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The Public Gambling Act, 1867
Article 226 in The Constitution Of India 1949
Article 227 in The Constitution Of India 1949
The Public Premises (Eviction of Unauthorised Occupants) Act, 1971
Union Of India & Anr vs Delhi High Court Bar Association & ... on 14 March, 2002

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Andhra High Court
Estate Officer And Manager ... vs Recovery Officer, Debts Recovery ... on 6 August, 2003
Equivalent citations: AIR 2004 AP 198, 2003 (5) ALD 599, 2003 (5) ALT 216, III (2004) BC 290
Author: B S Reddy
Bench: B S Reddy, P Narayana



JUDGMENT

 

 B. Sudershan Reddy, J. 

1. This batch of writ petitions and Contempt Case may be disposed of by a common order since the subject-matter that arises for consideration in all of them is one and the same and they are inter-related and interconnected. The parties in all the cases, except in W.P. No. 24115 of 1998, are also one and the same.

2. W.P. Nos. 14174, 24502 and 36133 of 1998 are filed by the Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC) whereas W.P. Nos. 24060 of 1998 and 17443 of 1999 are filed by the Syndicate Bank.

3. For the sake of convenience, we shall refer to the parties by their names i.e., APIIC and Syndicate Bank instead of referring to them as petitioners and respondents. We shall refer to the M/s. United Auto Tractors Limited, who is the allottee of the land and principal borrower as 'the company'.

4. The APIIC filed W.P. No. 14174 of 1998 challenging the proclamation of sale dated 21-1-1998 of Recovery Officer, Debts Recovery Tribunal (DRT), Bangalore and auction sale notice dated 8-3-1998 proposing to auction plot No. A-27/2 to an extent of Ac.25.00 which forms part and parcel of Plot No. A-27 measuring Ac.51.00 situated at IDA, Nacharam, Ranga Reddy District, Hyderabad on various grounds.

5. Likewise, W.P. No. 24502 of 1998 is filed by the APIIC challenging the orders dated 12-8-1998 passed by the Recovery Officer, DRT rejecting the claim of the APIIC in respect of the property in Plot No. A-27 and the consequential decision to sell the same in public auction in pursuance of the certificate dated 30-12-1996 issued by the DRT, Bangalore.

6. W.P. No. 36133 of 1998 is also filed by the APIIC challenging the action of the same Recovery Officer in proposing to auction the land admeasuring Ac. 51.00 in two lots in realisation of the amounts due from the company.

7. The Syndicate Bank filed W.P. No. 24060 of 1998 challenging the auction-cum-sale of the property out of plot No. A-27 situated at IDA, Nacharam pursuant to the auction notice dated 6-8-1998. W.P. No. 17443 of 1999 is also filed by the Syndicate Bank questioning the cancellation of allotment orders dated 14-7-1999 to an extent of Ac.26.00 of land earlier allotted to the company.

Factual Matrix:

8. The Company submitted its application dated 19th March, 1969 seeking allotment of an extent of Ac.100.00 of land in the industrial area for setting up of an industry to manufacture agricultural tractors and implements. The Government of Andhra Pradesh vide letter dated 18-7-1972 of the Director of Industries allotted an extent of Ac.51.00 of land in Nacharam Industrial Development area in favour of the company for setting up of the said industry. That accordingly an agreement was entered into on 3-8-1972 by and between the Government of Andhra Pradesh and the company, which inter alia required the company to pay to the Government the cost of the land plus developmental charges as determined by the Government. That as a condition precedent, to place the company in possession of the plot allotted, an initial payment of not less than Rs. 2,46,840/- being 50% of the costs was required to be paid. That the Company agreed to execute a promissory note in favour of the Government for the balance unpaid cost of the land plus developmental charges on the basis of the cost tentatively arrived at Rs. 9,680/- per acre. The Company had undertaken and agreed to pay the amount under the said promissory note within a period of six months from the date of execution of the agreement i.e., 3-8-1972. The date and time of payment has been agreed to be the essence of the contract. It is unnecessary to refer to the details of various terms and conditions incorporated into the agreement except those which are relevant for the purpose of disposal of these writ petitions.

9. Since the controversy between the parties is required to be resolved mainly with reference to the certain covenants incorporated in the agreement, we shall refer to the relevant clauses of the agreement in somewhat detail.

10. Under Clause 8, the Government agreed to the company raising money on the properly agreed to be sold provided the financing agency agrees to pay the Government on behalf of the Company so much of the amount advanced as loan to the Company as will remain due on the said promissory note hereinbefore mentioned. That under Clause 8(b) the financing agencies were required to obtain prior consent of the Government in case they advance more than 60% of the value of the land.

11. The terms and conditions of the agreement inter alia provide that the company shall complete the construction of the factory, building etc., within nine months (Clause 13-c), that if the land was no longer required for the purpose for which it was allotted, the company would relinquish and restore the land in favour of the Government (Clause 13-e), that in case the company commits breach of any of the covenants it shall be lawful for the Government to re-enter upon the said land and take possession thereof, that transfer made in favour of the company shall be null and void, and that all the rights of the company in the said land and the building standing in the said land shall at once cease and determine (Clause 13-t). Till such time, as the ownership of the property is transferred to the company in the manner mentioned in the agreement, the property continues to remain the property of the Government.

12. That on 3-8-1972 the Director of Industries, Andhra Pradesh issued a letter permitting the company to mortgage Ac.51.00 of land allotted in the Nacharam Industrial Development Area to any scheduled bank to obtain financial assistance to establish the project.

13. The Company executed a promissory note for a sum of Rs. 2,46,840/-towards the balance sale consideration for the allotted land.

14. The Government of Andhra Pradesh in pursuance of its policy decision issued orders vide G.O. Ms. No. 1162, dated 4-12-1973 directing the transfer of all the industrial estates and development areas, including the industrial area with which we are concerned for the present, to the APIIC with effect from 1-1-1974. That is how the industrial area together with all the rights in the land stood vested in the APIIC. That, immediately the APIIC required the company to take note of vesting of the land in the Corporation with effect from 1-1-1974 and accordingly demanded the company to pay the balance 50% cost of the land. The company failed to pay the same within the stipulated time.

15. In the meanwhile, the Syndicate Bank appears to have advanced several loans to the company subject to various terms and conditions. The Company by way of depositing the letter dated 18-7-1972 of the Director of Industries mortgaged the allotted land with the Syndicate Bank and secured loans for its purposes. That according to the Syndicate Bank, the mortgage is by way of deposit of title deeds. The Syndicate Bank treated the 'no objection letter' of the Director of Industries dated 18-7-1972 as title deeds.

16. The Company obviously failed to discharge its obligations to the Syndicate Bank leading to filing of application in O.A. No. 425 of 1995 by the Bank against the company, its Directors and guarantors for recovery of an amount of Rs. 2,57,10,393/-in DRT, Bangalore in respect of five loans advanced to the Company on 21-4-1981, 9-2-1985 and 17-8-1992 for purchase of machinery and movables, which were hypothecated in favour of the Bank as security.

