State Financial Corporations Act, 1951- Sale of property - challenged on the ground that against the one time settlement , the sale was conducted - Corporation clearly denied the one time settlement - Their Lordships held that with out considering the affidavit and documents of the corporation, the writ was allowed and as such the order are set aside holding that the sale is valid = Mulagundla Sudhakar Reddy... Appellant Mattapalli Laxmi Narasimha Industries, Huzurnagar, Nalgonda District and others... Respondents = 2014 (March. Part) judis.nic.in/judis_andhra/filename=10998
State Financial Corporations Act, 1951- Sale of property - challenged on the ground that against the one time settlement , the sale was conducted - Corporation clearly denied the one time settlement - Their Lordships held that with out considering the affidavit and documents of the corporation, the writ was allowed and as such the order are set aside holding that the sale is valid =
It is the case of the
writ petitioner that without waiting for the last date of payment of balance
amount i.e., 28.02.2010, the Corporation started taking action to sell the unit.
Hence, it was arbitrary action taken in complete breach of the promise and on
settled terms.=
In the counter affidavit filed by the Corporation, it was stated that the case
made out by the writ petitioner for one time settlement was merely a proposal
and it was never accepted. Since the payment was not made, the property was put
up for sale by way of advertisement and it was sold to respondent No.3.=
Result of writ
prayer of the writ
petitioner was allowed giving a direction to the Andhra Pradesh State Finance
Corporation to receive the amount of Rs.14,00,000/- deposited by the writ
petitioner and respondent No.3 to re-deliver possession of the Industrial Unit
to the writ petitioner. The Corporation was also directed to refund the amount
deposited by respondent No.3 including EMD within two weeks from the date on
which respondent No.3 makes the claim. =
Writ appeal
We
think that without considering the statement and averment of the counter-
affidavit, the findings of the learned single Judge with regard to one time
settlement is absolutely illegal and such recording is in complete violation of
the principles of natural justice. However, it appears from the record that the
learned single Judge perhaps was persuaded by a letter dated 15.02.2010, wherein
it has been stated that the Corporation will put on hold the sale till the
payment of Rs.17,00,000/- is received before 28th February 2010. The sale of
unit will be confirmed on 1st March 2010 if payment is not received by the
stipulated date. Even if taking note of that letter, we can conclude that the
sale shall be put on hold, but there is no mention about the one time
settlement. We fail to understand on what basis the learned single Judge came
to the conclusion that there has been one time settlement. Accordingly, this
finding is totally incorrect.
It is settled position of law that a person can approach
the writ Court for enforcement of fundamental right, legal right or legally
enforceable promise. The promise was that if the payment is made within the
time, then the sale would not be held. But, nowhere it has been said that the
entire transaction will be closed upon the payment of the aforesaid amount and
the writ petitioner will be relieved of other liability. Even on fact, the said
amount of Rs.14,00,000/- was not tendered within the time as stated by the writ
petitioner and it was deposited only with the intervention of the Court, not
before that.
Under the aforesaid circumstances, we are of the view that the writ petitioner
failed to make out any case of enforceable right not to speak of any legal
right. We, therefore, are unable to uphold the judgment and order of the
learned single Judge. Accordingly, we set aside the same.
It appears further that when the writ petitioner did not make any payment, an
advertisement was issued and the appellant has purchased the unit and he has
already invested huge amount on the unit towards repairs and renovation and it
has become very profitable concern at present. We think that when the appellant
purchased the unit, there has been no legal impediment or encumbrance.
Therefore, the theory of bona fide purchaser for value without notice of
encumbrance on the date of sale could be established. Further more, the writ
Court cannot take away appellant's lawfully accrued right or interest because of
the default of the writ petitioner.
