WP(C) 2745/2006 BEFORE HON’BLE MR. JUSTICE B.K. SHARMA All the writ petitions, being interrelated have been heard analogously a nd are being disposed of by this common judgment and order. 2. In the first two writ petitions, filed by one and the same writ petition er is a company incorporated under the Companies Act, 1956. While in the first w rit petition, the grievance raised is in respect of implementation of the terms and conditions of the Memorandum of Understanding (MOU) and the lease deed ente red into by and between the petitioner and the respondent No. 2 company owned by the Government of Assam, in the second writ petition the grievance raised is in respect of refusal on the part of the respondent No. 4 bank to provide working capital. The third writ petition has been filed by employees association of the respondent No. 2 company for a direction to the respondents to provide the emplo yees with the service benefits and to take steps for revival and functioning of the company. 3. The writ petitions are based on the following facts. WP(C) No. 8097/2002 M/s. Ashok Paper Mill Limited was initially promoted as a private company in the year 1958 with two paper mills - one located at Jogighopa, Assam and another at Rameswar Nagar, Bihar. The company went into liquidation in the year 1963 and i n the year 1970, the Government of Bihar and the Government of Assam took over t he company as a joint venture with active participation of Industrial Developmen t Bank of India (IDBI). Although, the paper mill at Jogighopa, Assam commenced p roduction in the year 1975, but it gradually became sick and finally stopped pro duction sometime in 1983. 4. A memorandum of settlement dated 15.8.1985 was signed between the Govern ment of India and the Students Body of Assam namely All Assam Students’ Union ( AASU) commonly known as the Assam accord , containing interalia, the clause for revival of the paper mill at Jogighopa. On the basis of such settlement, the pa ckage for revival of the mill was finalized and the Government of India agreed t o release, by way of an outright grant, a sum of Rs. 67.08 crores to the Governm ent of Assam under different heads. 5. The Government of Assam enacted the Jogighopa (Assam) Unit of Ashok Pape r Limited, Calcutta (Acquisition and Transfer of Undertaking) Act, 1990. By virt ue of Section 3 of the Act, the paper mill at Jogighopa stood transfer and veste d in the Government of Assam. In March, 1995, a MOU was signed between Ashok Pap er Mill (Assam) Limited (APM) and one M/s. Sanghi Textile Processors (P) Ltd. of Hyderabad for the purpose of leasing out the paper mill. Lease agreements etc. were also executed which eventually stood terminated on 1.7.1999. 6. After the aforesaid developments and abandonment of the mill by Ms/ Sang hi Textile processors (P) Limited, advertisement were published in the newspaper in July, 1999 inviting offers from private sector participants for re-activatio n of the paper mill, to which the petitioner company responded. After series of discussions with the Government of Assam officials as well the Managing Director of APM, the MOU and the lease deed dated 26.7.2000 and 10.1.2001 respectively w ere executed by and between the parties. Initial lease period was for 25 years w ith effect from the actual date of taking over physical possession of the mill, which was 2.8.2000. 7. The petitioner has indicated certain terms and conditions of MOU and the lease agreement in the writ petition including the major works required to be u ndertaking for revival of the mill and the execution thereof carried out. Referr ing to Annexure-3 technical report submitted by the Central Pulp & Paper Researc h Institute, Sahrainpur, U.P., prepared on the basis of the visits to the paper mill on 22nd, 23rd and 24th March, 2001, it is the case of the petitioner that i t had executed the required works and the paper mill was ready for trial product ion. According to the petitioner it had spent an amount of Rs. 6,38,47,330/- upt o march, 2001 and had submitted its claim to the respondents from time to time i n phased manner. However, it had only been sanctioned an amount of Rs. 2,97,00,0 00/-. According to the petitioner the aforesaid amount of Rs. 6,38,47,330/- was on account of capital expenditure towards creation of assets for rejuvenation an d rehabilitation of the paper mill. 8. Referring to the various clauses of the MOU and the lease deed, it is th e case of the petitioner that although the amounts spent and/or claimed by it on account of capital expenditure is to be reimbursed in installment of Rs. 1 cror e within 7 days from the date of submission of the claim, the respondents met wi th the 1st, 2nd and the 3rd claim after much delay and not at all responded to t he subsequent claim. It has been stated by the petitioner that the total claim o n account of capital expenditure made by it was for Rs. 8,07,23,313.50 against w hich the petitioner had only receipt the amount of Rs. 2,97,00,000/- and thus, a n amount of Rs. 5,10,23,313.50 was still receivable by the petitioner. It is the further case of the petitioner that apart from the said amount, it is also enti tled to the grant of eligibility certificate under the Industrial Policy of Assa m, 1997. 