Usha Singh … v. 1.The State of Jharkhand through the Chief Secretary, Ranchi 2. The State of Bihar
Case Details
IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(C) No. 4127 of 2022 Usha Singh …… Petitioner Versus 1.The State of Jharkhand through the Chief Secretary, Ranchi 2. The State of Bihar through its Chief Secretary, Patna, Bihar 3. The Bihar State Credit & Investment Corporation Ltd, through its Managing Director, Patna, Bihar 4. The Deputy Commissioner, Dhanbad 5. The Superintendent of Police, Dhanbad 6. The Sub-Divisional Officer, Dhanbad 7. The Executive Magistrate, Dhanbad 8. Prabhat Kumar …… Respondents --------- CORAM: HON'BLE MR. JUSTICE SANJAY KUMAR DWIVEDI --------- For the Petitioner : Mr. P.P.N. Roy, Sr. Advocate Mr. Mahavir Prasad Sinha, Advocate For State of Jharkhand : Mr. Anish Kumar Mishra, A.C. to Sr. S.C.-I For State of Bihar : Mr. Binit Chandra, Advocate For Resp. No.3 : Mr. Amit Kr. Das, Advocate : Mr. Siddharth Jain, Advocate For the Intervener (I.A. No.3006/2023): Mr. Kalyan Banerjee, Advocate For the Respondent No.8 : Mr. Tarun Kumar No.1, Advocate 11/Dated: 09/07/2024
Legal Reasoning
Heard Mr. P.P.N. Roy, learned senior counsel for the petitioner, Mr. Anish Kumar Mishra, learned counsel for the State of Bihar, Mr. Binit Chandra, learned counsel for the State of Bihar, Mr. Amit Kr. Das, learned counsel for the respondent no.3, Mr. Kalyan Banerjee, learned counsel for the Intervener (in I.A. No. 3006/2023) and Mr. Tarun Kumar No. 1, learned counsel for the respondent no. 8. 2 Prayer in this writ petition is made for quashing the letter dated 23.08.2022 contained in Annexure-2 issued under section 29 of the State Financial Corporation Act, 1951 by which the step was taken for taking over possession and evicting from the landed property of the petitioner situated at Khairkabad, Govindpur, Dhanbad. 3. Mr. P.P.N. Roy, learned senior counsel for the petitioner submits that the petitioner is owner of various plots of land situated at Mouza Khairkabad, 1 Mouza No. 222, Govindpur, Dhanbad purchased through two registered sale deeds dated 10.01.1996 and the land is mutated in the name of the petitioner. He further submits that the petitioner has received an order of respondent no.3 being letter no. 283 dated 23.08.2022 issued under section 29 of the State Financial Corporation Act, 1951 whereby order has been passed for taking over the possession of landed property of the petitioner. He further submits that when the petitioner came to know that said property in auction sale has been sold to respondent no. 8 by respondent no.3. By way of inviting the attention of the Court section 29 of the said Act, he submits that nowhere it has been prescribed that any property owned in private capacity of any director can be sold out by the Corporation in the light of said section. He submits that entire exercise is colourable exercise of power which cannot be allowed. He further submits that for the recovery of loan amount Certificate Case is already pending and in view of that the auction sale to the respondent no. 8 is not in accordance with law and to buttress this argument, he relied in the case of “Indian Overseas Bank Vs. R.M. Marketing and Services Pvt. Ltd.” AIR 2002 Delhi 344. He refers to para 5 and 6 of the said judgment which is quoted hereinbelow:- “5. The defendants 4 and 6 are also implead-ed on the ground that they were Directors of the defendant No. 1. However, these defendants did not give any personal guarantee for due payment of loan and sim- ply because they were Directors of the de- fendant No. 1 they could not be fastened with the liability as the defendant No. 1 which is a Company incorporated under the Companies Act is separate legal entity. The defendants 2 and 3 would be liable as Guarantors. Since the defendant No. 3 has also been absolved from the liabilities no decree al need to be passed against the defendant No. 3 as well. 6. Decree in the sum of Rs. 1,96,675.76p is accordingly passed against de the defendants 1 and 2 along with interest on this amount 16.5% per annum from 2 the date of institution of suit till recovery thereof. The plaintiff shall also be entitled to cost. Decree be drawn accordingly.” 4. Relying on the above judgment, learned senior counsel for the petitioner submits that the said property was not mortgaged and it was not on 2 the basis of guarantee as such the action of the respondent no.3 is bad in law and the said impugned order may be quashed. 