KUNDAN SINGH, J. ( 1 ) BY means of this petition, the petitioner bank has prayed for quashing the order dated 10. 10. 73 of the Assistant Commissioner of Payments, Ministry of Industries, Ahmedabad in Claim Application No. 455 of 1977 and the order dated 18/08/1980 of the Judge, Court no. 12, City Civil Court, Ahmedabad dismissing appeal no. 53 of 1978 confirming the said order and for a direction in the nature of injunction restraining the respondent no. 3, his agents, servants and subordinates from paying any amount to any other person other than the petitioner. ( 2 ) THE respondent no. 1 company was declared a sick undertaking by the Central Government notification dated 14. 2. 69 and the respondent no. 2 was appointed as authorised controller for the management of the company. The Assistant Commissioner of Payments was appointed to decide the claim of the petitioner as well as other persons. The petitioner made its claim alongwith prescribed application for the recovery of Rs. 99,97,944. 32 ps. The claim of the petitioner is mentioned in the table on page nos. 44 and 45 of the petition. The claim application and the statement of accounts together with documents were considered for categorisation and the amount of Rs. 51,55,894. 81 ps. was admitted in category no. 1 (a) while the amount of Rs. 24,86,109. 93 was considered in category no. 4 and the rest of the amount of Rs. 23,55,939. 58 ps. was not considered for the purpose of categorisation and as such the amount remained due from the owner. It was mentioned that all the accounts were running accounts and after the authorised controller took over the management in the year 1969, the said accounts were continued and the authorised controller continued to enjoy the benefit of all the facilities which were being given to the respondent company and obtained the benefit arising out of the aforesaid account facilities. There was no dispute between the parties so far as figures of accounts given in the Annexure "a" are concerned and there was also no dispute about rate of interest and the parties gave a pursis not challenging the correctness of the figures in the statements produced on the dates which are at exhs. 16 and 17 in the suit. The various documents produced showed that the authorised controller had executed various documents in favour of the bank. 16 and 17 in the suit. The various documents produced showed that the authorised controller had executed various documents in favour of the bank. The first document was dated 17. 3. 69 wherein it was shown that the bank has taken possession of the fixed assets, finished goods stock in process, raw material etc. in exercise of powers conferred by section 18-A of the Industries (Development and Regulation) Act, 1951, the Central Government has, by an order dated 14. 2. 69 appointed the guarantor as authorised controller of the mill company. The guarantee deed was also executed by the controller for the amount which was outstanding as on 14. 2. 69 and for future transations. On the basis of this document it was urged that the authorised controller has undertaken to pay whatever was outstanding as on 31. 3. 74 irrespective of the balance on 14. 3. 69. The document dated 17. 3. 69 shows that at the request of the guarantor, the petitioner bank released possession of the fixed assets, finished goods, stock in process etc. and the guarantor executed an undertaking in favour of the petitioner bank to pay on demand the amounts due orwhich might become due thereafter under all or any of the cash credit accounts. The cash credit form (special) dated 11th October, 1967 for Rs. 13,50,000. 00 covering hypothecation of the companys stock of cotton, yarn and cloth, stock in process and stores. A letter dated 17th March, 1969 was executed by Gujarat State Textile Corporation Ltd. as authorised controller of the mill company. A supplementary deed of guarantee dated 18th October, 1969 executed by Gujarat State Textile Corporation Ltd. , deed of guarantee dated 8th December, 1969 executed by the Secretary to the Government of Gujarat, Industries, Mines and Power Department. A supplementary agreement dated 2 5/09/1970 in respect of revision in the rate of interest, supplementary agreement and a copy of the relevant form no. 94 dated 4/12/1970 regarding penal rate of interest together with certificate of registration of modification of charge dated 21/12/1970 and cash receipt issued by the Registrar of Companies, Stateof Gujarat. A supplement agreement and relevant form no. 14 dated 26/02/1973 regarding revision in the rate of interest. ( 3 ) THE Assistant Commissioner made division regarding actual payment, pre-take pover and post take-over management period. A supplement agreement and relevant form no. 14 dated 26/02/1973 regarding revision in the rate of interest. ( 3 ) THE Assistant Commissioner made division regarding actual payment, pre-take pover and post take-over management period. It was considered bythe Commissioner that the liability to be discharged should be in respect of post take over management period. That period started from 14. 2. 69 and ended on31. 3. 