ORDER The petitioner in this writ application has prayed for the following relief(s): 1.For quashing the communication / order dated 23.11.2006 (Annexure – 5) issued by the respondents declaring that the petitioner is not eligible for taking the benefits of one time settlement scheme (OTS Scheme) for liquidation of his debt. 2.For quashing the specific clause of the OTS Scheme under which the promoters / guarantors of the Unit against which sale order has been issued and auction for retention of the Unit as per the terms of the sale order, has not been taken by them, shall not be eligible for taking benefits of OTS Scheme. 3.For issuance of a writ of mandamus commanding upon the respondents to issue the application form of OTS Scheme to the petitioner, so as to enable the petitioner to avail the benefits of settling the dues under OTS Scheme. By introducing a further prayer through the amendment of the writ application, the petitioner has also prayed for quashing the notice dated 29.3.2007 issued by the respondents and for quashing the order dated 9.1.2009 containing the decision of the respondents to allot the assets of the petitioner to one M/s RANTEC, R 1/3, Adityapur, Jamshedpur-13. 2. Issues which have been raised by the petitioner for consideration are; 1.Whether the petitioner is deemed to be in possession of Hypothecated assets of M/s Hindustan Conduits and Pipes and if so, whether the benefits of the OTS Scheme can be denied to him? 2.Whether the impugned clause in the OTS Scheme, 2006 as stipulated by the respondents, amounts to unreasonable restriction, arbitrary, violative of principles of natural justice and deprives the petitioner’s right to apply for one time settlement of his dues payable to the respondents? 3. The undisputed facts of the case is that petitioner had obtained loan of Rs. 2,68,000/-from the respondent BSFC in the year 1976-77 under the Self Employment Scheme for the purpose of establishing a small scale industry. After about a year of functioning, the petitioner’s Unit became sick and was later on declared as a sick Unit by the Bihar Industrial Technical Consultancy Corporation (BITC) in the year 1986. In absence of any financial help from any corner to revive and to rehabilitate the sick Unit, the petitioner could not pay off his debt to the respondent BSFC. In absence of any financial help from any corner to revive and to rehabilitate the sick Unit, the petitioner could not pay off his debt to the respondent BSFC. In the year 1998, the respondent BSFC proceeded to take action against the petitioner under sections 29 and 30 of the BSFC Act and had initiated steps to auction sale the assets of the petitioner’s Unit namely, M/s Hindustan Conduits and Pipes The assets of the Unit were auction sold in the year 1998 to one M/s Suchitra Agrawal of Calcutta on the basis of the asset valuation price, since the petitioner being the original promoter, could not manage to deposit the consideration money. An Agreement for sale was executed in favour of M/s Suchitra Agrawal and written instruments were executed together with corresponding Agreement by which all the assets of M/s Hindustan Conduits and Pipes were transferred by the respondent BSFC, unto the auction purchaser M/s Suchitra Agrawal, on the date of agreement i.e. on 15.10.1998. However, the auction purchaser M/s Suchitra Agrawal failed to pay off the balance amount of consideration / auction money to the BSFC and the debts payable to the BSFC could not be liquidated by her. Thereafter, the respondent BSFC put the Unit again on auction and one M/s Pawan Kumar Arora and Sri Deepak Kumar Arora has deposited the tender money expressing interest to purchase the assets of M/s Hindustan Conduits and Pipes. Such auction sale was put up only after informing M/s Suchitra Agrawal and calling upon her to liquidate the assets and upon receipt of her reply that she was not was intended in retaining the Unit and has no objection to the Unit being sold to M/s. Pawan Kumar Arora and Sri Deepak Kumar Arora. However, even the second auction bidder namely, M/s. Pawan Kumar Arora and Sri Deepak Kumar Arora did not deposit the balance of the consideration money. The auction sale of the assets of M/s Hindustan Conduits and Pipes which was proposed to be auction sold to M/s Pawan Kumar Arora and Sri Deepak Kumar Arora, was cancelled by the BSFC and thereafter, the Unit was again offered by BSFC for auction sale and by the impugned notice and order dated 9.1.2009, the respondents have taken the decision to allot the Unit to one M/s RANTEC, R 1/3, Adityapur, Jamshedpur-13., the auction bidder. 4. 