# OSWAL FATS AND OILS LIMITED v. ADDITIONAL COMMISSIONER (ADMINISIRATION), BAREILLY DIVISION, BAREILLY AND OTHERS

- **Citation:** [2010] 5 S.C.R. 927
- **Court:** Supreme Court of India
- **Decided:** 2010-04-01
- **Case number:** Civil Appeal No. 7962 of 2002
- **Bench:** G.S. Singhvi, Asok Kumar Ganguly
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/oswal-fats-and-oils-limited-v-additional-commissioner-adminisiration-bareilly-26802
- **Pages:** 43

## Headnote

U.P. Zamindari Abolition and Land Reforms Act, 1950:
s. 154 - Restriction on transfer by bhumidhar - Purchase .
A
B
c
of 40.45 acres land in certain villages through different sale
deeds by a Company -: Order of Collector and Additional
Commissioner that Company entitled to retain only 12.50
acres - Purchase of the remaining land measuring 27. 95 D
acres in violation of ss. 1541167 and would vest in State
Government - Upheld by High Court - Company and State
Government entered into lease agreement whereby Company
took 27.95 acres land on lease from Government by
conceding that it had purchased excess land in violation of E
s. 154(1) and the same vested in State Government -
Company withheld the lease agreement from Additional
Commissioner, High Court and this Court - No prayer made
to lead evidence to prove that purchase not in violation of s.
154(1) - No grievance that order of Collector was violative of
natural justice - Collector was right in relying upon the written
F
statement filed on behalf of Company admitting violation of
s. 154 - By execution of lease agreement, object and purpose
of the Act and order passed by Collector, stood.frustrated -
Thus, State Government directed not to renew lease of the
Company after 30 years and deal with excess land as per the G
provisions of the Act.
s. 154(1) - Word 'person' appearing in s. 154(1) -
Construction of - Held: It cannot be construed in a manner
I
927
H
928
SUPREME COURT REPORTS
[2010] 5 S.C.R.
A
which would defeat the object and the purpose of legislation
- Word 'person' includes any company or association or body
of individuals, whether incorporated or not - Co-operative
society is also included by virtue of explanation to s. 154(1)
- Words and phrases.
B
Interpretation of statutes: Use of word 'include' in
interpretation clause - Held: Is used to enlarge the meaning
of the words or phrases occurring in the body of the statue -
When it is used, those words or phrases must be construed
as comprehending, not only such things, as they signify
C
according to their natural import, but also those things which
the interpretation clause declares that they shall include -
Words and phrases.
Practice and procedure: Concealment of material facts
D - Effect of - Held: Such person has no right to be heard on
the merits of his grievance - Court not only has the right but
a duty to deny relief to such person.
Costs: Imposition of - Aggrieved party not approaching
E
quasi judicial and judicial forums including this Court with
clean hands and obtaining interim orders - Issuance of
direction to pay Rs.2 lacs as costs .
. The appeJICfnt-company proposed to set up a paper
project It authorized Kamal Oswal (Director), T.R. Sharma
F
{General Manager) and Jai Prakash Kaushal (Authorised
Signatory) of the company to negotiate and finalise the
purchase of land. An application was filed on behalf of
the appellant for grant of permission uls. 154(2) of the
U.P. Zamindari Abolition and Land Reforms Act, 1950 for
G purchase of land in excess of 12.5 acres. However,
without waiting for the permission, the appellant
purchased 40.45 acres land through different sale deeds.
The State Government filed suits challenging the transfer
of land in favour of the appellant. In the written statement,
H the appellant conceded that the land was purchased in
OSWAL FATS AND OILS LTD. v. ADDL. COMMNR., 929
BAREILLY DIVISION AND ORS.
contravention of the Act and prayed that it may be
A
allowed to retain 12.5 acres out of the disputed land. The
Collector and the Additional Commissioner declared that
the purchase made by the appellant in excess of 12.50
acres is against the provisions of ss. 154/167 of the Act
and it would be entitled to retain only 12.50 acres and the
B
remaining land measuring 27.95 acres would vest in the
State Government. The Single Judge of High Court
upheld the order. Hence the present appeal.
Dismissing the appeal, the Court
HELD: 1.1. A person who does not disclose all
material facts has no righ

## Text

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[2010] 5 S.C.R. 927
OSWAL FATS AND OILS LIMITED
v.
ADDITIONAL COMMISSIONER (ADMINISIRATION),
BAREILLY DIVISION, BAREILLY AND OTHERS
(Civil Appeal No. 7962 of 2002)
APRIL 01, 2010
[G.S. SINGHVI AND ASOK KUMAR GANGULY, JJ.]
U.P. Zamindari Abolition and Land Reforms Act, 1950:
s. 154 - Restriction on transfer by bhumidhar - Purchase .
A
B
c
of 40.45 acres land in certain villages through different sale
deeds by a Company -: Order of Collector and Additional
Commissioner that Company entitled to retain only 12.50
acres - Purchase of the remaining land measuring 27. 95 D
acres in violation of ss. 1541167 and would vest in State
Government - Upheld by High Court - Company and State
Government entered into lease agreement whereby Company
took 27.95 acres land on lease from Government by
conceding that it had purchased excess land in violation of E
s. 154(1) and the same vested in State Government -
Company withheld the lease agreement from Additional
Commissioner, High Court and this Court - No prayer made
to lead evidence to prove that purchase not in violation of s.
