Dismissed

Bimlendu Kumar Bimal v. the Bihar State Financial Corp

Patna HC31 Jan 2013CWJC/18899/2010

Case brief

AI extract

What is this about?

Petitioner challenged the grant of One Time Settlement benefit to a private respondent who had become the highest bidder in a property sale, arguing a right had crystallized earlier when the respondent withdrew. Court held the sale was not finalized and the respondent's scheme application was valid.

What did the court decide?

Writ application dismissed; interim order of status quo vacated.

Bimlendu Kumar Bimal Vs the Bihar State Financial Corp — Company and Corporate | Patna HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.18899 of 2010

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====================================================== Bimlendu Kumar Bimal S/o Late Jagdish Prasad Singh R/o Vill.- Amari, P.O.- Amari Kuchron, Police Station- Dhamdaha, Distt.- Purnea .... .... Petitioner Versus 1. The Bihar State Financial Corporation through the Managing Director Fraser Road, Patna-800001 2. The Managing Director, Bihar State Financial Corporation, Fraser Road, Patna-800001 3. The Deputy Manager, In-charge (Zone-II), Bihar State Financial Corporation Fraser Road, Patna-800001 4. The Assistan General Manager, Bihar State Financial Corporation, Purnea, Headquarter Fraser Road, Patna-800001 5. The Regional Manager, Bihar State Financial Corporation, Purnea, Headquarter Fraser Road, Patna-800001 6. The Branch Manager, Bihar State Financial Corporation, Purnea 7. Mrs. Kala Kiran Chaudhary W/o Late Krishna Murari Chaudhary R/o Sri Nagar Road, near D.M. Kothi, Police Station-K. Hat, Distt.- Purnea 8. Shri Subodh Kumar Chaudahry S/o not known, resident of Sri Nagar Road, Janta Chowk, Police Station-K.Hat, Distt.- Purnea .... .... Respondents ====================================================== Appearance : For the Petitioner/s : M/S Bindhychal Singh &. Manoj Kumar, Advocates For the BSFC : M/S Raj Nandan Prasad, Rakesh Kumar, Advocates For Respondent No.7 : M/S Manik Vedasen, Subhash Chandra Bose, Advocates ====================================================== CORAM: HONOURABLE MR. JUSTICE RAMESH KUMAR DATTA ORAL ORDER 5 31-01-2013 Heard learned counsel for the petitioner and learned counsels for the respondent Bihar State Financial Corporation and the private respondent No.7.

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The petitioner has come up to this Court for a direction to quash the grant of benefit of One Time Settlement (OTS) Scheme to private respondent No.7 or in the alternative to restrain the

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Patna High Court CWJC No.18899 of 2010 (5) dt.31-01-2013

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respondents from entering into One Time Settlement pursuant to BSFC One Time Settlement Scheme, 2009 with private respondent No.7 and for further direction upon the respondents to issue a sale certificate order with respect to the said property in favour of the petitioner.

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Shorn of unnecessary details the facts of the case are that the mortgaged assets of one M/s. Ajanta Foundry Works, Purnea which included land with equipment and building were sold in favour of one Z.A.Sharar by the BSFC by order dated 2.3.1990 of the Managing Director. Thereafter on 20.4.1990 the Branch Manager, BSFC, Purnea handed over possession to Sri Z.A.Sharar, Sri Krishna Murari Chaudhary and Smt.Kiran Chaudhary in the presence of independent witnesses after giving details of the same in the list of inventory drawn on that date. It appears that there was default on the part of the new purchasers and the property was again put up for sale by advertisement dated 24.8.2007. Pursuant to the same the respondent No.8 and the petitioner applied. Ultimately the petitioner and respondent No.8 were called for negotiation on 2.8.2010 and 17.8.2010. On 17.8.2010 an open bidding was held between the petitioner and respondent No.8 in which the respondent No.8 emerged as the higher bidder at Rs.53.05 lacs, whereas the petitioner’s bid was for

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Patna High Court CWJC No.18899 of 2010 (5) dt.31-01-2013

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Rs.52.50 lacs.

