# IFCI Ltd v. Lucknow Municipal Corp. & Ors

- **Citation:** Misc. Bench No. 4517 of 2013
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-04-29
- **Case number:** Misc. Bench No. 4517 of 2013
- **Bench:** Anil Kumar, Saurabh Lavania
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ifci-ltd-v-lucknow-municipal-corp-ors-46241
- **Pages:** 38

## Headnote

Shashi Prakash Singh, Dinesh Kumar
Pathak,
Kuldeep
Pati
Tripathi,
Mudit
Agarwal, Shailendra Singh Chauhan

Civil Law-L.N.N. is owner -leased to Uptron
India Ltd.-financial need-UPTRON India Ltd.
Mortgaged the land with IFCI Ltd-NOC was
issued by L.N.N.-UPTRON committed defaultIFCI initiated action against UPTRON u/s
13(2)
SERFAISI
Act,2002-no
reply
by
UPTRON-possession
notice
issued-L.N.N.
terminated lease upon non payment-and for
being rented to third party.

Writ
by
L.N.N.
-challenging-auction
proceeding by IFCI-maintainable -remedy of
Appeal u/s17 of Act,2002 not available to
L.N.N.-neither
borrower-nor
guarantor-nor
person.

L.N.N. determined lease deed-as per terms
and conditions of lease deed-and section 111
of Act,1882-no violation.

Auction
proceeding
by
IFCI
Ltd.-not
sustainable-had
lease
hold
rights-notice
published for-selling the property and not the
lease hold rights.

Rights and Liabilities -governed by registered
lease deed-no direction can be issued to
lessor-L.N.N. to renew lease.
Auction proceedings-carried by IFCI Ltd.-
unsustainable-lease
rightly
determined
byL.N.N.-M/s.
Shalimar-bidder-entitled
to
refund of 25% of bid amount with interest
from IFCI Ltd. W.P. No. 4517 (MB) of 2013dismissed; W.P. No.2397 (MB) of 2013-
allowed. (E-9)

Cases cited:

## Text

_Characters 0–39,918 of 128,446. This is a partial read: ask again with offset=39918 for what follows._

832 INDIAN LAW REPORTS ALLAHABAD SERIES
even
without
issuing
notice
to
the
respondents."

(emphasis supplied)

35. The Division Bench of this Court
in re: Radhika Devi vs. Union of India &
others reported in [2002 (1) LBSER 949
(All)] has observed in para-2 as under-

"2. The petitioner has prayed for
family pension, which has been paid, and
now she claims interest due to late
payment. Interest is the normal accretion
on capital and it is not a penalty or
punishment. If a certain amount is payable
at a certain time, then the person to whom
it is paid in time would invest it and earn
interest. However, if there is delay in
payment then the person who retained the
money would have earned interest on the
same. Hence, he has to pay not only the
principal amount but also interest on the
same."

(emphasis supplied)

36. In view of the facts and
circumstances considered here-in-above
and also in view of the dictum of Hon'ble
Supreme Court as well as of this Court, I
am of the considered opinion that the
impugned P.P.O. dated 07.03.2019 does not
sustain in the eyes of law so far as it
calculated the total length of service of the
petitioner as 27 years instead of 33 years
and made deduction of Rs.6,93,270/-,
therefore, the same is hereby quashed.

37. A writ in the nature of mandamus
is issued commanding the opposite parties
to sanction and pay full admissible D.C.R.
gratuity on the basis of length of service of
33 years of service and also to refund the
amount of Rs.6,93,270/-, which has been
withheld, with interest at the rate of 6% per
annum.

38. The opposite parties are also
commanded that the petitioner shall be paid
all consequential service benefits, for that,
the appropriate order shall be passed by the
Competent Authority.

39. Since the denovo inquiry has not
been
conducted
by
the
Disciplinary
Authority/ Appointing Authority in terms of
judgment and order dated 28.09.2015
passed by the State Public Service Tribunal
in Claim Petition No.1086 of 2015 within
the stipulated time, therefore, no such
inquiry can be conduced against the
petitioner and the petitioner shall be treated
exonerated from the said charges.

40. The compliance of this order shall
be made within a period of two months
from the date of production of a certified
copy of this order.

41. Accordingly, the writ petition
succeeds and is allowed.
----------
(2020)03-05ILR A832
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 29.04.2020

BEFORE

THE HON'BLE ANIL KUMAR, J.
THE HON'BLE SAURABH LAVANIA, J.

Misc. Bench No. 4517 of 2013
and
Misc. Bench No. 2397 of 2013

IFCI Ltd. ...Petitioner
Versus
Lucknow Municipal Corp. & Ors.
 ...Respondents
3-5 All. IFCI Ltd. Vs. Lucknow Municipal Corp. & Ors.
833
Counsel for the Petitioner:
Apoorva Tewari, Ashish Kumar Sharma,
Ganga Sagar Misra

Counsel for the Respondents:
Shashi Prakash Singh, Dinesh Kumar
Pathak,
Kuldeep
Pati
Tripathi,
Mudit
Agarwal, Shailendra Singh Chauhan

Civil Law-L.N.N. is owner -leased to Uptron
India Ltd.-financial need-UPTRON India Ltd.
Mortgaged the land with IFCI Ltd-NOC was
issued by L.N.N.-UPTRON committed defaultIFCI initiated action against UPTRON u/s
13(2)
SERFAISI
Act,2002-no
reply
by
UPTRON-possession
notice
issued-L.N.N.
terminated lease upon non payment-and for
being rented to third party.