9. Referring Annexure-4 letter dated 1.8.2000 addressed to the Government o f India in the Ministry of Industry by the Government of Assam in the Industries & Commerce Department, the petitioner asserts that the Government of Assam was fully alive to the legitimate claim of the petitioner. By the said letter the re quest made was for approval of utilization and release of Rs. 7.97 crore (Rs. 2. 97 crores in hand and Rs. 5 crores to be sanctioned by the GOI) in favour of the petitioner as per clause 9.3 of the MOU. The petitioner has stated that neither the said amount of Rs. 5 crores nor the excise duty exemption having been grant ed in favour of it, it was not in a position to commenced production in terms of the MOU and the lease deed. According to the petitioner the delay in commercial production is directly attributable to the respondent. However, referring to An nexure-5 letter dated 19.2.2001 addressed to it by the Managing Director of APM, it is the case of the petitioner that the mill was ready for trial run since Fe bruary, 2001. 10. In view of the above, the petitioner by its various letters intimated th e respondent that due to non-payment of the legitimate dues, non-grant of excise duty and sales tax exemption and non-issuance of factory and explosive licences , it was not in a position to drawn up schedule for trial production and eventua l commencing of the commercial production in the mill. In this connection the pe titioner has also referred to the minutes of discussion dated 7.8.2002 held in p resence of the Minister of Industries, Commissioner & Secretary and Deputy Secre tary, Industries Department and the Managing Director of APM alongwith the repre sentatives of the petitioner company. 11. According to the petitioner, inspite of the aforesaid position relating to the affairs of the production in the mill and discharge of the obligations on the part of the petitioner, the respondents in a most illegal and arbitrary man ner issued the Annexure-10, 11, 12 and 13 letters dated 21.10.2002, 9.10.2002, 1 .11.2002 and 6.11.2002 respectively threatening termination of lease upon failur e of the petitioner to start production in the mill by 31.12.2002. In fact, by A nnexure-12 letter dated 1.11.2002, an explanation was sought for within 7 days i n reference to the earlier notice, upon failure of the petitioner in not startin g the required activities in the mill premises with a view to start production b y 31.12.2002. Further by Annexure-13 letter dated 6.11.2002, a direction was iss ued for obtaining undertaking from the petitioner within 15.11.2002 failing whic h termination notice was to be issued. It will be pertinent to mention here that in fact such undertaking was conveyed by the petitioner as reflected in the ord er dated 18.11.2002 passed by the Division Bench of this Court in WP(C) (PIL) No . 44/2000 about which discussion will be made at a later stage. Be it further st ated here that in terms of clause 5 of aforesaid minutes of discussion dated 7.8 .2002, release of Rs. 5 crore against cash loss was to be taken up with the Gove rnment of India only after the mill had gone into commercial production for a mi nimum period of three months. 12. According to the petitioner the decision of the respondents has conveyed by the aforesaid Anexure-10, 11, 12 and 13 letters was contrary to the aforesai d minutes of discussion dated 7.8.2002. It is the stand of the petitioner that t he respondents with the purpose to cover up delay and laches on their part towar ds granting permission to the petitioner to mortgage the assets as collateral se curity for raising working capital from bank, resorted to the propose action tow ards terminating lease deed. The petitioner has stated that the paper mill was t echnically revived and it was only due to the aforesaid hurdles confronting the petitioner the commercial production did not commence. 