4. The case of the petitioner is that though, the auction sale was made in favour of M/s Suchitra Agrawal, but the possession of the assets of M/s Hindustan Conduits and Pipes were never physically transferred in her favour and the documents of transfer was only a paper transaction. The petitioner had always remained in possession and still continues to be in possession of the assets of M/s Hindustan Conduits and Pipes. Such possession was not disturbed even when the Unit was proposed to be auction sold to M/s. Deepak Kumar Arora and Sri Deepak Kumar Arora or even when the respondents have decided to auction sale the Unit to M/s RANTEC, R 1/3, Adityapur, Jamshedpur-13. The petitioner’s further contention is that in the year 2006, the respondent BSFC came out with a one time settlement Scheme (OTS Scheme) in respect of all the NPA Units which were categorized under the doubtful and loss categories as per the records of BSFC as on 31.3.2005. This scheme was made for the benefit of all the debtors of the NPA Units to enable them to liquidate their debts by one time settlement. The scheme had also enabled all such Units who had applied under the OTS scheme of 2004, but could not liquidate their respective debts, to apply under the 2006 scheme. The petitioner’s stand is that he being the original promoter, had applied for the benefit under the category-A of the OTS Scheme 2006 to which he was entitled and under which he would have had to pay only 1.1 time of the principle outstanding amount together with other charges, which on calculation would have been a total sum of Rs. 3.10 lakhs only. The grievance of the petitioner is that the respondents had refused to give the benefit of scheme to him by inserting the impugned arbitrary and discriminatory restrictive clause in the scheme. 5. Shri Ananda Sen, learned counsel for the petitioner, would explain that since admittedly, while the auction sale in respect of M/s Suchitra Agrawal and later, in respect of M/s. Pawan Kumar Arora and Sri Deepak Kumar Arora had become ineffective and the petitioner having remained all along in possession of the assets of the Unit and he being the original promoter, he was entitled to avail the benefits of Plan-A of the scheme. In support of the petitioner’s claim that he was all along in possession of the Unit, notwithstanding the sale order in favour of the aforementioned auction purchasers, learned counsel would advert to the several documents including the Electricity Bills, PHED Water Bills, Sales Tax Return, etc issued in the name of the petitioner which, according to the learned counsel, would confirm that the petitioner is in possession of the Unit all along and is running the same. 6. A counter-affidavit has been filed on behalf of the respondent BSFC. Shri M.S. Mittal, learned counsel for the respondents, would submit that the facts, as placed by the petitioner needs to be placed in proper perspective. Learned counsel explains that the petitioner had obtained loan of Rs. 2,68,000/-way back in the year 1976-77, but could not repay the same and the dues therefore increased year to year and after declaring the petitioner’s Unit as NPA Unit, the BSFC proceeded to take action under sections 29 and 30 of the BSFC Act to realize the debt payable by the petitioner and initiated the process of auction sale of the assets of the petitioner’s Unit. One M/s Suchitra Agrawal of Calcutta had participated in the process of auction by depositing the initial amount and entered into an agreement for sale with the respondents. The sale of the Unit was finalized in favour of M/s Suchitra Agrawal on receipt of the consideration of price of Rs. 10.00 lakhs. The same offer was given to the petitioner on matching terms if he wanted to retain the Unit but the petitioner did not avail the opportunity, nor did he offer the matching payment. The agreement for sale and agreement for payment of balance loan was executed by M/s Suchitra Agrawal and upon such execution, the entire assets of the Unit was handed over to M/s Suchitra Agrawal. Referring to Annexure-E dated 15.10.1998 in this context, learned counsel would explain that the same is the agreement of sale and agreement for payment of balance amount executed by M/s Suchitra Agrawal and also signed by the petitioner himself as an independent witness. The recitals in the agreement would confirm that the possession of the Unit with its entire assets was delivered to M/s Suchitra Agrawal on the date of agreement itself. The recitals in the agreement would confirm that the possession of the Unit with its entire assets was delivered to M/s Suchitra Agrawal on the date of agreement itself. Later, when M/s Suchitra Agrawal had defaulted in making payment of the balance of the consideration amount, though she had deposited a sum of Rs. 1.10 lakhs by way of demand draft with a request to the respondent BSFC to reschedule the balance amount for enabling payment and also to approve change of name of the Unit from M/s Suchitra Agrawal to M/s Prakash Industries, notices under sections 29 and 30 of the BSFC Act was issued to her, where-after the Unit was put on auction sale. The name of M/s Suchitra Agrawal was published as the owner of the Unit. In response to the tender notice, for auction sale, one Mr. Pawan Kumar Arora had submitted his tender. Upon accepting his tender, the respondents had issued sale order of the Unit together with its assets in favour of Mr. Pawan Kumar Arora. Prior to the issuance of the sale order, M/s Suchitra Agrawal was