Writ
by
L.N.N.
-challenging-auction
proceeding by IFCI-maintainable -remedy of
Appeal u/s17 of Act,2002 not available to
L.N.N.-neither
borrower-nor
guarantor-nor
person.

L.N.N. determined lease deed-as per terms
and conditions of lease deed-and section 111
of Act,1882-no violation.

Auction
proceeding
by
IFCI
Ltd.-not
sustainable-had
lease
hold
rights-notice
published for-selling the property and not the
lease hold rights.

Rights and Liabilities -governed by registered
lease deed-no direction can be issued to
lessor-L.N.N. to renew lease.
Auction proceedings-carried by IFCI Ltd.-
unsustainable-lease
rightly
determined
byL.N.N.-M/s.
Shalimar-bidder-entitled
to
refund of 25% of bid amount with interest
from IFCI Ltd. W.P. No. 4517 (MB) of 2013dismissed; W.P. No.2397 (MB) of 2013-
allowed. (E-9)

Cases cited:

1. Jagdish Singh Vs. Heeralal & ors., (2014) 1 SCC
479

2. U.O.I. Vs. Satyawati Tondon, (2010) 3 SCC (Civ.)
260
3. Regl. Provident Fund Commr. Vs. Hooghly Mills Co.
Ltd. & ors., (2012) 2 SCC 489 at page 499,

4. Krishan Lal Vs. F.C.I. & ors., (2012) 4 SCC 786 at
page 792

5. Durga Enterprises (P) Ltd. & anr. Vs. Principal
Secy. Govt. of U.P. & Ors., (2004) 13 SCC 665 at
page 665

6. Bal Krishna Agarwal (Dr.) Vs. St. of U.P. & ors.,
(1995) 1 SCC 614
7. Ram and Shyam Co. Vs. St. of Hary. & prs., (1985)
3 SCC 267 at page 274

8.Rajasthan SEB Vs. U.O.I. & ors., (2008) 5 SCC 632
at page 633

9. Rakesh Kumar Kaushal Vs. St. of U.P. & Ors., 2019
(1) ADJ 689

(Delivered by Hon'ble Saurabh Lavania, J.)

1. Heard Sri Kuldeep Pati Tripathi,
learned counsel appearing for Lucknow
Nagar Nigam, Sri Asit Chaturvedi, Senior
Advocate, assisted by Sri G. S. Misra,
Advocate appearing for IFCI Ltd., Sri J. N.
Mathur, Senior Advocate assisted by Sri
Mudit Agarwal appearing for Shalimar
Corporation Ltd. and Sri Manjiv Shukla,
Additional Chief Standing Counsel for
State.

2. In both the connected writ
petitions, primarily, the subject matter of
dispute is the property/land measuring
2,17,936 sq. ft. of the Sullage Farm situated
at
Village
Ujariyon
Gaon,
DistrictLucknow and it appears that keeping in
view the same, both the writ petitions were
clubbed vide order dated 31.05.2003 passed
in Writ Petition No.4517 (MB) of 2013
filed by IFCI Ltd.

3. The Writ Petition No.2397 (MB) of
2013 was filed by Lucknow Nagar Nigam
(in short "L.N.N.") challenging the auction
834 INDIAN LAW REPORTS ALLAHABAD SERIES
proceedings of property/land in issue
carried out by IFCI Corporation Ltd. The
main prayers sought in the writ petition are
as under: -

"(1) Issue writ, order or direction in
the nature of certiorari for quashing of the
proceedings of the Sale of the land measuring
about 2,17,936 sq. ft. land of Sullage Farm
Situated in Village-Jagauli (earlier villageUjariyaon) leased out to M/s Uptron Digital
System Limited (M/s. Uptron India Ltd.), after
summoning the same.

(2) Issue writ, order or direction in
the nature of mandamus commanding the
opposite parties to stop further proceedings of
confirmation of Sale of the land measuing about
2,17,936 sq. ft. land of Sullage Farm situated in
Village-Jugauli
(earlier
Village-Ujariyaon)
leased out to M/s Uptron Digital System
Limited (M/s Uptron India Ltd.)."

4. The Writ Petition 4517 (MB) of 2013
was filed by IFCI Ltd. challenging the order
dated
20.03.2013,
whereby
the
L.N.N.
determined/terminated
the
lease
of
the
property/land in issue with effect from
19.06.2013 and the order dated 06.04.2013,
whereby the L.N.N. has refused to accept the
arrears of lease rent which was deposited by
IFCI Ltd. During the pendecy of writ petition
the relief for quashing of the order dated
19.06.2013 (Annexure No.20A to the writ
petition) was added through amendment. The
main prayers sought in the writ petition are as
under:-

"To issue a writ, order or direction in
the nature of certiorari to quash the impugned
orders dated 20.03.2013 and 06.04.2013.

To issue a writ, order or direction in
the nature of certiorari to quash the impugned
order dated 19.06.2013.

To issue a writ, order or direction in
the nature of mandamus commanding the
Lucknow Municipal Corporation not to
interfere in the enjoyment of lease hold rights of
the property in question by the petitioner.
To issue a writ, order or direction in the nature
of mandamus commanding the Lucknow
Municipal Corporation to consider the renewal
of the lease in respect of the property in
question in favour of the petitioner."