74. There is nothing in the Act to show that the amounts during post take over management period could be towards dues of pre take over management period and liabilities which arise during post take over management period are required to be discharged from the compensation amount and that liability in one which was created by withdrawing the amount from the bank from time to time after 14. 2. 69. It was also held that if appropriation is taken over as inconsistent with the provisions of Relief Act as laid down under section 20 of the Act, the appropriation is not permissibleand the provisions of section 29 of the Act would be applicable and the Assistant Commissioner took a view that the Act does not permit any appropriation to be made fromthe credits received during the post take over management period towards the dues of pre-take over management period. In the accounts which were operated during the pre-take over management period and continued after post take over management period,the amount outstanding during the pre-take over management could not become post take over liabilities just because the accounts were continued after obtaining guaranteed dues etc. from the authorised controller. Even if the authorised controller had executed the documents for the liability to pay pre-take over dues, it would not carry the case of the claimant any further and the claimant would not be entitled to credit the payments made during post take over management period towards dues of pre-take management period. He also held that the very execution of documents by itself will not create the liability in favour of the bank. As argued by the bank that the authorised controller wrote a letter dated 25/09/1970 to the petitioner bank that the Government of Gujarat has agreed to give guarantee for various accounts operated by the mill. The document was executed by the Government subsequently. A letter dated 4. 12. As argued by the bank that the authorised controller wrote a letter dated 25/09/1970 to the petitioner bank that the Government of Gujarat has agreed to give guarantee for various accounts operated by the mill. The document was executed by the Government subsequently. A letter dated 4. 12. 70 was sent in which it is mentioned by the authorised controller that the bank shall charge penal interest on the amount at the rate of 12% per annum on the entire outstanding and the authorised controller agreed to pay the amount which was outstanding as on 14. 2. 69 alongwith penal interest and the authorised controller had undertaken the liability to pay the same by a letter dated 26. 2. 1973. The Assistant Commissioner also held that even the authorised controller had executed the documents for paying the entire amount outstanding under the scheme of the present Act and in view of the manner in which the liabilities are to be discharged,the payment made during post take over management period could not have been appropriated towards pre-take over management dues and the amount which remained unpaid as on 14. 2. 69 would be recovered under category 4 of the Act and not in category no. 1 of the Act. Though the parties were agreeable to the statement of the amounts givenby the petitioner bankand they have filed pursis, as such, there was no dispute regarding figures of the claim mentioned in the claim. The Assistant Commissioner divided the claim of the petitioner into separate categories, the amount due as on 14. 2. 69, the amount due from the period from 14. 2. 69 to 31. 3. 74 and the amount for the period thereafter. ( 4 ) THE Assistant Commissioner for Payment held that the bank was entitled to recover Rs. 25,80,561. 98 ps. from the compensation amount, but it was directed that the credit of the amount of Rs. 25,67,851. 23 ps. be given to National Textile Corporation Ltd. for the debits made after 1. 4. 74 and the amount realised after 1. 4. 1974. The claim of the bank for Rs. 56,144. 02 ps. as bank charges and Rs. 3912. 76 ps. as overdue interest debited after 21. 9. 74 for the dues prior to 31. 3. 1974 and interest would fall in category 2 (b) and the bank charges also fall in the category no. 4. 1974. The claim of the bank for Rs. 56,144. 02 ps. as bank charges and Rs. 3912. 76 ps. as overdue interest debited after 21. 9. 74 for the dues prior to 31. 3. 1974 and interest would fall in category 2 (b) and the bank charges also fall in the category no. 2 (b) as it is neither loan nor credit availed of for the purpose of trade or manufacturing operations. Therefore,these two items could not be paid. He passed the order holding that the bank was entitled to an award for Rs. 25,80,561. 98 ps. with a direction that the credit of Rs. 25,67,851. 03 ps. be given to National Textile Corporation (Gujarat) Ltd. , Ahmedabad. ( 5 ) THE learned counsel for the petitioner contended that the petitioner had invested a huge amount on undertaking guarantee and assurances of the authorised controller from the year 1969 and even after 1. 4. 74. The petitioner is entitled for the whole amount and the petitioner should not be dragged in further litigation in the Civil Court for the recovery of the aforesaid amount which it is entitled in law. ( 6 ) I have given anxious thought to the submissions made on behalf of the parties. The main question for the determination by this Court is whether outstanding dues in different accounts for the pre-take over period as on14. 