154(1) - No grievance that order of Collector was violative of
natural justice - Collector was right in relying upon the written
F
statement filed on behalf of Company admitting violation of
s. 154 - By execution of lease agreement, object and purpose
of the Act and order passed by Collector, stood.frustrated -
Thus, State Government directed not to renew lease of the
Company after 30 years and deal with excess land as per the G
provisions of the Act.
s. 154(1) - Word 'person' appearing in s. 154(1) -
Construction of - Held: It cannot be construed in a manner
I
927
H
928
SUPREME COURT REPORTS
[2010] 5 S.C.R.
A
which would defeat the object and the purpose of legislation
- Word 'person' includes any company or association or body
of individuals, whether incorporated or not - Co-operative
society is also included by virtue of explanation to s. 154(1)
- Words and phrases.
B
Interpretation of statutes: Use of word 'include' in
interpretation clause - Held: Is used to enlarge the meaning
of the words or phrases occurring in the body of the statue -
When it is used, those words or phrases must be construed
as comprehending, not only such things, as they signify
C
according to their natural import, but also those things which
the interpretation clause declares that they shall include -
Words and phrases.
Practice and procedure: Concealment of material facts
D - Effect of - Held: Such person has no right to be heard on
the merits of his grievance - Court not only has the right but
a duty to deny relief to such person.
Costs: Imposition of - Aggrieved party not approaching
E
quasi judicial and judicial forums including this Court with
clean hands and obtaining interim orders - Issuance of
direction to pay Rs.2 lacs as costs .
. The appeJICfnt-company proposed to set up a paper
project It authorized Kamal Oswal (Director), T.R. Sharma
F
{General Manager) and Jai Prakash Kaushal (Authorised
Signatory) of the company to negotiate and finalise the
purchase of land. An application was filed on behalf of
the appellant for grant of permission uls. 154(2) of the
U.P. Zamindari Abolition and Land Reforms Act, 1950 for
G purchase of land in excess of 12.5 acres. However,
without waiting for the permission, the appellant
purchased 40.45 acres land through different sale deeds.
The State Government filed suits challenging the transfer
of land in favour of the appellant. In the written statement,
H the appellant conceded that the land was purchased in
OSWAL FATS AND OILS LTD. v. ADDL. COMMNR., 929
BAREILLY DIVISION AND ORS.
contravention of the Act and prayed that it may be
A
allowed to retain 12.5 acres out of the disputed land. The
Collector and the Additional Commissioner declared that
the purchase made by the appellant in excess of 12.50
acres is against the provisions of ss. 154/167 of the Act
and it would be entitled to retain only 12.50 acres and the
B
remaining land measuring 27.95 acres would vest in the
State Government. The Single Judge of High Court
upheld the order. Hence the present appeal.
Dismissing the appeal, the Court
HELD: 1.1. A person who does not disclose all
material facts has no right to be heard on the merits of
c
his grievance. A person who approaches the Court for
grant of r«i;!lief, equitable or otherwise, is under a solemn
obligation to candidly disclose all the material/important D
facts which have bearing on the adjudication of the
issues raised in the case. He owes a duty to the court to
bring out all the facts and refrain from concealing/
suppressing any material fact within his knowledge or
which he could have known by exercising diligence
expected of a person of ordinary prudence. If he is found
guilty of concealment of material facts or making an
attempt to pollute the pure stream of justice, the court not
only has the right but a duty to deny relief to such
person. [Paras 15] [948-E-G]
E
F
State of Haryana v. Kamal Distillery Co. Ltd. (1977) 2
SCC 431; Vijay Kumar Kathuria v. State of Haryana (1983)
3 SCC 333; Welcome Hotel and Ors. v. State of Andhra
Pradesh and Ors. (1983) 4 SCC 575; G. Narayanaswamy
Reddy (dead) by LRs. and Anr. v. Government of Karnataka
G
and Anr. (1991) 3 SCC 261; S. P. Chengalvaraya Naidu
(dead) by L.Rs. v. Jagannath (dead) by LRs. and Ors. (1994)
1 SCC 1; Agricultural and Processed Food Products v. Oswal
Agro Furane and Ors. (1996) 4 SCC 297; Union of India and
others v. Muneesh Suneja (2001) 3 SCC 92; Prestige Lights
H
930
SUPREME COURT REPORTS
[2010) 5 S.C.R.
A Ltd. v. State Bank of India (2007) 8 SCC 449; Sunil Poddar
and Ors. v. Union Bank of India (2008) 2 SCC 326; K.D.
Sharma v. Steel Authority of India Ltd. and Ors. (2008) 12
SCC 481; G. Jayshree and others v. Bhagwandas S. Patel
and Ors. (2009) 3 sec 141; Dalip Singh v. State of U.P. and
s Ors C.A. No. 523912002 decided on 3.12.2009; Hari Narain
v. Badri Das AIR 1963 S.C. 1558, referred to.