5. It is relevant to clarify here that the
order dated 20.03.2013, under challenge in the
Writ Petition No.4517 (MB) of 2013, is in fact
is a 'Notice' determining the lease and as such
hereinafter the "Order dated 20.03.2013" is
referred as "notice dated 20.03.2013".

6. Brief facts, which lead to the filing
of the writ petitions, are as under:

7. The property/land in issue
admittedly belongs to L.N.N. In other
words, it is also not in dispute that the
L.N.N. is the owner of the property/land in
issue. The property/land in issue was leased
out to Uptron India Ltd. The lease deed was
executed on 23.05.1985 for a period of 30
years on payment of Rs.25,06,285 as a
premium and as per term of the lease deed
the Uptron India Ltd. the lessee was
required to pay the lease rent by the end of
month of April each year in advance and
any failure in making of such payment of
rent regularly in advance by the end of
month of April each year shall render the
lease deed terminable by the lessor/L.N.N.
by giving only three months notice to the
lessee through registered post to the
registered office of Uptron India Ltd. The
relevant part of the lease deed on
reproduction reads as under:

"NOW
THEREFORE
it
is
mutually agreed and consented between the
lessor and the lessee that in consideration
of the said premium of Rs.22,06,265/-
3-5 All. IFCI Ltd. Vs. Lucknow Municipal Corp. & Ors.
835
(already paid by the lessee to the lessor in
three
installments
by
three
cheques
aggregating to Rs.25,06,265/- as stated
above the receipt of which as already
stated
above,
the
lessor
hereby
acknowledges with the liability of refunding
Rs.3,00,000/- as stated above) and in
consideration of the rent of Rs.25,062.65/-
(Rs.Twenty five thousand sixty two and
Paise sixty five) only per annum payable
from the date of handing over the
possession of the land hereby demised, and
in consideration of the mutually agreed
terms and conditions contained herein, the
Lessor does hereby grant to the lessee the
lease of the said plot of land of its Sullage
Farm in Village Ujariyaon, Lucknow
rectangular in shape measuring 2,17,936
sq. ft. more particularly described in the
scheduled below and for clarity shown by
red lines in the plan attached herewith on
the following terms and conditions:-

1. That this lease of the said
measuring 2,17,936 sq.ft. with all its
advantages and disadvantages what so ever
is hereby granted for a term of 30(thirty)
years from .....x... the date on which the
possession of the plot of land hereby
demised was handed over by the Lessor to
the Lessee with two rights of renewal for a
similar term of 30 (thirty) years on each
renewal on the same terms and conditions
provided that no premium shall be
chargeable on any of the two renewals but
the rent will be enhanced with due regard
to market value subject to a maximum of
50% of the rent payable before the due date
for the renewal.

2. That the rent of Rs. 22,062.65
(Rs. Twenty two thousand sixty two & paise
sixty five) only which is calculated as on
the reduced premium of Rs,22,06,265/- for
the period from the date of handing over
the possession aforesaid to 31.03.1985 the
date of end of the financial year 1984-85
will be paid up by the lessee to the lessor
through Bank draft at the time of
presentation of this deed of lease for
Registration and thereafter the rent of each
year shall be paid up by the lessee to the
lessor by Bank Draft latest by the end of the
month of April each year in advance the
first such advance payment being payable
by the end of April 1985 and any failure in
making such payment of rent regularly in
advance by the end of April each year shall
render this lease terminable by the lessor
by only three months notice and sending
such notice by registered post to the lessee
to its Registered Office shall be deemed to
be sufficient service.

3. That the lessee shall be entitled
to errect a building or buildings without
houses etc. on the land hereby demised
after getting its plan sanctioned by the
Lucknow
Development
Authority
in
accordance with law and shall be entitled
to use subject of limitations if any under the
law enforce the buildings so errected and
the land hereby deminised for any of the
objects and/or purpose authorised by its
constitution under which the Lease has
been create and constituted by the
Government. Provided that the Lessee shall
not use the premises aforesaid for any
purposes or in any manner which may
become and nuisance to the neighbourers
or the people living in the neighbourhood.

4. That in consideration of the
Lessee having agreed to absolve the Lessor
and to take upon itself the responsibility of
filling up and/or raising the level of the
land hereby demised at its own cost
according to its own desire and needs, the
Administrator had agreed to reduce the
total
amount
of
the
premium
from
Rs.25,06,265/-
to
Rs.22,06,265/-
and
because, this change, in the initial
agreement was affected by as agreement
subsequent to the said three payments the
836 INDIAN LAW REPORTS ALLAHABAD SERIES
Lessor agreed and hereby agrees to refund
Rs.3,00,000/- to the lessee within one
month of the date or presentation of the
deed of lease for registration.

5. That with effect from ......x.....
the date of handing over the possession of
the land hereby deminised to the lessee, the
responsibility and liability of paying up
besides the rent hereby reserved all cesses,
taxes assessments and levies etc. existing or
future whatsoever in respect of or attaching
to the land hereby deminised or to any
buildings and structures that may be
erected or re-errected thereon shall all be
absolutely of the Lessee alone and the
lessee hereby agrees to discharge the said
liabilities by full regular payments to the
authorities concerned including the Nagar
Maha Palika Lucknow.