5. Per contra Mr. Amit Kr. Das, learned counsel for the respondent no.3- Bihar State Credit & Investment Corporation Ltd submits that the petitioner and the husband of the petitioner who was director and the Managing Director of the aforesaid company accepted the terms and conditions of the respondent no.3 for sanction of the loan of Rs. 86,00,000/- and BICICO released the fund in favour of M/s Bindhyabasini Bee Hive Hard Coke Pvt Ltd and before the release of the of the loan amount, Phulena Singh @Fulena Singh (husband of the petitioner) and Smt. Usha Singh (petitioner) both executed several Security documents in favour of the BICICO. He further submits that the husband of the petitioner, who was the Managing Director of Ms/ Bindhyabasini Beehive Hard Coke Pvt. Ltd along with present petitioner, who was other Director, had created mortgage with respect to landed properties which they had acquired through Sale Deeds bearing no. 960,961, 954, 955 all dated 15.04.1997. He further submits that thereafter the loan amount was disbursed to M/s Bindhyabasini Bee Hive Hard coke Pvt. Ltd, Dhanbad through five different Cheques in its favour. For the purpose of repayment of loan an installment chart was also prepared by the answering respondent and the same was provided to the petitioner and her husband indicating the Equated Monthly Installments through which the loan was required to be repaid payable by them to the answering respondent against the said loan. He further submits that several documents were executed in favour of BICICO which is disclosed in para 12 of the counter affidavit. He further submits that on the strength of agreement and deeds executed on the behalf of M/s Bindhyabasini Bee Hive Hard Coke Pvt. Ltd. in favour of the BICICO and on the basis of the document executed by the present petitioner and her husband namely, Usha Singh and 3 Phulena Singh @Fulena Singh, they also become personal guarantors against the said loan as such the petitioner cannot escape the liability to repay loan. He further submits that intention of the petitioner and her husband was not good and they have not paid any farthing to BICICO as such reminders were issued to the petitioner and her husband to pay the due amount. It was also found in inquiry by the BICICO the petitioner and her husband transferred the fund to another unit for another business purpose and in view of that the BICICO had filed a certificate case vide Certificate Case No. 123/2002 dated 03.01.2006 for recovery of 1 crore 57 lakhs Eight Five thousand Rs (1,57,85,000)/-, but the petitioner did not take care to pay the due amount to BICICO and lastly, the demand notice was issued by the BICICO on 28.12.2005 however no response was made by the petitioner and her husband. He further submits that vide Notification dated 29.02.1988 issued by the Govt. of India, Ministry of Finance, the Central Govt. directed that the provisions of Section 29, 30, 31, 32, 32 (A), 32 (B), 32 (C) and 32 (D) of the State Financial Corporation Act 1951 (63 of 1951) was made applicable to the answering respondent no. 3-BICICO. He submits that in view of above power provided under the said Act, the Deputy Commissioner, Dhanbad under provision of Section 29, 30 of the State financial Act to attach the mortgage property and sale through Auction issued Sale Notice dated 05.03.2021 and pursuant to that bidders have come forward and the respondent no. 8 was found to be a bidder on a higher side and the said auction sale was made in favour of the respondent no.8. He submits that the respondent no. 8 has paid Rs. 1 crore 5 lakh and 11 thousand. He submits that in the meantime present writ petition has been filed and in absence of BICICO on the first date the said order was granted. He draws the attention of the Court to the supplementary counter affidavit particularly Annexure-J and submits that property in question which has been auctioned sale to the 4 respondent no.8 was also mortgaged. On these grounds, he submits that this writ petition is fit to be dismissed. 