intimated of the offer, as made by Pawan Kumar Arora and the same was given to her on matching terms if she wanted to retain the Unit. However, M/s Suchitra Agrawal responded by letter dated 25.9.2002 declaring that she was no more interested to retain the Unit. Learned counsel explains that though in the aforementioned letter, M/s Suchitra Agrawal had also stated that the factory premises was not vacated by the original owner namely, S.P. Gupta, but the respondents had refused to accept such claim on the ground that it was she who had allowed the petitioner to reside in the factory premises. In reply to the letter dated 25.9.2002 of M/s Suchitra Agrawal, the respondents have categorically informed her that since the possession of the Unit together with its assets were earlier delivered to her on the date of her executing the sale agreement, it was for her to ensure that the possession of the factory premises is delivered to the respondent BSFC to enable them to transfer the same in favour of the auction purchaser Mr. Pawan Kumar Arora. Though, the offer of Mr. Pawan Kumar Arora was accepted, but after depositing the initial amount, they too had defaulted in paying off the outstanding balance of the consideration money. Pawan Kumar Arora. Though, the offer of Mr. Pawan Kumar Arora was accepted, but after depositing the initial amount, they too had defaulted in paying off the outstanding balance of the consideration money. Consequently, the BSFC issued another notice on 29.3.2007 in the local newspaper for sale of the Unit. The petitioner has challenged this notice by way of amendment in his writ application and by order dated 17.5.2007, this court had directed that it would be open to the petitioner to participate in the bid in the meanwhile without prejudice to his legal rights and defences. The petitioner thus having been allowed to participate in the auction bid, his offer was also considered, but in view of the fact that one M/s Prakash Industries had offered to purchase the mortgaged assets of the Unit at Rs. 47 lakhs and one Smt. Pratima Singh had offered to purchase the Unit at Rs. 45 lakhs, the petitioner’s offer was only Rs. 3.20 lakhs and therefore, it being a ridiculous offer, the same could not possibly be accepted by the respondents. Denying and disputing the petitioner’s claim that the terms of clause-A of the OTS Scheme, 2006 were applicable to the petitioner, learned counsel would explain with reference to the various clause of the scheme that the benefit of clause-A of scheme can, under no circumstances, be available to the petitioner. Learned counsel explains that by subsequent modification in the scheme, another clause-E was inserted to the benefit of the different class of the debtors which could have been applicable to the petitioner. Learned counsel would explain that sub-clause-A of Clause-1 of the OTS Scheme, 2000 is in respect of the original promoters / guarantors of NPA Unit categorized in doubtful and loss categories as per the records of the BSFC as on 31.3.2005. The petitioner, according to the learned counsel, does not fall within the category of original promoter / guarantor of the Unit since the Unit together with its entire mortgaged assets were already sold to M/s Suchitra Agrawal and the possession of the property was also handed over to her way back on 15.10.1998. The Unit having stood transferred to M/s Suchitra Agrawal and on her becoming defaulter, it was she alone who could have availed the benefits under the OTS Scheme and not the petitioner. The Unit having stood transferred to M/s Suchitra Agrawal and on her becoming defaulter, it was she alone who could have availed the benefits under the OTS Scheme and not the petitioner. However, even Suchitra Agrawal may not have been eligible, in view of Clause-F of the scheme which lays down the guidelines regarding the sale cases under which promoters / guarantors of the Unit, for which sale order has already been issued and action for retention of the Unit, as per the terms of the sale order, has not been taken by them, they shall not be eligible for taking the benefits of this OTS Scheme. Learned counsel explains further that whereas as per the modified scheme, notified on 4.11.2006, in cases where after issuance of the sale order, on failure of the promoter to retain the assets, the purchaser who have deposited the initial consideration amount and after execution of the agreement, the assets have been handed over to the purchaser, in such cases, only the purchaser is to pay the dues in terms of the sale order and they may settle their dues under eligibility category 1-C and under Plan-C or Plan-D of the scheme. In such sold cases, the promoter can settle their dues only under the eligibility category under 1-D and Plan-E for the loan outstanding against them, but the original promoter would not get back the Unit. In cases where the Unit stood handed over to the purchaser and the sale became infructuous and ineffective, neither the original promoter nor the purchaser will be eligible for settlement of his dues