Allowed

M/S.Sarveshwari Enterprises v. Bihar State Financial Corporat

Jharkhand HC22 Mar 2022WPC/4776/2008

Case brief

AI extract

What is this about?

A loan petitioner challenged the rejection of a one-time settlement offer after paying the balance amount the day after the deadline due to bank closures. The High Court applied the General Clauses Act, 1897 to allow the delayed payment and quashed the rejection order.

What did the court decide?

Quashed the rejection order; directed the respondents to issue a 'No Dues Certificate' and release documents within 15 days.

M/S.Sarveshwari Enterprises Vs Bihar… — Contract and Commercial Disputes | Jharkhand HC (2022)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI [Civil Writ Jurisdiction] W.P.(C ) No. 4776 of 2008

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M/s Sarveshwari Enterprises through its partner Shambhu Nath Singh, S/o Late Kedar Nath Singh, Adityapur, Jamshedpur, East Singhbhoom

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.... .. ... Petitioner(s)

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Versus

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1.Bihar State Financial Corporation, through its Managing Director, Patna. 2.Manager (Z IV), Bihar State Financial Corporation, Patna. 3.Branch Manager, BSFC, Adityapur, Jamshedpur

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. .. ... ...Respondent(s)

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........... CORAM : HON'BLE MR. JUSTICE KAILASH PRASAD DEO .........

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For the Petitioner : Mr. Sidharth Roy, Advocate For the respondent(s)/BSFC : Mr. Ashok Kumar Yadav, Advocate

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07/ 22.03.2022 . Heard, learned counsel for the parties.

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Mr. Sidharth Roy, learned counsel for the petitioner has submitted that Writ Petitioner- M/s Sarveshwari Enterprises through its partner Shambhu Nath Singh has preferred the instant Writ Petition on 17.09.2008 against the order dated 23.06.2008 for a direction upon the respondent(s)- Bihar State Financial Corporation, through its Managing Director, Patna, to issue 'No Dues Certificate' and also to release the documents forthwith, which were submitted at the time of grant of loan by the respondent- Corporation.

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Mr. Sidharth Roy, learned counsel for the petitioner has further submitted that finally the Respondent No.2 vide Letter dated 23.06.2008 has rejected the application of the petitioner on the ground that the petitioner did not deposit the Demand Draft as mentioned in the settlement order of the OTS Scheme and since the petitioner instead of Demand Draft deposited the cheque which is against the terms of the settlement and, as such, the offer of one time settlement deemed to lapse and the payment under the scheme shall be adjusted in terms of the settlement order.

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Mr. Sidharth Roy, learned counsel for the petitioner has further submitted that the petitioner had taken loan from the respondent(s)- Bihar State Financial Corporation [hereinafter be referred as BSFC] on 08.09.1987 to the tune of Rs.13.20 Lakhs for setting up an industrial unit at Adityapur Industrial Area, Jamshedpur. The petitioner could not repay the loan amount and thus, a demand notice was issued by the respondent-authorities on 07.03.1995.

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Mr. Sidharth Roy, learned counsel for the petitioner has further submitted that respondent- Corporation introduced a scheme for settlement of the dues under Plan A (Platinum 110) of BSFC OTS Scheme, 2006.

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Mr. Sidharth Roy, learned counsel for the petitioner has further submitted that the petitioner applied for the same and as per one time settlement, the settled

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amount came to Rs.14,81,685/-, as per the terms and conditions of the OTS which has been brought on record by the respondent-authorities as Annexure-G to the counter-affidavit. Clause-2 of the terms of settlement [Annexure-G to the counteraffidavit filed on 10.01.2022] may profitably be quoted hereunder :-

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“2.As per provisions of the scheme the concern will deposit the aforesaid amount of Rs.8,30,685/- (Rupees Eight lakhs thirty thousand six hundred eighty five) only by way of demand draft/ Banker's Cheque drawn in favour of BIHAR STATE FINANCIAL CORPORATION' payable at Patna within One month from the date of issue of this order of settlement (excluding the day of issue of this order of settlement), with the stipulation that if they fail to deposit this amount within the period mentioned above, the settlement under this scheme will stand automatically withdrawn and the 10% of the Principal Outstanding i.e. Rs.1,30,200/- (Rupees One lakh thirty thousand two hundred) only out of the application money of Rs.6,51,000/- (Rupees Six lakhs fifty one thousand) only shall stand forfeited and the balance amount of application money and other payments, if any, made under this scheme shall be adjusted against the normal dues of the Corporation, as if no settlement under this One Time Settlement Scheme had been arrived at between the Corporation and the concern.”

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Mr. Sidharth Roy, learned counsel for the petitioner has further submitted that after sanction of the term loan by the respondent(s)- BSFC of Rs.13,20,000/on 08.09.1987 for setting up an industrial unit at Adityapur Industrial Area, Jamshedpur, the concerned petitioner has availed loan of Rs.13,02,000/- from the Corporation after mortgaging and hypothecating the fixed assets by way of executing and registering the loan agreement and other legal documents on 20.10.1989. The industry was set up and it also gone into production, but the petitioner defaulted in payment of dues of the respondents- BSFC and the loan was recalled under Sections 30 and 29 of the State Financial Corporation Act, 1951 by issuing legal notice on 07.03.1995 vide Memo No.1670.

