In an industrial dispute involving auction proceeds and settlement accounts, this Court held that since the underlying writ petition was dismissed, the conditions in the release letter and first charge claim did not survive. The parties were relegated to a civil suit to pursue mutual monetary claims.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.5984 of 2014
(Through hybrid mode)
Esskay Machinery Pvt. Ltd.
Petitioner
Mr.A.Patnaik, Advocate
-versus-
Industrial Promotion & Investment …. Opposite Parties Corporation of Orissa Ltd. and others
Mr.L.Pangari (Senior Advocate) (O.P.no.1) Mr.P.C.Panda, Addl. Govt. Advocate (O.P. no.2)
CORAM: JUSTICE ARINDAM SINHA
ORDER 23.11.2021
Order No.
29.
petitioner and submits, the writ petition was filed pursuant to order dated 25th November, 2013 made by the Supreme Court. Said order is quoted in paragraph-25 of the petition. The order mentions petitioner to have grievance against letter dated 27th September, 2013, whereby bank guarantee of Rs.70,00,000/was encashed and further sum of Rs.51,47,704.97 demanded. Said Court observed that it would be open to petitioner to challenge validity of said letter by filing a writ petition before the High Court.
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no.996 of 2004 (petitioner’s own case). He submits, one time settlement failed. The industrial unit was put to auction and bid received for Rs.230 lakhs. Share of opposite party was 69.69% of bid amount, calculated at Rs.160.29 lakhs. This was more than lapsed OTS amount of Rs.129.18 lakhs. Hence, the earlier writ petition to compel opposite party to accept the OTS amount and not the higher percentage amount of auction bid amount.
“ (I) Release of the assets are in terms of order dated 17.05.2006 and 17.7.2006 of the Hon’ble High Court of Orissa.
(II) M/s. Esskay Machinery Pvt. Ltd. is liable to pay an amount of Rs.28,03,538.00 towards interest on the OTS amount from 3.3.2004 to 31.3.2006.
(III) The company is also liable to pay an amount of Rs.23.91 lakhs towards equity investment of IPICOL
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in the company with return as per the terms of the equity agreement.
(IV) The company is also liable to pay interest @ 14% p.a. i.e. an amount of Rs.6148/- (Rupees six thousand one hundred forty eight) only per day from 1.4.2006 till the date of payment. The company is also liable to pay the legal, seizure, security and insurance etc., expenses incurred by IPICOL in this case.
(V) IPICOL shall continue to have first charge over the assets of the company till payment of all the dues of IPICOL or till final orders on the writ petition and the implementation thereof.”
Mr. Patnaik responds to submit, opposite party issued ‘No Due Certificate’ dated 22nd October, 2008. After that it cannot claim anything from his client. Text of the ‘No Due Certificate’ is reproduced below:
“In compliance of interim order of Hon’ble High Court, Orissa dated 27.06.2008 and dated 24.09.2008 in W.P.(C) 996/2004 and 12323 of 2008 and consequent upon the submission of Bank Guarantee No.0665808BG0000067 dated 30-8-2008 of State Bank of India, we, IPICOL do hereby certify that there is no dues of IPICOL as on the date against said company (Esskay Machinery (P) Ltd.) subject to further order(s) of Hon’ble High Court order. Since order dated 26-092008 is a continuation or part of the order dated 26-072008, the no due certificate (NDC) and return of documents are without prejudice to the right and contention of IPICOL before the Hon’ble High Court in the above matter.”
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lakhs. It is on this basis that interference with Rs.160.29 lakhs as OTS amount was not made and the writ petition dismissed. It appears from the judgment that there was settlement on increase of OTS value, from Rs.129.18 lakhs to Rs.160.29 lakhs, as was found by the Division Bench. It is significant that only auction bid was considered as benchmark. There is no mention in said judgment of auction bidder having expressed earnest intention to purchase.
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petition having been dismissed, it is to be seen whether all dues of opposite party, as claimed in the release letter, were or were not paid. To ascertain the position, one must look at the ‘No Due Certificate’. It says that the certificate and return of documents are without prejudice to the rights and contentions of opposite party before the High Court in the writ petition [W.P.(C) no.996 of 2004]. The writ petition stands dismissed. The order of dismissal has been accepted by all. It does not appear that any security or first charge against the claim of opposite party, survived thereafter.
(Arindam Sinha) Judge
RKS
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2 issues framed by the court
whether conditions in a release letter imposed under interim order survived the dismissal of the writ petition
whether the respondent could continue to claimsecured creditor status after issuing a No-Due Certificate
Esskay Machinery Pvt. Ltd.
Industrial Promotion & Investment Opposite Parties Corporation of Orissa Ltd.
Arindam Sinha
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