2. 69 were the liabilities of the authorised controller or that liabilities which were thereafter can be considered under section 5 of the Act for the purpose of awarding the compensation amount. For this purpose we have to see the actual meaning of loan and advances. Loans and advance loans have been explained by the Apex Court in the case of Jiwanlal Achariya vs. Rameshwarlal Agarwalla, reported in AIR 1967 SC,1118 wherein it has been held that the loan means an advance whether of money or in kind on interest made by a money lender and shall include a transaction on a bond bearing interest in respect of post liability and in transaction which in substance is a loan. When a loan is renewed by the execution of a fresh document, there is no difficulty in holding that the former loan was repaid by borrowing a fresh loan on the document of renewal. So, the transaction itself can be treated as a fresh loan. When a loan is renewed by the execution of a fresh document, there is no difficulty in holding that the former loan was repaid by borrowing a fresh loan on the document of renewal. So, the transaction itself can be treated as a fresh loan. The word "advance" appears to have been used there for convenience of the language, particularly to indicate that the loan must have been made after commencement of the Act. It does not imply that there should have been an actual advance whether of money or any kind. Thus, in view of the preposition of law laid down by the Apex Court the loans advanced by the petitioner bank prior to 14. 2. 69 guaranteed by the Authorised controller and by the State Government and guarantee for the post take over period would fall under the category no. 1 (a) of the second schedule and it would not fall in category no. 4 of para "b". The Bombay High Court has completely answered the question regarding the liability of the Authorised Controller for the amount due prior to 1. 4. 74 and thereafter. In the case State Bank of India vs. Edward Textile Mills Ltd. and others reported in AIR 1988, Bombay, 313, the Bombay High Court has held as under:" Section 5 states that every liability of the owner of a sick textile undertaking prior to 1st April, 1974 shall be the liability of such owner. The liability which is incurred by the owner in the present case is the liability to repay to the appellant bank amounts advanced under cash-credit facility together with interest. This liability had been incurred prior to 1/04/1974. The liability of the owner therefore, includes the liability to pay interest on the loan amount until such time as the loan is repaid in full. Since the liability is incurred by the owner prior to 1st April, 1974, this liability continues to be the liability of the owner and can be discharged from the compensation amount. The Commissioner was therefore, not right when he said that the liability of the owner to pay interest ceases from 1/04/1974. There is nothing in the Act which terminates the liability of the owner as from 31/05/1974. " ( 7 ) ON the basis of the case laws stated above, it appears that the authorised controller, after taking over the management on 14. 2. There is nothing in the Act which terminates the liability of the owner as from 31/05/1974. " ( 7 ) ON the basis of the case laws stated above, it appears that the authorised controller, after taking over the management on 14. 2. 69 gave an undertaking and guarantee to the petitioner bank to repay the entire outstandings prior to 14. 2. 69. The bank has also placed certain documents on record to shows that the government of Gujarat has also undertaken and also given assurance to repay the entire liability accrued on or before 14. 2. 69 and that liability continued till 1. 4. 74, when the liability was re-affirmed prior to the appointed day i. e. 1. 4. 74 and that liability continues till the loan or advance with interest is discharged. It is not necessary that the loan should be actually given in cash. If the liability has been credited, that would amount to a liability of loan and that will be considered as loan under the Act. ( 8 ) AS such, in my view, both the lower authorities have committed an error in holding that the petitioner was not entitled for the amount of pre-take over period as the loan advanced does not fall under category I (a) of part I of second schedule of the Act. On the basis of the above discussion, I am constrained to hold that both the lower authorities have committed an error on the face of the record in holding that the petitioner bank is not to be paid the liability which is already incurred on or before 14. 2. 69. The whole amount of the petitioner falls under 1 (a) category of Part I of second schedule. ( 9 ) ACCORDINGLY, the petition is allowed. The orders passed by both the authorities below are quashed and set aside. The respondent no. 2 is directed to pay the entire amount of the petitioner actuallypaid in cash, amount of hypothecation account no. 81813, mortgage account 81811, pledge account 81810 with interest till the date of claim for which there was no dispute between the parties within three months from the date of presentation of a certified copy of this judgment. Rule is made absolute accordingly with no order as to costs. .