17. It is the case of the Syndicate Bank that as collateral security for the credit facilities availed by the company, its Managing Director deposited the title deeds of its immovable property with it and thus by virtue of deposit of title deeds, the Company created equitable mortgage of its immovable property and before creation of said equitable mortgage it was satisfied that the Government of Andhra Pradesh has granted Ac. 51-00 of land to the company in the Industrial Development Area, Nacharam and it was further impressed that the Government has absolutely no objection for the creation of equitable mortgage of the said land in favour of the Bank. The original title deeds were accordingly deposited on 8-5-1974 as security for the repayment of the financial facilities then granted to the company. That subsequently, on 21-4-1981 the equitable mortgage was extended to all the financial facilities availed and to be availed by the company. Letter dated 21-4-1981 confirming the equitable mortgage was given by the company per its Chairman-cum-Managing Director.

18. At this stage, it is required to notice that the charge dated 11-11-1977 for Rs. 13,67,537/- created by the company and registered with the Registrar of the Companies does not cover the five loans granted by the Syndicate Bank to the company in between 21-4-1981 and 17-8-1992 for whose recovery O.A., was filed by the Syndicate Bank before the DRT. The APIIC is not impleaded as a party respondent in the said O.A., filed by the Syndicate Bank for recovery of its money as against the Company.

19. The DRT allowed the said application filed by the Syndicate Bank on 18-10-1996 declaring that the Bank is entitled for recovery of a sum of Rs. 2,57,10,393-00 from the company and its Directors including the Managing Director jointly and severally with costs, current and future interest on the principal amount at the rate of 21.5% per annum with quarterly rests from the date of application till the date of realisation. Directions were accordingly passed to "issue recovery certificate accordingly and inform all the parties concerned". The DRT accordingly issued the Recovery Certificate dated 30th December, 1996 inter alia certifying "that in default of such payments as aforesaid the amount due shall be recoverable by sale of hypothecated movables or mortgaged immovable property as scheduled hereunder belonging to the defendants". The schedule appended to the Certificate is shown as 'NIL'.

20. It is required to appreciate that the APIIC by its proceedings dated 17-8-1993 itself cancelled the allotment of an extent of Ac. 25-00 acres of land on the ground that the company had failed to utilise the land allotted for setting up of a unit for manufacture of tractors. The said order dated 17-8-1993, of cancellation of allotment of 25 acres of land, has attained finality since the same has not been challenged by the company, in any manner whatsoever.

21. That pursuant to the said cancellation of allotment of 25 acres of land for the reason of failure on the part of the company to utilise the said land for the purpose for which it was allotted, the APIIC issued show-cause notice dated 29-4-1995 under Section 4(1) of the Andhra Pradesh Public Premises (Eviction of Unauthorised Occupants) Act, 1968 (for short 'the Public Premises Act'). A copy of the said proceedings was duly served upon the Syndicate Bank also. It is at that stage, the Syndicate Bank filed O.A. No. 425 of 1995 against the company and its Directors for recovery of the amounts due to it. The APIIC is not arrayed as a party respondent in the said Original Application filed by the Syndicate Bank. We have already noticed about the nature of the decree and recovery certificate issued by the DRT in the said Original Application.

22. That the Recovery Officer appointed under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short 'the Act') has issued the proclamation of sale dated 21-1-1998 and auction sale notice in newspapers dated 8-3-1998 proposing to auction on 23-3-1998 the entire land admeasuring Ac. 51-00 initially allotted to the company, for realisation of the dues of the Syndicate Bank. At this stage, the APIIC has filed its claim petition before the Recovery Officer, DRT inter alia contending that there was no valid much less any enforceable mortgage in inspect of the said lands and that the allotment of land to an extent of Ac. 25-00 was already cancelled and the proceedings for eviction of the company from the unauthorised occupation of the land under the Public Premises Act were already initiated. The said application was kept pending by the Recovery Officer without taking any decision thereon. It is under those circumstances, the APIIC filed W.P. No. 14147 of 1998 challenging the very sale proclamation.

23. In the meanwhile, the Recovery Officer by the order dated 12-8-1998 rejected the claim petition of the APIIC inter alia holding that the APIIC has permitted the company to mortgage the entire property in favour of the Syndicate Bank and the charge spreads over the entire piece of land. That order is challenged in W.P. No. 24502 of 1998 by the APIIC.

24. The APIIC having cancelled the allotment of an extent of Ac.25-00 of land resumed the same and the Estate Officer handed over the same to the APIIC on 6-8-1998. The APIIC has decided to allot the said land by dividing the same into various plots through public auction to 42 entrepreneurs collecting a part of sale consideration thereof vide auction notice dated 6-8-1998. It is at that stage, the Syndicate Bank filed W.P. No. 24060 of 1998 challenging the auction of plots in Ac.25-00 of land already resumed by the APIIC and obtained stay of all further proceedings from this Court vide the order dated 27-8-1998.

25. That the Nacharam Industries Association already filed W.P. No. 24115 of 1998 challenging the auction of plots in Ac.25-00 of land on 24-8-1998. The Company also filed W.P. No. 25056 of 1998 challenging the auction-cum-sale notice dated 6-8-1998 of the APIIC. However, no stay was granted in the said writ petition since there is already a stay in W.P. No. 24060 of 1998 filed by the Syndicate Bank.

26. In the meanwhile, the APIIC issued show-cause notice dated 18-12-1998 to the Company proposing to cancel the allotment of balance Ac.26-00 of land from out of Ac.51-00 of land on the ground that the Company failed to set up any industry much less the proposed industry for which the land was allotted except constructing some structures on Plot No. A27/1. The Company was put on notice that it had failed till date to utilise the land and was not in a position to take up the proposed new industry although the APIIC had, in fact, did not approve the change of line of the industrial activity of the Company. The Company was also put on notice that it failed to pay the balance land cost, property tax and maintenance charges amounting to Rs. 27,19,366-35 paise. The Company failed to submit its explanation to the said show-cause notice except asking time repeatedly for submitting explanation.

27. It is under those circumstances, the APIIC, vide its proceedings dated 14-7-1999, cancelled the allotment, duly determining the sale agreement dated 3-8-1972 and forfeiting the amounts already paid by the Company towards the use and occupation of the property. The Company was accordingly put on notice to surrender the vacant possession of the land admeasuring Ac.26-00 of the land to the Assistant Zonal Officer (Development) of the APIIC. The Syndicate Bank filed W.P. No. 17443 of 1999 challenging the said cancellation order dated 14-7-1999, on 18-8-1999.