under the scheme nor can they have any claim over the Unit. The BSFC in such cases will take over the Unit and resale it. Learned counsel explains further that the petitioner has wanted to mislead this court by stating that he was not offered the benefit of the scheme. In fact, the petitioner was offered the benefit of category 1-D and Plan-E of the scheme, but he refused to avail the same. 7. Learned counsel explains further that the petitioner has wanted to mislead this court by stating that he was not offered the benefit of the scheme. In fact, the petitioner was offered the benefit of category 1-D and Plan-E of the scheme, but he refused to avail the same. 7. As against this, learned counsel for the petitioner would refer to sub-clause 3(1) of the modified scheme to emphasize that the benefit of clause-A was available to the petitioner in view of the declaration in the modified scheme that in cases where even after deposit of the initial consideration money by the purchaser, but for some reason beyond the control of the corporation, the assets could not be handed over to the purchaser and the same becomes ineffective / infructuous and in such cases, promoter of the Unit purchased, can submit a request and his request can be considered depending upon the actual circumstances of the cases. Learned counsel would reiterate that the agreement dated 15.10.1998 purported to have been executed by M/s Suchitra Agrawal was only a paper transaction and the respondent corporation had only succeeded in handing over the assets to the purchaser M/s Suchitra Agrawal since it was the petitioner who was all along in possession of the Unit and upon the purported sale of the Unit, M/s Suchitra Agrawal has admittedly become infructuous. 8. From the rival submissions, as it would appear, the controversy revolves around the petitioner’s claim of his having remained in possession of his Unit despite the sale of the unit to M/s Suchitra Agrawal. While the respondents deny his claim, the petitioner would assert that he was never dispossessed from the Unit and this fact has even been confirmed by M/s Suchitra Agrawal in her letter dated 19.5.2002 addressed to the respondent Corporation, whereby she had expressed that on account of such possession of the Unit by the petitioner, she is unable to liquidate her dues to the Corporation. 9. This issue can be resolved by reference to the terms of agreement dated 15.10.1998 (Annexure-E). 9. This issue can be resolved by reference to the terms of agreement dated 15.10.1998 (Annexure-E). The recitals in the agreement categorically declares that in pursuance of the sale order communicated by the respondents vide letter dated 17.8.1998, the assets of M/s Hindustan Conduits and Pipes has been sold to M/s Suchitra Agrawal and the mortgaged assets of the Unit has been taken over by the officials of the Corporation on 15.10.1998 in presence of the independent witness and in the presence of the original promoter and the same has been handed over to the purchaser. The details of the assets have been mentioned in the agreement. The petitioner S.P. Gupta has also signed on the agreement as an independent witness and the purchaser M/s Suchitra Agrawal has also appended her signature after confirming therein that she has taken over the aforementioned assets. In view of the above categorical statement contained in the document, the petitioner’s claim that it was only a paper transaction, cannot be accepted. Further more, in the statement contained in para-14 of the writ application, the petitioner has admitted that M/s Suchitra Agrawal has appointed the petitioner to look after the affairs of the unit. The implication is therefore that the petitioner was appointed by M/s Suchitra Agrawal only to look after the affairs of the Unit in the capacity of her Agent though retaining the possession and ownership of the property with herself as the purchaser of the Unit. 10. This controversy having been resolved, it has to be seen as to whether the petitioner could be considered as eligible to avail the benefits of the OTS Scheme, 2006 including the modified scheme and if so, to which of the clauses of the scheme? 11. The petitioner has claimed the benefits of Plan-A of the scheme which relates to the clause-1(a and b) of the eligibility criteria. Category of clause 1(a) applies to all the eligible promoters / guarantors of NPA Units categorized in the doubtful and loss Units, as per the records of the BSFC as on 31.3.2005. Admittedly, the Unit was auction sold to M/s Suchitra Agrawal on 15.10.1998 and the mortgaged assets of the petitioner’s Unit was transferred in favour of M/s Suchitra Agrawal and the possession thereof was delivered to her on the date of execution of sale agreement. Admittedly, the Unit was auction sold to M/s Suchitra Agrawal on 15.10.1998 and the mortgaged assets of the petitioner’s Unit was transferred in favour of M/s Suchitra Agrawal and the possession thereof was delivered to her on the date of execution of sale agreement. Since after the sale, it was the purchaser M/s Suchitra