Allowed

Smt. Susheela H. Deshpande v. M/S Karnataka State Textiles Mill Ltd.

Karnataka HC21 Jan 2014CA/214/2013

Case brief

AI extract

What is this about?

The Single Judge allowed the application under Section 446 of the Companies Act, 1956, directing the Official Liquidator to deliver possession of specific land to applicants who claimed ownership. The court held the claim was undisputed and ordered the handover of the property.

What did the court decide?

The Official Liquidator is directed to hand over possession of the property to the applicants.

Smt. Susheela H. Deshpande Vs M/S Karnataka State… — Company and Corporate | Karnataka HC (2014)

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IN THE HIGH COURT OF KARNATAKA AT BANGALORE

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DATED THIS THE 21^st DAY OF JANUARY 2014 BEFORE:

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THE HONOURABLE MR. JUSTICE ANAND BYRAREDDY

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COMPANY APPLICATION No.214 OF 2013

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COMPANY PETITION No.149 OF 1998

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BETWEEN:

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Smt. Susheela .H.Deshpande

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Sri. Ajitkumar H Deshpande

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Sri. Anil H Deshpande

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Sri. Abhay H Deshpande

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Smt. Jayashri, Wife of Ramesh Gudi,

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All are residents of “Sridevi”, No.B-46, Shantiniketan, P.B.Road, Hubli – 25.

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Applicants 1, 3 to 5 are Represented by their GPA Holder Ajitkumar H Deshpande, Son of Hanumath Deshpande, Occupation: Advocate, Aged about 50 years.

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… APPLICANTS

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(By Shri. S.S. Haveri , Advocate)

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AND:

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M/s. Karnataka State Textiles Mill Limited, (in liquidation), Represented by its Official Liquidator, No.25 and 26, Raheja Towers, 12^th Floor, M.G.Road, Bangalore. …RESPONDENT

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(By Shri. K.S. Mahadevan, Advocate for Official Liquidator)

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This Company Application is filed under Section 446[2] of the Companies Act, 1956 read with Rules 6 and 9 of the Companies [court] Rules, 1959, praying to direct the respondent company [in liquidation] by Official Liquidator to hand over the possession of the property of land bearing CTS No.99, situated in Ward No.3, Mariyana Thimmasagar Village, Hubli Taluka, the measurement of which is 14 acres, 28 guntas, 59,510.40 square meters, now lying within the limits of Hubli-Dharwad Municipal Corporation, more fully described in the schedule hereunder and as described in the map to the applicants forthwith and etc;

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This Company Application coming on for Orders this day, the Court made the following: -

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O R D E R

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The present application is filed in the following

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background:

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The applicants claim to be owners of property bearing Sy.No.(R.S.No.16, 17 and 19B) CTS No.99, situated in Ward No.3, Mariyana Thimmasagara Village, Hubli Taluk, measuring 14 acres and 28 guntas, now within the limits of Hubli-Dharwad Municipal Corporation.

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The Karnataka Co-operative Textile Mills Limited was ordered to be would up by this Court, by order dated 5.11.1998 in Company Petition 149/1998 and the Official Liquidator was appointed as the Liquidator of the respondent – Company. The company in liquidation had suspended all activity long before the winding up order and the lands held by the company were sold by virtue of orders of this Court. The property referred to above was originally a Kulkarni Watan land held by the ancestors of the applicants and it was leased to M/s. Southern Maratha Spinning and Weaving Company Limited, by Sri. Vittal Annaji Deshpande, an ancestor of the petitioners in the year 1905 for a period of 99 years. In terms of the lease deed, the lessee could use the property for the purpose of spinning and weaving and on the expiry of the

