27 August 1996
Supreme Court
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DMAI Vs

Bench: RAMASWAMY,K.
Case number: C.A. No.-002576-002577 / 1981
Diary number: 63440 / 1981


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PETITIONER: MAHABIR SUGAR MILLS LTD. & ORS. ETC.

       Vs.

RESPONDENT: STATE OF U.P. & ORS. ETC.

DATE OF JUDGMENT:       27/08/1996

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. HANSARIA B.L. (J) MAJMUDAR S.B. (J)

ACT:

HEADNOTE:

JUDGMENT:                             WITH       CIVIL APPEAL NOS. 347, 1292-94/86,2578/81, WRIT           PETITION NOS. 7535-36/85, 378 AND 391/86                             AND              CIVIL APPEAL NOS. 11732-33 OF 1996         (Arising out of SLP (C) No. 9931-32 of 1991)                             AND            CAMP NO. 18628-86 IN C.A. NO. 1292/86                          O R D E R      IN C.A. Nos. 2576-77/81, 347/86, W.P. No. 7535-36/85 AND CMP NO. 18628/86 IN C.A. NO. 1292/86      These matters  are disposed  of together.  We need  not elaborately mention  the fact  leading to  filling of  these appeals and  writ Petitions.  Suffice it  to state  that the validity of  U.P. Sugar  Undertaking (Acquisition) Act, 1971 was upheld  by this  Court in The Ishwari Khetan Sugar Mills (P) Ltd.  & Anr.  etc. vs. The State of Utter Pradesh & Ors. etc. [(1980)  3 SCR  331]. However,  proceedings before  the BIFR are pending to streamline the working of sick industry, namely, U.P.  State Sugar  Corporation. Shri H.N. Salve, the learned senior counsel appearing for the appellants and Writ Petitioner in  these cases, submitted that he had discussion with his  clients after  the case  was  last  adjourned.  He suggested that  the  appellants  are  proposing  to  make  a representation to  the BIFR for consideration of their cases and so  it was not necessary to argue the case on merits. In that view,  we need  not decide the case on merits. It would be open to the appellants to make representation to the BIFR and  it   would  be  open  to  the  BIFR  to  entertain  the representation and dispose it of.      The  appeals   and  Writ   Petitions  are   accordingly dismissed as  withdrawn with  the above observation. We make it clear  that no issue of law or fact is left open in these cases.      Pending appeal,  the appellant  mede an  application in CMP No. 18628/86 for directions as regards the possession of

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the bungalow  occupied by  the  Director  of  the  appellant Company. When  there was  conflicting claim  as regards  the possession, this  court had  called for  a report  from  the District Judge,  Bulandshehar. In  furtherance thereof,  the District Judge submitted the report. Or consideration of the report by  prcceedings  dated  January  O9,199O  this  Court passed the order as under :      "In, this  case, a  report has been      received from  the learned District      Judge as  to the persons who are in      possession of  the property  as  on      May  9,  l936.  These  are  clearly      prima facie  Findings in  order  to      enable  this   Court  to   pass  an      interim order.  We direct  that the      status    quo     regarding     the      possession,  as   reported  by  the      District Judge  will continue  till      the disposal of the case.      We may make it clear that we do not      pronounce regarding  the  title  to      the property  in question  and also      regarding  any  question  of  mense      profits which the appellants may be      entitled  to.  The  appellants,  if      they   so   desire,   may   takethe      appropriate   proceeding   in   the      matter."      In view  of the  fact that  we are  now dismissing  the appeals as withdrawn we make it clear that the order and the status  quo   order  stand  discharged.  Whoever  seeks  any positive  direction.   as  regards  the  possession  of  the bungalow, it  would be open to the appropriate party to take such procedure  as is available at law. We give eight weeks’ time from  today to  take such steps; untill then the status quo order  granted by this Court would be continue for eight weeks only  and no further. As regards the vesting and other incidental issues,  it would  be  open  to  the  appropriate parties to  lay proceedings  under Section  10 of U.P. Sugar Industry Undertakings  Act before  the prescribed  Authority which would  decide the  matter in  accordance with  law. It would be  open to  the prescribed  authority to consider the question independently  on its  own merit in accordance with law and  it would  be open  to the  parties  to  place  such material as is available to them at law.      IN C.A. No. 2578/1981      Appeal is dismissed as infructuous.      IN C.A. NO 1292-93/86 AND W.P. NO. 378/86      These matters  are disposed  of together.  We need  not elaborately mention  the facts leading to file these appeals and Writ Petitions. Suffice it to state that the validity of U.P. Sugar  Undertakings (Acquisition)  Act, 1971 was upheld by this  Court in  The Ishwari Khetan Sugar Mills (P) Ltd. & Anr. etc. vs. The State of Utter Pradesh & Ors. etc. [(1980) 3 SCR 331)]. However, proceedings before the BIFR is pending to streamline  the working  of sick  industry.  namely,  U.P State Sugar Corporation. Shri H.N. Salve, the learned senior counsel appearing for the appellants and Write Petitioner in these cases submitted that he had discussion with his cilent after the  case was  last adjourned.  He suggested  that the appellants are  proposing to  make a  representation to  the BIFR for  consideration of  their cases and so not necessary to argue the case on merits. In that view we need uot decide the case  on merit.  It would  be open  to the appellants to make representation  to the BIFR and it would be open to the