R. v. Kensington Income Tax Commissioner (1917) 1 KB
486, referred to.
c
1.2. After one year and five months of passing of
order by the Collector, the appellant and the State
Government entered into a lease agreement dated
15.10.1994 whereby the latter agreed to give excess land
measuring 27.95 acres to the appellant on lease for a
D period of 30 -years at an yearly rent of Rs.281.05. The
lease a~reement was signed on behalf of the appellant
by the Director and the General Manager (Liaison). In the
lease agreement, the lessee-appellant candidly admitted
that transfers made in its favour by the Bhumidhars were
E contrary to s. 154 of the Act and were void and, as such,
land vested in the State Government uls. 167. [Para 13]
[946-F-H; 947-A]
1.3. The lease agreement was not brought to the
notice of the Additional Commissioner and the Single
F Judge of the High Court and neither of them was
apprised of the fact that the appellant had taken 27.95
acres land on lease from the Government by
unequivocally conceding that it had purchased excess
land in violation of s. 154(1) of the Act_ and the same
G vested in the State Government. In the list of dates and
the memo of special leave petition filed in this Court also
there is no mention of lease agreement dated 15.10.1994.
This shows that the appellant has not approached the
Court with clean hands. The withholding of the lease
H agreement from the Additional Commissioner, the High
OSWAL FATS AND OILS LTD. v. ADDL. COMMNR., 931
BAREILLY DIVISION AND ORS.
Court and this Court appears to be a part of the strategy
A
adopted by the appellant to keep the quasi-judicial and
judicial forums including this Court in dark about the
nature of its possession over the excess land and make
them believe that it has been subjected to unfair
tre9tment. If the factum of execution of lease agreement
B
.and' Its contents were disclosed to the Additional
Commissioner, he would have definitely incorporated the
same in order dated 30.5.2001. In that event, the High
Court or for that reason this Court would have non-suited
the appellant at the threshold. However, by concealing a c
material fact, the appellant succeeded in persuading the
High Court and this Court to entertain adventurous
litigation instituted by it and pass interim orders. If either
of the courts had been apprised of the fact that by virtue
of lease deed, the appellant has succeeded in securing
D
temporary legitimacy for its possession over excess land,
then there would have been no occasion for the High
Court or this Court to entertain the' writ petition or the
special leave petition. [Para 14] [947-F-H; 948-A-D]
2.1. The appellant in his written statement filed before
E
F
the Collector admitted that land had been purchased
without waiting for the permission of the Government
under the belief that permission will be granted for
establishing the industry. Not only this, it was candidly
stated that the appellant has no objection if any legal
action is taken with regard to land in excess of 12.50
acres. In the proceedings of the suits, no prayer was
made on behalf of the appellant for permission to lead
evidence to prove that the purchase made by it from
Bhumidhars was not in violation of Section 154(1) of the
G
Act. Before the Additional Commissioner and the High
Court, the appellant did not make a grievance that the
Collector had passed order without giving it a reasonable
or effective opportunity of hearing. Thus, the appellant
cannot now contend that the Collector did not act in
H
932
SUPREME COURT REPORTS
(2010] 5 S.C.R.
A consonance with the rule of audi alteram partem. (Para 21)
(953-A-D]
2.2. Though, the counsel for the appellant made
strenuous efforts to convince the Court that TR had no
B authority to make tacit admission of the illegality
committed in the purchase of land and that he had no
right to make an offer for surrender of excess land, but it
is not impressing. A reading of resolution dated
14.10.1991 makes it clear that TR, the then General
Manager of the appellant was authorised to take all
C actions necessary for transfer of land. That apart, in vievy
of lease agreement dated 15.10.1994, which was not
produced by the appellant before the Additional
Commissioner, the Single Judge of the High Court and
even this Court (for the first time, the lease agreement
D came to the fore when a copy thereof was annexed with
the counter affidavit filed on behalf of the respondent),
challenge to the competence of TR to make an admission
that the land was purchased by the appellant without
waiting for the State Government's permission and that
E appropriate legal action can be taken with regard to
excess land pales into the realm of insignificance. The
counsel was at loss to explain as to how in the face of
the lease agreement, which was signed by none else than
the Director of the appellant, whose name finds mention
F in Resolution dated 14.10.1991 and General Manager
(Liaison) and which contains unequivocal admission that
the land was purchased in violation of s. 154(1) and, as
such, the transaction was void and that by virtue of s.
167, excess land vested in the State Government, it can
G be said that TR acted beyond his authority in filing the
written statement. Thus, it is not possible to find any fault
with the order of the Collector who relied upon the
written statement filed on behalf of the appellant and
declared that land in excess of 12.50 acres will vest in the
H State Government. [Para 22] (953-E-H; 954-A-C]
OSWAL FATS AND OILS LTD. v. ADDL COMMNR., 933
BAREILLY DIVISION AND ORS.
B
3.1. Section 154(1) declares that no Bhumidhar shall
A
be entitled to transfer any land other than tea gardens by
sale or gift to any person if holding of the transferee
would exceed 12.50 acres. An explanation was
;ubseq·Jently added to clarify that the word 'person' shall
include and be deemed to have included a co-operative
society on June 15, 1976. Proviso to s. 154(1) lays down
that where the transferee is a co-operative society, the
land held by it having been pooled by itS members u/s.