28. It is not necessary to notice the further details as to the eviction orders passed by the Estate Officer against the Company for taking possession of the land after cancellation of allotment by the APIIC. The Civil Miscellaneous Appeals preferred by the Company against the orders of eviction are stated to be pending on the file of the Principal District Judge, Ranga Reddy. In such view of the matter, it would not be appropriate to express any opinion whatsoever with regard to the eviction order passed by the Estate Officer pursuant to the cancellation of allotment of the land.

29. That on an analysis of the pleadings and the mass of material made available, the following crucial features of the case emerge:

30. That the company having obtained the allotment of land failed to utilise the same for the industrial purposes, for which it was allotted by the Government. It had raised huge amounts of money as loan from the Syndicate Bank by mortgaging the land as if it belongs to it. It had failed to repay the same since it has nothing to loose by committing default. The Company had taken the APIIC as well as the Syndicate Bank for a ride. The fact remains that the Syndicate Bank did not initiate any coercive steps as against the Managing Director and Directors for realisation of the amounts, but appears to have decided to go all out against the APIIC for realisation of the decreetal amount by putting huge extent of land to public sale, whose worth may be in crores of rupees as on today. Nothing prevented the Syndicate Bank to proceed against the personal properties of the Managing Director, Directors and Guarantors for realisation of the amounts.

31. The Company and its Managing Director did not promote any viable and useful industry for which purpose a vast extent of land belonging to the State has been made available to it, but successfully promoted a no holds bar fight between a Nationalised Bank and a Corporation fully owned by the State of Andhra Pradesh thereby gaining an undue advantage to itself, which resulted in public mischief. The Company merrily watches the ongoing internecine warfare between two instrumentalities of the State from the ringside without being adversely effected in any manner whatsoever. The situation on hand is a classic illustration and depiction of an oft-quoted saying that in this country, "profits are privatised and losses are nationalised".

32. The most singular and remarkable feature of this case is, namely, the non-participation of principal dramatis personae in the debate. It has nothing to lose by keeping away from the Court and perhaps everything to gain in the process. The non-appearance of the Company and its abstemious silence in the Court have embarrassed the Syndicate Bank to whose lot it fell to defend the case since its monies are involved. This, however, is not to certify that the Syndicate Bank acted diligently in the matter and in advancing huge financial assistance to the Company on the strength of a letter of 'no objection' purported to have been issued by the Director of Industries. Surprisingly, the Syndicate Bank equated that letter to that of a title deed and accordingly advanced monies without taking any proper care and caution.

33. We must, however, express our strong condemnation of the tactics adopted by the company and its Managing Director, which we consider deplorable.

34. Be it as it may, the following crucial features of the case may have to be noticed before dealing with the submissions made by the Counsel appearing for the parties;

35. The APIIC by its proceedings dated 17-8-1993 cancelled the allotment of land to an extent of Ac.25-00. The said order remained unquestioned. The Company, in response to the cancellation order, through its letter dated 7-6-1994 admitted that the factory became sick due to unavoidable reasons and unable to manufacture the tractors. It has revealed that the company had pledged the entire land to the Syndicate Bank for obtaining working capital limits.

The APIIC was informed that some new arrangement for the manufacture of sugarcane harvester combine and rice tramplater in collaboration with Cuban Government and Korean party was in the offing and necessary arrangements were being made for starting production of those machines in the factory. Accordingly a request was made to withdraw the order of cancellation.

36. The APIIC in its claim petition dated 21-3-1998 before the Recovery Officer, DRT, specifically expressed its 'no objection' for the sale of Ac.26-00 of land provided that the dues payable to the APIIC by the Company are paid to it. Even in the affidavit filed in support of W.P. No. 14174 of 1998 an averment is made to the effect that sale of Ac.26-00 of land, which is allowed to be retained by the company, would secure more amount than the amount payable under the decree passed in O.A. No. 425 of 1995 and, therefore, the inclusion of Ac.25-00 of land i.e., plot No. A-27/2 belonging to the APIIC for sale by way of public auction is unwarranted. The said affidavit is swom and signed by the Estate Officer. It is not known how the Estate Officer who is entrusted with specified duties under the provisions of the Public Premises Act could have filed an affidavit for and on behalf of the APIIC. The APIIC never bothered itself and taken any care to protect its own interest. The Estate Officer, who is not entitled to represent the APIIC, has no business to file such an affidavit in this Court.

37. Be that as it may, the Recovery Officer vide the order dated 12-8-1998 rejected the claim of the APIIC and accordingly found that the Company mortgaged the entire property of Ac.51-00 of land in favour of the Syndicate Bank and the charge spreads over the entire piece of land admeasuring Ac.51-00.

38. During the course of hearing of these writ petitions, an affidavit is filed by the Syndicate Bank stating that it confines its claim to the extent of Ac.26-00 of land as per the admission made by the APIIC and accordingly sought for permission to sell only Ac.26-00 of land along with the structures and building through the Recovery Officer, DRT, Hyderabad. It is stated that by the sale of Ac. 26-00 of land, if the Bank does not recover the entire dues, it will proceed against the guarantors. The learned Standing Counsel for the Syndicate Bank reiterated the same in the form of submission.

Submissions:

39. Sri Ramesh Ranganathan, learned Additional Advocate General, submitted that the Recovery Officer acted in excess of the jurisdiction conferred on him, under Section 25 of the Act, by issuing the proclamation dated 21-1-1998 for sale of Ac.51-00 of land belonging to the APIIC, since the schedule of the Recovery Certificate issued by the DRT is shown as 'NIL'. The jurisdiction conferred, by Section 25 of the Act, on the Recovery Officer is to recover the amount due strictly in accordance with the Certificate issued by the Presiding Officer under Section 19(22) of the Act. It is not as if the Recovery Officer can issue proclamation for sale of the properties belonging to the third parties in the absence of any Certificate issued under Section 19(22) of the Act. There is no Certificate in the eye of law issued by the DRT authorising the Recovery Officer to sell the lands in question belonging to the APIIC. The learned Additional Advocate General contended that the Company could not have mortgaged the properties belonging to the APIIC without its prior consent. The very acceptance of the property and creation of charge by way of simple mortgage is totally illegal and void. The letter dated 3-8-1972 of the Director of Industries by itself does not confer any title and the said letter cannot be treated as a document of title enabling the company to deposit the same as title deed and create simple mortgage in respect of the lands belonging to the APIIC. The statement in the claim petition expressing 'no objection' for sale of Ac. 26-00 of land does not operate as estoppel nor the same can be treated as an admission enabling the Syndicate Bank to initiate steps for sale of the said land.