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BIFR to  entertain the representation and dispose it of. The appeals and  Writ Petitions  are  accordingly  dismissed  as withthdrawn with  the above  observation. We  make it  clear that no issue of law or fact is left open in these cases.      IN C.A. 1294/86 AND W.P. NO. 391/86      These matters  are disposed  of together.  We need  not elaborately mention  the facts leading to file these appeals and Writ Petitions. Suffice it to state that the validity of U.P. Sugar  Undertakings (Acquisition)  Act, 1991 was upheld by this  Court in  The Iswari  Khetan Sugar  Mill (P) Ltd. & Anr. etc. vs. The State of Utter Pradesh & Ors. etc. [(1980) 3 SCR  331]. However, proceedings before the BIFR is pending to streamline  the working  of sick  indutry sick  industry, namely, U.P.  State Sugar  Corporation. Shri H.N. Salve, the learned senior counsel appearing for the appellants and Writ Petitioner in  these cases, submitted that he had discussion with his  clients after  the case  was  last  adjourned.  He suggested that  the  appellants  are  proposing  to  make  a representation to  the BIFR for consideration of their cases and so  not necessary  to argue  the case on merits. In that view we  need not decide the case on merit. It would be open to the  appellants to make representation to the BIFR and it would be  open to  the BIFR  lo entertain the representation and dispose it of.      The  appeals   and  Writ   Petitions  are   accordingly dismissed as  withdrawn with  the above observation. He make it clear  that no issue of law or fact is left open in these cases.      SLP(C) Nos. 9931-32/1991      Leave granted.      We have heard the learned counsel on both sides.      The appeals arise from order if High Court made in Writ Petition No.9690/1990  dated January 24,1991. The appellants have  sought   for  directions  against  the  bank  for  the realisation of  the dues  belonging to the undertakings. The High Court in the impugned order passed as under :      "For  the   above  reasons   having      regard to  the circumstance  of the      case, while we cannot grant all the      reliefs prayed  for in  these  writ      petitions,  they  are  disposed  of      with the following directions:-      (i) Neither  the  Central  Bank  of      India nor  the State  Bank of India      (respondents 1  and 2  respectively      in W.P.  No. 9690  of 1990 and sole      respondents in  W.P. No.  19630 and      19629 respectively)  shall pay  any      further amounts  to  respondents  3      and 4  or any  other person  out of      the principal  of the said deposits      or interest  accruing thereon.  The      said deposits  and Bank  Guarantees      shall be subject to the orders that      may ultimately  be  passed  by  the      Supreme  Court   in   appeals   now      pending  before  it,  namely  civil      appeals Nos.  712 and  713 of 1977.      If the  said appeals are dismissed,      it  is   abvious  that  the  amount      covered by  the Bank Guarantees has      to be  paid  over  to  the  Central      Bank\Food Corporation of India. If,      however,  the   said  appeals   are      allowed, the  amount will go to the

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    scheduled undertaking,  which would      go towards the discharge of arrears      which accrued prior to 2.3.1970. In      that  event,   any  surplus  amount      accruing   on    account   of   the      difference   in   interest   should      firstly    be     available     for      dischargint the  said  arrears  for      recovering which  the Receiver  was      appointed.    Of    course,    this      direction. shall  be subject to any      directions to the contrary given by      the Supreme  Court  in  the    said      appeals.      (ii) Within  a period  of one  year      from today  it shall be open to the      Government or  the Collector  under      the   provisions    of   the   U.P.      Zamindari   Abolition    and   Land      Reforms Act  to  issue  appropriate      unders of  attachment or restraint,      as the  case may  be, calling  upon      the respondent  Banks  to  pay  the      surplus interest amount to them. It      such orders  are issued,  the  Bank      shall obey  the  same  subject,  of      course, to  orders to  the contrary      if any  by any  court or  competent      authority.      (iii) The  bank may  consider,  and      indeed it  will be  well advised in      taking  steps  for  recovering  the      amounts paid by it or loan given by      it,  as   the  case   may  be,   to      respondents  3   and  4.  That  is,      however, a  matter for  the bank to      decide.      This order  does not  preclude  the      petitioner     Corporation     from      adopting such  remedies as are open      to it  under law,  including  civil      suits, for  establishing its claims      and  contentions.  Similarly,  this      order   does   not   preclude   the      Government, Collector  or any other      authority   from   recovering   the      amounts which they claim are due to      them either  from respondents 3 and      4 or  from any  other person liable      in that  behalf in  accordance with      the procedure prescribed by law. If      any   proceedings    are    already      initiated in  that behalf  they can      also  be   continued  according  to      law."      We are  informed that  both the  appellant as  well  as respondent  have   filed  civil   suits  which  are  pending disposals under these circumstances, we think that it is not necessary for  us to  go into the question. It would be open to their  rights in  the suits and decrees will be passed by the Civil Court in accordance with law.      The appeals are accordingly dismissed. No. costs.