77(1)(a) of the Uttar Pradesh Cooperative Societies Act,
1965 shall not be taken into account for the purpose of c
computing 12.50 acres. Under sub-section (2), the State
Government is empowered to authorize transfer of land
in excess of the limit prescribed in sub-section (1) if it is
D
of the opinion that such transfer is in favour of a
registered co-operative society or an institution
established for a charitable purpose, which does not
have sufficient land for its need or the transfer is in the
interest of general public. The sub,Stantive part of subsection (3), which was added by an amendment made in
2005, lays down that every transfer of land in excess of
the limit prescribed under sub-section (1) shall require
E
prior approval of the State Governrnent. By virtue of
proviso to this sub-section, the .State Government has
been clothed with power to g~ve post facto approval on
payment of the specified amount as fine. Section 166
declares that every transfer made in contravention of the
provision of the Act shall be void. This obviously includes
F
s. 154(1). Section 167 enumerates the consequences of
void transfers. Clause (a) of Section 167(1) lays down that
a transfer which is void by virtue of SEtction 166, the
subject matter of transfer shall be deemed to have vested
G
in the State Government from the date of transfer. In
terms of Section 167(2), the Collector is entitled to take
over possession of any land or other property which ·has
vested in the State Government under sub-section (1) and
H
934
SUPREME COURT REPORTS
[2010) 5 S.C.R.
A also direct eviction of ~my person occupying such land
or property. [Para 24] [957-B-H; 958-A-B]
3.2. The submission 'that a company is not a 'person'
within the meaning of s. 154(1) of the Act and, therefore,
the restriction contained therein is not applicable to
8 transfer of land in favour of a company sans merit. A
reading of s. 3(1) of the Uttar Pradesh General Clauses
Act, 1904 makes it clear that the provisions contained in
the U.P. General Clauses Act are applicable to all Uttar
Pradesh Acts including the present Act. By virtue of s.
C 3(1) of the General Clauses Act, the definition of the word'
'person' contained in s. 4(33) will be deemed to have been
engrafted in the Act and the same cannot be given a
restricted meaning. Rather, in view of the definition
contained ins. 4(33) of the U.P. General Clauses Act, the
D word 'person' appearing ins. 154(1) would include ~ny
company or association or body of individuals, whether
incorporated or not. This is strengthened by the language
of explanation added to s. 154(1) whereby it was declare,d
that the expression 'person' shall include a co-operative
E society. The word 'include' is generally used in
interpretation clauses in order to enlarge the meaning of
the words or phrases occurring in the body of the statue
and'when it is so used those words or phrases must be
construed as comprehending, not only such_ttiings, as
F they signify according to their natural import,\but also
those things which the interpretation clause declares that
they shall include. The word 'include' is susceptible of
another construction, which may become imperative, if
the context of the Act is sufficient to show that it was not
G merely employed for the purpose of adding to the natural
significance of the words or expressions used. It may be
equivalent to 'mean and include' and in that case it may
afford an exhaustive explanation of the· meaning which
for the purposes of the Act must invariably be attached
H to those words or expressions. [Para 25) [958-C, G-H; 959A-E]
OSWAL FATS AND OILS LTD. v. ADDL. COMMNR.,
935
BAREILLY DIVISION AND ORS.
State of Bombay and Ors: v. Hospital Mazdoor Sabha
A
and Ors. AIR 1960 SC 610; CIT, A.P. v. Taj Mahal Hotel,
Secunderabad (1971) 3 SCC 550, referred to.
Dilworth v. Commissioner of Stamps (1899) AC 99,
referrej to.
3.3. The word 'person' appearing in s. 154(1) cannot
be construed in a manner which would defeat the object
and purpose of legislation. If a narrow meaning is given
to the word 'person' appearing in s. 154(1), the purpose
B
of legislation viz., abolition of zamindari and making tillers
C
owner of the land, which is in consonance with the
mandate of the object of social justice set out in the
preamble and the provisions contained in Articles 38 and
39 of the Constitution, would be substantively defeated
because in that event companies, corporations, etc. will
D
be able to grab the land of the tillers by offering them
comparatively remunerative prices and again make them
landless poor. It cannot be said that the word 'person' in
s. 154(1) means a human being or a natural person only
and that the explanation by which a co-operative society
E
was included in the said word is indicative of the
legislature's intention to give a narrow meaning to the
word 'person' The explanation instead of narrowing the
meaning of the word 'person' makes it clear that the same
would include a non-natural person. [Paras 27 and 30]
F
[960-H; 961-A-B; 966-E-F]
Poppatlal Shah v. State of Madras AIR 1953 SC 274;
S.K. Gupta and Anr. v. K.P. Jain and Anr. (1979) 3 SCC 54;
Reserve Bank of India v. Peerless General Finance and
Investment Co. Ltd. and Ors. (1987) 1 SCC 424; Central Bank
G
of India v. State of Kera/a and Ors. (2009) 4 SCC 94;
Hasmukhlal Dahayabhai and othws v. State of Gujarat and
Ors. (1976) 4 SCC 100; Raman/a/ Bhaila/ Patel v. State of
Gujarat (2008) 5 SCC 449, relied on.
