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Judgment
Rajiv Sahai Endlaw, J.—This petition impugns the, i) amendment dated 09.01.1981 to the Cement Control Order, 1967; ii) the Cement Control (Regulation of Production) Order, 1981 dated 24.02.1981; and, iii) seeks to prohibit the respondents from acting upon the notices dated 28.06.1990 and 25/26.10.1990 demanding a sum of Rs. 69,52,538.80 with interest at the rate of 18% per annum from the petitioners and upon the failure of the petitioners to pay the same, threatening to initiate criminal proceedings against the petitioners. Notice of the petition and the application for interim relief was issued and vide order dated 19.03.1991, the respondents restrained from, initiating any proceedings against or making any recoveries from, the petitioners. Rule was issued in the petition and the interim order made absolute on 18.01.1993. The writ petition thereafter was twice dismissed in default of appearance of the petitioner but restored. The petitioners have filed CM No. 1462/2012 for urging additional grounds, facts and circumstances. The counsels have been heard. It is the case of the petitioners:
(i) that the petitioner No. 1 of which the other petitioners are Directors, was engaged in the manufacture of cement and which activity was governed by the Cement Control Order, 1967 issued in exercise of powers u/s 18G of the Industries (Development and Regulation) Act, 1951 (IDRA);
(ii) that the Cement Control Order, 1967 excluded from its purview the coloured cement other than the Grey Colour Portland Cement;
(iii) that the petitioner on 05.11.1980 commenced manufacturing of coloured cement and got the pricelist thereof approved from the Excise Authorities and informed the Cement Controller of the same;
(iv) that though the definition of cement in the Cement Control Order, 1967 was amended with effect from 09.01.1981 but without any effect on the coloured cement being manufactured by the petitioners; however the authorities under the Cement Control Order, 1967 treated the coloured cement being manufactured by the petitioners to be within the purview of the said Order;
(v) the petitioner No. 1 company having its manufacturing unit at Bagalkot in the State of Karnataka filed writ petition No. 1672/1981 in the Karnataka High Court at Bangalore; vide interim order in the said writ petition, the operation of the Cement Control Order, 1967 with regard to the coloured cement being manufactured by the petitioner was stayed;
(vi) that the authorities under the Cement Control Order, 1967 vide order dated 24.02.1981 sought to restrain the petitioner from manufacturing and selling coloured cement;
(vii) the petitioner No. 1 company filed another writ petition being writ petition No. 27794/1981, again in the Karnataka High Court, challenging the said order dated 24.02.1981 and vide interim order dated 09.12.1981, the operation of the said order dated 24.02.1981 was stayed on the undertaking of the petitioner No. 1 to that High Court to maintain accounts for production and sale of the said coloured cement;
(viii) that the petitioners with effect from 27.02.1982 stopped the manufacture of coloured cement and in view thereof withdrew both the writ petitions aforesaid preferred before the Karnataka High Court;
The notices dated 28.06.1990 and 25/26.10.1990, impugning the demand wherein the present petition has been filed, were in pursuance to the demand in the year 1985 by the authorities under the Cement Control Order, 1967 on the petitioner towards the dues on account of the said ''coloured cement'', under the said Cement Control Order, 1967. The petitioner contends that the Cement Control Order, 1967 being not applicable to the coloured cement, the said demand is bad.
It is not necessary to go into the intricacies of the challenge aforesaid to the demand since the opposition by the respondents to the petition is on the following grounds:
(a) that the petitioners had started manufacture of ''coloured cement'' without any authority and in violation of the Cement (Quality) Control Order, 1962 and without obtaining any licence therefor;
(b) that the petitioners sold, in all 58,820 tons of coloured cement between 05.11.1980 and 27.02.1982 and did not contribute the amount of Rs. 69,52,538.80 on account thereof to the Cement Regulation Account as required under Clause 9 of the Cement Control Order, 1967;
(c) that the petitioners by filing the earlier writ petitions aforesaid before the Karnataka High Court and obtaining interim orders therein restrained the respondents from recovering the said dues but that did not stop the petitioners from making the contribution to the Cement Regulation Account as they were obliged in law to make; that the petitioners thereafter did not press the petitions and withdrew the same;
(d) that the petitioners are therefor in contravention of Section 18G of the IDRA and are liable to be prosecuted u/s 24 thereof;
(e) that the petitioners having earlier raised a similar challenge before the Karnataka High Court and having withdrawn the same, are not entitled to maintain the present petition;
(f) that the territorial jurisdiction of this Court has been invoked mischievously; no part of the cause of action has accrued within the territorial jurisdiction of this Court.
