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of <h1>Court upholds GIDC's land ownership, denies State's appeal, orders land use facilitation.</h1> <h3>THE LIQUIDATOR PETROFILS CO. OPERATIVE LTD (IN LIQUIDATION) Versus INDUSTRIAL DEVELOPMENT BANK OFINDIA LTD (IDBI LTD) & 21</h3> THE LIQUIDATOR PETROFILS CO. OPERATIVE LTD (IN LIQUIDATION) Versus INDUSTRIAL DEVELOPMENT BANK OFINDIA LTD (IDBI LTD) & 21 - TMI Issues Involved:1. Appointment and Role of the Liquidator2. Land Acquisition and Vesting3. Financial Crisis and Liquidation of the Society4. Debt Recovery Tribunal (DRT) and Debts Recovery Appellate Tribunal (DRAT) Proceedings5. Application of the Securitisation Act6. Constitution and Functioning of the Sale Committee7. Review Application by the State Government8. Legal Ownership and Vesting of Acquired Land9. Public Purpose and Change of Land Use10. Auction Sale and Confirmation11. Role of Gujarat Industrial Development Corporation (GIDC)Detailed Analysis:1. Appointment and Role of the Liquidator:The petitioner was appointed as the Liquidator under Section 90(1) of the Multi-State Cooperative Societies Act, 2002. The petitioner is not an Official Liquidator nor envisaged under the Companies Act, 1956. The Liquidator was tasked with finalizing the liquidation of the Society as per the Central Registrar's directive.2. Land Acquisition and Vesting:The land required for establishing Petrofils industry and township was acquired by the State Government under the Land Acquisition Act, 1894. The entire cost of acquisition and compensation was borne by GIDC, and the land vested in GIDC free from all encumbrances as per Section 30(2) of the Gujarat Industrial Development Act, 1962.3. Financial Crisis and Liquidation of the Society:Petrofils Co-operative Limited faced severe financial crises leading to the shutdown of its plants. The Government of India decided to wind up the Society, and a Liquidator was appointed on 11.4.2001 to finalize the liquidation.4. Debt Recovery Tribunal (DRT) and Debts Recovery Appellate Tribunal (DRAT) Proceedings:Creditors filed applications before the DRT, Ahmedabad for recovery of dues. The DRT directed the Liquidator to pay the decreed amount to IDBI, which was challenged before the DRAT. The appeals were admitted, and interim stay was granted.5. Application of the Securitisation Act:IDBI issued a notice under Section 13(2) of the Securitisation Act on 16.8.2007 to recover dues. The Liquidator challenged this notice, leading to the constitution of a Sale Committee by the Court to prevent further erosion of the Society's assets.6. Constitution and Functioning of the Sale Committee:The Court constituted a Sale Committee on 12.12.2008 to oversee the sale of the Society's assets. The Committee included representatives from financial institutions, banks, unsecured creditors, NCDC, and the Department of Chemicals & Petrochemicals. The Committee was responsible for obtaining valuation reports and conducting the auction sale.7. Review Application by the State Government:The State Government filed a review application on 15.10.2013, arguing that the land acquired for public purpose could only be used for another public purpose with prior State approval. The State and GIDC were not initially made parties to the writ petition.8. Legal Ownership and Vesting of Acquired Land:The Court held that the land vested in GIDC free from all encumbrances as per Section 30(2) of the GID Act. The State Government's contribution of Rs. 1,000/- did not confer ownership rights. The land never vested in the State under Section 16 of the LA Act as the State never took possession.9. Public Purpose and Change of Land Use:The land was acquired for public purposes, and the public purpose was not changed by the auction purchasers. The Court noted that once land vests in GIDC, it can be used for any public purpose. The auction purchasers intended to use the land for industrial and residential purposes, consistent with the original public purpose.10. Auction Sale and Confirmation:The auction sale was conducted under the supervision of the Court and confirmed in favor of the highest bidders. The sale proceeds were deposited with the Court and later released to the Liquidator for distribution among secured creditors. The Court found no irregularities in the auction process.11. Role of Gujarat Industrial Development Corporation (GIDC):GIDC, as the absolute owner of the land, had the authority to lease and transfer the land. The Court directed GIDC and other authorities to expedite the formalities for the auction purchasers to use the land as intended.Conclusion:The Court dismissed the State Government's review application, affirming that the land vested in GIDC and the auction sale was valid. The Court directed GIDC and other authorities to complete the necessary formalities for the auction purchasers to utilize the land. The State Government's request for a stay of the judgment was rejected.
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