H
936
SUPREME COURT REPORTS
[2010] 5 .S.C.R.
A
4. The submission that if share of the individual
Director is taken into consideration, the total land of the
appellant would not exceed 12.50 acres is to be rejected
in view of the contents of lease agreement. That apart, no
evidence was produced before the Collector or the
B Additional Commissioner to prove that the land was
purchased in the name of the Directors of the appellant.
Even before the Single Judge of the High Court and this
Court, no such evidence has been produced. [Para 31]
[966-H; 967-A-B]
c
5. The submission that a direction may be given to
the State Government to accord post facto sanction to the
purchase of excess land cannot be entertained much less
accepted because the appellant has been found guilty of
not coming to the Court with clean hands. In any case,
D in the absence of any factual foundation, such a plea
cannot be entertained at this stage. [Para 32] [968-F]
6. The appellant's grievance against the direction
given by the Single Judge to the Chief Secretary to
E ensure that possession of excess land is taken without
delay does not merit consideration because the State
Government had already granted lease of excess land to
the appellant. [Para 33] [968-G-H]
7. It is impossible to fathom any rational reason for
F this action of th.e State Government in granting lease of
excess land to the appellant ignoring that the appellant
had purchased land in patent violation of s. 154(1) of the
Act. By executing lease agreement dated 15.10.1994, the
concerned officers of the State effectively frustrated the
G object sought to be achieved by the legislature by
enacting the Act and the order passed by the Collector.
[Para 34] [968-A-B]
8. Since the appellant has not approached the quasi
H judicial and judicial forums i.e., the Additional
OSWAL FATS AND OILS LTD. v. ADDL. COMMNR., 937
BAREILLY DIVISION AND ORS.
Commissioner, the High Court and this Court with clean
A
hands and succeeded in securing interim orders, it is
ordained to pay costs, which is quantified at Rs.2 lacs.
With a view to ensure that functionaries of the State
Government may not connive with the appellant and
compound the wrong already done, the Government of
B
Uttar Pradesh is directed not to renew the lease of the
appellant at the end of 30 years period and deal with
excess land in accordance with the provisions of the Act.
[Para 35] [969-C-E]
Case Law Reference:
c
(1917) ~ KB 486
Referred to.
Para 15
(1977) 2 sec 431
Referred to.
Para 17
(1983) 3 sec 333
Referred to.
Para 17
D
(1983) 4 sec 575
Referred to.
Para 17
(1991) 3 sec 251
Referred to.
Para 17
(1994) 1 sec 1
Referred to.
Para 17
E
(1996) 4 sec 291
Referred to.
Para 17
(2001 > 3 sec 92
Referred to.
Para 17
(2007) 8 sec 449
Referred to.
Para 17
F
(2008) 2 sec 326
Referred to.
Para 17
(2008) 12 sec 481
Referred to.
Para 17
(2009) 3 sec 141
Referred to.
Para 17
AIR 1963 SC 1558
Referred to.
Para 18
G
(1899) AC 99
Referred to.
Para 25
AIR 1960 SC 610
Referred to.
Para 25
(1971) 3 sec 550
· Referred to.
Para 25
H
938
SUPREME COURT REPORTS
[2010] 5 S.C.R.
A
AIR 1953 SC 274
Relied on.
Para 26
(1979) 3 sec 54
Relied on.
Para 26
(1987) 1 sec 424
Relied on.
Para 26
B
(2009) 4 sec 94
Relied on.
Para 26
(1976) 4 sec 1 oo
Relied on.
Para 28
(2008). 5 sec 449
Relied on.
Para 29
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
C 7982 of 2002.
D
E
From the Judgment & Order dated 16.07.2001 of the High
Court of Judicature at Allahabad in Civil Misc. Writ Petition No.
25819 of 2001.
Manoj Awarup, Lalita Kohli (for M/s. Manoj Swarup & Co.)
for the Appellant.
T.N. Singh, Shekhar Raj Sharma, Chandra Prakash
Pandey, for the Resporidents.
The Judgment of the Court was delivered by
G.S. SINGHVI, J. 1. Feeling aggrieved by refusal of the
learned Single Judge of Allahabad High Court to quash orders
dated 24.5.1993 and 30.5.2001 passed by Collector, Pilibhit
F
(for short, 'the Collector') and Additional Commissioner
(Administration), Bareilly (for short, 'the Additional
Commissioner') respectively under the U. P. Zamindari
Abolition and Land Reforms Act, 1950 (for short, 'the Act'),
declaring that 27.95 acres land purchased by the appellant in
G Shahi and Khamaria Pul villages of District Pilibhit shall vest
in the State Government, the appellant has filed this appeal.
2. The appellant is a company incorporated under Section
149(3) of the Companies Act, 1956. In 1991, the appellant
H decided to set up agro based paper projects in the State of
OSWAL FATS AND OILS LTD. v. ADDL. COMMNR.,
939
BAREILLY DIVISION AND ORS. [G.S. SINGHVI, J.]