The petitioners by way of CM No. 1462/2012 (supra) seek to urge that the petitioner No. 1 company was declared sick under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 on 02.06.2000; that a Scheme for rehabilitation and revival of the petitioner No. 1 company was sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) on 20.09.2007; that the respondents have not put forth before the BIFR any claim under the Cement Control Order, 1967 qua which the present petition has been filed; that accordingly the rehabilitation scheme does not make any provision therefor; that even otherwise BIFR has ordered payment only of 10% of the outstanding dues, that too without any interest and in six annual installments qua all unsecured and contingent creditors and the petitioners even if failing in the present petition would be liable to pay only 10% of the principal amount of Rs. 69,52,538.80.
The learned Additional Solicitor General in response to the aforesaid application has urged that the respondents having restrained by interim order in this petition could not have urged their claims before the BIFR.
The senior counsel for the petitioners in rejoinder has handed over a copy of the order dated 28.05.2007 of the BIFR to contend that the said hearing was attended by the representative of the Ministry of Commerce who had informed the BIFR of the then claim of Rs. 139 lacs plus interest under the Cement Regulation Account and on the basis thereof has urged that the BIFR having made no provision thereof in the rehabilitation scheme, the petitioners cannot be liable therefor even if this petition was to be dismissed on merits by this Court.
The senior counsel for the petitioners relies on Vallabh Das Vs. Madan Lal and Others, to urge that the notices of demand raised on the petitioners constitute a fresh/new cause of action and the filing of the earlier writ petitions in the Karnataka High Court do not disentitle the petitioners from maintaining the present petition.
Learned Additional Solicitor General has relied on Shree Chamundi Mopeds Ltd. Vs. Church of South India Trust Association CSI Cinod Secretariat, Madras, on the effect of interim order.
We are of the opinion that the present petition is not maintainable for the reason of the same raising the same challenge as earlier raised by the petitioners before the Karnataka High Court and which petitions were unconditionally withdrawn by the petitioners after enjoying the fruits of the interim orders therein. Had the petitioners pursued the petitions filed in the Karnataka High Court and succeeded in the same, the occasion for the respondents raising a demand impugned in this petition would not have arisen. The senior counsel for the petitioners has been unable to satisfy us that the challenge, as made in those petitions in the Karnataka High Court, is not substantially the same as made in this petition. The reliance on the judgment in Vallabh Das supra before us is of no avail. The Supreme Court in that case was concerned with a subsequent suit for possession on the basis of title after withdrawal of the earlier suit for partition and separation, with liberty to file fresh suit. That is not the position here. The cause of action for filing of the petitions before the Karnataka High Court was the action of the respondents of bringing within the ambit of the Cement Control Order, 1967 the ''coloured cement'' being then manufactured by the petitioners and which the petitioners claimed to be outside the ambit and purview of the Cement Control Order, 1967. Owing to the interim orders obtained by the petitioners in the said writ petitions, the respondents could neither enforce the contribution which the petitioners were required to make under the said Cement Control Order, 1967 to the Cement Regulation Account nor restrain the petitioners from manufacturing and selling the so-called ''coloured cement'' for not making the said contribution. The petitioners having invoked the jurisdiction of the Karnataka High Court, and rightly so, its manufacturing unit being situated within the jurisdiction of that Court, if, notwithstanding having stopped the manufacture of the coloured cement, interested in evading the liability for the coloured cement manufactured and sold under the ambit of the interim order, ought to have pursued that petitions. The petitioners however chose to withdraw the same. The petitioners appear to have entertained a hope that by stopping the manufacture, their illegal actions under the protection of the interim orders of the Court would be wiped out. The notices of demand challenged in the present writ petition are nothing but a consequence of the same activity. It cannot be lost sight of that the said demand was raised on the petitioners as far back as in the year 1985; even if the petitioners earlier wrongly entertained a hope that by stopping the manufacture of coloured cement, their liability for the quantity manufactured under the protection of the interim order would be wiped out, ought to have then immediately approached the Karnataka High Court for revival of the earlier petitions. The petitioners however did not do so and continued to engage the respondents in multifarious correspondence, thereby delaying the recoveries. The present petition was filed after more than six years, when threatened with prosecution.