2014 (March. Part) judis.nic.in/judis_andhra/filename=10998
THE HONOURABLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HONOURABLE JUSTICE SANJAY KUMAR
WRIT APPEAL No.162 of 2011
04-03-2014
Mulagundla Sudhakar Reddy... Appellant
Mattapalli Laxmi Narasimha Industries, Huzurnagar, Nalgonda District and
others... Respondents
COUNSEL FOR APPELLANT: Sri C.Damodar Reddy
COUNSEL FOR RESPONDENT No.1: Sri B.Vijaysen Reddy
COUNSEL FOR RESPONDENT No.2 : Sri N.Vijay
COUNSEL FOR RESPONDENT No.3 : Sri Y.N.Lohita
<GIST
>HEAD NOTE:
?CITATION:
HON'BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA
AND
HON'BLE SRI JUSTICE SANJAY KUMAR
WRIT APPEAL No.162 of 2011
JUDGMENT: (per Hon'ble the Chief Justice Sri Kalyan Jyoti Sengupta )
This appeal has been preferred against the judgment and order of the learned
single Judge dated 18th February 2011, by which the prayer of the writ
petitioner was allowed giving a direction to the Andhra Pradesh State Finance
Corporation to receive the amount of Rs.14,00,000/- deposited by the writ
petitioner and respondent No.3 to re-deliver possession of the Industrial Unit
to the writ petitioner. The Corporation was also directed to refund the amount
deposited by respondent No.3 including EMD within two weeks from the date on
which respondent No.3 makes the claim.
The fact of the case is that the writ petitioner/respondent No.1 obtained loan
from the Andhra Pradesh State Financial Corporation (for short 'Corporation')
for running a small-scale industrial unit, which was set up for producing
packaged drinking water. The loan amount could not be repaid within the time,
as a result, there has been an outstanding amount of Rs.24,15,000/-. A notice
for payment was issued. In response to the notice, the writ petitioner
approached for negotiations and on negotiations with the Corporation, it was
settled between the parties, namely the writ petitioner and the Corporation,
that the Corporation would accept a sum of Rs.17,00,000/- as full and final
settlement if the same is to be paid in two instalments, one of which is
Rs.3,00,000/- by way of down payment and the balance of Rs.14,00,000/- would be
paid on or before 28-02-2010. Initially, an amount of Rs.3,00,000/- was paid.
Thereafter, without waiting for payment of balance amount of Rs.14,00,000/- on
or before 28.02.2010, the Corporation issued a notice on 27.01.2010 stating that
it had received certain offers in response to its advertisement dated
24.10.2009, and in case any other person is willing to offer, it would consider
the offers. Respondent No.3 in the writ petition is said to have made his offer
and thus, negotiations have taken place on 18.01.2010. It is the case of the
writ petitioner that without waiting for the last date of payment of balance
amount i.e., 28.02.2010, the Corporation started taking action to sell the unit.
Hence, it was arbitrary action taken in complete breach of the promise and on
settled terms.
The learned single Judge accepted the case as made out by the writ petitioner.
In the counter affidavit filed by the Corporation, it was stated that the case
made out by the writ petitioner for one time settlement was merely a proposal
and it was never accepted. Since the payment was not made, the property was put
up for sale by way of advertisement and it was sold to respondent No.3.
Learned Counsel for the appellant says that in terms of the advertisement, his
client has purchased the property having found that there has been default in
paying the loan amount and there was no encumbrance at all. The learned single
Judge has failed to notice that there has been no agreement for one time
settlement. The learned single Judge has accepted one side version of the writ
petitioner.
Learned Counsel for the writ petitioner/respondent No.1 says that there has been
one time settlement and the learned single Judge has recorded the fact correctly
and rightly interfered with the order.
Learned Counsel for the Corporation/respondent No.2 also supports the argument
of the learned Counsel for the appellant (respondent No.3 in the writ petition).
He submits that there was no settlement agreed upon subsequently, only it was at
the negotiations stage and since the negotiations did not crystallize and no
payment was forthcoming, the property was put on hold by way of public auction
and that the appellant has lawfully purchased the same by paying entire
consideration amount at a time.
We have heard the learned Counsel for the parties and have gone through the
impugned judgment and order of the learned single Judge.
