M/S Periwal Chemicals Industries ... vs Bihar State Credit & Investment ...
2022 Latest Caselaw 4970 Jhar

     IN THE HIGH COURT OF JHARKHAND AT RANCHI
                (Civil Appellate Jurisdiction)
                          L.P.A No. 737 of 2018
M/s Periwal Chemicals Industries Pvt. Ltd., a private limited company duly
incorporated under the provisions of Companies Act, having its registered
office at Kunwar Nando Bhawan, Radium, PO-Kutchery, PS-Lalpur,
District-Ranchi, represented through its Director Shri Uma Shankar Periwal,
s/o Nand Kishore Periwal, R/o Kunwar Nando Bhawan, Near Maharaja Inn,
Radium Road, PO-GPO, PS-Kotwali, Districit-Ranchi             .... Appellant

                            Versus

1. Bihar State Credit & Investment Corporation, Patna, having its office at
Indira Bhawan, 4th Floor, Ram Charitra Singh Path, PO-GPO, PS-Kotwali,
District-Patna, through its Managing Director
2. Manager, Bihar State Credit & Investment Corporation, Bihar having its
office at Indira Bhawan, 4th Floor, Ram Charitra Singh Path, PO-GPO, PS-
Kotwali, District-Patna
3. Deputy Manager, Bihar State Credit & Investment Corporation, Patna
having its office at Indira Bhawan, 4 th Floor, Ram Charitra Singh Path, PO-
GPO, PS-Kotwali, District-Patna
4. M/s Bhawani Enterprises, Patna having its Main Office at Kaushaliya
Apartment, Block B, Flat No.103 & 304, Bandar Bagicha, Dakbangla
Chouraha, PO-Patna, PS-Patna, District-Patna                .....Respondents
                               --------------

CORAM: HON'BLE MR. JUSTICE SHREE CHANDRASHEKHAR
         HON'BLE MR. JUSTICE RATNAKER BHENGRA

For the Appellant           : Ms. Amrita Sinha, Advocate
For BICICO                  : Mr. Amit Kumar Das, Advocate
For Respondent No.4         : Mr. Vipul Poddar, Advocate
                                ---------------
                                  ORDER

th 8 December 2022 Per, Shree Chandrashekhar, J.

M/s Periwal Chemicals Industries Pvt. Ltd. has challenged the order dated 26th September 2018 passed in W.P(C) No.1360 of 2017.

2. Before the writ Court, the appellant raised a grievance against the auction sale of its mortgaged properties and demand of Rs.31.79 crores by the Bihar State Credit and Investment Corporation (in short, "BICICO"). A further prayer was made for a direction upon BICICO for final settlement of the accounts by accepting Rs.1.51 crores.

3. The writ Court did not accept the challenge laid by the appellant to the auction sale and demand of Rs.31.79 crores.

4. Consequently, the prayer made by the appellant seeking a direction upon the BICICO for final settlement of accounts by accepting Rs.1.51 crores has also been rejected by the writ Court.

5. In the present proceeding, the appellant has raised an issue as regards refund of Rs.1.51 crores which was deposited by it in compliance of the order dated 20th April 2017 passed in L.P.A No.154 of 2017.

6. The order dated 20th April 2017 reads as under:

"Since Mr. A.K. Das, learned counsel accepts notice on behalf of all the respondents, no notice need be issued to them on the question of admission.

Put up this case after two weeks.

Till then, status quo, as existing today, shall be maintained, subject to deposit of Rs.1.51 crore before the Registrar General of this Court within ten days from today by way of cheque or Bank Draft.

If the said amount is not deposited within the aforesaid time frame, respondents are at liberty to proceed with the case and order of status quo will automatically stand vacated."

7. On 14th Septembr 2022, the following order has been passed by this Court:

" This Letters Patent Appeal has been preferred by M/s Periwal Chemicals Industries Pvt. Ltd. (in short, the Company) questioning legality of the order dated 26th September 2018 passed in W.P(C) No.1360 of 2017.

2. The Company came before the writ Court with a prayer seeking a direction upon the Bihar State Credit and Investment Corporation (in short, BICICO) to adhere to the communication dated 27th February 2017 and accept Rs.1.51 crores towards full and final settlement of the loan account.

3. The prayer at Clause (b) gives a clear picture of the issue raised by the Company before the writ Court which reads as under:

"(b) For a direction upon the Respondent No.1 to forthwith consider the proposal made by the Appellant vide Letter dated 20.02.2017 (Annexure-10) sent in response to the Letter dated 17.02.2017 (Annexure-9) issued by the Respondent No.1, whereby the Appellant has been offered to acquire the aforesaid sold out property at Rs.1,51,00,000/- on the terms and conditions mentioned therein and admittedly the Appellant has accepted the said proposal of the Respondents communicated to the Appellant vide Letter dated 17.02.2017 (Annexure-9) subject to settlement of entire outstanding loan amount at Rs.1,51,00,000/-, against the Principal outstanding dues of Rs.79,00,000/- and interest charged thereon to the tune of Rs.31 crores, total being Rs.31.79 crores approx."

4. Before the writ Court M/s Bhawani Enterprises, Patna was made respondent no.4.

5. The writ Court proceeded to examine the stand taken by the Company with a special reference to the judgments of the Hon'ble Supreme Court passed in Civil Appeal Nos.2928-2930 of 2018

title "ITC Limited v. Blue Coast Hotels Ltd.", "Central Bank of India v. C.L Vimla & Ors." (2015) 7 SCC 337 and "Punjab Financial Corporation v. Surya Auto Industries" (2010) 1 SCC 297 and came to a conclusion that the Company which failed to avail the benefits offered by BICICO is not entitled for any relief - W.P(C) No.1360 of 2017 was dismissed.

