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2004 DIGILAW 511 (PAT)

Adarsh Paper Board Co. Petitioners (P) Ltd. v. State Of Bihar

2004-05-06

RADHA MOHAN PRASAD

body2004
Judgment 1. In this writ petition, the petitioners have assailed the validity of the notice dated 15.4.2002 purported to have been issued under section 7 of the Bihar & Orissa Public Demands Recovery Act, 1914 (hereinafter referred to as the Act) and also have sought for quashing of the entire certificate proceeding in Certificate Case No. BICICO/132/2002. 2. In short, the relevant facts of the case are that the Bihar State Financial Corporation (BSFC) invited tender in the year 1989 for sale of the mortgaged assets of sick and closed unit of M/s Jamshedpur Card Board (Pvt.) Ltd. with a representation that the buyers would be extended required assistance for the rehabilitation of the sick unit to be purchased by them. Petitioner no. 4 made an offer for purchase of the unit and the same was accepted by BSFC with the conditions that cash deposit of 15% of consideration money being loan outstanding of BSFC and BICICO against the said Company and the rest amount was to be repaid in instalments. On fulfilment of the said conditions, sale deed was executed in favour of petitioner no. 4. However, later petitioner no. 4 formed a company in the name and style of "M/s Adarsh Paper Board Company (P) Ltd." inducting other Directors, who are all petitioners before this Court, for production in the said unit. Petitioner no. 4 took all assets with all liabilities of the aforementioned sick and closed unit. One of the liabilities was to be discharged against the loan advanced by the respondent BICICO. As the said liability was not discharged, the BICICO filed the certificate case and pursuant thereto the impugned notice was issued to the petitioners. 3. According to the case of the petitioners, the petitioners have not executed or signed any documents for repayment of loan of BICICO as a public demand and it is contended that in absence of this as per specific provisions of the Act, the BICICO could not resort to proceed under the Act against the petitioners. 4. 3. According to the case of the petitioners, the petitioners have not executed or signed any documents for repayment of loan of BICICO as a public demand and it is contended that in absence of this as per specific provisions of the Act, the BICICO could not resort to proceed under the Act against the petitioners. 4. Learned counsel for the petitioners submitted that as per section 3(6) of the Act, the public demand recoverable under the Act has been referred to and enlisted in Schedule 1 of the Act and so far as BICICO is concerned, its dues is covered under item 15 of Schedule 1 subject to specific condition that the person liable to pay the same has agreed by a written instrument that it shall be recovered as public demand whereas the petitioners have not agreed by any such written instrument. He thus contended that in view of the law settled by this Court in the case of Sunil Kumar Mehrotra vs. The State of Bihar & ors. (C.W.J.C. No. 12155 of 2002), in the case of M/s Murlidhar Sohanlal vs. State of Bihar & ors., reported in 1998(3) PUR 526, in the case of Janardan Prasad Singh vs. The Bihar State Credit & Investment Corporation Ltd. & ors., reported in 2003 (3) PUR 757, and in the case of Nav Bharat Link Chain Manufacturers Pvt. Ltd. & ors. vs. The State of Bihar & ors., reported in 2004(1) PUR 487, the impugned notice and the certificate case is bad in law and fit to be quashed. 5. Mr Datta, learned counsel appearing for the BICICO has submitted that the petitioners cannot deny their liability to be fulfilled towards the dues of the respondent-BICICO, particularly in view of the condition for sale of the erstwhile unit and admission of the petitioner no. 4 in his letter, contained in Annexure D. However, he has not been able to defend the action of the respondent-BICICO to initiate action under the Act in the absence of any specific condition by written instrument that such amount shall be recovered as public demand obviously as there is no agreement at all with the respondent BICICO much less the agreement with such a condition. However, he contended that the respondent BICICO has filed L.P.A. in this Court against the aforementioned judgment in the case of Sunil Kumar Mehrotra in which notices have been issued and is pending consideration before the Division Bench. He, however, has not been able to produce any order staying the operation of the said judgment. 6. Under such circumstances, the writ petition is allowed and the impugned notice and the certificate case are quashed. However, the respondent-BICICO will be at liberty to proceed to realize its dues by moving the appropriate forum in accordance with law and this order shall not in any manner prejudice their claim as against the petitioner. Further, it is made clear that if the Division Bench in the aforementioned L.P.A. holds that the proceeding can proceed even without any such conditions, referred to above, the present case shall also be governed by the said decision.