6. The lessee shall be fully
entitled without the requirement of the
consent of the Lessor to enter into the
agreements of Collaboration or similar
agreements with others or agreements to
under let or sublet to subsidiary Companies
or Ancillaries permitting these portions the
user of the land hereby demised or of the
building
and
structures
thereon
in
connection with the legitimate business
objects and activities of the lessee. Any
permission or collaboration stipulated
above shall be intimated to the lessor
within one month of entering into such
agreement.

7. That it shall be lawful for the
lessor or any one authorised in this respect
to enter on or upon land hereby demised or
the buildings or structures thereon from
time to time to inspect the same and to
bring to the notice of the Lessee any matter
which may be considered undesirable by
the lessor and to remove or discontinue any
such thing whereupon the same shall be
discontinued or removed unless the matter
be amicably settled.

8. That any default on the part of
the lessee in respect of any of the terms and
conditions required to herein to be carried
out or discharged by or on the part of the
lessee notwithstanding any previous waiver
of any such default shall entitle the lessor
to terminate this lease even before the
expiry of the said terms of 30 years by
notice of three months only.

9. That on the expiry of the terms
of this case, if no renewal is obtained, or on
sooner determination of this lease by notice
as provided herein the Lessee shall be
bound to remove all the buildings and
structures aforesaid and their materials
from the land hereby demised within a
period of one month from the date of expiry
of the term or within the period of the
notice as the case may be and all rights of
the Lessee in respect of the building or
structure aforesaid shall come to an end at
the expiry of the said period of one month
and the Lessor shall be entitled to re-enter
on into or upon the land hereby demised on
the buildings and structures standing
thereon unless the matter is amicably
settled between the parties.

10. That any dispute or difference
arising from under or in connection with
this deed of lease may be referred by any of
the parties to the secretary L.S.G. of the
State of U.P. and to none else for his
arbitration in the matter and his decision
thereon shall be binding on both the Lessor
and the Lessee and if he refuses or neglects
to arbitrate or is otherwise incapable of
working as arbitrator the parties shall be
free to seek their remedy in a court of law."

8. In view of the undisputed facts
related to the ownership of property/land in
issue and the terms of lease deed, it would
be appropriate to mention here that the
L.N.N. did not tansferred the property/land
in issue in favour of Uptron India Ltd. and
3-5 All. IFCI Ltd. Vs. Lucknow Municipal Corp. & Ors.
837
being lessee the Uptron India Ltd. was
entitled to enjoy the rights of lessee as
provided under the lease deed read with the
provisions of the Transfer of Property Act,
1882 (in short "Act of 1882").

9. It is also not disputed that due to
financial needs the Uptron India Ltd.
mortgaged the property/land in issue with
IFCI Ltd. For the purposes of mortgaging
the property/land in issue, no objection
certificate dated 13.10.1987 was issued by
L.N.N.. It was issued to enable the Uptron
India Ltd. to deposit the lease deed of the
property/land in issue with Financial
Institutions/Banks for the purposes of
mortgaged and obtaining loan. The original
lease deed dated 23.05.1985 was deposited
with IFCI Ltd. and the mortgaged was
created with respect to property/land in
issue. It would be proper to mention here,
on the basis of pleadings on record, that the
Uptron India Ltd. took the financial
assistance from IFCI Ltd., IDBI Bank,
State Bank of India, for which, property in
question was mortgaged as security.

10. Needless to say that the
mortgaged was/is permissible as per the
provisions of Section 108 (j) of the Act of
1882 and such mortgaged can be made by
deposit of title deed as provided under
Section 58 of the Act of 1882. In view of
Section 108 (j) of the Act of 1882 the
lessee
i.e.
Uptron
India
Ltd.
was
empowered to transfer the lease hold rights.
In view of the Section 108 (j) of the Act of
1882 a lessee is not empowered to transfer
more than the rights available to him under
the lease deed.

11. It is further undisputed that the
Uptron India Ltd. committed default in
payment of its dues and as such the loan
account(s) with above mentioned Financial
Institutions became a Non Performing
Assets (NPA). For recovery of due amount
a
meeting
was
held
between
the
representative
of
secured
creditors,
Managing Director of Uptron India Ltd.
and Principal Secretary, Department of
Information and Technology, Government
of U.P. on 17.01.2012. Thereafter a
meeting of creditors was again held on
23.04.2012 and it was decided therein that
IFCI Ltd. would initiate action under the
Securitization
and
Reconstruction
of
Financial
Assets
and
Information
of
Security Interest Act, 2002 (in short "Act of
2002"). It is also stated in writ petition filed
by IFCI Ltd. that in furtherance to the
decision dated 23.04.2012 the State Bank
of Patiala and IDBI Bank gave their
consent in terms of Section 13 (9) of the
Act of 2002. The IFCI Ltd. also called
upon vide letter dated 02.05.2012 Uptron
India Ltd. to make payment in terms of One
Time Settlement (in short "OTS"). The
amount i.e. Rs.13.90 crores, of OTS was
also communicated by the IFCI Ltd. to the
Uptron India Ltd. vide letter dated
22.05.2012. In absence of any response
from the Uptron India Ltd. as also on
account of non payment of due amount in
terms of OTS the IFCI vide letter dated
01.08.2012 revoked its offer for OTS. After
revoking the offer of OTS the IFCI Ltd.
proceeded under the Act of 2002 and issued
the notice dated 02.08.2012 under Section
13 (2) of the Act of 2002 to Uptron India
Ltd. and its guarantor, the U.P. Electronics
Corporation. No reply was given by the
Uptron India Ltd. to the notice dated
02.08.2012. However, the reply was given
by the guarantor, the U.P. Electronics
Corporation. The reply submitted by the
guarantor was rejected by the IFCI Ltd.
vide order dated 05.10.2012 and thereafter
the IFCI Ltd. issued the possession notice
dated 08.12.2012 with respect to the
838 INDIAN LAW REPORTS ALLAHABAD SERIES
property/land
in
issue
through
its
authorized
officer.
The
notice
dated
08.12.2012 was issued in view of Rule 8 of
Security Interest (Enforcement) Rules,
2002 (in short "Rules, 2002"). The notice
was published on 09.12.2012 in daily
newspaper (s) namely 'Times of India' and
'Dainik Jagran'. The possession notice
dated 11.12.2012 under Rule 8 (6) of
Rules, 2002 was also issued calling upon
the Uptron India Ltd. to clear its dues
within thirty days. In the notice dated
11.12.2012 it has been stated that IFCI Ltd.
would proceed under Rule 8 (5) of Rules,
2002, if Uptron fails to clear its dues. The
Uptron failed to clear the dues and
accordingly public notice dated 22.01.2013
inviting bids for sale of the mortgaged
properties including the property/land in
issue was published on 23.01.2013 in daily
newspaper(s) namely 'Times of India' and
'Dainik Jagran'. At this stage this Court
feels it proper to reproduce the contents of
possession notice dated 08.12.2012 as also
the contents of public notice dated
22.01.2013.

