pay public money to the creditors. Any sympathy to the unauthorized occupants, who were given sufficient notice of three months, will be totally misconceived and will jeopardize the entire sale proceedings.
14. The 23 applicants in the application of Shri Rakesh Kumar Srivastava may have right to claim damages from the Nagar Panchayat but that is not a ground to stay their dispossession. The 39 applicants in the application of Shri Ram Soorat and others occupying open spaces and paying ''the bazari' have absolutely no right to resist the eviction proceedings.
15. Having regard to the facts and circumstances stated as above, both the applications are rejected.
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