Rameshwar Kumar And Another vs State Of J&K And Others
2021 Latest Caselaw 1296 j&K

     HIGH COURT OF JAMMU AND KASHMIR AND LADAKH
                      AT JAMMU
                                 Reserved on 27.09.2021
                                 Pronounced on 13.10.2021

                                                                OWP No. 159/2016

Rameshwar Kumar and another                               .....Appellant/Petitioner(s)

                                Through :- Mr. C. M. Koul, Sr. Advocate with
                                           Mr. A. R. Bhat, Advocate
                          v/s

State of J&K and others                                            .....Respondent(s)

                                Through :- Mr. Vijay Gupta, Advocate


CORAM: HON'BLE MR. JUSTICE RAJNESH OSWAL, JUDGE

                                 JUDGMENT

1. The petitioners, being the partners of the M/s Natraj Hotel and

Restaurant situated at National Highway, Tikri, Udhampur, have

filed the present petition for quashing Notice bearing No.

SFC/DOU/15/192 dated 31.12.2015 issued by the office of

respondent No. 3 by virtue of which, the petitioners have been asked

to deposit the balance amount of Rs. 11.04 lacs within a period of 07

days. The petitioners also seek a direction to the respondents to

settle their loan case under the Settlement Scheme for Sick Unit

(SSSU) as has been done in other loan cases.

2. It is stated in the petition that the petitioners were sanctioned an

amount of Rs. 36.87 lacs under two loan accounts out of which an

amount of Rs. 34,97,708/- was disbursed in favour of the petitioners

and the petitioners after availing the loan facility set up the said hotel

and started paying the required installments towards liquidation of

the loan liabilities. However, after some time, due to widening of the

roads, the unit of the petitioners was closed. The petitioners opted for

loan settlement under One Time Settlement Scheme and the

respondent Nos. 2 and 3 settled the loan on 24.07.2014 on the basis

of distress value of assets determined as on 30.11.2012 by approved

valuer of the respondents. Aggrieved by the settlement, the

petitioners requested the respondents to reconsider their case for the

settlement. A committee was constituted by the respondents, which

has examined, considered and approved the settlement of the distress

value of the unit-hotel of the petitioners valued as Rs. 46.04 lacs. It is

further stated that the respondents again placed the case of the

petitioners before the committee in its meeting held on 07.02.2015

and it was decided not to entertain the case of the petitioners and

they were required to deposit the amount up to 31.03.2015. While the

petitioners were in process of depositing the amount after arranging

the funds, another scheme known as Settlement Scheme for Sick

Units (SSSU) was announced on 14.10.2015. After coming to know

about the said scheme, the petitioners applied and requested the

respondents vide notice dated 15.01.2016 and thereafter vide

reminder dated 22.01.2016 to process the case de novo for the

settlement of the loan account under the said scheme as the case of

the petitioners fell within the ambit and purview of clause 6 proviso

(ii) and (iii) of the aforesaid SSSU.

3. It is further stated that as per the information provided by the

respondents to the petitioners under Right to Information Act, the

loan liabilities have been shown in both the loan amount i.e. account

No. 1 and account No. 2 as nil and the unit has been classified as non

functional and it shows the mala fide on the part of the respondents

while demanding as Rs. 11.04 lacs from the petitioners vide letter

dated 30.12.2015. The respondents vide letter dated 04.02.2016

addressed to the counsel for the petitioners conveyed that the hotels

do not fall within the purview of so called scheme. The petitioners

have impugned the letter dated 30.12.2015 on the ground that the

petitioners are entitled to the benefit of SSSU and further that the

respondents have willfully avoided to redress the grievances of the

petitioners with regard to their claim of wrong calculations by not

giving the benefits of the money already deposited in the principal

amount for which the respondents have not responded with any

affirmative reason but the petitioners could only come to know

through the information sought under the RTI Act.

4. Response stands filed by the respondents, in which it is stated that

disputed question of facts have been raised by the petitioners those

cannot be decided in a writ petition and it is further stated that a total

loan amount of Rs. 36.87 lacs was sanctioned in favour of the

petitioners-unit and an amount of Rs. 34.98 lacs has been disbursed

to the petitioners. It is further stated that on the request of the

petitioners, the respondent-Corporation, placed the matter before the

Recovery Settlement Committee it its meeting held on 08.09.2015

for resettlement of the loan and the Recovery Settlement Committee

in its decision dated 08.09.2015 considered the request of the

petitioners and approved the adjustment of the token of Rs. 7.80 lacs

towards the already settled amount of Rs. 46.04 lacs. The net payable

amount thus worked out to Rs. 38.24 lacs out of which the petitioners

have already deposited Rs. 27.20 lacs leaving a balance of Rs. 11.04

lacs. Accordingly, the decision of the committee was conveyed to the

petitioners on 29.09.2015. It is also stated that the hotel of the

petitioners does not fall within the ambit/purview of the SSSU

launched by the Corporation vide order dated 14.10.2015 and more

so, the case of petitioners had already been settled, as such, their case

cannot be reopened after launch of the new scheme. It is also stated

by the respondents that the petitioners cannot dictate the terms to the

Corporation with regard to the appropriation of the money for

adjustment under a particular head. It is the prerogative of the

Corporation to make adjustment of the amount deposited by the

borrower as per their accounting standard norms.