40. Sri K.G. Sastry, learned Standing Counsel for the Syndicate Bank, submitted that the Syndicate Bank would be satisfied if it is allowed to proceed against only Ac.25-00 of land for realisation of those amounts since the Bank's claim to that extent is clearly admitted by the APIIC. The learned Standing Counsel further contended that the writ petitions filed by the APIIC are not maintainable inasmuch as the APIIC has an alternative and effective remedy by way of an appeal to challenge the proceedings of the Recovery Officer. This Court cannot judicially review the proclamation of sale as well as the order rejecting the claim petition of the APIIC by the Recovery Officer. It was submitted that the judgment of the DRT has become final and the Syndicate Bank is entitled, in law, to proceed against the properties that were mortgaged by the company for realisation of the amounts due to it by the company. The finding of the DRT that there is a valid charge created over the properties in question by way of simple mortgage has become final and the same cannot be re-opened at the instance of the APIIC in these judicial review proceedings.

41. The Director of Industries, Andhra Pradesh, vide his letter dated 18-7-1972 allotted Ac.51-00 of land to the Company at the provisional rate of Rs. 9,680/- per acre for setting up of an industry for manufacture of agricultural tractors. That an agreement dated 3-8-1972 was entered into between the Director of Industries and the Company subject to various terms and conditions incorporated in the said agreement itself. It is not a sale deed. The Company expressly agreed and undertaken that the land shall be utilised exclusively for the purpose set forth in the allotment proposal and that no change shall be made without there being any written consent of the Government. The Company had also undertaken, after securing necessary clearance from the Government authorities, to complete the construction of the factory buildings in not later than nine months. The company had also undertaken that as and when the said land is no longer required by it for the aforesaid purpose, it shall forthwith relinquish and restore the land in favour of the Government and the company forfeit the amount already paid and the payment made shall be treated as rent for use and occupation of the schedule property and in no event the Company can claim the refund of the same; that if the Company commits a breach of any of the covenants contained in the agreement, it shall be lawful for the Government to re-enter upon the said land and take possession thereof and also of the buildings standing thereon; the transfer made in favour of the Company shall become null and void and all rights of the company in the said land and in any building standing thereon shall at once cease and determine. The Government reserved its right to resume the land if the Company did not use the land for the purpose for which it was allotted within the period specified and the period to be reckoned from the date of which the company was placed in possession of the land. One of the important covenants in the agreement is that "till such time as the ownership of the property is transferred to the Company in the manner provided in the agreement, the property shall continue to remain the property of the Government."

42. That a cumulative reading of all the covenants incorporated in the agreement entered by and between the Company clearly reveals that the Government merely granted permission by putting the Company in possession of the land to utilise the same for the specified industrial purpose for which it was allotted. The ownership of the land always remains with the Government until a regular sale deed is executed by the Government in favour of the Company. Admittedly, no such sale deed has been executed by the Government in favour of the company. It is not as if the Company is entitled to use the land for whatever purposes deviating from its undertaking to utilise the land only for specified industrial purpose.

43. However, Clause 8 of the agreement is required to be noticed as some controversy as regards the interpretation of the same arises for consideration:

"8. The Government agree to the Company raising money on the property hereby agreed to be sold as well as buildings, plant and machinery that may be erected or installed therein or thereon notwithstanding anything to the contrary in this agreement by raising a loan from the State Bank of India, or any other financial agency approved by the Government on the security of the property, provided, the State Bank of India or the financing agency agrees to pay the Government on behalf of the company so much of the amount advanced as loan to the Company as will remain due on the said promissory note hereinbefore mentioned.

8(a) Without prejudice to the rights of the State Bank of India or any other financing agency approved by the Government as first mortgages, Government have a second charge on the land, buildings, plant and machinery which shall be converted into a first charge when the obligation of the financing agencies are liquidated.

8(b) If the Financing Institutions were to advance more than 60% of the value of the land, building, machinery and structures, prior agreement of the Government will be required."

44. There is absolutely no dispute whatsoever that the Syndicate Bank advanced more than 60% of the value of the land, building, machinery and structures in favour of the Company.

45. The question that falls for consideration is as to whether the Company as well as the Syndicate Bank obtained prior agreement of the Government in the matter as is required under Clause 8(b) of the agreement?

46. The letter dated 3-8-1972 of the Director of Industries, Andhra Pradesh, which is vague in its terms, is to the following effect:

GOVERNMENT OF ANDHRA PRADESH No. 4082-DII(1)/68,                                                            dated 3-8-1972 
 

 From
 

The Director of Industries,  

Andhra Pradesh, Hyderabad.
 

To
 

M/s. United Auto Tractors Pvt. Ltd.,  

D0432, Defence Colony, New Delhi.
 

Sir,
 

Sub: Land - Allotment of land in Nacharam Industrial Development Area - Permission to mortgage the land to the Financial Institutions - Regarding.
 

Ref: 1. This office letter of even No. dated 10-7-1972 and 18-7-1972.
 

2. Your letter No. UAT/Hyd/LN/ 6149, dated 27-7-1972.
 

In the circumstances stated in your letter second cited, you are hereby permitted to mortgage the 51 acres of land allotted in the Nacharam Industrial Development area to any Scheduled Bank to obtain financial assistance to your project.
 

The agreement executed by you is returned herewith duly signed.
 

 Your faithfully,      
 

 (Sd) G.V. DHARMA REDDY 

Additional Director of Industries
 

End: 1 agreement.
 

//Attested//
 

 Sd/-       

Deputy Director 
 

47. The letter referred to hereinabove cannot be construed as a prior agreement of the Government enabling the Company to raise money on the property. That at any rate, Clause 8 of the agreement, in no manner, puts restriction upon the Government's right to resume the land on the failure of the Company to use the land for the purpose for which it was allowed within the period specified.
 

48. The expression 'prior agreement' used in Clause 8(b) of the agreement signifies its importance. The facts that consequences of not obtaining the requisite prior agreement are severe, the burden of proof is on the person who claims the advantage of such prior agreement. There is nothing on record that the Syndicate Bank obtained prior agreement of the Government before advancing more than 60% of the value of the land, buildings, machinery and structures.

49. Be that as it may, the letter dated 3-8-1972 of the Director of Industries, which is vague and indefinite in its terms, cannot be treated and characterised as a document of title enabling the Company to create charge as against the property belonging to the APIIC The said letter is not even in conformity with Clause 8 of the agreement, whereunder the Government has agreed enabling the company to raise money on the property subject to the condition of the financing agency agreeing to pay the Government on behalf of the Company so much of the amount advanced as loan to the Company as will remain due on the said promissory note executed by the Company in favour of the Government at the time of agreement. The financing agency in the instant case being the Syndicate Bank did not enter into any such agreement with the Government in the manner provided for in Clause 8 of the agreement. The letter dated 3-8-1972 of the Director of Industries cannot be treated as a prior agreement of the Government expressing its no objection for advancing more than 60% of the value of the land. There is nothing on record suggesting that the so-called no objection of the Director of Industries binds the Government. There is nothing on record to show that the said letter has been issued by the Director of Industries with the prior approval of the Government. The agreement requires prior consent of the Government expressing no objection if the financing agencies were to advance more than 60% of the value of the land. The said letter by no stretch of imagination could be characterised and treated as a prior agreement of the Government enabling the Syndicate Bank to advance more than 60% of the value of the land. The actual mortgage deed executed by way of deposit of title deeds is not made available for the perusal of the Court by the Syndicate Bank.