U.P. By resolution dated 14.10.1991, the Board of Directors
A
of the appellant authorised Shri Kamal Oswal (Director), Shri
T.R. Sharma (General Manager) and Shri Jai Prakash Kaushal
(Authorised Signatory) to negotiate and finalise purchase of
land in the State of Uttar Pradesh and/or other States and
Union Territories, to sign sale deeds etc. for effective
B
acquisition/transfer of land. Paragraphs (e} and (f) of that
resolution read as under:
'To sign for and on behalf of the company all sales deeds
conveyance deeds, lntkals, Mutations and other C
documents necessary for the effective acquisition/transfer
of the land in the name of the company and for this purpose
to appear for and on behalf of the company before any
court of law, Tehsildar, Naib Tehsildar, Patwari, Registrar,
Sub Registrar of any other land transferring authority.
And to do all other acts, things and deeds for and on behalf
of the company which any of the above noted persons in
the discharge of their lawful duties consider proper and· in
the best interest of the company."
3. Soon thereafter, an application dated 24.10.1991 was
submitted on behalf of the appellant to Joint Director of
Industries, Bareilly Zone, Bareilly for grant of permission under
Section 154(2) of the Act for purchc.ise of land in excess of 12.5
acres. The relevant portions of that application are extracted
below:
D
E
F
"Our Company is proposing to set up a 100 TPD (Gross)
Agro based paper project in area adjoining villages of
Shahi Kamariapul, Adhkata Nazrana. For this project we
require about 200 Acres of land out of which about 50
G
Acres shall be in Pilibhit District and about 150 Acres in
Nawabganj Tehsil of Bareilly District.
The proposed paper project shall utilise Agricultural
wastes such as wheat Straw, Rice Straw and Bagasse
H
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[2010] 5 S.C.R.
etc. as the main raw materials. The project shall generate
direct employment opportunities for about 750 persons
and for many more indirectly. The project shall be of
special benefit to the people living in the areas near the
site.
We through this letter are applying to your office for the
permission under section 154 of ZALR Act for purchase
of land in excess of 12.5 Acres for industrial purpose. We
are enclosing two additional copies of this letter. We are
also enclosing the site plan, recommendations of Technical
/
,
Consultants for your ready reference.
We shall be pleased to furnish any other information
required by you in this connection. We wish to bring to your
kind notice that we plan to start the purchase of land for
D
this project from next month i.e. Nov. 1991."
4. However without waiting for response of the concerned
·authority, the appellant purchased 40.45 acres land in Shahi
and Khamaria Pul villages, Pargana Jahanabad, Tehsil and
E District Pilibhit through different sale deeds executed between
January and April, 1992.
5. The State of Uttar Pradesh challenged transfer of
various parcels of land in favour of the appellant by filing
identical suits under Sections 154, 167, 168A and 194 of the
F Act. The transferors, who were impleaded as parties in all the
suits did not contest the same. However, the appellant filed
identical written statements in all the cases. In first paragraph
of the written statement filed in Suit No.133 of 1993, the
appellant admitted all the paragraphs of the suit. In the
G additional statement, the appellant virtually conceded that the
land was purchased in contravention of the Act and stated that
it may be allowed to retain 12.5 acres out of the disputed land.
This is evinced from English translation of paragraphs 2 to 4
of the written statement which are reproduced below:
H
OSWAL FATS AND OILS LTD. v. ADDL. COMMNR., 941
BAREILLY DIVISION AND ORS. [G.S. SINGHVI, J.]
"2. That all the lands of both the village had been A
purchased for establishment of Industry after making the
payment to the farmers. But I had the knowledge of law in
Punjab and was not well conversant with the provisions of
U.P. Zamindari Abolition Act therefore, I purchased the
land in question which is more than 12 acres. We had
B
given an application dated 24.10.1991 to the State
Government for the permission of establishment of Industry
and only thereafter we started purchasing the land without
waiting for the permission from the Government because
we had the belief that permission will be granted to us for c
establishment of Industry.
3. That we filed application for mutation of whole of the
land under the sale and all of them had been accepted and
we continued the purchasing of land because we had the
belief that we are not violating any provision of Zamindari D
Abolition Act.
4. That the details of land which we want to keep for the
establishment of factory, measuring twelve and a half acres
out of the disputed land, are being given in the succeeding
E
paras and we have no objection for any legal action with
regard to the remaining land."
The particulars of the land suit sought to ~e retained by
the appellant were given in the affidavit of Shri T.R. Sharma. A
F
sketch map showing those khasra numbers were also filed with
the written statement.
6. By an order dated 24.5.1993, the Collector declared that
the purchase made by the appellant in excess of 12.50 acres
is against the provisions of Sections 154/167 of the Act and G
that it will be entitled to retain only 12.50 acres and the
remaining land measuring 27.95 acres would vest in the State
Government. The relevant portion of the order passed by the
·Collector is extracted below:
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[2010] 5 S.C.R.