It appears that the learned single Judge, without considering the case made out
by the Corporation in the counter-affidavit that there has been no one time
settlement, has accepted the version of the writ petitioner/respondent No.1. We
think that without considering the statement and averment of the counter-
affidavit, the findings of the learned single Judge with regard to one time
settlement is absolutely illegal and such recording is in complete violation of
the principles of natural justice. However, it appears from the record that the
learned single Judge perhaps was persuaded by a letter dated 15.02.2010, wherein
it has been stated that the Corporation will put on hold the sale till the
payment of Rs.17,00,000/- is received before 28th February 2010. The sale of
unit will be confirmed on 1st March 2010 if payment is not received by the
stipulated date. Even if taking note of that letter, we can conclude that the
sale shall be put on hold, but there is no mention about the one time
settlement. We fail to understand on what basis the learned single Judge came
to the conclusion that there has been one time settlement. Accordingly, this
finding is totally incorrect.
The Corporation at the most agreed to put on hold the sale till 28-02-2010, that
does not mean that the Corporation has accepted a sum of Rs.17,00,000/- as full
and final settlement, whereby no right is said to have been created in favour of
the writ petitioner. It is settled position of law that a person can approach
the writ Court for enforcement of fundamental right, legal right or legally
enforceable promise. The promise was that if the payment is made within the
time, then the sale would not be held. But, nowhere it has been said that the
entire transaction will be closed upon the payment of the aforesaid amount and
the writ petitioner will be relieved of other liability. Even on fact, the said
amount of Rs.14,00,000/- was not tendered within the time as stated by the writ
petitioner and it was deposited only with the intervention of the Court, not
before that.
Under the aforesaid circumstances, we are of the view that the writ petitioner
failed to make out any case of enforceable right not to speak of any legal
right. We, therefore, are unable to uphold the judgment and order of the
learned single Judge. Accordingly, we set aside the same. The amount deposited
in terms of the order of the learned single Judge will be returned to the writ
petitioner. It would be open for the Corporation to take steps in accordance
with law.
It appears further that when the writ petitioner did not make any payment, an
advertisement was issued and the appellant has purchased the unit and he has
already invested huge amount on the unit towards repairs and renovation and it
has become very profitable concern at present. We think that when the appellant
purchased the unit, there has been no legal impediment or encumbrance.
Therefore, the theory of bona fide purchaser for value without notice of
encumbrance on the date of sale could be established. Further more, the writ
Court cannot take away appellant's lawfully accrued right or interest because of
the default of the writ petitioner. A reference of the claim shall be made
within a period of one week from the date of receipt of a copy of this order.
Accordingly, the Writ Appeal is allowed. Pending miscellaneous Petitions, if
any, shall also stand closed. No costs.
___________________
K.J.SENGUPTA, CJ
__________________
SANJAY KUMAR, J
04-03-.2014
It is the case of the
writ petitioner that without waiting for the last date of payment of balance
amount i.e., 28.02.2010, the Corporation started taking action to sell the unit.
Hence, it was arbitrary action taken in complete breach of the promise and on
settled terms.=
In the counter affidavit filed by the Corporation, it was stated that the case
made out by the writ petitioner for one time settlement was merely a proposal
and it was never accepted. Since the payment was not made, the property was put
up for sale by way of advertisement and it was sold to respondent No.3.=
Result of writ
prayer of the writ
petitioner was allowed giving a direction to the Andhra Pradesh State Finance
Corporation to receive the amount of Rs.14,00,000/- deposited by the writ
petitioner and respondent No.3 to re-deliver possession of the Industrial Unit
to the writ petitioner. The Corporation was also directed to refund the amount
deposited by respondent No.3 including EMD within two weeks from the date on
which respondent No.3 makes the claim. =
Writ appeal
We
think that without considering the statement and averment of the counter-
affidavit, the findings of the learned single Judge with regard to one time
settlement is absolutely illegal and such recording is in complete violation of
the principles of natural justice. However, it appears from the record that the
learned single Judge perhaps was persuaded by a letter dated 15.02.2010, wherein
it has been stated that the Corporation will put on hold the sale till the
payment of Rs.17,00,000/- is received before 28th February 2010. The sale of
unit will be confirmed on 1st March 2010 if payment is not received by the
stipulated date. Even if taking note of that letter, we can conclude that the
sale shall be put on hold, but there is no mention about the one time
settlement. We fail to understand on what basis the learned single Judge came
to the conclusion that there has been one time settlement. Accordingly, this
finding is totally incorrect.