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lease period, was to be handed over to the original owner or his legal heirs. The property stood in the name of his original grandfather Ranganath Vittal Deshpande after the demise of Vittal Annaji Deshpande. The original lessee – Southern Maratha Spinning and Weaving Company sold its right, title and interest in the mill including the lease hold rights in the suit property to the New Gujarat Cotton Mills Ltd., Calcutta, which in turn sold its interest in the mill including its lease hold rights to the Bharat Cooperative Textiles Mills Ltd., Hubli, renamed as Karnataka Cooperative Spinning Mills Ltd., Hubli, in the year 1959. The said company ran into financial difficulties and was shut down. The mill was leased out to G. Mahadevappa and sons for a period of 20 years by a lease deed of the year 1970. When the lease was in force, the State Government promulgated an ordinance and ultimately enacted the Karnataka Co-operative Textiles Mills (Acquisition and Transfer) Act, 1986, by virtue of which the State Government acquired right and title in the said mills and Mahadevappa and Sons Limited, Hubli and in view of the

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acquisition, the State Government stepped into the shoes of the original lessee Southern Maratha Spinning and Weaving Company Ltd., and claimed relationship of lessor and lessee between the applicants and the respondent. The Board of Industrial and Financial Reconstruction (‘hereinafter referred to as

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‘the BIFR’, for brevity) ordered for winding up of the said KCTML and appointed the Karnataka State Industrial Investment and Development Corporation Ltd. as its selling agents to sell the assets of the KCTML and G. Mahadevappa and Sons, Hubli. In view of that, the company was ordered to be wound up in the aforesaid petition Co.P.149/1998 on 5.11.1998 by this Court. By virtue of the winding up order, the lease came to an end and it is contended that the respondent was duty bound to deliver the suit property to the applicants. However, it was inexplicably brought to sale. This was challenged by way of a writ petition before this court in W.P.No.4227/1999. The writ petition was allowed by an order dated 10.01.2001 directing the Government and other respondents not to bring the property to sale unless the title of

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ownership is acquired in accordance with law. That was challenged in an appeal by the Government in W.A.966-968/2002, which was dismissed confirming the order of the Single Judge. The Government brought an amendment to the Karnataka Cooperative Textile Mills (Transfer and Acquisition) Act, 1986 under Act No.20/2005 inserting the word ‘owner’, which was not there in the parent Act. The said Amendment Act was challenged by way of a writ petition before this Court in W.P.No.55/2006 which was allowed by an order dated 5.8.2009 and the Amendment Act, 2004 was declared as null and void. Against the said order, writ appeals were filed, which were dismissed confirming the order passed by the Single Judge and the schedule property was transferred in the name of the applicants by the ADLR, Hubli, by an order dated 2.6.2007. The khatha was transferred in the name of the applicants by the Hubli-Dharwad Municipal Corporation, Hubli, on 19.04.2008 and they are paying taxes in respect of the same. This Court, in OLR 674/2005 in Company Petition 149/1998 in C.A.762/2003 of M.K. Kathere

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and another vs. M/s. Karnataka State Co-operative Textiles Mill Limited, in the similar set of facts, ordered for delivery of possession and accordingly, the possession of the property has been delivered to the owners in W.A.No.736/2010, the applicants in C.A.762/2003. Attention is also drawn to a similar company application in C.A.1112/2010, whereby this Court had ordered for delivery of possession by order dated 8.7.2011. A civil suit in O.S.No.260/2002 was filed by the petitioners in W.P.9972/2007. However, the applicants had not filed any such proceedings and therefore are before this court seeking for a direction to the respondent – company to hand over possession of the property bearing R.S.No.16, 17, 19B/CTS No.99 situated in Ward No.3, Mariyana Thimmasagar Village, Hubli Taluk measuring 14 acres 28 guntas.

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Given the above facts and circumstances and the sequence of events, the claim of the applicants is not in dispute, given the other documents in support of their claim. The Official Liquidator would also endorse that the applicants may be entitled for delivery

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of possession. Accordingly, the application is allowed. The Official Liquidator is directed to hand over possession of the property prescribed in the schedule, to the applicants.

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Sd/JUDGE

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Smt. Susheela H. Deshpande v. M/S Karnataka State Textiles Mill Ltd.

Case brief

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Smt. Susheela H. Deshpande v. M/S Karnataka State Textiles Mill Ltd.

Case brief

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