50. The Company obviously is a resourceful and influential one as it not only could successfully obtain allotment of huge extent of Ac.51-00 of land in the midst of city, but also could secure huge amounts of loan from time to time by mortgaging the property, which does not belong to it, without undertaking any industrial activity of whatsoever nature. The Company has created this unfortunate situation where one authority is pitted against the other and itself remained unaffected in any manner whatsoever.

51. The APIIC vide its letter dated 17-8-1993 cancelled the allotment of land to an extent of Ac.25-00 acres from out of Ac.51-00 acres on the ground that the Company had committed breach of terms and conditions of the agreement dated 3-8-1972 since it has failed to utilise the land for the purpose for which it was allotted. That order has become final. The subsequent order dated 14-7-1999 cancelling the allotment of remaining extent of Ac.26-00 of land is also self-explanatory. There is a reference in the said order itself to the letter dated 25-6-1985 of the Company admitting that it could not set up the industry for manufacture of agricultural tractors and it further undertook to set up a new industry for manufacture of sugarcane harvester combine and rice tramplator. But the Company failed to do so till the proceedings dated 14-7-1999 were issued cancelling the allotment of remaining extent of Ac.21-00 of land. The order dated 14-7-1999 is a composite one. The allotment was cancelled on both the grounds that (1) the outstanding amounts payable in accordance with the terms and conditions of the agreement were not paid; and (2) the land was not utilised for the purpose for which it was allotted. The Company failed to submit any explanation to the show-cause notice and after providing innumerable opportunities, the APIIC passed final order dated 14-7-1999 cancelling the allotment of remaining extent of land also. The first order dated 17-8-1993 cancelling the allotment of Ac.25-00 the land remained unchallenged. This order dated 14-7-1999 cancelling the allotment of remaining extent of Ac. 26-00 of land, in our considered opinion, is not vitiated for any reason whatsoever. There is a clear and categorical finding in the said order that the Company failed to utilise the land for the purpose for which it was allotted. The APIIC was well within its limits to cancel the remaining extent of land.

52. Be it as it may, whether the Recovery Certificate dated 30th December, 1996 issued by the DRT enables the Recovery Officer to recover the amount by sale of mortgaged property?

53. The Recovery Certificate dated 30th December, 1996 enables the Recovery Officer to recover the due "by sale of hypothecated movables or mortgaged immovable property as schedule hereunder belonging to the defendants". The immovable property mortgaged in the instant case does not belong to the company (defendant). The schedule of the Recovery Certificate is shown as 'NIL'. Yet, the Recovery Officer had chosen to issue sale proclamation proposing to sell the lands in question by way of pubic auction.

54. That Section 19 of the Act is a Code by itself. This provision deals with the procedure, right from filing of application by a bank or financial institution, as the case may be, before the Tribunal, to the stage of issuance of recovery certificate to the Recovery Officer for recovery of the decretal amount. It is true that after the Presiding Officer of the Tribunal issues a certificate to the Recovery Officer, the authorities cannot dispute the correctness of the said certificate before the Recovery Officer. The Recovery Officer shall, on receipt of the copy of the certificate, proceed to recover the amount of debt specified in the certificate by one or more of the following modes, namely:

(a) attachment and sale of the movable or immovable property of the defendant;

(b) arrest of the defendant and his detention in prison;

(c) appointing a receiver for the management of the movable or immovable properties of the defendant.

55. That a bare reading of Section 25 of the Act makes it clear that the Recovery Officer is entitled to realise the amount of debt, whose details are specified in the certificate issued by the Presiding Officer of the Tribunal, by attachment and sale of the movable or immovable properties of the defendant etc. The Recovery Officer himself cannot decide as to what are the properties of the defendant that could be attached and sold for the purpose of recovery and realisation of the amount of debt specified in the certificate. It is, therefore, clear that the properties that could be attached by the Recovery Officer for the purpose of sale in order to recover the amount of debt specified in the certificate are required to be stated and specified in the certificate issued by the Presiding Officer of the Tribunal. But, in the instant case, in the recovery certificate issued by the Presiding Officer of the Tribunal, the schedule of properties that could be attached or sold is shown as 'NIL'. It is not known as to on what basis the Recovery Officer proceeded to issue the proclamation of sale proposing to sell the lands of APIIC, which is not arrayed as one of the defendants in the O.A., filed by the Syndicate Bank.

56. Be it as it may, the finding, if any, recorded by the DRT as against the APIIC, in no manner, effects the title since the lands in question remained under the ownership of the APIIC as there is no transfer of title as such in favour of the company. Admittedly, no sale deed has been executed by the APIIC in favour of the company.

57. In the circumstances, we hold that the proclamation of sale notice dated 21-1-1998 issued by the Recovery Officer proposing to auction the lands belonging to the APIIC is ultra vires. Such a proclamation has been issued without putting the APIIC on any proper notice.

58. The APIIC filed claim petition before the Recovery Officer on 21-3-1998 itself stating that Ac.25-00 of land, allotment of which had already been cancelled, be exempted from sale. No doubt, in the said claim petition, the APIIC admitted that the said Syndicate Bank was entitled to sell an extent of Ac,26-00 acres of land along with the buildings and structures constructed therein. The same averment has been reiterated in W.P. No. 14174 of 1998 filed by the APIIC on 20-5-1998. We have already noticed that the Estate Officer filed the affidavit in support of the said writ petition. Obviously, such averments made without any sense of responsibility and regard to the actual state of affairs do not bind the APIIC, which is an instrumentality of the State. Such irresponsible statements do not bind the APIIC. That apart, the concession, if any, made for and on behalf of the APIIC that balance of Ac.26-00 of land could be sold by the Syndicate Bank was neither acted upon by the Syndicate Bank nor such a concession confers any jurisdiction on the Recovery Officer to act contrary to the mandatory provisions of Section 19(22) read with Section 25 of the Act. It is explained that such a concession was made inadvertently by the APIIC since it did not have a copy of the recovery certificate. It is specifically stated in the counter-affidavit filed by the Manager (Law) of APIIC in W.P. No. 17443 of 1999 that "by the time it filed the claim petition the Corporation did not have a copy of the Recovery Certificate issued to the 5th respondent in O.A. No. 425/95. The Corporation had therefore limited its claim to the extent of 25.00 acres only in the claim petition filed before the 5th respondent. I submit that the 5th respondent is not empowered to sell either 25.00 acres of the land whose allotment was cancelled on 17-8-1983 or the balance of 26.00 acres of land also since the entire land of 51.00 acres of the Corporation was not under mortgage in favour of the Bank in respect of the loans covered by the decree passed in O.A, No. 425/ 95 by the Debts Recovery Tribunal".