13. It is in the aforesaid background of the case, the petitioner has invoke d the writ jurisdiction of this Court with the prayer for issuance of a writ in the nature of mandamus directing the respondents to act as per the terms and con ditions of the MOU and the lease deed and to make payment of the dues amounting to Rs. 5,10,23,313.50 and to allow the petitioner to mortgage the assets of the respondent No. 2 company as collateral security for raising working capital loan and term loan from financial institution/State Bank of India. Further prayer ma de is for setting aside and quashing of the letters containing to the threat to terminate the lease agreement. WP(C) No. 8341/2003 14. This writ petition has been filed in reference to the first writ petitio n setting out the basic facts narrated therein and discussed above. Additionally , it has been stated that the petitioner, for securing financial assistance from bank towards working capital by way of mortgaging the assets of APM as collater al security, laid out a comprehensive proposal in the prescribed form to the res pondent bank with intimation to the governmental authorities and the authority o f the APM. However, the working capital proposal submitted by the petitioner wit h the respondent bank having been turned down, the petitioner filed the writ pet ition seeking setting aside and quashing of the Annexure-11 letter dated 17.3.20 03 issued by the bank conveying its decision of rejection of the proposal. In th is connection, the petitioner has referred to its communications with the respon dents for favourable disposal of the proposal for financial assistance. By Annex ure-13 communication dated 17.6.2003, the respondent bank apprised the Managing Director, APM about its conclusion upon inspection of the unit that the mill can not be said to be fully restored, although some additional machinery has been in stalled. Stating about the trial run of the mill, it was indicated that the same was not as a whole unit, but not in respect of all the sections. As per the sai d communication, the mill was found to be in shut down condition and no preventi ve maintenance was done. Expressing its overall view, the bank intimated that th e revival of the unit would require complete renovation and restoration and that the makeshift restoration work done by the petitioner company may not be effica cious in resuming and continuing operations without interruption. 15. It is in the aforesaid backdrop, the prayer made in the writ petition, a part from the prayer for setting aside and quashing of the Annexure-11 rejection letter dated 17.3.2003, is for a direction to the respondent bank to grant cash credit limits of Rs. 5 crores towards working capital. 16. During the course of hearing, Mr. P.K. Goswami, learned Sr. Counsel argu ing for the petitioner submitted that the petitioner may not have to press this petition in the attending facts and circumstances of the case, more particularly , if the petitioner succeeds in the first writ petition as the same would take i nto its fold the grievance raised in the second writ petition. WP(C) No. 2745/2006 17. This writ petition has been filed by the employees union of APM with the prayers for appropriate direction to make the APM functional within specified p eriod and to pay the outstanding dues to the employees with updating of the prov ident fund accounts of the employees. Further prayer made is for a direction tow ards CBI investigation relating to cause of the unit becoming non-functional. 18. In all the writ petitions, all the respondents, excepts the Union of Ind ia have filed their counter affidavits. However, Mr. H. Rahman, learned Assistan t Solicitor General of India made his submissions in reference to M.C. No. 2802/ 2004, which the Union of India has filed seeking review of the order dated 3.3.2 004 passed in the first writ petition, by which certain interim directions were issued for taking up the matter relating to release of the aforesaid amount of R s. 5 crores with the Union of India by the Government of Assam. 