TaxTMI 
TaxTMI 
2010 (4) TMI 962
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....er Section 149(3) of the Companies Act, 1956. In 1991, the appellant decided to set up agro based paper projects in the State of U.P. By resolution dated 14.10.1991, the Board of Directors 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 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, Intkals, Mutations and other 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." ....
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....ion 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: "2. That all the lands of both the village had been 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 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 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 Abolition Act. 4. That the details of land which we want to keep for the establishment....
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....was that the company consists of 8 directors and if each Director is entitled to have a share of 12.5 acres, the purchase 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 authorised to pursue the case but he did not do it properly. The Additional Commissioner dismissed the revision of the appellant 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 in their objections filed before 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 for obtaining the permission and it has also been admitted that they had purchased the land in excess than....
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....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." 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 of 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 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 ensure that possession of the excess land is taken by the 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 d....
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....ppellant 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 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 Judge rightly held that the transfers made in violation of Section 154 were null and void. 13. Before dealing with the respective arguments/submissions, we consider it appropriate to note that 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, the details of which were given in Schedule `A' appended to the agreement, to the 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 Osw....
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....actum of execution of lease agreement 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 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 dated 15.10.1994, the appellant has succeeded in securing 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. 15. It is settled law that a person who approaches the Court for grant of relief, equitable or otherwise, is under a solemn obligation to candidly disclose all the material/important facts which have bearing on the adjudication of the issues raised in the case. In other words, he owes a duty to the court to bring out all the facts and refrain from concealing/suppressing any material fac....
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....he case before us." Warrington, L.J. was also of the same opinion. In a concurring judgment His Lordship observed: "It is perfectly well settled that a person who makes an ex parte application to the Court - that is to say, in absence of the person who will be affected by that which the Court is asked to do - is under an obligation to the Court to make the fullest possible disclosure of all material facts within his knowledge, and if he does not make that fullest possible disclosure, then he cannot obtain any advantage from the proceedings, and he will be deprived of any advantage he may have already obtained by means of the order which has thus wrongly been obtained by him." 17. This Court and different High Courts have repeatedly invoked and applied the rule that a person who does not disclose all material facts has no right to be heard on the merits of his grievance - State of Haryana v. Karnal Distillery Co. Ltd. (1977) 2 SCC 431, Vijay Kumar Kathuria v. State of Haryana (1983) 3 SCC 333, Welcome Hotel and others v. State of Andhra Pradesh and others etc. (1983) 4 SCC 575, G. Narayanaswamy Reddy (dead) by LRs. and another v. Government of Karnataka and another (1991) 3 SCC 2....
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....made a misleading statement in the writ petition giving an impression that the tenure holder did not know of the proceedings initiated by the prescribed authority. The preface and para 21 of that judgment read as under: "For many centuries, Indian society cherished two basic values of life i.e., `Satya' (truth) and `Ahimsa' (non-violence). Mahavir, Gautam Buddha and Mahatma Gandhi guided the people to ingrain these values in their daily life. Truth constituted an integral part of justice delivery system which was in vogue in pre-independence era and the people used to feel proud to tell truth in the courts irrespective of the consequences. However, post-independence period has seen drastic changes in our value system. The materialism has over-shadowed the old ethos and the quest for personal gain has become so intense that those involved in litigation do not hesitate to take shelter of falsehood, misrepresentation and suppression of facts in the court proceedings. In last 40 years, a new creed of litigants has cropped up. Those who belong to this creed do not have any respect for truth. They shamelessly resort to falsehood and unethical means for achieving their goals. In ....
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...., Shri Manoj Swarup made strenuous efforts to convince the Court that Shri T.R. Sharma had no 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, we have not felt impressed. A reading of resolution dated 14.10.1991 makes it clear that Shri T.R. Sharma, the then General Manager of the appellant was authorised to take all actions necessary for transfer of land. That apart, in view of lease agreement dated 15.10.1994, which was not produced by the appellant before the Additional Commissioner, the learned Single Judge of the High Court and even this Court (for the first time, the lease agreement 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 Sri T.R. Sharma to make an admission that the land was purchased by the appellant without waiting for the State Government's permission and that appropriate legal action can be taken with regard to excess land pales into the realm of insignificance. The learned counsel was at loss to explain as to how in the face of the lease agreement, which was sig....
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....mputing the 5.0586 hectares (12.50 acres) land held by it. (2) Subject to the provisions of any other law relating to the land tenures for the time being in force, the State Government may, by general or special order, authorise transfer in excess of the limit prescribed in sub-section (1) if it is of the opinion that such transfer is in favour of a registered cooperative society or an institution established for a charitable purpose, which does not have land sufficient for its need or that the transfer is in the interest of general public. Explanation.- For the purposes of this section, the expression 'family' shall mean the transferee, his or her wife or husband (as the case may be) and minor children, and where the transferee is a minor also his or her parents. (3) For every transfer of land in excess of the limit prescribed under sub-section (1) prior approval of the State Government shall be necessary: Provided that where the prior approval of the State Government is not obtained under this sub-section, the State Government may on an application give its approval afterward in such manner and on payment in such manner of an amount, as fine, e....