"I have heard the arguments of Government Counsel
(Revenue) for State and the learned counsel for M/s. Oswal
Fats and Oil Limited and perused the records. After
hearing the arguments of both the parties and the perusal
of records, I have reached on the conclusion that the
defendants M/s. Oswal Fats and Oil Limited, New Delhi
have purchased the total land measuring 40.45 Acres in
Village Shahi and Khamaria Pul, Pargana Jahanabad,
Tehsil and District Pilibhit, as detailed above. However as
per the provisions of Section 154/167 of Jamindari
Abolition and Land Management Act, they can possess
only 12.50 Acres land. Therefore, the transfer of remaining
land measuring 27.95 Acres, which is in excess than 12.50
Acres, is against the provisions of Section 154/167 of Z.A.
Act. The defendant Company Oswal Fats and Oil Limited
has also given the option for 12.5() Acres land, in their
affidavit. Therefore, the remaining land except the 12.50
Acres land mentioned in the Affidavit dated 19.05.93 is
liable to t>e merged into the State."
7. The appellant questioned the order of the Collector by
E
filing revision under Section 333 of. the Act. In the memo of
revision, it was claimed that excess land was purchased under
the belief that the State Government would grant permission
under Section 154(2). It was then urged that although the Board
of Directors had given power to Shri T.R. Sharma to appear
F
before any court of law on behalf of the appellant, he was not
authorized to enter into a compromise or give consent for
retaining the particular land. Another plea taken by the appellant
was that the company consists of 8 directors and if each
Director is entitled to have a share of 12.5 acres, the purchase
G made by the appellant will not exceed the prescribed limit.
However, at the hearing of the revision petition, the plea that
Shri T.R. Sharma had filed written statement and affidavit
beyond the scope of his authority appears to have been given
up and it was submitted that the general manager had been
H
authorised to pursue the case but he did not do it properly. The
OSWAL FATS AND OILS LTD. v. ADDL. COMMNR., 943
BAREILLY DIVISION AND ORS. [G.S. SINGHVI, J.]
Additional Commissioner dismissed the revision of the A
appellapt and confirmed the order of the Collector by recording
following reasons:
"It is clear from the perusal of records that the defendants
themselves have admitted iri their objections filed before
8
the court below that the land in question had been
purchased for establishment of Industry and purchased the
land more than 12.50 acres intentionally. They have also
given the details of land which they want to keep with them
and agree for merging of remaining land into the State.
Revisionist has stated that they had given an ,application C
for obtaining the permission and it has also been admitted
that they had purchased the land in excess than 12.50
acres without waiting for the permission. In these
circumstances, the court below has correctly passed an
order for merging of 27.95 Acre land into the State, which D.
is in excess than the 12.50 acres land and this order does
not require any intervention. Therefore, the Revision, being
devoid of merits, is liable to be dismissed."
8. The appellant challenged the orders of the Collector and
E
the Additional Commissioner in Writ Petition No.25819/2001
by taking up the position that Shri T.R. Sharma was not
authorised to enter into a compromise or to make a statement
relinquishing the land in favour of the State Government. It was
also pleaded that the appellant was entitled to purchase land
F
in excess of 12.50 acres because its case is covered by the
explanation appearina below Section 154(1) of the Act.
9. The learned Single Judge rejected the argument on the
issue of lack of authority of Shri T.R. Sharma to indirectly admit
violation of Section 154(1) of the Act and to agree to surrender G
excess land by making the following observations:
":t is apparent on face of record that petitioner Company
has no authorization either general or special to hold land
in excess of 12 .50 acres by State Government. H
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[2010] 5 S C.R.
Indisputably the petitioner Company is not a Co-operative
Society registered under the Co-operativ~ Societies Act
nor petitioner Company is established for charitable
purposes. Nothing is brought to my notice that the present
Company is established in the interest of general public.
Contrary to it, there are overwhelming materials on record
and also from attending circumstances it is inferable that
the petitioner Company is an establishment established
with profit orientation for its shareholders. It is pertinent to
mention here that the petitioner Company has not
produced its certificate of registration under the
Companies Act. During the course of argument articles of
association of Nuskar Enterprises Ltd. is produced by the
learned counsel for the petitioner. It is not understandable
as to why the certificate of registration under the
Companies Act is not produced before the Court. It is also
not understandable as to how the Articles of Association
of Nuskar Enterprises Ltd. has nexus with the petitioner
Company. I am of the view that even if the affidavit dated
19.5.1993 (Annexure-7 to the writ petition) of the General
Manager of the petitioner Company giving consent to
relinquish the land in excess of 12.50 acres in favour of
State Government is ignored even then the findings of
respondents No.1 and 2 are sustainable for the reasons
given hereinabove."
F
The learned Single Judge then- referred to the provisions
of Sections 152, 154, 166 and 167 of the Act and held that the
purchase made by the appellant in excess .. ef 12.50 acres was
illegal per se and its case does not fall within the ambit of the
exceptions carved out in sub-section (2) of Section 154. The
G learned Single Judge rejected the appellant's plea that·
surrender made by Shri T.R. Sharma was unauthorized and
held that the Collector did not commit any illegality by declaring
that excess land will vest in the State Government.
Simultaneously, he gave a direction to the Chief Secretary to
H
OSWAL FATS AND OILS LTD. v. ADDL. COMMNR., 945
BAREILLY DIVISION AND ORS. [G.S. SINGHVI, J.]
ensure that possession of the excess land is taken by the
A
Government free from all encumbrances without any delay.
