STATE OF U.P. & ORS. versus M/S. JASWANT SUGAR MILLS LTD. & ORS.ETC.

Citation: [2014] 9 S.C.R. 838 · Decided: 30-06-2014 · Supreme Court of India · Bench: S. J. MUKHOPADHAYA · Disposal: Disposed off
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Judgment (excerpt)

A 
[2014] 9 S.C.R. 838 
STATE OF U.P. & ORS. 
v. 
M/S. JASWANT SUGAR MILLS LTD. & ORS.ETC. 
(Civil Appeal Nos. 6169-6171 of 2013) 
B 
JUNE 30, 2014. 
[SUDHANSU JYOTI MUKHOPADHAYA AND 
KURIAN JOSEPH, JJ.] 
c 
Compensation: Dispute relating to payment of 
compensation pursuant to acquisition of land of respondent-
company and auction of part of the land of the company - In 
the instant case, respondent company was in heavy arrears 
and a receiver was appointed - Company was acquired on 
D 28th October, 1984 under Sugar Undertakings (Acquisition) 
Act, 1971 - State Government extended a facility of loan to 
the extent· of Rs. 6. 13 crores to the receiver - Meanwhile, 
land owned _by respondent company acquired for the 
Development Authority - On 20th February, 1992, District 
E Collector ordered to pay the compensation amount to the 
Company after adjustment of different dues payable by the 
Company -
Challenged - Held: It is always open to the 
competent authority to seek recovery of the amount if due 
F from the Company or to adjust the dues - The Collector was 
not a party by name - Order dated 20th February, 1992 
passed by the Collector was also not under challenge, inspite 
of the same the High Court declared the said order as illegal 
- High Court's order set aside - Matter remitted to the District 
G Collector to determine the liability of the Company upto the 
date of vesting i.e. 28th October, 1984 after notice to the 
parties. 
H 
838 
STATE OF U.P. v. JASWANT SUGAR MILLS LTD. 
839 
Interest: Auction of part of land - Auction sale set aside 
- Refund of amount to auction purchaser - Claim for interest 
- Held: There was no mis-representation on the part of the 
A 
auction purchasers; they deposited the total auction amount 
within the time stipulated -
The title of the land was also 
B 
transferred in their favour - But for the reasons mentioned 
by the High Court the sale was cancelled - Auction purchaser 
is entitled to interest on the refund amount on equitable 
grounds @ 6% P.A. 
Disposing of the appeals, the Court 
HELD: 1. The High Court though noticed that Section 
c 
8 of the U.P. State Sugar Undertakings (Acquisition) Act, 
1971 empowers the prescribed authority to decide any o 
dispute regarding the amount payable to any person or 
authority in respect of earlier liabilities of the undertaking, 
but it wrongly held that in view of the provisions of the 
Act of 1971, any liability incurred by the Company or loan 
etc. taken by the receiver is not payable by the Company. 
E 
It is always open to the competent authority to seek 
recovery of the amount if due from the Company or to 
adjust the dues. The Collector was not a party by name. 
The order dated 20th February, 1992 passed by the 
Collector was also not under challenge, inspite of the 
same the High Court declared the order as illegal. The 
matter is remitted to the District Collector, Meerut to 
determine the liability of the Company upto the date of 
vesting i.e. 28th October, 1984 after notice to the parties. 
The authority while so determining shall take into 
G 
consideration the liability of the Company as on 28th 
October, 1984. After determination of liabilities and 
adjustment of the dues which is payable by the 
Company, if any amount is found payable to the 
F 
H 
A 
840 
SUPREME COURT REPORTS 
[2014] 9 S.C.R. 
Company, the appellant shall pay the amount within four 
months from the date of determination. [Paras 31 to 34] 
[850-8-H] 
B 
2. No fault can be found with the impugned judgment 
of the High Court so far as the setting aside of the sale 
is concerned. In a situation like in the present case, one 
cannot hold of any statute entitling the auction 
purchasers to claim interest, in case the auction got 
C cancelled or set aside by the Court of law. The question 
arises as to whether in such a situation an auction 
purchaser can claim interest on equitable ground. In the 
present case, there was no mis-representation on the part 
of the auction purchasers; they deposited the total 
D auction amount within the time stipulated. It has not been 
in dispute that the title of the land was also transferred 
in their favour. But for the reasons mentioned by the High 
Court the sale has been cancelled. It has been ordered 
to refund the amount in favour of the auction purchaser-
E appellant(s). There is no reason as to why on equitable 
grounds the appellants should not get interest on the 
said amount. Taking into consideration the said
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