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On 17.8.2010 itself the BSFC came up with the One Time Settlement Scheme, 2009. The respondent No.7 Mrs. Kala Kiran Chaudhary, who was among the three persons to whom the possession had been handed over on 4.10.2010, which also included her husband Late Krishna Murari Chaudhary, deposited an amount of Rs. 15,60,000/- being the full amount under the OTS Scheme. Aggrieved by the said action of the respondent BSFC the petitioner has filed the present writ application.

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Learned counsel for the petitioner submits that the petitioner having participated in the sale of the unit pursuant to the advertisement dated 24.8.2007 and also having taken part in the negotiation held on 17.8.2010 and the respondent No.8 being the higher bidder having already withdrawn from the sale process on 5.6.2010 and having not appeared on 2.8.2010 when the first date was fixed for negotiation, the authorities of the BSFC ought to have finalized the same in favour of the petitioner on 2.8.2010 itself and in collusion with the respondent the BSFC has acted unfairly in the matter.

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Learned counsel also submits that the right of the petitioner had crystallized on 17.8.2010 on his having participated in the bidding process and the higher bidder having withdrawn

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Patna High Court CWJC No.18899 of 2010 (5) dt.31-01-2013

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from the same, whereas the petitioner had not applied for the benefit of OTS Scheme until 4.10.2010 and thus the unit ought to have been handed over to him.

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It is also submitted by learned counsel that under Clause 5.9 of the OTS Scheme the benefit of OTS could not have been given to respondent No.7 as the sale had been made earlier in favour of Z.A.Sharar on 2.3.1990 and even if the best view is taken that the name of respondent No.7 along with others have also been incorporated in the document on 20.4.1990 when the possession was handed over, the respondent No.7 alone could not have applied for benefit of the OTS Scheme nor the same could be allowed to her.

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Learned counsel for the BSFC, on the other hand, submits that the petitioner has no such right as he claims when at no stage the sale had become final. It is submitted that even till 17.8.2010 the petitioner was only the second bidder and the highest bidder was respondent No.8 and thus no right accrued in favour of the petitioner even on 17.8.2010. With respect to withdrawal of respondent No.8 from the sale process on 5.6.2010, it is submitted that the same has no relevance as ultimately the respondent No.8 had in fact come back into the negotiation process and had participated in the bidding which took place on 17.8.2010 between

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Patna High Court CWJC No.18899 of 2010 (5) dt.31-01-2013

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the respondent No.8 and the petitioner and he emerged as the higher bidder. It is the contention of learned counsel for the BSFC that thereafter it was decided by the BSFC initially to proceed with re-advertisement treating the highest offer of Rs.53.05 lacs as the reserve price so that transparency was maintained. However, when the OTS had been floated on 17.8.2010 itself the respondent No.7 had applied against the same on 4.10.2010 and therefore ultimately the unit was not re-advertised. It is thus argued by learned counsel that at no stage the sale had crystallized in favour of the petitioner until the present writ application was filed so as to claim a right to the unit in question.

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Learned counsel also refers to a decision of this Court dated 6.10.2010 passed in CWJC No. 16988 of 2010 (Sunil Kumar Sinha vs. The Bihar State Financial Corporation & Ors.) in which this Court had held that the right of the owner of the unit under the OTS Scheme would arise on 17.8.2010 when the Scheme was floated. He relies upon the following observations and findings of this Court in the said decision, which are quoted below :

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“This Court does not find any force in the submission of learned counsel for the respondents. The right of the petitioner to apply under the OTS Scheme would arise on 17.8.2010 when the said scheme was floated and the scheme itself is valid till 15.11.2010. So long as the petitioner had a right to retain the unit on the date the OTS Scheme came into operation, he would also have the right to apply for the benefit under the said scheme till the last

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Patna High Court CWJC No.18899 of 2010 (5) dt.31-01-2013

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date, i.e., 15.11.2010.

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The petitioner having neither lost possession of nor a right to retain the unit on the date of the Scheme, his right cannot be defeated by the inaction of the respondentauthorities in not giving him the application form that he had demanded. In fact, according to this Court, if he was entitled to the benefit of the OTS scheme on the date it was floated, he would have the right to apply till the last date, i.e., 15.11.2010.

