U.P. STATE SUGAR & CANE DEVELOPMENT LTD. versus RAZA BULAND SUGAR CO.LTD. AND ORS

Citation: [2009] 6 S.C.R. 571 · Decided: 17-04-2009 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Disposed off

Judgment (excerpt)

I 
[2009] 6 S.C.R. 571 
U.P. STATE SUGAR & CANE DEVELOPMENT LTD. 
A 
v. 
RAZA BULAND SUGAR CO.LTD. AND ORS. 
(Civil Appeal Nos. 2176-2177 of 2002) 
APRIL 17, 2009 
[DR. ARIJIT PASAYAT, P.SATHASIVAM AND DR. 
MUKUNDAKAM SHARMA, JJ.] 
UTTAR 
PRADESH 
SUGAR 
UNDERTAKINGS 
8 
(ACQUISITION) ACT, 1971: 
C 
ss.2(h)(vi) and 3 - 'Scheduled underlaking' - Acquisition 
of Sugar Undertaking - 'Lands' and Buildings' - Suit for 
· declaration that certain properties were not covered by 
expression 'Scheduled underlaking' - Held: As regards lands, 
D 
burden is on the Company to establish that lands or any 
specified parl of it were held or occupied for the purpose of 
cultivation or it was grove land - In respect of buildings, the 
burden is on the Corporation to establish that the buildings 
were held or occupied for purpose of factory - Shops 
constructed out of the funds of the Sugar Underlaking after 
E 
its acquisition, were covered by definition of 'scheduled 
undertaking' -
Evidence -
Burden of proof -
Sugar 
Underlaking (Taking over of Management) Act, 1978. 
The plaintiff Sugar Company (respondent no. 1 in 
C.A.No.2176 of 2002) on coming into force of the U.P. 
Sugar Undertakings (Acquisition) Act, 1971 and the 
Sugar Undertaking (Taking Over of Management) Act, 
1978, filed a suit against the U.P. State Sugar Corporation 
( predecessor-in-interest of the appellant) and others for 
possession and permanent injunction restraining the 
defendants from interfering with the possession and 
management of affairs and business and assets of the 
registered office of the Company as detailed in para 10 
F 
G -
of the plaint, and for declaration that the properties 
571 
H 
572 
SUPREME COURT REPORTS 
[2009] 6 S.C.R. 
A mentioned in para 10 of the plaint were not covered by 
the definition of 'scheduled undertaking' as provided in 
s.2(h) of the 1971 Act. The trial court decreed the suit in 
part. In the cross appeals, the High Court dismissed the 
suit in respect of the property mentioned at Item 3 in para 
B 10, namely, Maize Colony including quarters and land 
appurtenant thereto, and decreed the suit in respect of 
the properties at Item Nos. 4 and 6 in para 10 of the plaint, 
namely, 'shops at Nainital Road along with land of 
playground' and 'Nursery land' etc. 
C 
Disposing of the appeals, the Court 
HELD:1.1 Section 2(h) of the U.P. Sugar Undertakings 
(Acquisition) Act, 1971 makes the position clear that the 
Act intends to keep intact the identity of the company. It 
is only the scheduled undertaking as defined u/s 2(h) of 
D the Act, that vets in the Corporation u/s 3 of the Act. 
Therefore, the real controversy is in regard to 
interpretation of clause (vi) of s.2(h) of the Act which 
relates to land and buildings of the Company which have 
been acquired under the Act Clause (vi) can be divided 
E into two parts i.e. (i) land and (ii) buildings. [Para 5) [580-
B-D] 
1.2. The definition in respect of land contemplates 
that every kind of la.nd shall stand vested u/s 3 of the Act 
F except such lands which are held or occupied for the 
purpose of cultivation and grove land of the company 
whose land has been acquired. The burden of proof is 
upon the company to establish that the lands or any 
specified parts of it were held or occupied for the purpose 
of cultivation or it was grove land, because it is the 
G company which has the knowledge about the nature of 
user of the land in its occupation. This can be established 
by evidence. It is required to be established that the land 
was held or occupied for the purpose of cultivation and 
grove land. If the company fails to prove that aspect, the 
H land vests in the Corporation u/s 3 of the Act and be 
\ 
-· 
U.P. STATE SUGAR & CANE DEVELOPMENT LTD. v. RAZA 573 
BULAND SUGAR CO.LTD. AND ORS. 
~ 
deemed to have been transferred to the Corporation. 
A 
[Para 6] [580-G-H; 581-A-B] 
2.1. In respect of buildings the burden of proof was 
on the Corporation to establish that the buildings were 
held or occupied for the purpose of factory. The 
B 
description of buildings under clause (vi) of s.2(h) is not 
in the same language as in respect of lands. While 
I 
defining lands the words used are "other than" but in 
respect of buildings such words are missing and, 
therefore, the Corporation has to lead evidence to prove 
that the buildings held or occupied by the company were c 
used for the purpose of factory and obviously the burden 
is on the person who claims exclusion. [Para 

Excerpt shown. Read the full judgment & AI analysis in Lexace.