VENUS SUGAR LIMITED Vs. STATE OF U P

JUDGEMENT

(1.) Venus Sugar Limited, Moradabad has filed this petition for quashing the citation dated 23rd May, 2011 and for a direction upon the Respondents not to realize Rs. 515.94 lacs from the Petitioner-company as arrears of land revenue pursuant to the aforesaid citation.

(2.) The Petitioner is a Public Limited Company incorporated under the Companies Act, 1956 and carries on business of manufacture and sale of white crystal sugar and refined sugar. It transpires from the records of the writ petition that a recovery certificate dated 20th April, 2011 was forwarded by the Cane Commissioner to the Collector for recovery of Rs. 515.94 lacs from the Petitioner, out of which Rs. 472.97 lacs was the balance cane price upto 20th April, 2011, Rs. 34.14 lacs was balance commission to the Cane Unions and Rs. 0.86 was interest on the delayed commission. This recovery certificate dated 20th April, 2011 was challenged by the Petitioner in Writ Petition No. 30011 of 2011 which was dismissed by a Division Bench of the Court by a detailed judgment dated 31st May 2011 and the recovery certificate dated 20th April, 2011 was upheld. The citation dated 23rd May, 2011 was thereafter issued by the Tehsildar under Section 282 of U.P. Zamindari Abolition and Land Reforms Act, 1950 (hereinafter referred to as the 'Act'). It is this citation that has been assailed in this petition and a further relief has been sought that the Respondents should be restrained from realising the amount from the Petitioner as arrears of land revenue till the reference of the Petitioner Company under Section 15 of the Sick Industrial Company (Special provisions) Act, 1985 (hereinafter referred to as the 'SICA') is decided.

(3.) It is the submission of Sri Umesh Chandra, learned Senior Counsel for the Petitioner, assisted by Sri Neeraj Tripathi that as the Petitioner-Company has been declared a sick company under Section 3(1)(o) of the SICA, no coercive method can be taken against the Petitioner-Company for recovery of the amount. It is also his submission that the rights of the pawnee who had parted with the money in favour of the pawnor on the security of the goods cannot be defeated by the goods being seized by the Government and making the money available to the other creditors without the claim of the pawnee being fully satisfied. He has also submitted that objections against the citation have been filed by the Petitioner before the Sub-Divisional Magistrate and they need to be decided before the auction can take place. In support of his contention learned Senior Counsel for the Petitioner has placed reliance upon the decisions of the Supreme Court reported in Central Bank of India v. Siriguppa Sugars and Chemicals Limited, 2007 8 SCC 353; The Bank of Bihar v. The State of Bihar and Ors., 1972 3 SCC 196 and Seth Banarasi Dass (Dead) by L.Rs. v. District Magistrate and Collector Meerut and Ors., 1996 2 SCC 689.