59. Be it as it may, the Recovery Officer did not act on the basis of the concession. But, on the other hand, rejected the claim petition of APIIC by the order dated 12-8-1998. Therefore, the APIIC is not estopped from contending that it continues to be the owner of the whole extent of the land, including Ac.26-00 of land in respect of which it had made some concession in the claim petition filed before the Recovery Officer.

60. The question is one of jurisdiction of the Recovery Officer to bring the properties of the APIIC for sale by way of public auction in the absence of the details of the properties mentioned in the certificate issued by the DRT.

61. It is well settled that the consent of the parties does not by itself confer any jurisdiction upon the authorities. Nor such consent can take away the jurisdiction if otherwise conferred under the provisions of the Act. It is not open to the parties to confer, by their agreement, jurisdiction on a Court, which it does not possess. "Consent cannot give a Court jurisdiction if a condition which goes to the root of the jurisdiction has not been performed or fulfilled. No appearance or consent can give a jurisdiction to a Court of limited jurisdiction which it does not possess............The distinction clearly is between the jurisdiction to decide matters and the ambit of the matters to be heard by a Tribunal having jurisdiction to deal with the same. In the second case, the question of acquiescence or irregularity may be considered and overlooked. When however the question is of the jurisdiction of the Tribunal to make the award under the circumstances..........no question of acquiescence or consent can affect the decision. (See: U.C. Bank v. Their Workmen, , and Hakam Singh v. Gammon (India) Ltd., ).

62. The Recovery Officer, Debts Recovery Tribunal, Bangalore rejected the claim petition filed by the APIIC on the ground that the APIIC permitted the company to mortgage the entire property in favour of the Syndicate Bank and the charge spreads over the entire piece of land. The Recovery Officer further came to the conclusion that as per Clause 8(a) of the agreement of sale financier has first charge and claimant has second charge. As per Clause 8 the Government has agreed to allow first charge over the property to financing agency provided they agree for clearing the dues due to the Government in accordance with promissory note executed by the allottee. In view of the facts and terms of sale the interest of financiers is not affected. The financier is entitled to bring the whole of the property to sale.

63. The letter given by the Director of Industries, which we have already noticed supra, in our considered opinion, cannot be equated to that of the Government agreeing to the company raising money on the property agreed to be sold. The agreement was between the company and the Government and not between the company and the Director of Industries. The letter from the Director of Industries permitting the company to mortgage Ac.51-00 of land allotted to any scheduled bank cannot be equated to that of the Government agreeing to the company raising money on the property agreed to be sold by raising the loans from any financial agency approved by the Government on the security of the Government. It was clearly unauthorised, unless the Director could be stated to have been lawfully authorised to act for the Government in the matter, in according permission to the company to raise money on the property agreed to be sold. Neither the Government nor the APIIC being the successor in interest of the Government is bound by such letters as the one that has been issued by the Director of Industries in the instant case. At any rate, the Bank never expressed its readiness, willingness and agreement to pay the Government on behalf of the company so much of the amount advanced as loan to the company as will remain due and payable to the Government. That apart, there is no evidence of any prior agreement of the Government as is required in terms of Clause 8 (b) of the agreement since the Syndicate Bank admittedly advanced more than 60% of the value of the land. In the circumstances, the letter dated 3-8-1972 purported to have been issued by the Director of Industries in no manner enables the company to raise money on the property agreed to be sold by the Government. That apart, there is no compliance with Clause 8(b) of the agreement and, therefore, the Syndicate Bank advanced the loan on its own and it is its own risk. It cannot be permitted to proceed against the land, which admittedly belongs to the APIIC being the successor in interest of the Government. It can only proceed against the personal properties of the company, its Managing Director, other Directors and guarantors in terms of the decree obtained by it in O.A. No. 425 of 1995. The decision of the Recovery Officer rejecting the claim of the APIIC is vitiated by an error apparent on the face of the record.

64. The land allotted to the company is in an industrial area and is required to be utilised only for the purpose of establishment of an industrial unit in terms of the agreement entered by and between the Government of Andhra Pradesh and company. The agreement so entered referred to hereinabove, not only enables the Government and its successor-in-interest to resume the land for failure on the part of the company to make the payment of balance sale consideration but also clearly enables the APIIC to resume the land on the ground of non-utilisation of it by the company for the purpose for which it was allotted. This distinction has been clearly lost sight off by the Recovery Officer in disposing of the claim petition filed by the APIIC. The APIIC has resumed the land for failure on the part of the company to utilise the same for the purpose for which it was allotted in terms of Clauses 13(t), 15 and 16 of the agreement dated 3-8-1972. The APIIC has a right to resume the land for the failure on the part of the company to utilise the same for the purpose for which it was allotted since no title has been passed on to the Company, Both the cancellation orders are preceded by the required show-cause notices requiring the Company to explain as to why appropriate action should not be taken in the matter and as to why the land should not be resumed for the reason of its failure to utilise the said land for the purpose for which it has been allotted. Detailed enquiries have been made after providing a reasonable opportunity of being heard to the company. The orders dated 17-8-1993 and 14-7-1999 resuming the land, in our considered opinion, do not suffer from any legal infirmities.

65. The Company having filed W.P. No. 25056 of 1998 challenging the act of the APIIC in proposing to auction the plots in Ac.25-00 of land did not even press the said writ petition by participating in the proceedings, which went on for a quite considerable time before us.

66. W.P. No. 17443 of 1999 filed by the Syndicate Bank challenging the order of cancellation of allotment dated 14-7-1999 is totally misconceived. The company did not even care to challenge either of the orders of cancellation of allotment passed by the APIIC. In the said writ petition, it is contended that the Company had paid the entire cost of the land admeasuring Ac.51-00 as is evident from the letter dated 31-7-1980 of the Company addressed to the APIIC. The whole of the affidavit filed in support of the said writ petition proceeds on the assumption as if the APIIC passed the order dated 14-7-1999 cancelling the allotment of the land admeasuring Ac.26-00 only on the ground of non-payment of outstanding amounts due to it by the company. We have already noticed that the order dated 14-7-1999 passed by the APIIC cancelling the allotment of the land is a composite one. Therefore, the bank sending a demand draft for a sum of Rs. 3,366-35 paise along with its letter dated 22-7-1999 purporting it to be the amount due to be paid to the APIIC by the company is of no consequence. It is a different matter altogether that even that amount was not accepted by the APIIC since the demand draft was returned to the Syndicate Bank. The order of cancellation of allotment of land is not only based on the ground of default, but also on the ground of non-utilisation of land by the company for the purpose for which it has been allotted to it. There is a clear reference in the order of cancellation of allotment of land to the breach of the covenants. The Syndicate Bank cannot be allowed to be heard in saying that the land has been completely utilised by the company for industrial purposes in the absence of any such assertion and proof by the Company itself of its utilising the land for industrial purpose for which it was allotted to it.