It cannot be lost sight of that the jurisdiction under Article 226 of the Constitution of India which has been invoked is a discretionary jurisdiction. The said jurisdiction of this Court will never come to the aid of any litigant who is found to have indulged in such practices amounting to abuse of the process of this Court. The petitioners are clearly so, guilty. This is further evident from the petitioners, though based in Karnataka and having earlier approached the Karnataka High Court for the redressal of their grievance have for the second round of litigation on the same cause of action chosen to approach this Court. The petitioners appear to have been aware that having once approached the Karnataka High Court and having withdrawn the challenge therefrom, could not approach that High Court.
We therefore are not inclined to entertain the present writ petition.
That however still leaves us with another aspect. The petitioners not only enjoyed the fruits of the interim relief of the Karnataka High Court but have for the last over twenty years been enjoying the interim relief aforesaid in these proceedings also. The Supreme Court in Indian Council for Enviro-Legal Action Vs. Union of India (UOI) and Others, , Abhimanyoo Ram Vs. State of U.P. (2008) 17 SCC 73 and in Ramesh Chandra Sankla Etc. Vs. Vikram Cement Etc., has held that it is the bounden duty and obligation of the Court to neutralize any unjust enrichment and undeserved gain made by anybody by invoking the jurisdiction of the Court and that when a party applies and gets a stay or injunction from the Court, it is always at the risk and responsibility of the party applying, and an order of stay cannot be presumed to be conferment of additional right upon the litigating party. Equities flowing from the interim orders ought to be balanced and a litigant cannot get the benefit of an interim order. The attempts by litigants to retain the benefits of interim orders have been deprecated and have been directed to be dealt with sternly.
Notice may also been taken of Nava Bharat Ferro Alloys Ltd. Vs. Transmission Corporation of A.P. Ltd. and Another, holding that where the consequences of non-payment have been provided, the same have to be enforced notwithstanding any interim orders of the Courts. It was held that after the decision of the Court upholding the demand, the demand stood revived with full force with all its consequences, though it had remained unenforceable for some period on account of the orders of the Court. The principle of restitution was invoked and it was held that the Court has to endeavour to ensure that a party who has suffered on account of an order that is finally reversed should be put back in the same position as far as may practicable, in which it would have been if the decision of the Court adversely affecting it had not been passed. The offer of the defaulter in that case to pay interest @ 18% per annum on the unpaid amount was rejected and the defaulter held liable to pay additional amounts as provided. It was yet further held that an erroneous decision of the High Court or the default being not deliberate on account of such erroneous decision will not affect such restitution.
Mention may yet further be made of another recent judgment in State of Rajasthan and Another Vs. J.K. Synthetics Ltd. and Another, where the Supreme Court enhanced the rate of interest for the period of interim protection in the earlier round of litigation to 18% per annum and 24% per annum. It was held that where the statute or contract specifies the rate of interest, usually interest will have to be paid at such rate unless there are special reasons for not doing so, as any other interpretation would encourage unscrupulous debtors to file writ petitions and make attempts to obtain interim orders of stay. It was further held that if the obligation, to make restitution by paying appropriate interest on the withheld amount, is not strictly enforced, the loser will end up with a financial benefit by resorting to unjust litigation and the winner will end up as the loser financially, for no fault of his.
The petitioners having evaded the coercive recoveries of Rs. 69,52,538.80 with interest at 18% per annum and of prosecution under the interim orders of this Court, are directed to within four weeks hereof pay the entire said amount into the Cement Regulation Account and furnish proof thereof to the Registry of this Court, failing which the Registry to re-list the matter before this Court for further appropriate action against the petitioners.
As far as the pleas raised of sickness and rehabilitation of the petitioner are concerned, in the light of the above, the same have no bearing whatsoever on our aforesaid direction. Suffice it is to state that sickness is of a date much after the interim restrain order obtained in this petition and but for such interim order, the amounts would have been coercively recovered from the petitioners and would have been un-affected by the subsequent sickness. We therefore dismiss the petition with directions aforesaid. The petitioners to also pay cost of Rs. 30,000/- of the present writ petition to the respondents.