GUJARAT PANNALAL LIMITED Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) A dispute has been sought to be raised as to the extent of the land enjoyed by a cotton mill that was set up in the pre-Independence days and has only recently stopped functioning altogether. Mahalaxmi Cotton Mills near Palta Railway Station in North 24-Parganas was owned by a company of substantially the same name. That company, Mahalaxmi Cotton Mills Ltd, was wound up in 1955 and its assets were put up for sale. In March, 1960 Gajraj Pannalal Ltd purchased the assets and properties of Mahalaxmi Cotton Mills Ltd (in liquidation). In 1972, the Central Government took over the cotton mill under the Industries (Development and Regulation) Act, 1951. In 1974 the Sick Textile Undertakings (Nationalisation) Act came into force and it was under such Act that the said cotton mill and assets in relation thereto were taken over by the Central Government and vested in the National Textile Corporation (NTC). Gajraj Pannalal Ltd went into liquidation in 1972 within a few months of the cotton mill and the assets in relation thereto having been taken over.

(2.) The applicant in three of the four applications is a contributory of Gajraj Pannalal Ltd (in liquidation) and the principal issue raised in these proceedings is that a piece of land measuring slightly over 4.25 acre that lay across a narrow road from the mill compound was not, and could not have been, taken over by the Central Government or NTC under either the 1951 Act or the 1974 Act and the official liquidator should have taken possession thereof while presiding over the liquidation of Gajraj Pannalal Ltd (in liquidation). Thirty-five years after all assets in relation to the mill had been taken over by the Central Government and it vested in the NTC, CA No. 232 of 2007 has been carried by the contributory claiming that NTC had no authority to sell such land bearing original CS Dag Nos. 1101-1108, 1133, 1134, 1137, 1138, 1140, 1143-1147 and 1152 at mouza Palta in district North 24-Parganas. At the hearing, the applicant has relied on a map that appears at page 173 of the affidavit in support of the summons and the applicant has asserted the rights of the company (in liquidation) in respect of the land covered by original CS Dag Nos. 1101-1105 and 1145-1147. The so-called disputed land has been shaded and bordered in red at page 173 of the Court's papers.

(3.) CA No. 231 of 2007 is an application seeking permanent stay of windingup of Gajraj Pannalal Ltd (in liquidation) under Section 466 of the Companies Act. CA No. 146 of 2009 is the third application by the contributory seeking the appointment of a special officer to submit a report on the state of the land that the applicant claims belongs to Gajraj Pannalal Ltd (in liquidation) and sought to be wrongfully sold by NTC. Upon CA No. 232 of 2007 being received, an order was made on March 30, 2007 permitting the sale of the entirety of the assets of the cotton mill to be conducted by NTC on the reasoning that if the application succeeded the sale proceeds of the relevant property could be directed to be made over by NTC to the official liquidator who is the custodian of the properties and credits of Gajraj Pannalal Ltd (in liquidation). The applicant says that an appeal carried from such order was dismissed. The land in question has been purchased by Paharpur Cooling Towers Ltd. CA No. 627 of 2009 is an application by the successful purchaser seeking leave to intervene in these proceedings.