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Mr. Sidharth Roy, learned counsel for the petitioner has further submitted that the petitioner did not respond to the said legal notice, as a result, the unit was advertised for sale which was published in the Hindustan Times on 25.09.1998 under Section 29 of the SFC Act, 1951 for realization of dues on continuous sale.

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Mr. Sidharth Roy, learned counsel for the petitioner has further submitted that no tender has been received in response to the sale advertisement. Thereafter the Corporation introduced One Time Settlement Scheme- 2004 (OTS-2004) for settlement of Corporation dues and the concern was informed through letter no.650 dated 13.12.2004 to avail benefit under this OTS Scheme, but the petitioner did not apply under OTS Scheme-2004.

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Mr. Sidharth Roy, learned counsel for the petitioner has further submitted that again the Corporation came with another OTS Scheme in the year 2006 known as B.S.F.C. OTS -2006 for settlement of dues of Corporation starting from

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25.09.2006.

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Mr. Sidharth Roy, learned counsel for the petitioner has further submitted that the petitioner purchased the prescribed OTS-2006 application form and submitted the application form to the Corporation on 01.11.2006 together with requisite application fee of Rs.6,51,000/- under plan-''A” of OTS Scheme-2006 by means of Banker's cheque payable at Jamshedpur bearing application form no.JAMAL-20036 dated 11.10.2006.

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Mr. Sidharth Roy, learned counsel for the petitioner has further submitted that after examining the concern's OTS application, the OTS settlement order has been issued vide memo no.929/z-IV dated 07.03.2007. As per OTS Settlement order the settlement amount is mentioned as Rs.14,81,65/- as per provisions of B.S.F.C. OTS Scheme-2006 under plan-''A''. After adjustment of application money of Rs.6,51,000/- the balance settlement amount payable by the concern was to be Rs.8,30,685/- and as per terms and conditions of OTS settlement order at Sr. no.2 and under the provisions of OTS Scheme-2006 the concern must deposit the said balance settlement amount of Rs.8,30,685/- only by way of demand draft/ bankers cheque drawn in favour of B.S.F.C. payable at Patna within one month from the date of issue of order of settlement. If the concern fails to deposit the balance settlement amount within the stipulated period of one month the scheme will stand automatically withdrawn and the 10% of the principal outstanding i.e. Rs.13,02,000/- shall stand forfeited and balance amount deposited by the concern shall be adjusted against the normal dues of Corporation.

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Mr. Sidharth Roy, learned counsel for the petitioner has further submitted that the letter/ memo which has been brought on record as Annexure-G to the counter-affidavit shows that letter has been issued vide Memo No.929/z-IV dated 07.03.2007 and the petitioner has already paid Rs.6,51,000/- at the time of acceptance of offer to the respondent(s)- BSFC and thus, excluding the day of issue of settlement offer dated 07.03.2007, the petitioner has to pay the balance amount of Rs.8,30,685/- from 8^th March, 2007 within 30 days. But because of the closure of the Bank(s) on 6^th / 7^th / 8^th April, 2007, the petitioner could not deposit the said amount within time as per the offer issued by the respondent(s)- BSFC. However, the petitioner on the very next date of reopening of the Bank i.e. 09.04.2007 deposited as Par Cheque of the aforesaid amount to the Adityapur Branch of the respondent(s)- BSFC and the same was accepted by the Branch Office and the cheque amount was also encashed.

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Mr. Sidharth Roy, learned counsel for the petitioner in support of his submission has placed Section 10 of the General Clauses Act, 1897 to substantiate

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that when situation was beyond the control of the petitioner because of the closure of the Bank on 6^th / 7^th /8^th April, 2007, the said amount could not be deposited within 30 days, but it has been definitely deposited on the very next date of reopening on 9^th April, 2007 and the same has also been encashed by the respondent(s)- BSFC.

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Section-10 of the General Clauses Act, 1897 may profitably be quoted hereunder :-

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“ 10.Computation of time.- (1) Where, by any [Central Act] or Regulation made after the commencement of this Act, any act or proceeding is directed or allowed to be done or taken in any Court or office on a certain day or within a prescribed period, then, if the Court or office is closed on that day or the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the Court of office is open.

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Provided that nothing in this section shall apply to any act or proceeding to which the Indian Limitation Act, 1877 applies.

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(2) This section applies also to all [Central Acts] and Regulations made on or after the fourteenth day of January, 1887.”

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Mr. Sidharth Roy, learned counsel for the petitioner has further submitted that admittedly the Banks were closed on 6^th / 7^th /8^th April, 2007 when one month's time expired from the date of issuance of aforesaid letter dated 07.03.2007, as such, as per Clause-10 of the General Clauses Act, 1897, the amount deposited on 9^th April, 2007 is to be considered within the prescribed period which they failed to consider. As such, they have issued such notice on 23.06.2008 vide H.O. No.131/zIV under the signature of Manager (z-IV) of the respondent(s)- BSFC, Fraser Road, Patna-800 001.