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....uced to 12.50 acres). An explanation was subsequently added to clarify that the word `person' shall include and be deemed to have included a cooperative society on June 15, 1976. Proviso to Section 154(1) lays down that where the transferee is a cooperative society, the land held by it having been pooled by its members under Section 77(1)(a) of the Uttar Pradesh Cooperative Societies Act, 1965 shall not be taken into account for the purpose of 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 of the opinion that such transfer is in favour of a registered cooperative 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 substantive part of sub-section (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 prior approval of the State Government. By virtue of proviso to this sub-section, the State Government has been clothed with power to give post....
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....nition contained in Section 4(33) of the U.P. General Clauses Act, the word 'person' appearing in Section 154(1) would include any company or association or body of individuals, whether incorporated or not. This view of ours is strengthened by the language of explanation added to Section 154(1) whereby it was declared that the expression 'person' shall include a cooperative 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 things, as 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 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 invari....
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.... of the Act including Section 154(1), the word 'person' appearing in Section 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 Section 154(1), the purpose of legislation viz., abolition of zamindari and making tillers 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 be able to grab the land of the tillers by offering them comparatively remunerative prices and again make them landless poor. 28. At this stage, we may notice two precedents which have direct bearing on the interpretation of word 'person'. In Hasmukhlal Dahayabhai and others v. State of Gujarat and others (1976) 4 SCC 100, this Court was called upon to interpret Section 6 of the Gujarat Ceiling Act, 1961. It was argued on behalf of the appellant that the concept of person embodied in Section 6(2) was contrary to the concept of that word in second proviso to Article 331A(1) of the Consti....
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....s, the entitlement to the ceiling area would be possessed by every person, whether artificial or natural. In other words, if Section 6(2) of the Act was not there, each individual member of a family would have been entitled to hold land upto the ceiling limit if it was his or her legally separate property. This follows from the obvious meaning of the term "person" as well as the inclusive definitions given both in the Act under consideration and in the General Clauses Act. Spouses and minor children, as natural persons, have not been debarred from holding their separate rights to land by the provisions of the Act. It is not the object of the Act to do that. The object of the Act, as set out above, is twofold: firstly, to limit the ceiling area of each holder; and, secondly, to acquire what falls beyond the ceiling limit so that the State may distribute it to more needy persons. It is not disputed that compensation is provided for acquisition of what exceeds the ceiling area in every case. As was held by this Court in H.H. Kesavananda Bharati Sripadagalavaru v. State of Kerala the amount of compensation fixed cannot be questioned. Therefore, no provision of the Act could be....
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....hose things which the interpretation clause declares that they shall include. Thus, where a definition uses the word "includes", as contrasted from "means", the word defined not only bears its ordinary, popular and natural meaning, but in addition also bears the extended statutory meaning (see S.K. Gupta v. K.P. Jain following Dilworth v. Commr. of Stamps and Jobbins v. Middlesex Country Council). The ordinary, popular and natural meaning of the word "person" is "a specific individual human being". But in law the word "person" has a slightly different connotation and refers to any entity that is recognised by law as having the rights and duties of a human being. Salmond defines "person" as "any being whom the law regards as capable of rights and duties" or as "a being, whether human or not, of which rights and duties are the attributes" (Jurisprudence, 12th Edn., p. 299). Thus the word "person", in law, unless otherwise intended, refers not only to a natural person (male or female human being), but also any legal person (that is an entity that is recognised by law as having or capable of having rights and duties). The General Clauses Act thus defines a "person" as includin....
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.... persons, the members of which by custom or usage, are joint in estate and residence." 30. In view of the above, the argument of the learned counsel that the word 'person' in Section 154(1) means a human being or a natural person only and that the explanation by which a cooperative society was included in the said word is indicative of the legislature's intention to give a narrow meaning to the word 'person' is liable to be rejected. In our view, the explanation instead of narrowing the meaning of the word 'person' makes it clear that the same would include a non natural person. 31. 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 being mentioned only to be rejected in view of the contents of lease agreement. That apart, no evidence was produced before the Collector or the Additional Commissioner to prove that the land was purchased in the name of the Directors of the appellant. Even before the learned Single Judge of the High Court and this Court, no such evidence has been produced. In Ramanlal Bhailal Patel's case, this issue was considered and answered in negative in the fol....
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....ple (husband and wife) in the land, plus any other land individually held by them will have to be calculated to find out whether they held any land in excess of the ceiling limit. Therefore, the share of each appellant in the lands jointly purchased, with the addition of the lands held by his spouse, and addition of any other land held by them, will give the basis for determining the surplus land. For example, if a husband's share as co-owner is 20 acres and wife's share as co-owner is 20 acres, and their other individual holding is another 10 acres (all of the same category in 'C' Class), the total holding of the family will be 50 acres (20+20+10 acres) and the surplus will be 14 acres." 32. The submission of Shri Manoj Swarup 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, in the absence of any factual foundation, such a plea cannot be entertained at this stage. 33. The appellant's grievance against the direction given by the learned Single Judge to the Chief Secretar....