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2010 DIGILAW 1044 (PAT)

M/s Shyam Industries v. Bihar State Financia

2010-04-29

AJAY KUMAR TRIPATHI

body2010
JUDGEMENT Ajay Kr.Tripathi, J. 1. Heard learned counsel for the parties. 2. Petitioner is a borrower from the respondent Bihar State Financial Corporation. Two term loans were sanctioned to him. Based on the loans and his own resources he tried to set up the industry in question but it did not work out the way he expected it to be and the industry ran into difficulty and even defaulted. 3. Failure on the part of the petitioner to repay back the loans compelled the Corporation to invoke Sections 29 and 30 of the said Financial Corporation Act. When the Corporation sold the unit they got a buyer in the name of Bijay Kumar Motani. The sale was never completed because the said Bijay Kumar Motani too defaulted in his commitment and payment. Matter travelled to the High Court and even to the Honble Supreme Court. Motani failed in taking possession of the property as he failed to keep the commitment and the direction of the Court. 4. As the unit was not sold or transferred the petitioner made another bid to retain the property by taking advantage of One Time Settlement Scheme brought into existence by the Corporation in the year, 2006. The terms and conditions of OTS Scheme, 2006 are available as Annexure- 7 to the writ application. 5. There are various parts to the said scheme. We are concerned with clause-1 dealing with eligible category. The categorization in clause-1 has been sub- categorized into categories (a) to (d). 6. On the application made by the petitioner before the respondents he received a communication dated 25.10.2006 contained in Annexure-11 to the writ application. Annexure-11 is the subject matter of adjudication in the present writ application. By virtue of this communication the Deputy Manager of the respondent Corporation informed the petitioner that petitioners application will have to be processed under category 1(d) of One Time Settlement Scheme. Petitioner was also informed that if he wanted to process his application he has to express his desire in this regard. Under the said eligibility category the corresponding plan was to be plan (E). This relates to the case of promoters whose units have been sold. 7. Petitioner was also informed that if he wanted to process his application he has to express his desire in this regard. Under the said eligibility category the corresponding plan was to be plan (E). This relates to the case of promoters whose units have been sold. 7. Learned counsel for the petitioner took this Court through the various provisions or categorizations and tried to prevail upon the Court that it is the case of original promoter whose unit had been categorized NPA, doubtful or loss. This is so because the petitioner is still in possession and control of the unit. The interpretation of the Corporation with regard to clause (d) was misplaced. 8. The Court has no hesitation in rejecting such a submission, more so by a plain reading of category (a) to (d) the petitioner does fall in category (d) of the Scheme in the circumstances that his unit was sold to the private respondent, namely, Motani. It is another issue that the sale did not reach the logical conclusion. 9. Another aspect which also must be taken note of is that the Corporation has issued certain corrigendum or clarifications to the One Time Settlement Scheme, 2006. The corrigendum or clarifications are also on record as Annexure-R/4 and Annexure- 14 to the writ application. The said modifications or clarifications have been issued because the Corporation found certain gray areas, taking into consideration the various kinds of cases which were coming before them for settlement. 10. Learned counsel for the petitioner has a few submissions to make on those corrigendum or clarifications as well as their applicability as they have been brought into effect on subsequent dates to the original scheme. But those submissions can be met by one observation that even if the corrigendum or clarifications have come subsequently it is a part of the scheme and the applicability of those provisions will very much form part of the original scheme. 11. The position as stands today as the Court has been informed by learned counsel for the petitioner is that the matter stands still as it was despite many efforts on the part of the Corporation to sell it. The petitioner is still continuing to be in possession or occupation of the unit physically. He still desires to remain in possession of property as original promoter. The petitioner is still continuing to be in possession or occupation of the unit physically. He still desires to remain in possession of property as original promoter. He would like to approach the Corporation for settlement of dues even at belated stage. 12. The fact is that the communication contained in Annexure-11 was the subject matter of challenge before this Court. When the matter was initially heard at the admission stage, the Court was not in position to adjudicate the issue within the time frame. This writ application got admitted and it has only now been finally heard. 13. Keeping the said fact in mind the Court is of the opinion that denying the opportunity of OTS Scheme to the petitioner because of the pendency of the writ application would be unfair to him only for the reason that the Scheme has come to an end. Pendency of the writ application was no fault of the petitioner. The Court must take into consideration the equity in this regard. 14. The Court after considering the submissions made at the bar and taking into consideration the OTS Scheme and the clarifications, does record that the decision of the Corporation conveying to the petitioner that his liability lay in category 1(d) is the correct interpretation. 15. If that is so then the writ application is disposed with the direction upon the respondent Corporation that if the petitioner expresses his desire to settle the dispute within fifteen days from today then the Corporation would be duty bound to process that application in terms of the OTS Scheme, 2006. Existence or nonexistence of that Scheme at present would be of no consequence. The outcome of such exercise would be made known to the petitioner and if the petitioner abides by the terms and conditions worked out under the OTS Scheme, 2006 then the issue will stand resolved or else the law will take its own course. 16. Before parting learned counsel for the petitioner has drawn my attention to clause 3(iv) of circular no. 9/06-07 i.e. Annexure-14. In this regard his prayer is that if he is ready to take steps for repayment and settlement of the issue then least which the Corporation can do is to allow the petitioner to reclaim his unit. 17. 16. Before parting learned counsel for the petitioner has drawn my attention to clause 3(iv) of circular no. 9/06-07 i.e. Annexure-14. In this regard his prayer is that if he is ready to take steps for repayment and settlement of the issue then least which the Corporation can do is to allow the petitioner to reclaim his unit. 17. This is one of the aspects which the Corporation needs to consider taking into account that their past exercise to alienate the unit over more than a decade or two has proved to be futile. Even otherwise if the petitioner decides to wipe out liability in terms of the scheme it will be considered appropriately by Financial Corporation. 18. This writ application stands disposed of with the above terms and order as above. There will be no order as to costs.