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Mr. Sidharth Roy, learned counsel for the petitioner has further submitted that a person is taking financial assistance from any financial institution as he is not capable to invest his money. Accordingly, the petitioner has applied and after being satisfied, he was provided financial assistance from the respondent(s)-BSFC. The motive of the petitioner was never to make default in payment and thus, when the OTS Scheme came, the petitioner applied under this Scheme on payment of Rs.6, 51,000/- on 1^st November, 2007 [which ought to have been 1^st November, 2006] and the respondent(s)- BSFC took time till 7^th March, 2007 asking the petitioner to pay within 30 days, the balance amount was of Rs.8,30,685/-. Since the 7^th March, 2007 is the date of issuance of the acceptance letter and as per Clause-II of Annxure-G brought on record by the respondents- BSFC in counteraffidavit, the date of issuance is to be excluded. So the 8^th March, 2007 is to be considered as the initial date which expires on 8^th April, 2007, but 6^th / 7^th /8^th April, 2007 were closing date of the Bank(s) which has not been controverted by the Respondents- BSFC, as such, the petitioner paid the entire amount of Rs.8,30,685/-

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on 09.04.2007 and as per Clause-10 of the General Clauses Act, 1897 , the respondent(s)- BSFC has to accept the same though they have accepted, but, deliberately they were victimising the petitioner, as such, the petitioner knocked the door of this Hon'ble Court for redressal of his grievance(s).

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Mr. Sidharth Roy, learned counsel for the petitioner has thus, submitted that the impugned order passed by the respondents- BSFC may be quashed and direction may be issued for issuance of No Dues Certificate and subsequent thereto to issue all the documents of the petitioner which have been kept by respondentsBSFC within a reasonable time.

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Mr. Ashok Kumar Yadav, learned counsel for the respondent(s) has opposed the same and submitted that counter-affidavit has been filed by the respondents on 10.01.2022 through Vikash Kmar, S/o Sri Vijay Prasad Yadav, Branch-In-Charge, Ranchi Branch, BSFC, para-15 of the counter-affidavit may profitably be quoted hereunder :-

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“15.That since the concern petitioner failed to deposit the balance settlement amount within the stipulated period, but the same has been paid within seven days from the last date for payment, a letter bearing No.211/ZIV dated 07.07.2007 was issued to the concern from H.O., asking them to pay grace period penalty @10% of the balance settlement amount in terms of B.S.F.C. OTS Scheme-2006 which the concern has declared to abide within the application form submitted on 01.11.2007.”

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After hearing learned counsel for the petitioner, Mr. Sidharth Roy and learned counsel for the respondents- BSFC, Mr. Ashok Kumar Yadav and perusing the entire materials brought on record, it is admitted fact that the petitioner has taken loan of Rs.13,20,000/- on 08.09.1987 from the respondents- BSFC and out of this amount, Rs.13,02,000/- has been availed by the petitioner. The petitioner defaulted in payment of the amount to the respondents- BSFC. The respondentsBSFC has introduced one time settlement [OTS Scheme] in the year 2006 which is also popularly known as Plan A (Platinum 110) of BSFC OTS Scheme, 2006. The petitioner purchased the document and applied on 01.11.2006 along with the requisite fee of Rs.6,51,000/- [50% of the Principal amount] and the respondentsBSFC took more than four months in deciding the same and communicated the same vide Memo no.929/z-IV dated 07.03.2007. As per Clause-II of the said agreement, the date of issuance is to be excluded, as such, 8^th March is the period from where the 30 days' time or one month's time is to be reckoned. It also depends upon the month, when the month is January of is 31 days, if the month is February of is 28 days/ 29 days, in case of March of is 31 days and if the month is April it is of 30 days. So admittedly one month's time was till 8^th April, 2007. On that day and previous two days also, 6^th / 7^th /8^th April, 2007, Bank(s) were closed.

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However, this fact has not been disputed by the respondents- BSFC and the petitioner in bona-fide has deposited the amount on 9^th April, 2007 in the Adityapur Branch of the respondents- BSFC account which was also encashed by the respondents, as such, this Court, considering equity in view of Clause-10 of the General Clauses Act, 1897, has no hesitation in holding that the impugned order as contained in Letter No.H.O. No.131/z-IV dated 23.06.2008 issued by the Manager (z-IV) of the respondents- BSFC is not sustainable in the eyes of law, as such, the same is accordingly quashed.

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Accordingly, the instant Writ Petition stands allowed.

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However, respondents- BSFC is directed to issue “No Dues Certificate” and also to release the documents of the petitioners forthwith within a period of 15 days from today, as the matter is pending before this Hon'ble Court since the year 2008.

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Let a copy of this order be communicated to the espondent No.1 -Bihar State Financial Corporation, Frazer Road, Patna-800001 through FAX at once.

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( Kailash Prasad Deo, J. )

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Sandeep/

M/S.Sarveshwari Enterprises v. Bihar State Financial Corporat

Case brief

What is this about?

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M/S.Sarveshwari Enterprises v. Bihar State Financial Corporat

Case brief

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