"Rule 8 (1) POSSESSION
NOTICE

WHEREAS IFCI Ltd. (formerly
known as Industrial Finance Corporation
of India, being secured creditor of M/s.
UPTRON India Ltd. (UIL), (Borrower) has
issued demand notice dated 2nd August,
2012 under Section 13 (2) of the
Securitization
and
Reconstruction
of
Financial Assets and Enforcement of
Security Interest Act, 2002 (Securitization
Act) calling upon the borrower to repay the
sum of Rs.140,48,74,218/-(Rupees One
hundred forty crore forty eight lakhs
seventy four thousand two hundred and
eighteen only) towards outstanding dues of
IFCI, as on 31.07.2012, with further
interest on contractual rates till payment
besides the dues of other secured creditors,
within sixty days from the date of receipt of
the said notice.

The Authorized Officer of IFCI,
under the Securitization Act and in exercise
of powers conferred under Section 13 (12)
read with rule 9 of the Security Interest
(Enforcement) Rules, 2002, demanded the
amount of Rs.140,48,74,218/-(Rupees One
hundred forty crore forty eight lakhs
seventy four thousand two hundred and
eighteen only) towards outstanding dues of
IFCI, as on 31.07.2012, with further
interest on contractual rates till payment,
besides the dues of other secured creditors
from the borrower. The borrower having
failed to repay the amount within 60 days
from the date of the said notice, IFCI
hereby gives notice to the borrower and the
public in general that the undersigned,
being the Authorized Officer appointed by
IFCI has taken possession of the property
described herein below, on this 8th day of
December, 2012, in exercise of powers
conferred on him under Section 13 (4) of
the Securitization Act, 2002 read with
Rules 6 (1) & 8 (1) of the said Rules. The
borrower in particular and the public in
general is hereby cautioned not to deal
with the property and any dealings with the
property will be subject to the charge of the
IFCI for Rs.140,48,74,218/-(Rupees One
hundred forty crore forty eight lakhs
seventy four thousand two hundred and
eighteen only) towards outstanding dues of
IFCI, as on 31.07.2012, with further
interest on contractual rates till payment,
besides the dues of other secured creditors.

"DESCRIPTION OF THE
PROPERTIES

1.
Plot
No.
A-1
UPSIDC
Industrial Area, Deva Chinhat Road,
Village Goela,Pargana/Tehsil-Malihabad,
3-5 All. IFCI Ltd. Vs. Lucknow Municipal Corp. & Ors.
839
Lucknow
Uttar
Pradesh
admeasuring
39,753 sq. mtrs or 9.82 acres (app)
together with all the buildings and
structures/erections constructed erected
thereon, plant and machinery attached to
the earth of permanently fastened to
anything attached to the earth and fixtures
and fitlings erected/installed thereon and
every part thereof, in the name of Company
viz. UPTRON India Ltd. (UIL).

2. Village Jugauli (earlier known
as Ujariyan Gaon) near Gomti Barrage,
Gomti Nagar, Lucknow Uttar Pradesh
admeasuring 8 Bigha, 2 Biswani together
with
all
the
buildings
and
structures/erections constructed erected
thereon, plant and machinery attached to
the earth or permanently fastened to
anything attached to the earth and fixtures
and fitlings erected/installed thereon and
every part thereof, in the name of Company
viz. UPTRON India Ltd. (UIL).
Date : 08.12.2012

Sd/-
Place - Lucknow

Authorized
Officer under Securitization Act"

 "PUBLIC NOTICE

(In terms of Securitization and
Reconstruction of Financial Assets and
Enforcement of Security Interest Act,
2002(SARFAESI) read with rule 6,7,8,9 of
Security Interest (Enforcement) Rules,
2002).