6. Mr. Ajit Kumar, the learned senior counsel for the Company assisted by Ms. Amrita Sinha, the learned counsel raises a question on legality of BICICO in retaining the amount of Rs.1.51 crores which was deposited by the Company pursuant to the order dated 20th April 2017 passed by this Court in L.P.A No.154 of 2017.

7. There is no dispute that M/s Bhawani Enterprises, Patna which was declared the highest bidder has deposited the bid amount and possession of the property in question was handed over to it.

8. Mr. Ajit Kumar, the learned senior counsel for the Company submits that BICICO which settled the loan account under sold off category and realized the principle loan amount from the Company, on receiving the full bid amount from the respondent no.4-M/s Bhawani Enterprises, Patna cannot retain Rs.1.51 crores deposited by the Company pursuant to the order passed by the Letters Patent Court vide order dated 20th April 2017.

9. In view of the aforesaid submissions, the present Letters Patent Appeal is now confined to the issue: Whether BICICO can retain Rs.1.51 crores which was deposited by the Company pursuant to the order dated 20th April 2017 passed by the Letters Patent Court, even after realizing the said amount from the successful bidder?

10. Let an affidavit be filed by the appellant-Company within two weeks, confining the present Letters Patent Appeal on the above issue.

11. Since this Letters Patent Appeal is now confined to the aforementioned issue, a specific reply shall be filed by the BICICO within the same period.

12. Post the matter on 13th October 2022."

8. In the meantime, the Special Leave Petition (Civil) vide Diary No.46078 of 2018 filed by the appellant against the order dated 10 th October 2017 passed in L.P.A No.154 of 2017 came up for hearing before the Hon'ble Supreme Court and the aforesaid Special Leave Petition has been disposed of by an order dated 4th November 2022.

9. On 4th November 2022, the following order has been passed by the Hon'ble Supreme Court:

".... ... .....

Having heard learned counsel appearing for the respective parties and considering the fact that subsequently the property in question has been auctioned and sold and the auction purchaser is in possession, after depositing the entire sale consideration of Rs. 1.51 Crores, and even thereafter the no-dues certificate has been issued with respect to the property in question, as the amount of Rs. 1.51 Crores was deposited by the petitioner while protecting the property from auction during the pendency of the LPA and

thereafter the LPA was withdrawn and, as observed hereinabove, the property in question has been auctioned and the amount of Rs. 1.51 Crores is realized, we are of the opinion that the petitioner shall be entitled to withdraw the amount of Rs. 1.51 Crores which the petitioner deposited, pursuant to the interim order passed by the Division Bench of the High Court passed in LPA No. 154 of 2017. However, it is observed that if there are any other dues the same can be recovered by the respondent in accordance with law and after following due procedure as required. .... ..... ......"

10. At this stage, we may indicate that being aggrieved of the direction issued by a co-ordinate Bench of this Court to permit the BICICO to adjust Rs.1.51 crores so deposited by the appellant against its outstanding liability, the aforesaid Special Leave Petition was filed by the appellant.

11. In view of the order dated 4th November 2022, the BICICO has filed an affidavit dated 5th December 2022 stating as under:

"5. That it is stated that during pendency of the instant appeal, the said Special Leave petition being S.L.P(C) Diary No.46078 of 2018 was taken up for hearing before the Hon'ble Supreme Court on 04.11.2022 and after hearing the parties, the Hon'ble Supreme Court observed that the petitioner (present appellant) is entitled to withdraw the amount of Rs.1,50,00,000/- which they have deposited pursuant to the interim order passed in L.P.A No.154 of 2017. However, it has been observed that if there are any dues to be recovered, same can be done in accordance with law by the respondents-authorities.

6. That it is stated that instant appeal was listed before this Hon'ble Court on 28.11.2022 and on that day when the said order was brought to the notice of this Hon'ble Court, the answering respondents were directed to take instructions and file an affidavit as to by what time the said amount can be refunded to the appellant.

7. That in this regard, it is stated that as the amount involves Rs.1,50,00,000/-, a formal approval of the Board is required to be taken. However, the answering respondents state that if such application for withdrawal is filed, the same shall be immediately processed and all steps shall be taken for refund of the said amount to the appellant within a period of Three months thereafter."

12. Ms. Amrita Sinha, the learned counsel for the appellant states that the appellant shall have no objection to refund of the amount deposited by it with the BICICO within three months, provided interest is paid thereon by the BICICO.

13. Ms. Amrita Sinha, the learned counsel for the appellant submits that Rs.1.51 crores was deposited by the appellant with the Registrar General of this Court on 20 th April 2017 and the said amount has been withdrawn by the BICICO in October 2018.

14. In these facts, a submission is made on behalf of the appellant

that the BICICO must pay interest for the period from October 2018 till date, on the entire amount of Rs.1.51 crores.

15. For payment of interest by the BICICO, Ms. Amrita Sinha, the learned counsel for the appellant submits that a government undertaking is under a duty to act fairly and must not intend to its unjust enrichment. We, however, refrain from issuing any direction for payment of interest to the appellant for the period between October 2018 till the final payment is made. However, the appellant may approach the competent authority with such demand.

16. In view of the affidavit dated 5th December 2022, L.P.A No.737 of 2018 stands disposed of, with the aforesaid liberty to the appellant.

(Shree Chandrashekhar, J.)

(Ratnaker Bhengra, J.) Jharkhand High Court, Ranchi Dated : 8th December 2022 sudhir/N.A.F.R.