19. In the affidavits filed by the respondents, the pleas raised in the writ petitions have been denied. According to them, it is the petitioner, which is r esponsible for the position in which the APM is after signing of the MOU and the lease agreement. It has been stated that the release of the amount of Rs. 5 cro res is dependent on certain pre-conditions, which the petitioner measurably fail ed to fulfill. As regards the plea of the petitioner that it should be allowed t o mortgage the assets of the APM as collateral security towards obtaining financ ial assistance, it is the stand of the respondents that the same being beyond th e scope of the MOU and the lease agreement, cannot be ground for raising the gri evance as has been raised in the writ petitions. The respondent bank in its affi davit has stated that the bank being not a signatory either to the MOU or to the lease deed, the petitioner cannot seek any enforcement of the clauses therein a gainst the bank. According to it the proposal made by the petitioner was rightly turned down upon consideration and evaluation of the facts and circumstances. 20. Mr. P.K. Goswami, learned Sr. Counsel assisted by Mr. M. Bhuyan, learned counsel for the petitioner advancing argument in the first two writ petitions, has exclusively referred to the various clauses of the MOU and the lease deed re ferred to above. Emphasizing the need for a pragmatic approach to the chronic pr oblem of revival of the unit in view of hostile conditions due to the apathy sho wn by the respondents, he submitted that if necessary the Court with appropriate directions may monitor the project of revival of the unit. According to him, th e Union of India although party to the proceedings having not responded to the s ame by filing any counter affidavit, has virtually admitted the grievance raised by the petitioner and since it is the Union Government, who is responsible towa rds granting approval of utilization and release of Rs. 7.97 crore (Rs. 2.97 cro res in hand and Rs. 5 crores to be sanctioned by the GOI), appropriate direction needs to be issued to the Government of India and other respondents. 21. Being confronted with the forceful argument made by the learned counsel for the respondents regarding maintainability of the writ petition in view of in volvement of disputed questions of fact and being a contractual matter and also when the petitioner seeks implementation of the clauses in the MOU and the lease agreement, Mr. Goswami, referring to the principles involved towards exercising writ jurisdiction and putting emphasis that the writ jurisdiction is wide enoug h to take up all such matters even in case of availability of alternative remedy placed reliance on the decision of the Apex Court reported in (2004) 3 SCC 553 (ABL International Ltd. Vs. Export Credit Guarantee Corproation) as well as the decision of this Court reported in 2007 (2) GLT 312 (Raja Kakati Vs. Union of In dia). 22. Mr. K.N. Choudhury, learned Additional Advocate General, Assam assisted by Mr. J. Patowary and Ms. A. Baruah, learned Advocates has questioned the very maintainability of the writ petition being involved with disputed questions of f act. He submitted that the writ petition are misconceived and that the Writ Cour t cannot issue any mandamus as has been prayed by the petitioner. He has also pl aced reliance on certain decisions which are AIR 1962 SC 1320 (M/s. Burmah Const ruction Company Vs. State of Orissa); 2006 (1) GLT 19 (State of Manipur Vs. Moi rangthem Chaoba Singh; (2004) 9 SCC 786 (National Textile Corporation Ltd. Vs. M /s. Haribox Swalram) and (2004) 12 SCC 327 (State of Jammu & Kashmir Vs. Ghulam Mohd.). 23. Mr. B.D. Das, learned counsel represented the APM referring to the under taking given by the petitioner, forming part of the order passed in WP(C) (PIL) No. 44/2000, about which a mention has been made above, submitted that after suc h undertaking furnished by the petitioner, the theme in which the writ petitions have been presented is misconceived and is by way of taking a chance for favour able consideration and to delay the liability upon failure to act as per the pro mise made. Referring to Article 13 of the lease agreement, he further submitted that there being alternative remedy by way of resolving the dispute, if any, thr ough arbitration proceeding, the Writ Court would be reluctant to exercise writ jurisdiction towards entertainment of the claim made by the petitioner. 24. Mr. H. Rahman, learned Asstt. SGI, appearing on behalf of the Union of I ndia also questioning the maintainability of the writ petition, submitted that t he writ petitions are misconceived. As regards the submission of the learned cou nsel for the petitioner that in absence of any counter affidavit filed by the Un ion of India, the contentions raised in the writ petition go unrefuted, he submi tted that mere non-filing of counter affidavit cannot lead to the presumption th at the contentions in the writ petitions are admitted. He submitted that the Wri t Court will not be oblivious of the glaring facts staring on the face of it and shall adopt a mechanical approach to the matter. 