Pursuant to the possession taken
by the Authorized Officer under SARFAESI
Act, 2002 for recovery of secured debts of
Rs.140,48,74,218/-(Rupees One hundred
forty crore forty eight lakhs seventy four
thousand two hundred and eighteen only)
towards outstanding dues of IFCI, as on
31.07.2012,
with
further
interest
on
contractual rates till payment besides the
dues of other secured creditors, SEALED
BIDS are invited for purchase of movable
and immovable assets of two units of M/s.
UPTRON India Ltd. (UIL) at Village
Jugauli (earlier known as Ujariyan Gaon)
Near
Gomti
Barrage,
Gomti
Nagar,
Lucknow,
Uttar
Pradesh
AND
A-1,
UPSIDC Industrial Area, Deva Road,
Chinhat, Lucknow, Uttar Pradesh on AS IS
WHERE IS AND WHATEVER THERE IS
BASIS as per details given below :

Sl. No.
Particul
ars
of
Assets
Reserve
Price
(Rs.In Lakh)
Earnest
Money
Deposit
(EMD)
(Rs.In Lakh)
1.
Unit -1:
Gomti
Nagar,
Lucknow
Uttar
Pradesh
VillageJugauli
(earlier
known
as
Ujariyan
Gaon)
Near
Gomti
Barrage,
Gomti
Nagar,
Lucnow,
Uttar
Pradesh
admeasu
ring
8
Bigha,
Biswani
together
with all
the
building
s
and
structure
s/erectio
ns
construc
ted
erected
thereon,
plant
and
machine
ry
attached
to
the
7400.00
744.00
840 INDIAN LAW REPORTS ALLAHABAD SERIES
earth or
permane
ntly
fastened
to
anything
attached
to
the
earth
and
fixtures
and
fitlings
erected/i
nstalled
thereon
and
every
part
thereof.
2
Unit 2 :
UPSIDC
Industria
l
Area,
Chinhat
Road,
Lucknow
Uttar
Pradesh
Plot No.
A-1
UPSIDC
Industria
l
Area,
Deva
Chinhat
Road,
Village
Goela,
Pargana
/TehsilMalihab
ad,
Lucknow
Uttar
Pradesh
admeasu
ring
39,753
sq. mtrs
or 9.82
acres
(app.)
together
with all
the
building
s
and
structure
s/erectio
ns
1431.00
143.10
construc
ted
erected
thereon,
plant
and
machine
ry
attached
to
the
earth or
permane
ntly
fastened
to
anything
attached
to
the
earth
and
fixtures
and
fittings
erected/i
nstalled
thereon
and
every
part
thereof.

2. Copy of tender document
containing details of assets and particulars
of terms and conditions of sale forming
part of this sale notice may be collected
from the office of Authorized Officer at
IFCI Tower, 16th Floor, 61, Nehru Place,
New Delhi-1100019 from 1st February,
2013 onwards on payment of Rs.1,000/- by
D.D./pay order favouring "IFCI Ltd."
payable
at
New
Delhi.
The
tender
document can also be downloaded from
IFCI's Website at www.ifciltd.com after 1st
February, 2013, however, the submission
of such downloaded tender document
should be accompanied by a Demand Draft
of Rs.1,000/- towards the cost of the tender
document at the time of submission of bid.

3. Interested parties shall submit
their bid for individual unit along with
Earnest Money Deposit (EMD) in the form
of demand draft/pay order in favour of
"IFCI Ltd." payable at New Delhi drawn
3-5 All. IFCI Ltd. Vs. Lucknow Municipal Corp. & Ors.
841
on any Nationalized/scheduled Bank in
sealed cover superscribed "Bid for assets of
M/s. UPTRON India Ltd., Gomti Nagar,
Lucknow, U.P." and "Bid for assets of M/s.
UPTRON
India
Ltd.,
Chinhat
Unit,
Lucknow,
U.P."
addressed
to
"The
Authorized
Officer,
Sri
Anil
Kumar
Chauhan, AVP, IFCI Ltd., IFCI Tower,
16th Floor, 61 Nehru Place, New Delhi110019". No interest shall be payable by
the Authorized Officer/IFCI Ltd. on the
EMD. The sealed bid can be dropped in the
''Tender Box' to be kept at the reception on
the ground floor of IFCI Tower, 61 Nehru
Place, New Delhi-110019 on or before
01.03.2013 by 11:30 A.M..

4. The bid so received by the
Authorized Officer shall be opened and
considered by an Asset Sale Committee
(ASC) specifically constituted for the
purpose, at 12:00 noon on 01.03.2013 at
IFCI Tower, 61 Nehru Place, New Delhi110019 in the presence of bidders who wish
to attend the auction proceedings. The
Authorized Officer may allow inter-se
bidding amongst eligible bidders as per the
terms of Tender Document. The assets shall
not be sold below the reserve price.

5. The successful bidder shall
deposit 25% of the amount of sale price
after adjusting the EMD already deposited
within two (2) working days of acceptance
of the offer by the Authorized Officer
failing which the EMD shall be forfeited.
The balance 75% of the sale price is
payable on or before 15th day of issue of
letter of acceptance conferring the highest
bid (Letter of Acceptance). If the 15th day
happens to be Sunday or a holiday the
balance 75% may be deposited on the next
working day. In case of failure to deposit
the balance amount within the prescribed
period mentioned above, the amount
deposited shall be forfeited. The Authorized
Officer reserves the right to accept or
reject any/or all the bids or to adjourn,
postpone or cancel the auction sale without
assigning any reason thereof.

