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Judgment
Ghulam Mohammed, J.—This writ petition was filed with the following prayer :
"... to issue a writ or order or direction more particularly one in the nature of Writ of Mandamus declaring the action of the respondents in not granting 24% interest on the deposit of Rs. 15,20,000/- with the 1st respondent from 31-3-1992 till the date of delivery of the possession of the assets of M/s. Dhakshin Fabrics Limited, as highly illegal, arbitrary and unjust and consequently direct the 1st respondent to pay 24% interest on the said amount from 31-3-1992 till the date of delivery of possession of the assets of M/s. Dhakshin Fabrics Limited and pass such other order or orders as are deemed fit and proper in the circumstances of the case."
By order dated 30-8-2001, the above payer was amended in WPMP No. 21339 of 2001, which is as follows :
"... to issue a writ or order or direction more particularly one in the nature of Writ of Mandamus declaring the action of the 1st respondent in not handing over the possession of the assets of M/s. Dhakshin Fabrics Limited, pursuant to the statutory sale effected by the 1st respondent u/s 29 of the State Financial Corporations Act, 1956 as highly illegal, arbitrary, and unjust and consequently direct the respondents to deliver the possession of the assets of the said company to the petitioner free from all encumbrances and further direct the 1st respondent to pay interest at the rate of 24% per annum on the amount of Rs. 15,20,000/- deposit by the petitioner on 31-3-1992 till the delivery of possession is effected by the 1st respondent."
The petitioner states that pursuant to the sale advertisement issued by the 1st respondent-AP Industrial Development Corporation, Fatch Maiden Road, Hyderabad, to sell M/s. Dhakshin Fabrics Limited, situated in Sy. No. 165 (New). Mazidpura Village, Shamirpet Mandal, Ranga Reddy District, (for short, ''the unit'') he offered his bid for Rs. 76 lacs to purchase the unit and the same was accepted by the 1st respondent and the unit was sold for Rs. 76 lacs. It is the case of the petitioner that pursuant to the said sale, the petitioner had paid an amount of Rs. 15,20,000/- to the 1st respondent on 31-3-1992 being 20% amount of the total sale consideration of Rs. 76 lacs and the 1st respondent also issued sale confirmation letter dated 31-3-1992 confirming the sale in favour of the petitioner. The petitioner further states that as per the said letter dated 31-3-1992 the balance amount payable under the sale has to be treated as term loan and the petitioner was required to pay the amount in instalments and the interest chargeable thereon shall be 24% per annum.
The grievance of the petitioner is that though the sale was confirmed in his favour the 1st respondent has not handed over the possession of the unit up to May 1993 on the ground that the 3rd respondent, State Bank of Hyderabad, Gunfoundary, Hyderabad (for short, ''the 3rd respondent-SBH'') did not give necessary clearance to the 1st respondent being one of the financier of the unit. It is further stated that at that juncture, the 3rd respondent-SBH filed WP No. 6865 of 1993 challenging the sale confirmed in favour of the petitioner on the ground that the unit was sold for an under price though it would fetch lucrative price. It is further stated that this Court by order dated 3-7-1996 while dismissing the writ petition No. 6865 of 1993 directed the 1st respondent to handover possession of the unit to the petitioner. However, in the meantime, the 4th respondent-Assistant Collector, Customs, Central Excise Department, Hyderabad, (for short, the 4th respondent-Central Excise Department) raised a demand for Rs. 3,76,50,083.85 Ps. from the petitioner on the ground that the unit owes the said sum to the department and as the sale was confirmed in favour of the petitioner, the petitioner is liable to pay the said dues. It is further stated that challenging the said action of the 4th respondent-Central Excise Department, the petitioner had filed WP No. 10792 of 1994 and this Court had admitted the said writ petition and granted stay of the demand made by the 4th respondent-Central Excise Department on condition the petitioner furnishing bank guarantee for a sum of Rs. 4,40,000/-, which was subsequently stated to have been modified in WPMP No. 27672 of 1996 permitting the petitioner to furnish immovable property security place of bank guarantee.
The contention of the petitioner''s counsel is that the respondent having confirmed the sale in favour of the petitioner and said sale being a statutory sale u/s 29 of the State Financial Corporations Act, 1956 (for short, ''the Act''), ought to have handed over the possession of the unit soon after the sale was confirmed in favour of the petitioner. It is also contended that the distraint order passed by the 4th respondent-Central Excise Department restraining the 1st respondent from delivery of the possession of the unit on the ground that the unit fell in arrears to the 4th respondent, is illegal and without any authority of law and the petitioner could not challenge the same as the order was passed against the 1st respondent. The counsel also states that the petitioner is entitled to receive interest at the rate of 24% per annum on the amount of Rs. 15,20,000/- paid by him from 31-3-1992 till the date of delivery of the possession of the unit as he was denied possession of the unit illegal and without any justifiable reasons.
It is not in dispute that the sale of the unit was confirmed in favour of the petitioner and he has paid an amount of Rs. 15,20,000/- on 31-3-1992 in terms of the sale conditions. It is stated that the unit was financed by respondents 1 to 3, and the 1st respondent being the lead institution, invoked the provisions of Section 29 of the Act and sold the assets of the unit to the petitioner. As rightly pointed out by the learned counsel for the petitioner, when once the sale is confirmed in favour of the petitioner and such sale being a statutory sale u/s 29 of the Act, there is no justification on the part of the 1st respondent in not handing over the possession of the unit to the petitioner. Likewise the 4th respondent cannot interdict the handing over of possession of the unit by passing a distraint order against the 1st respondent on the ground that the unit is in arrears of central excise duty. The 4th respondent can proceed against the petitioner by taking appropriate proceedings, as are available under law, if it is of the opinion that the petitioner being the auction purchaser of the unit is liable to pay the arrears of excise duty payable by the unit. As regards the interest claimed by the petitioner, this Court sitting under Article 226 of the Constitution cannot adjudicate upon the same as it is purely a contractual matter, and no material is produced or pointed out to show that the 1st respondent is statutorily obligated to pay the interest on the amount deposited by the 1st petitioner pursuant to the sale confirmed in his favour.
In the circumstances, the writ petition is allowed directing the 1st respondent to handover possession of the unit to the petitioner within a period of four weeks from the date of receipt of a copy of this order subject to the petitioner fulfilling the conditions of sales order as to costs.
That Rule Nisi has been made absolute as above.
Witness the Hon''ble Dr. Davinder Gupta, the Chief Justice on this Monday the Seventh day of March, Two thousand and three.