67. In Indu Kakkar v. Haryana State I.D.C. Ltd., , the Supreme Court while interpreting the covenants of the agreement and the terms of the letter of allotment issued by the Haryana State Industrial Development Corporation Limited, which were similar to that of the terms of the agreement and letter of allotment in the instant case, observed:

"The condition that the industrial unit shall be established within a specified period failing which the interest shall cease, is a valid condition. Clause 7 of the Agreement between the parties, is therefore, valid and is binding on the parties thereto."

68. In the said case, the allottee filed a civil suit for declaration that the order of resumption is illegal and void and also for certain other consequential reliefs. During the pendency of the suit, one Indu Kakkar, appellant before the Supreme Court, got a registered sale deed from the allottee on 27-12-1989 of his rights in respect of the plot in question and got herself impleaded as second plaintiff in the suit. The trial Court decreed the suit and declared the resumption order passed by the Corporation as manifestly illegal and beyond jurisdiction. The first appellate Court reversed the decree and dismissed the suit holding that the Corporation was well within its power to resume and that the resumption was made in accordance with the terms of the allotment. The first appellate Court further found that the said Indu Kakkar has no locus standi as the sale in her favour was hit by Section 52 of the Transfer of Property Act. The High Court held that on resumption of the plot it became the absolute property of the Corporation and allottee had been left with no right, title or interest in the property which he could transfer to the second plaintiff therein. The Supreme Court observed that the real question is whether the assignee has a legal right to claim performance of any part from the allottor. "Answer of the said question depends upon the terms of allotment. Assignment by Act of parties may cause assignment of rights or of liabilities under a contract. As a rule a party to a contract cannot transfer his liabilities under the contract without consent of the other party. This rule applies both at the Common Law and in Equity (vide para 337 of Halsburys Laws of England, Fourth Edition. (Part 9). Where a contract involves mutual rights and obligations as assignee of a right cannot enforce that right without fulfilling the co-relative obligations. Upholding the order of resumption, the Supreme Court observed:

"Here the agreement was entered into between the Corporation and the allottee as a sequel to the request made by the allottee to give him an industrial plot for the purpose of setting up an industry. Corporation reciprocated to the request on being satisfied that the allottee was able to carry out the obligations so as to accomplish the purpose of allotment. The assurance given by of the allottee that he shall start construction of the building for setting up the industry within a period of six months and complete the construction thereof within two years from the date of issue of allotment letter was verified and found acceptable to the Corporation and then only the Corporation has chosen to enter into the agreement with the allottee. It is a matter of confidence which the Corporation acquired in the promise made by the allottee that the latter would perform such obligations. If the allottee evacuates from the scene after inducting someone else into the plot without consent of the Corporation it is not legally permissible for the inductee to compel the Corporation to recognize him as the allottee."

69. In our considered opinion, this is the complete answer to all the questions that had arisen for consideration in this batch of cases. The right of resumption by the APIIC for the admitted failure on the part of the company to utilise the land for the purpose for which it was allotted, in our considered opinion, is not vitiated for any reason whatsoever. That once the resumption orders are to be upheld the land reverts to and vests in APIIC.

70. Sri K.G. Sastry, learned Standing Counsel for the Syndicate Bank, however, submitted that an appeal under Section 20 of the Act was an adequate and efficacious remedy and the APIIC could have exhausted the statutory remedy before applying for a writ under Article 226 of the Constitution of India. The learned Standing Counsel contended that the writ petitions filed by the APIIC deserve dismissal on that simple ground.

71. We are not impressed by the submission. It is a true and very well established proposition of law that when an alternative and equally efficacious remedy is open to a litigant he should be required to pursue that remedy and not to invoke the special jurisdiction of the High Court under Article 226 of the Constitution of India. It is equally well settled that the existence of a statutory remedy does not affect the jurisdiction of the High Court to issue a writ. It may be one of the factors that may have to be taken into consideration in the matter of granting writs. It is a rule of self imposed limitation, a rule of policy, and discretion rather than a rule of law. The Court in exceptional cases can always issue a writ such as a writ of certiorari, notwithstanding the fact that the statutory remedies have not been exhausted. There are at least two well-recognised exceptions to the doctrine with regard to the exhaustion of statutory remedies. In the first place, it is well settled that where proceedings are taken before a Tribunal under a provision of law, which is ultra vires, it is open to a party aggrieved thereby to move the High Court under Article 226 for issuing appropriate writs. In the second place, the doctrine has no application in a case where the impugned order has been made in violation of the principles of natural justice.

72. It is not possible to dismiss the petitions under Article 226 of the Constitution of India as not maintainable on the ground of there being an alternative remedy available in cases where the Court has entertained and admitted the writ petition and was heard on merits. It is a different matter altogether when the Court in exercise of its discretion refused to interfere even at the threshold on the ground of availability of an alternative and efficacious remedy. But in a case where the Court having admitted the writ petition and having put the parties to trial normally cannot refuse to exercise its jurisdiction and dismiss the writ petition on the ground of availability of an alternative remedy. It is a matter always well within the discretion of the Court and that discretion is required to be exercised in a judicial and judicious manner. It is equally a well settled proposition of law that where the order is illegal and invalid as being contrary to law, a petition at the instance of person adversely affected by it would lie to the High Court under Article 226 of the Constitution and such a petition cannot normally be rejected on the ground that an appeal lies to the authorities specified under an enactment. It needs no restatement at our hands that the Court has imposed a restraint in its own wisdom on its exercise of jurisdiction under Article 226 of the Constitution where the party invoking the jurisdiction has an adequate, alternative and efficacious remedy. The availability of alternative remedies does not oust the jurisdiction of this Court. (See for the proposition: Khurai Municipality v. Kamal Kumar, , Baburam v. Zilla Parishad, , Hirday Narain v. I.T. Officer, Bareilly, , and Ram and Shyam Company v. State of Haryana, ).

73. The learned Standing Counsel for the Syndicate Bank, however, relied upon the decision of a Division Bench of this Court in R. Adavaiah v. Union of India, (DB), in support of his submission that the APIIC having an alternative remedy of filing an appeal, it must approach the appellate Tribunal. In the said decision, this Court refused to interfere with the order of attachment and sale proclamation issued by the Recovery Officer on the ground that an appeal is provided against the said order. The said decision does not lay down that the availability of alternative remedy in any manner affects the jurisdiction of this Court under Article 226 of the Constitution of India to interfere in appropriate cases in spite of availability of alternative remedy.