5. Mr. C. M. Koul, learned senior counsel appearing for the petitioners

has vehemently argued that as per section 2(c) of the State Financial

Corporations Act, 1951 (for short the Act) Industrial Concern means

any concern engaged or be engaged in hotel industry as well,

therefore, the contention of the respondents that the scheme does not

cover the hotel industry is not tenable in the eyes of law. He further

argued that the respondents have resorted to the wrong accounting

procedure. Therefore, they are under obligation to consider the claim

of the petitioners for settlement of their case under the scheme.

6. Per contra, Mr. Vijay Gutpta, learned counsel for the respondents

has vehemently argued that the scheme is not meant for the hotel

industry but for the sick industrial units and further that once the

petitioners had already settled their case, so they are not entitled to

be considered under the scheme on this ground as well.

7. Heard and perused the record.

8. The issues those arise for consideration by this Court are as under:

(i) whether the Settlement Scheme for Sick Units (SSSU) launched by the respondents is comprehensive enough, so as to include all the activities mentioned in the definition of Industrial concern within its purview ?

(ii) whether the respondents have resorted to wrong calculations by not giving the benefits of the amount already deposited as principal by the petitioners ?

9. The eligibility criteria as prescribed under the SSSU is reproduced as

under:

"All units under MSME sector declared/identified sick by or before December 31st 2015 by the respective General Managers of concerned District Industries Centres and countersigned by Directorate of Industries & Commerce and the units which have not been able to commence production and are not formally registered with respective DICs or have left the scheme halfway/abandoned or the unit has remained non-functional for a period of more than „10‟ years to be certified as such, by the concerned General Manager, DIC/District Incharge, JKSFC."

10. A perusal of the eligibility criteria reveals that the following units

fall within the ambit of scheme:

(a) MSME sector declared/identified sick by or before

31.12.2015 by the respective General Managers and counter

signed by the Director of Industries and Commerce.

(b) The units which have not been able to commence

production and are not formally registered with the

respective DICs or have left the scheme halfway or

abandoned or the unit has remained non-functional for a

period of more than 10 years to be certified as such by the

concerned General Manager, DIC/District Incharge.

11. Section 2 (c) of the State Financial Corporations Act, 1951defines

Industrial Concern and the same reads as under:

2. Definitions: In this Act, unless the context otherwise requires-

(c) "Industrial concern" means any concern engaged or to be engaged in

(i) the manufacture, preservation or processing of goods;

(ii) mining or development of mines;

(iii) the hotel industry;

(iv) the transport of passengers or goods by road or by water or by air....

(v).......

(vi)......"

12. A perusal of the „Industrial Concern‟ as defined under section 2(c)

provides that it includes various activities including the hotel

industry and the transport of passengers or goods by road or by water

or by air. In order to properly adjudicate the controversy, it would be

profitable to take note of the serial No. 10 of scheme, which is

reproduced as under:

"10. It is also proposed to bring plus „15‟ years old vehicles within the ambit of the scheme"

13. Though the said stipulation is loosely worded, it is not forthcoming

as to whether this scheme is applicable to the vehicles, which are

more than 15 years old or this scheme is proposed to be made

applicable to these vehicles but nonetheless the fact remains that

there is a separate provision for applicability of the scheme to the

vehicles those are more than 15 years old. If the contention of the

petitioners is to be accepted that hotel industry was also entitled for

the benefit of the scheme, then the respondents would not have

referred the details of the units, those are entitled to the benefits of

the scheme in the eligibility criteria of the scheme. The intention of

the respondents for granting the benefits to some of the units

involved in a particular activity and not to the units involved in all of

the activities as mentioned in the definition of industrial concern as

per section (2) of the Act (supra) gets substantiated by the stipulation

at serial No. 10 of the scheme. Had it been the intention of the

respondents to bring in the ambit of the scheme, all the industrial

concerns, they would not have incorporated a separate stipulation at

serial No. 10 of the scheme. The scheme was target specific and had

no universal applicability for all the units indulging in activities as

defined by section 2 (c) of the Act. Thus, the scheme was meant for

the benefit of the units those were involved in the production

activity. As such, the respondents have rightly rejected the claim of

the petitioners on the ground that the scheme was meant for

industrial sick units and not for hotels.

14. Whether the respondents have resorted to wrong calculations by not

giving the benefits of the amount already deposited as principal by

the petitioners. This is a disputed question of fact that cannot be

adjudicated upon while exercising writ jurisdiction.

15. In view of what has been discussed above, there is no merit in the

petition, as such, the same is dismissed.

                                                              (Rajnesh Oswal)
                                                                     Judge
JAMMU
13.10.2021
Rakesh                   Whether the order is speaking:     Yes/No
                         Whether the order is reportable:   Yes/No