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In the above circumstances, the prayer of the petitioner is fit to be allowed. The authorities of the respondent-BSFC are directed to accept the application form of the petitioner forthwith and consider and dispose of the same in accordance with law and in terms of what has been observed in this order.”

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Learned counsel for the respondent No.7 while adopting

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the submission of learned counsel for the BSFC further submits that no right had accrued to the petitioner on 17.8.2010, he merely being the second highest bidder; further that even if the sale had been made on 17.8.2010 then still the respondent No.7 would have the right to exercise his option to retain the unit by taking the benefit of OTS scheme as has been held in the case of Sunil Kumar Sinha (supra) and thus there is no good reason in support of the petitioner’s claim over the unit in question.

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I have considered the submissions of learned counsels for the parties. It is evident that till 17.8.2010 when the OTS Scheme was floated by the respondent Corporation the sale of the unit in question had not been finalized. On that date there was a so-called

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Patna High Court CWJC No.18899 of 2010 (5) dt.31-01-2013

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negotiation in the form of bidding which took place inter se between the petitioner and respondent No.8 in which respondent No.8 emerged as the higher bidder and the right, if any, accrued in favour of respondent No.8. However, that right itself would not crystallize until the higher offer made by respondent No.8 had been accepted and confirmed by the appropriate authority of BSFC. It does not appear from the materials on the record that that had been done. Later on the BSFC had decided to re-advertise the unit for sale but actually advertisement could not be made.

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In any case, since the OTS scheme had come into force on 17.8.2010 itself the right of the respondent No.7 to apply against the same had immediately arisen and as held in Sunil Kumar Sinha’s case (supra) such right to apply for the benefit under the said Scheme would continue till the last date of the scheme, i.e., 15.11.2010. Within the said period the respondent No.7 had applied for getting the benefit of the OTS scheme and thus there was no superior right of even the respondent No.8 in the matter of getting the sale of the unit being directed in his favour, much less that of the petitioner who was not even the highest bidder.

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So far as the submission of learned counsel for the petitioner that the respondent No.7 not being mentioned as purchaser in the sale order and in any case being one of the three

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Patna High Court CWJC No.18899 of 2010 (5) dt.31-01-2013

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persons to whom the possession had been handed over would not be entitled to the benefit of the OTS scheme, the same appears to be misconceived in view of the provisions of Clause 5.9 (iii) of the Scheme, which is in the following terms :

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“Proprietor/Partner (duly authorized by all the partners)/Director (duly authorized by the company by special resolution) can file the application. Legal heir of the deceased proprietor can file application with documentary evidence about his/her being legal heir. Partner of a partnership firm who applies individually without consent of other partners (legal heir of any deceased partner) or director of a company who applies without being authorized by the company by a special resolution, shall be applying at their own risk because the Corporation would not be releasing documents individually to them.”

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It is evident on a consideration of the said provision that it does not bar a partner of a partnership firm individually to apply without consent of other partners; while it normally requires a partner authorized by all the partners to file the application for grant of benefit under the OTS scheme but it does not completely bar a partner of a partnership firm without consent of other partners, only stipulating that they shall be applying at their own risk since the Corporation would not release the documents individually to them. Therefore, it cannot be said that the respondent No.7 had no right to apply. The only effect of such application prima facie would be that the benefit of the scheme

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Patna High Court CWJC No.18899 of 2010 (5) dt.31-01-2013

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would be given to the partnership firm and the applying partner would not have a right to insist upon release of all the documents individually to her.

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Thus, in the light of the aforesaid discussions, this Court does not find any merit in the writ application. It is, accordingly, dismissed.

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Needless to say that since the writ application has been dismissed, the interim order of status quo passed on 19.11.2010 stands automatically vacated.

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(Ramesh Kumar Datta, J)

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spal/-

Bimlendu Kumar Bimal v. the Bihar State Financial Corp

Case brief

What is this about?

What did the court decide?

Bimlendu Kumar Bimal v. the Bihar State Financial Corp

Case brief

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