6. Learned counsel for the respondent no.8 submits that in view of above provision the State has acted and provided the necessary support for possession of the property in question. He submits that the respondent no.8 has already paid Rs. 1 crore 5 lakh and 11 thousand however, due to stay the possession was not there in favour of respondent no. 8 till date. He submits that the respondent no. 8 is bonafide purchaser in auction sale as such this writ petition is fit to be dismissed. 7. Learned counsel for the intervener in I.A. No. 3006 of 2023 submits that the certificate case is still pending and inspite of that the said action has taken under section 29 of the said Act which itself is bad in law and in view of that this writ petition may be dismissed. 8. In reply, Mr. P.P.N. Roy, learned senior counsel for the petitioner submits that the petitioner is disputing the Annexure-J which is document which suggests that the said property which is auction sale was mortgaged with the BICICO. 9. In view of above submission of the learned counsel for the parties the Court has gone through the materials on record. Admittedly on the mortgaged sale a sum of Rs. 86,00,000/- was sanctioned in favour of petitioner’s company M/s Bindhyabasini Bee Hive Hard Coke Pvt. Ltd. The petitioner has signed the document to obtain the said loan. The property in question was also mortgaged and document to that effect brought on record by way of counter affidavit as well as supplementary counter affidavit which clearly suggests that property in question was mortgaged with BICICO. 10. It was pointed out that after obtaining loan of Rs. 86,00,000/- not even a single farthing was paid and it was further alleged that the said amount 5 was transferred to the another unit of the petitioner for another business. The reminder was also sent to the petitioner for repayment of EMI however the petitioner has not replied the said reminder. Thus, it is a clear-cut case of non payment of single farthing of loan amount taken from BICICO by the petitioner. 11. In the case of “ITC Limited Vs. Blue Coast Hotels Ltd. & Ors.”(Civil Appeal Nos. 2928-2930 of 2018) it has been observed as under: “the undisputed facts of the case are that a loan was taken by the debtor which was not paid, the debtor did not respond to a notice of demand and made a representation which was not replied to in writing by the creditor. The creditor, however, considered the proposals for repayment of the loan as contained in the representations in the course of negotiations which continued for a considerable amount of time. Several opportunities were in fact availed of by the debtors for the repayment of the loan after the proceedings were initiated by the secured creditor. The debtor failed to discharge its liabilities and eventually undertook that if the debtor fails to discharge the debt, the creditor would be entitled to take realize the secured assets”. 12. Section 29 of the said Act stipulates and provides the power to BICICO to take possession of the mortgaged property as such action was taken by the BICICO under section 29 of the said Act. 13. The learned counsel for the petitioner has not been able to satisfy the Court that the said property was the personal property of one of the director. Annexure-J document brought on record by way of supplementary counter affidavit filed by the respondent no.3 is document which suggests that the said property was also mortgaged with the BICICO. If such a situation is there the judgment relied by the learned senior counsel for the petitioner in the case of Indian Overseas Bank(supra) is not helping the petitioner. In that case before the Delhi High Court the director has not given any personal guarantee for repayment of loan and his personal property was tried to be taken over. The facts in the present is otherwise. Annexure-J is a document which clearly suggest that such property was mortgaged with BICICO. 14. In view of above facts and considering that the property in 6 question was mortgaged with BICICO and not even a single farthing has been paid to the BICICO after obtaining a sum of Rs. 86,00,000/- and the power under section 29 of the said Act is there with the BICICO and pursuant to that auction sale has taken place to respondent no. 8 after paying a sum of Rs. 1 core 5 lakh and 11 thousand and purchased the said property in auction sale. There is no illegality in the auction sale of respondent no.3 accordingly, this writ petition is dismissed. Interim order is vacated. Pending, I.A, if any, stands dismissed. Satyarthi/A.F.R. ( Sanjay Kumar Dwivedi, J.) 7