6.
For
any
clarification/information, interested parties
may
contact
Shri
S.
K.
Bhandari
(09990725917)/Shri
S.
G.
Kundu
(09990725969)/Shri Anil Kumar Chauhan
(09990725738)/Shri
D.
P.
Rauhilla
(09990725916).

Place : New Delhi

Sd/-

Dated : 22.01.2013

(ANIL KR. CHAUHAN)

AUTHORIZED OFFICER

IFCI Ltd., IFCI Tower, New Delhi"

12. It is also not in dispute that in the
auction proceedings the bid of M/s.
Shalimar Corporation Ltd. (in short "M/s.
Shalimar") was accepted and IFCI Ltd. vide
letter dated 01.03.2013 directed the M/s.
Shalimar
to
deposit
25%
of
sale
consideration and 1/4th (25%) of the bid
amount
i.e.
Rs.18,64,01,000/-
was
deposited by the M/s. Shalimar.

13. On coming to know about the
auction proceedings carried out by IFCI
Ltd., the L.N.N. being aggrieved by the
auction proceedings approached this Court
by means of Writ Petition No.2397 (MB)
of 2013, for the reliefs quoted herein above,
and while entertaining the writ petition, this
Court on 19.03.2013 passed a detailed
interim order, whereby the opposite parties
to the writ petition including the IFCI Ltd.
were restrained from confirming the sale
proceedings. The interim order dated
19.03.2013 on reproduction reads as under
:-

"Yesterday i.e. on 18.3.2013,
learned Counsel for thepetitioner made a
842 INDIAN LAW REPORTS ALLAHABAD SERIES
mention that the land measuring about
2,17,936 Sq.Ft. situated in village Jugauli
(earlier
village
Ujariyaon)
hasbeen
auctioned but the sale has not been
confirmed and the lastdate of confirmation
of sale of the land in question is
20.3.2013.Therefore, it was urged that the
matter is urgent and it may betaken up
tomorrow. Accordingly, on permission
being granted bythis Court, the instant writ
petition has come up foradmission/hearing
today.

At the outset, Sri S.K. Kalia,
Senior Advocate, appearing onbehalf of the
petitioner submits that he may be permitted
toimplead the auction purchaser i.e.
Shalimar Corps. Ltd., Lalbagh,Lucknow as
opposite party No.5 in the array of the
oppositeparties as he is necessary party.

Let him do so during the course
of the day.

Issue notice.

Notice on behalf of opposite party
No.1 has been acceptedby the Chief
Standing Counsel, whereas notice on
behalf ofopposite parties Nos. 2 and 3 has
been accepted by Sri G.S.Misra, Advocate
and on behalf of opposite party No.4 by
SriSanjay Bhasin. On behalf of opposite
party No.5, appearance hasbeen put in by
Sri Vishal Dixit,
Heard learned Counsel for the parties and
perused the records.

Through the instant writ petition
under Article 226 of the Constitution of
India,
the
petitioner
challenges
the
proceedings
ofthe
sale
of
the
land
measuring about 2,17,936 Sq. Ft. situated
atVillage
Jugauli
(earlier
known
as
Village-Ujariayon), which hasbeen leased
out to M/s UPTRON Digital System
Limited (M/s UPTRON India Ltd.). It has
also been prayed that opposite partiesmay
be directed to stop the further proceedings
of confirmation ofSale of the land in
question.

According to the petitioner, land
in question belongs toNagar Nigam Ltd.,
which was leased out to M/s UPTRON
India Ltd.by the erstwhile Nagar Maha
Palika, Luckow on 23.5.1985 for aperiod of
30 years on payment of Rs.25,06,285/- as
premium andfurther M/s UPTRON India
Ltd. was required to pay Rs.22,062.65per
year as lease rent. According to him, M/s
UPTRON IndiaLtd./Company registered
under the Companies Act, 1956 and
anundertaking of Government of Uttar
Pradesh, applied for certainloan and cash
credit facilities from certain Banks and
financialinstitutions, to which State Bank of
India required 'No ObjectionCertificate' for
creating equitable mortgage pertaining to
land inquestion vide letter dated 14.9.1987.
The erstwhile Nagar MahaPalika, Lucknow
granted 'No Objection Certificate' on
13.10.1987for
equitable
mortgage.
Thereafter, certain loan and financial
assistance was granted to M/s UPTRON
India Ltd. Of late, M/sUPTRON India Ltd.
became sick and as such, Company
wasreferred
to
BIFR
on
20.7.1994.
Therefore, M/s UPTRON India Ltd.did not
pay lease rent since 1998.

Learned
Counsel
for
the
petitioners submits that even afternot
paying the lease rent since 1998 as per the
terms
andconditions
of
the
lease
agreement, the petitioner did not take
anyaction against M/s UPTRON India Ltd.
as
M/s
UPTRON
India
Ltd.
isan
undertaking of U.P. State Government.
However, all of asudden, vide letter dated
11.3.2013,
M/s
UPTRON
India
Ltd.informed the Municipal Commissioner,
Nagar Nigam, Lucknow thatthe Company
has taken a loan of Rs.9.70 Crores in 198687 as along term loan from different banks
and financial institutions suchas I.F.C.I,
3-5 All. IFCI Ltd. Vs. Lucknow Municipal Corp. & Ors.
843
I.D.B.I., State Bank of India and State Bank
of Patialabut due to financial crunch, the
Company could not repay thedebts and
interest also and as such, the said Bank had
publisheda notice in Newspaper 'Dainik
Jagran'
dated
8.12.2012
for
takingpossession of the building of M/s
UPTRON India Ltd. andthereafter on
22.1.2013, notice was also published, by
which thebuilding was put to sale by
inviting tender.