It is settled position of law that a person can approach
the writ Court for enforcement of fundamental right, legal right or legally
enforceable promise. The promise was that if the payment is made within the
time, then the sale would not be held. But, nowhere it has been said that the
entire transaction will be closed upon the payment of the aforesaid amount and
the writ petitioner will be relieved of other liability. Even on fact, the said
amount of Rs.14,00,000/- was not tendered within the time as stated by the writ
petitioner and it was deposited only with the intervention of the Court, not
before that.
Under the aforesaid circumstances, we are of the view that the writ petitioner
failed to make out any case of enforceable right not to speak of any legal
right. We, therefore, are unable to uphold the judgment and order of the
learned single Judge. Accordingly, we set aside the same.
It appears further that when the writ petitioner did not make any payment, an
advertisement was issued and the appellant has purchased the unit and he has
already invested huge amount on the unit towards repairs and renovation and it
has become very profitable concern at present. We think that when the appellant
purchased the unit, there has been no legal impediment or encumbrance.
Therefore, the theory of bona fide purchaser for value without notice of
encumbrance on the date of sale could be established. Further more, the writ
Court cannot take away appellant's lawfully accrued right or interest because of
the default of the writ petitioner.
2014 (March. Part) judis.nic.in/judis_andhra/filename=10998
THE HONOURABLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HONOURABLE JUSTICE SANJAY KUMAR
WRIT APPEAL No.162 of 2011
04-03-2014
Mulagundla Sudhakar Reddy... Appellant
Mattapalli Laxmi Narasimha Industries, Huzurnagar, Nalgonda District and
others... Respondents
COUNSEL FOR APPELLANT: Sri C.Damodar Reddy
COUNSEL FOR RESPONDENT No.1: Sri B.Vijaysen Reddy
COUNSEL FOR RESPONDENT No.2 : Sri N.Vijay
COUNSEL FOR RESPONDENT No.3 : Sri Y.N.Lohita
<GIST
>HEAD NOTE:
?CITATION:
HON'BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA
AND
HON'BLE SRI JUSTICE SANJAY KUMAR
WRIT APPEAL No.162 of 2011
JUDGMENT: (per Hon'ble the Chief Justice Sri Kalyan Jyoti Sengupta )
This appeal has been preferred against the judgment and order of the learned
single Judge dated 18th February 2011, by which the prayer of the writ
petitioner was allowed giving a direction to the Andhra Pradesh State Finance
Corporation to receive the amount of Rs.14,00,000/- deposited by the writ
petitioner and respondent No.3 to re-deliver possession of the Industrial Unit
to the writ petitioner. The Corporation was also directed to refund the amount
deposited by respondent No.3 including EMD within two weeks from the date on
which respondent No.3 makes the claim.
The fact of the case is that the writ petitioner/respondent No.1 obtained loan
from the Andhra Pradesh State Financial Corporation (for short 'Corporation')
for running a small-scale industrial unit, which was set up for producing
packaged drinking water. The loan amount could not be repaid within the time,
as a result, there has been an outstanding amount of Rs.24,15,000/-. A notice
for payment was issued. In response to the notice, the writ petitioner
approached for negotiations and on negotiations with the Corporation, it was
settled between the parties, namely the writ petitioner and the Corporation,
that the Corporation would accept a sum of Rs.17,00,000/- as full and final
settlement if the same is to be paid in two instalments, one of which is
Rs.3,00,000/- by way of down payment and the balance of Rs.14,00,000/- would be
paid on or before 28-02-2010. Initially, an amount of Rs.3,00,000/- was paid.
Thereafter, without waiting for payment of balance amount of Rs.14,00,000/- on
or before 28.02.2010, the Corporation issued a notice on 27.01.2010 stating that
it had received certain offers in response to its advertisement dated
24.10.2009, and in case any other person is willing to offer, it would consider
the offers. Respondent No.3 in the writ petition is said to have made his offer
and thus, negotiations have taken place on 18.01.2010. It is the case of the
writ petitioner that without waiting for the last date of payment of balance
amount i.e., 28.02.2010, the Corporation started taking action to sell the unit.