10. At this stage, we may mention that during the pendency
of the suits filed by the State Government before the Collector,
the appellant instituted Suit No.25/1992-93 under Section 143
of the Act, which was disposed of by Pargana Adhikari, Pilibhit
vide her order dated 12.7.1993 by declaring that 7.97 acres
land purchased by the appellant in Tehsil and District Pilibhit
was non-agricultural land.
B
11. Shri Manoj Swarup, learned counsel for the appellant
C
argued that the order passed by the Collector was vitiated due
to violation of the basics of natural justice inasmuch as the
concerned officer did not give reasonable opportunity to the
appellant to defend its case on the issue of alleged violation
of Section 154 of the Act and the Additional Commissioner and
D
the learned Single Judge gravely erred in confirming/upholding
the order of the Collector. The learned counsel further argued
that Shri T.R. Sharma, who was holding the post of General
Manager was not authorised to make any concession on behalf
of the appellant or give consent for surrendering 27.95 acres
land on the ground that the purchase of land was made in
violation of.mandate of Section 154 and the Collector was not
at all justified in acting upon the concession made by Shri T.R.
Snarma. Learned counsel then referred to Section 154 of the
Act and submitted that the embargo contained in that section
is not applicable to the appellant's case because purchase
made by a company does not fall within the ambit of that
section. The learned counsel reiterated the plea that if each
director of the company is held entitled to purchase 12.50 acres
E
F
of land, the purchase of 40.45 acres land by the appellant
G
cannot be treated as violation of Section 154(1 ). He lastly
argued that even if transfer of land in favour of the appellant is
held to be contrary to the mandate of Section 15411), the Court
may direct the State Government to accord post facto sanction
in terms of sub-section (3) of Section 154 which was inserted
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[201 O] 5 S.C.R.
A by an amendment dated 24.3.2005. Learned counsel also
criticized the direction given by the High Court to the Chief
Secretary to take possession of the excess land and submitted
that while deciding the writ petition filed by the appellant against
the orders of the Collector and the Additional Commissioner,
s the learned Single Judge was not justified in treating the case
as a public interest litigation.
12. Shri T.N. Singh, learned counsel appearing for the
respondents supported the impugned order and argued that the
C Collector did not commit any error by declaring that the excess
land will vest in the State Government because the purchase
was made by the appellant without obtaining permission in
terms of Section 154 of the Act. Learned counsel relied upon
the averments contained in the written statement filed on behalf
of the appellant in Suit No. 133/1993 and argued that after
D having indirectly admitted contravention of Section 154(1) of the
Act, the appellant did not have the locus to challenge the orders
of the Collector and the Additional Commissioner on the ground
that Shri T.R. Sharma was not authorized to give option for
retaining the particular parcels of land and the learned Single
E Judge rightly held that the transfers made in violation of Section
154 were null arid void.
13. Before dealing with the respective arguments/
submissions, we consider it appropriate to note that after one
F year and five months of passing of order by the Collector, the
appellant and the State Government entered into a lease
agreement dated 15.10.1994 whereby the latter agreed to give
excess land measuring 27.95 acres, the details of which were
given in Schedule 'A' appended to the agreement, to the
G appellant on lease for a period of 30 years at an yearly rent of
Rs.281.05. The lease agreement was signed on behalf of the
appellant by Shri Kamal Oswal, Director and Shri J.P. Kaushal,
General Manager (Liaison). In the lease agreement, a copy of
which has .been annexed as Annexure CA-1 with the counter
affidavit filed on behalf of the respondents in this Court, the
H
OSWAL FATS AND OILS LTD. v. ADDL. COMMNR.,
947
BAREILLY DIVISION AND ORS~ [G.S. SINGHVI, J.]
lessee i.e., the appellant candidly admitted that transfers made
A
in its favour by the Bhumidhars were contrary to Section 154
of the Act and were void and, as such, land vested in the State
Government under Section 167. This is.evinced from the
following paragraphs of the lease agreement:
B
"AND WHEREAS the transfers as aforesaid made by
the Bhumidhars in favour of the Lessee in respect of the
land described in Schedule 'A' hereto being in
contravention of Section 154 of the Uttar Pradesh
Jamindari Abolition and Land Reforms Act, 1950
(hereinafter called "the said Act'? were void under Section
C
166 of the said Act and consequently the said land vested
in the Government of Uttar Pradesh (hereinafter called
"the State Government'? under Section 167 of the said
Act, free from all encumbrances with effect from the date
of their transfer.
D
AND WHEREAS the lessor at the request of the Lessee
has agree to demise and land vested in the State
Government as aforementioned subject to the rights and
restrictions and the several convenants hereinafter
E
expressed for the purposes of the said project."
(emphasis supplied)
14. It is quite intriguing and surprising that the lease
agreement was not brought to the notice of the Additional
F
Commissioner and the learned Single Judge of the High Court
and neither of them was apprised of the fact that the appellant
had taken 27.95 acres land on lease from the Government by
unequivocally conceding that it had purchased excess land in
violation of Section 154(1) of the Act and the same vested in
G
the State Government.