25. Mr. S. S. Sarma, learned Sr. Counsel assisted by Mr. R.K. Bhatra, learned co unsel representing the bank, referring to the bank’s stand in the affidavit subm itted that the petitioner cannot seek any mandamus against the bank for providin g financial assistance. He submitted that it is for the bank to decide about the viability of the proposal for financial assistance. 26. Mr. G. Uzir, learned counsel for the petitioner in the third writ petiti on highlighting on the plight of the employees of the APM submitted that amidst the dispute by and between the parties, it is the employees who have been made t o suffer for no fault of their own. He submitted that the respondents cannot shi rk off their responsibilities in making the APM functional and to pay the outsta nding dues to the employees. He submitted that inaction on the part of the respo ndents is the primary cause for which the unit is in the present situation and a s such appropriate direction needs to be issued for a proper enquiry relating to the affairs of the APM and as to who are responsible for the same. 27. I have given my anxious consideration to the submissions made by the le arned counsel for the parties and the materials on record. During the course of hearing, Mr. Goswami, learned counsel for the petitioner produced the copy of th e representation made by the petitioner on 30.5.2007 to the Minister of Industri es forwarding the proposal for revival of the APM in collaboration with another company M/s. Century Plyboards (I) Limited. According to Mr. Goswami the proposa l has receipt due attention of the concerned Minister. However, Mr. Choudhury, l earned Additional Advocate General, Assam upon written instruction furnished to him by letter dated 6.6.2007 submitted that there was no scope of the new propos al and that the same has no connection with the MOU and the lease agreement by a nd between the parties. 28. The whole emphasis of the petitioner interalia is on clause 9 of the MOU and clause 3, 4, 8, 9 and 13 of the lease agreement. For a ready reference the said clauses (relevant sub-clauses) are quoted below: MEMORANDUM OF UNDERSTANDING 9.3 I) The balance of the amount earmarked under the Assam Accord as Cash Lo ss for the revival of the mill are Rs. 7.97 crores out of which Rs. 2.97 crores are available with the First Party. Govt. of Assam shall take necessary steps fo r immediate release of the balance of Rs. 5.00 cores by the Govt. of India. In view of the present condition of the Plant & Machinery of the Mill, to avoid any further loss of life of the plant an estimate amount of Rs. 700 cores shall be required to be invested towards capital expenditures, for viable and smooth o peration of the mill. Govt. of India will be approached by First Party t allow u tilization of the above amount earmarked for cash loss towards capital expenditu re and working capital for revival of the mill and this amount will be released to the second party for capital expenditure and working capital and approval of Govt. of India would be sought. The following modalities will be followed while releasing Rs. 7.97 crores to the Second Party. a) & & & &.. b) & & & &.. c) Further the balance fund, subject to maximum of Rs. 6.97 lakhs will be r eleased in installments of Rs. 1,00 lakh (Rupees One hundred lakh) on submission of certificate of utilization by Chartered Accountant of the party of the Secon d Part and also on verification and satisfaction by the party of the First Part regarding capital expenditure in creation of assets for the revival of the Mill, subject to release of the fund Rs. 5.00 lakhs by Govt. of India. 1.9 Concessions/Incentives All concessions/incentives as per Industrial Policy of Assam 1997 or subsequent concessions/incentives given by the Assam Government and the Government of India from time to time to North Eastern States shall be made available for the perio d which is available to a new unit to the Party of the SECOND PART. The Party of the SECOND PART shall be given the STATUS OF a New Unit for the purpose of all such incentives from the date of the possession of the Unit. However, the follo wing concessions/incentives shall be made available to the party of the SECOND P ART. I. The State Government shall take up with the Government of India for gran ting Excise duty exemption for a minimum period of 10 years from the date of com mercial production immediately to the Party of the SECOND PART as per the Assam Accord, as allowed to M/s. Sanghi Textiles Processors (P) Ltd. II. The Sales Tax exemption will be granted to the part of the Second Part