74. In Union of India and Anr. v. Delhi High Court Bar Association and Ors., 2002 (5) 99 SC = 2002 (4) SBR 207, the Supreme Court observed that by virtue of Section 29 of the Act, the provisions of the Second and Third Schedules to the Income-Tax Act, 1961 and the Income-Tax (Certificate Proceedings) Rules, 1962 have become applicable for the realisation of the dues by the Recovery Officer, wherein detailed procedure for recovery is contained including provisions relating to arrest and detention of the defaulter. It cannot, therefore, be said that the Recovery Officer would act in an arbitrary manner. Furthermore, Section 30, after amendment by the Amendment Act, 2000, gives a right to any person aggrieved by an order of the Recovery Officer to prefer an appeal to the Tribunal. "Thus now an appellate forum has been provided against any orders of the Recovery Officer which may not be in accordance with law. There is, therefore, sufficient safeguard which has been provided in the event of the Recovery Officer acting in an arbitrary or an unreasonable manner". The provisions of Sections 25 and 28 were accordingly upheld.

75. In Punjab National Bank v. O.C. Krishnan and Ors., 2001 (6) Supreme 81, the Supreme Court observed that the High Court ought not to have exercised its jurisdiction under Article 227 since the order passed by the Tribunal directing the sale of mortgaged property was appealable under Section 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The Supreme Court further observed:

"Even though a provision under an Act cannot expressly oust the jurisdiction of the Court under Articles 226 and 227 of the Constitution, nevertheless when there is an alternative remedy available judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act." (Emphasis is of ours).

76. The observations so made by the Supreme Court were confined to the facts and circumstances on hand. The Supreme Court came to the conclusion that the case on hand was a case where the High Court should not have entertained the petition under Article 227 of the Constitution of India and should have directed the respondent to take recourse to the appeal mechanism provided by the Act. None of these decisions, upon which reliance has been placed by the learned Standing Counsel for the Syndicate Bank, lay down that under no circumstances this Court in exercise of its jurisdiction under Article 226 of the Constitution of India can entertain the writ petition even when the order passed by the Tribunal is complained of suffering from jurisdictional errors.

77. When an order complained of is illegal and ultra vires, this Court in appropriate cases can entertain the writ petition and adjudicate the same on merits. That on the facts and in the circumstances, we are not inclined to dismiss the writ petitions on the ground of availability of alternative remedy at this stage after a period of more than 5 years of their admission by this Court for its consideration and disposal on merits.

78. In the circumstances, the contention urged by the learned Standing Counsel for the Syndicate Bank is accordingly rejected.

79. W.P. No. 24115 of 1998 filed by the Nacharam Industrial Association and two others, seeking for a declaration that the public auction held by the APIIC pursuant to the notice dated 6-8-1998 is illegal, is devoid of any merit. The grounds raised in the said writ petition are imaginary. The averments made in the affidavit filed in support of the said writ petition are totally vague and indefinite. The petitioners did not seriously press the said writ petition for any serious adjudication as such. Even otherwise, we do not find any merit in the said writ petition.

80. In the result, we hold:

(a) that the letter dated 3-8-1972 purported to have been issued by the Director of Industries, by no stretch of imagination, could be characterised as a document of title so as to enable the Company to mortgage the same by way of deposit of title deeds in order to secure financial assistance from the Syndicate Bank. The Director of Industries cannot be equated to that of the Government and it is the only Government, which could have agreed to the company raising money on the property. Such letters voluntarily issued by an individual officer of the Government, in no manner, bind the Government unless it is clearly pleaded and established that the Director of Industries has been authorised and delegated with the power to accord permission to the company raising money on the property;

(b) that the Syndicate Bank admittedly advanced more than 60% of the value of the land but without prior agreement of the Government as is required in terms of Clause 8(b) of the agreement. Therefore, the APIIC, being the successor-in-interest of the Government, is not bound by the advances so made by the Syndicate Bank. Therefore, the Syndicate Bank cannot have the first charge over the property in question;

(c) that there is no specific agreement as such by the Syndicate Bank agreeing to pay the Government on behalf of the company so much of the amount advanced as loan to the Company as will remain due on the promissory note executed by the Company. In the absence of any specific agreement, the APIIC is not bound to accept the demand draft for a sum of Rs. 3,366-35 paise purporting to be due from the company towards the land cost and the same has been rightly rejected by the APIIC;

(d) that the order of cancellation of allotment of land dated 17-8-1993, which remained unchallenged, has not only become final, but also does not suffer from any legal infirmities requiring any interference;

(e) that the order dated 14-7-1999 cancelling the allotment of remaining extent of Ac.26-00 of land, which is challenged by the Syndicate Bank in W.P. No. 17443 of 1999, is not vitiated for any reason whatsoever. It is a composite order passed by the APIIC cancelling the allotment of land both on the ground of failure to pay the balance sale consideration by the Company and also on the ground that the Company failed to utilise the land for the purpose for which it has been allotted to it. The orders of cancellation of allotment of land have duly taken into account the admissions made by the Company that it has failed to utilise the land for the purpose for which it has been allotted to it. The company has admitted that it was in red and could not establish any industrial unit for the purpose of manufacture of agricultural tractors for which purpose the land has been allotted to it;

(f) that the order dated 12-8-1998 passed by the Recovery Officer rejecting the claim petition of APIIC is vitiated. The Recovery Officer could not have proceeded with the sale of the land belonging to the APIIC in the absence of any specific authorisation and permission by the Presiding Officer Of DRT. In the schedule of the recovery certificate, there is no mention of the details of the lands in question enabling the Recovery Officer to proceed against the same for recovery and realisation of the decretal amount; and

(g) that the sale notifications issued by the APIIC do not suffer from any legal infirmities.

81. Before parting with the case, we are constrained to observe that the Syndicate Bank is bound to proceed against the personal properties of the Company, its Managing Director, Directors and Guarantors whose details are within the knowledge of the Bank. Public interest requires that the Syndicate Bank should proceed against them for realisation of its monies, which are nothing but public monies. We hope and trust that the Bank shall vigorously pursue the matter as against them in the same manner, if not, more vigorously as it has prosecuted the case against APIIC.

82. In the result, W.P. Nos. 14174, 24502 and 36133 of 1998 filed by the APIIC are allowed with costs, quantified at Rs. 10,000/- (Rupees ten thousand only), in each case, as against the company.

83. W.P. Nos. 24060 of 1998 and 17443 of 1999 filed by the Syndicate Bank are dismissed without costs.

84. W.P. No. 25056 of 1998 filed by the Company shall stand dismissed with costs, quantified at Rs. 10,000/- (Rupees ten thousand only), payable to the APIIC.

85. W.P. No. 24115 of 1998 filed by the Nacharam Industrial Association and two others is also dismissed with costs.

86. In the light of the aforementioned orders, no further adjudication of C.C. No. 2065 of 1998 is called for. The same is accordingly closed.

W.P. No. 14174 of 1998 and Batch:

87. Sri K.G. Sastry, learned Standing Counsel for the Syndicate Bank made an oral application seeking certificate for appeal to the Supreme Court. In our considered opinion, the case on hand does not involve any substantial question of law as to the interpretation of the Constitution. Nor any substantial question of law of general importance is involved requiring the same to be decided by the Supreme Court.

88. The oral application is accordingly dismissed.