The Judge observed that 1,655 acres of land was acquired by the government by invoking emergency clause in 1992

The Madras High Court has recalled its order of December 2010 passed on applications by Asset Reconstruction Company (India) Ltd. (ARCIL) in a matter relating to the setting up of an industry here for the manufacture of various chemicals, including Purified Teraphthalic Acid (PTA.)

Justice V. Ramasubramanian passed the present order on a petition by Chennai Petroleum Corporation Limited (CPCL) seeking to recall the order.

The Judge observed that 1,655 acres of patta and poromboke lands in Mathur, Kosapur, Amullavoyal, Vaikadu, Elanthancheri and Manali in North Chennai were acquired by the government by invoking the emergency clause in 1992. Within two years, Southern Petrochemical Industries Corporation which joined hands with the CPCL, formerly Madras Refineries Ltd., for putting up the joint venture project, chose to go its own way by forming SPIC Petrochemicals Ltd., a company-in-liquidation and getting about 168 acres diverted to it. This triggered litigation in 1996 and before the litigation could come to its logical end, the joint venture got aborted and the company in liquidation got wound up.

In December 2010, the court ordered the handing over possession to ARCIL subject to the condition that ARCIL would associate the Official Liquidator in the sale of the property and also agree to the payment of sums under the SARFAESI Act. The CPCL sought setting aside of this order.

Mr.Justice Ramasubramanian said invoking the emergency clause and acquiring a huge extent of land had been rendered an exercise in futility. Hundreds of acres hurriedly acquired from thousands of families for industrial development were eventually mortgaged with financial institutions, without any industry coming up and the financial institution had approached the court for an auction sale of such land to realise its dues from the company-in-liquidation.

“People, who had small extents of land in their private ownership, lost their right, title and even sentimental attachment to the lands, on the specious plea that a huge industry was going to come up. When those small men challenged the acquisition proceedings before this court, the doctrine of public interest coloured the vision of this court and the acquisition was upheld. But, today, the industry for which acquisition was made, has not come up.” Since the company is wound up, it cannot come up hereafter. This was why the court in 1997 ordered a CBI enquiry into the whole gamut of allotment of land. The Judge said though the order was made 16 years ago, he did not know the outcome. Therefore, in such circumstances, it was hard for the court to give a nod for the sale of the property by the secured creditor. “The recalling of the order dated December 20, 2010, in a way, will be atonement by this court, for upholding the acquisition made 20 years ago, for the benefit of unscrupulous elements,” Mr. Justice Ramasubramanian observed.

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