Agrawal who had stepped in the shoes of the petitioner and had become the promoter. Clause-1(C) applies to another category comprising of such purchaser who has purchased the assets on or above below the balance outstanding amount and have subsequently become NPA Unit in doubtful and loss category, as per the BSFC records as on 31.3.2005 and enabling such purchasers the benefit of liquidation of the balance consideration amount which was deemed as loss. Clause 1(d) of the scheme relates to yet another category comprising of all promoters / guarantors whose mortgaged assets has been sold below the balance outstanding amount and who have not repaid the balance amount of the outstanding amount shown as outstanding in the loan ledger of the original Unit which amount remains to be recovered from the original promoters / guarantors of the Unit. 12. The above category however prohibits the eligibility of all such promoters / guarantors of the Unit for which sale order has already been issued and action for retention of the Unit, as per the terms of the sale order, has not been taken by them. The scheme also declares that the corresponding settlement plans under each of the category of Plan-A, B, C, D and E for the promoters who fall in Plan A category-1a and 1b, the benefit of one time settlement has been specified in Plan-A under which terms of settlement is 1.10 times of the principal outstanding amount + other charges. For those promoters who fall in category 1(d), the settlement plan applicable is Plan-E which lays down plan for settlement in terms of payment of principal outstanding (if any) + other charges + 10% of the other dues left in the loan account as on the date of the application. 13. Considering the fact that after the sale of the Unit to M/s Suchitra Agrawal, the petitioner cannot claim himself to be the original promoter any more he could not come within the eligibility category of clause-1-A or even clause-1(C) of the OTS Scheme. 13. Considering the fact that after the sale of the Unit to M/s Suchitra Agrawal, the petitioner cannot claim himself to be the original promoter any more he could not come within the eligibility category of clause-1-A or even clause-1(C) of the OTS Scheme. The category to which the petitioner could be eligible was clause 1(d) of the OTS Scheme and in such category, settlement scheme applicable was under the Plan-E. Apparently, though offered by the respondent, the petitioner did not express his inclination to accept the plan-E of the OTS Scheme. 14. As rightly pointed out by the learned counsel for the respondent Corporation, the benefits of the scheme under clause 1(C) should have been availed by M/s Suchitra Agrawal who, for all practical purposes, is deemed to be the promoter, but she had never come forward to avail the benefits. 15. On the ground of it being arbitrary and against the principles of natural justice, the petitioner would challenge the restriction placed by the non-eligibility clause in the scheme under which the promoters/ guarantors of the Unit, for which sale order has already been issued and action for retention of the Unit, as per the terms of the sale order, has not been taken by them, have been made ineligible for taking the benefits of the OTS scheme. It needs to be noted that the OTS Scheme, as floated by the respondent corporation, is in pursuance of the policy decision taken by the respondents which concerns with its commercial transactions and recovery of debts due from the debtors. The scheme offers benefit to a wide range of debtors under several categories and is manifestly designed to benefit only such debtors who for some reasons, have failed to liquidate their debt within a reasonable period and the outstanding balance has considerably increased. The scheme has apparently been made applicable to all the original promoters and to all the purchasers who have purchased the assets of the Unit in auction, but have not been able to clear off the balance of the consideration amount of sale. The scheme has apparently been made applicable to all the original promoters and to all the purchasers who have purchased the assets of the Unit in auction, but have not been able to clear off the balance of the consideration amount of sale. By making such distinction between the original promoter who have lost hold on the Unit upon sale of the Unit to other purchasers and those who have gained status of becoming the promoter after the purchase of the Units, the restriction clause would disallow the original owners from availing the benefits of the scheme for retaining the Unit. Such restriction is apparently in consonance with clause 1(C) of the eligibility category. Such being the policy decision of the respondent Corporation, I do not find any unreasonableness in the restriction imposed, nor do I find any ground to quash the restriction clause in the OTS Scheme. 16. For the reasons stated, I do not find any merit in this application and the same is accordingly dismissed, but without cost(s). The interim order dated 19.4.2007 is hereby vacated.