Hence, it was arbitrary action taken in complete breach of the promise and on
settled terms.
The learned single Judge accepted the case as made out by the writ petitioner.
In the counter affidavit filed by the Corporation, it was stated that the case
made out by the writ petitioner for one time settlement was merely a proposal
and it was never accepted. Since the payment was not made, the property was put
up for sale by way of advertisement and it was sold to respondent No.3.
Learned Counsel for the appellant says that in terms of the advertisement, his
client has purchased the property having found that there has been default in
paying the loan amount and there was no encumbrance at all. The learned single
Judge has failed to notice that there has been no agreement for one time
settlement. The learned single Judge has accepted one side version of the writ
petitioner.
Learned Counsel for the writ petitioner/respondent No.1 says that there has been
one time settlement and the learned single Judge has recorded the fact correctly
and rightly interfered with the order.
Learned Counsel for the Corporation/respondent No.2 also supports the argument
of the learned Counsel for the appellant (respondent No.3 in the writ petition).
He submits that there was no settlement agreed upon subsequently, only it was at
the negotiations stage and since the negotiations did not crystallize and no
payment was forthcoming, the property was put on hold by way of public auction
and that the appellant has lawfully purchased the same by paying entire
consideration amount at a time.
We have heard the learned Counsel for the parties and have gone through the
impugned judgment and order of the learned single Judge.
It appears that the learned single Judge, without considering the case made out
by the Corporation in the counter-affidavit that there has been no one time
settlement, has accepted the version of the writ petitioner/respondent No.1. We
think that without considering the statement and averment of the counter-
affidavit, the findings of the learned single Judge with regard to one time
settlement is absolutely illegal and such recording is in complete violation of
the principles of natural justice. However, it appears from the record that the
learned single Judge perhaps was persuaded by a letter dated 15.02.2010, wherein
it has been stated that the Corporation will put on hold the sale till the
payment of Rs.17,00,000/- is received before 28th February 2010. The sale of
unit will be confirmed on 1st March 2010 if payment is not received by the
stipulated date. Even if taking note of that letter, we can conclude that the
sale shall be put on hold, but there is no mention about the one time
settlement. We fail to understand on what basis the learned single Judge came
to the conclusion that there has been one time settlement. Accordingly, this
finding is totally incorrect.
The Corporation at the most agreed to put on hold the sale till 28-02-2010, that
does not mean that the Corporation has accepted a sum of Rs.17,00,000/- as full
and final settlement, whereby no right is said to have been created in favour of
the writ petitioner. It is settled position of law that a person can approach
the writ Court for enforcement of fundamental right, legal right or legally
enforceable promise. The promise was that if the payment is made within the
time, then the sale would not be held. But, nowhere it has been said that the
entire transaction will be closed upon the payment of the aforesaid amount and
the writ petitioner will be relieved of other liability. Even on fact, the said
amount of Rs.14,00,000/- was not tendered within the time as stated by the writ
petitioner and it was deposited only with the intervention of the Court, not
before that.
Under the aforesaid circumstances, we are of the view that the writ petitioner
failed to make out any case of enforceable right not to speak of any legal
right. We, therefore, are unable to uphold the judgment and order of the
learned single Judge. Accordingly, we set aside the same. The amount deposited
in terms of the order of the learned single Judge will be returned to the writ
petitioner. It would be open for the Corporation to take steps in accordance
with law.
It appears further that when the writ petitioner did not make any payment, an
advertisement was issued and the appellant has purchased the unit and he has
already invested huge amount on the unit towards repairs and renovation and it
has become very profitable concern at present. We think that when the appellant
purchased the unit, there has been no legal impediment or encumbrance.
Therefore, the theory of bona fide purchaser for value without notice of
encumbrance on the date of sale could be established. Further more, the writ
Court cannot take away appellant's lawfully accrued right or interest because of
the default of the writ petitioner. A reference of the claim shall be made
within a period of one week from the date of receipt of a copy of this order.
Accordingly, the Writ Appeal is allowed. Pending miscellaneous Petitions, if
any, shall also stand closed. No costs.
___________________
K.J.SENGUPTA, CJ
__________________
SANJAY KUMAR, J
04-03-.2014
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