Learned
Counsel
for
the
petitioner submits that though the 3I.F.C.I.
Ltd. was fully aware that building of M/s
UPTRON IndiaLtd. is situated on the land
belonging to Lucknow Nagar Nigamand the
property was under lease with certain
conditions butneither M/s UPTRON India
Ltd. nor I.F.C.I. Ltd. brought to thenotice
of the petitioner that the land belonging to
the LucknowNagar Nigam has been taken
possession by the I.F.C.I. Ltd. underRule 8
(1) of the Security and Reconstruction of
Financial
Assetsand
Enforcement
of
Security
Interest
Act,
2002
[hereinafterreferred to as the "Act"], which
is in violation of the provisions ofSection 6
(1) of the Act. Thus, the entire action has
been donebehind the back of the Luckow
Nagar Nigam.

Learned
Counsel
for
the
petitioner submits that the auctionof the
property in question was done on 1.3.2013
but till date thesame has not been
confirmed.

Sri
Sanjay
Bhasin,
learned
Counsel for the opposite partyNo.4 submits
that as stated by the petitioner's counsel,
the matterhas been referred to BIFR,
wherein the matter was reserved onceupon
a time but subsequently, it was released
and the matter hasbeen fixed for 18.4.2013.
He
submits
that
in
the
said
proceedings,IFCI Ltd. is also one of the
parties and as such, the conduct ofIFCI
Ltd. is dubious and not on board.
Therefore, the entireexercise has been done
in a haste manner by the IFCI Ltd.

Sri G.S. Misra, learned Counsel
for the opposite parties Nos.2 and 3 has
filed a counter affidavit. The same is taken
on record. He has raised a preliminary
objection that the petitioner has got equally
efficacious alternative remedy by filing
Securitization Application under Section 17
of the Act before the Debts Recovery
Tribunal. He further submits that lease
deed, which was executed by the petitioner
in favour of M/s UPTRON India Ltd. was
for 30 years only and the same is going to
expire in the year 2015 andas such, M/s
UPTRON India Ltd. has no right.

Per contra, Sri S.K. Kalia, Senior
Advocate, appearing onbehalf of the
petitioner submits that due to nonavailability of thePresiding Officer, Debts
Recovery
Tribunal,
Lucknow,
itsjurisdiction is attached with Debts
Recovery
Tribunal,
Jabalpur
andthe
Presiding
Officer,
Debts
Recovery
Tribunal, Jabalpur hasearmarked two days
in a month to hear the cases of
DebtsRecovery Tribunal, Lucknow. He
further submits that the opposite parties
Nos. 2 and 3 are adament to confirm the
sale of the landin question by fixing
20.3.2013 as date of confirmation of sale
andas such, the petitioner has no option but
to approach this Courtunder Article 226 of
the Constitution of India.

Sri Vishal Dixit, learned Counsel
for the auction purchaseri.e. opposite party
No. 5 submits that in the auction notice,
whichhas been published, it was not made
clear as to what would bethe status of the
auction purchaser i.e. whether he has been
givenlease right or free hold right till 2015
as the term of the lease isgoing to expire in
the year 2015. He submits that he has
onlydeposited 1/4th amount at the time of
844 INDIAN LAW REPORTS ALLAHABAD SERIES
bidding and the Bank hasassured him to
consider the matter thereafter.

At this stage, a specific query was
put to learned Counselfor the opposite
parties Nos. 2 and 3 that since the lease of
theland in question is going to expire in the
year 2015, as such, whatis the status of the
auction purchaser, to which learned
Counselfor the opposite parties Nos. 2 and
3 submits that he may beallowed some time
to file an affidavit to this effect.

Under the circumstances, we
direct the parties to filerespective affidavits
by tomorrow.

Since the confirmation of the sale
of the property inquestion is going to expire
tomorrow, as such, as an interimmeasure,
we restrain the opposite parties from
confirming thesale of the property in
question.

List/put
up
tomorrow
i.e.
20.3.2013."

14. Thereafter on 20.03.2013 the
L.N.N. determined/terminated the lease of
the land leased out to the Uptron India Ltd.
on 23.05.1985. The reasons for termination
of lease was non payment of lease rent
from 1997-98. It is also stated in the notice
dated 20.03.2013 that the Uptron India Ltd.
has violated the term no.6 of lease deed, as
the Uptron India Ltd. had used the property
for the purposes other than those for which
it was leased out and the parts of the
property were rented out to third parties in
an unauthorized manner and no information
regarding the same was given to the
L.N.N., as required under the lease deed.

15. According to term no. 6 of lease
deed, the lessee-Uptron India Ltd. was
entitled to entering into the agreements of
collaboration or similar agreements with
others or agreements to under let or sub-let
to subsidiary Companies or Ancilliaries
Companies permitting the use of portion of
property leased out to the Uptron India Ltd.
including building and structure thereon in
connection with business objects and
activities of lease. However, as per the
same term, the Uptron India Ltd. was under
obligation to intimate the L.N.N. within
one month from the date of entering into
agreement, as provied in term no.6 of lease
deed.

16.