IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH FRIDAY, THE 3RD OCTOBER 2008 / 11TH ASWINA 1930 WP(C).No. 23636 of 2008(L) ---------------------------------------------- PETITIONER(S): ---------------------- M/S. ALWAYE FERTILIZER INDUSTRIES PVT. LTD., KEEZHMAD, ALWAYE, REP. BY ITS MANAGING DIRECTOR, K.A. ABDUL KHADER, RESIDING AT HP 25, KKP NAGAR, U.C. COLLEGE.P.O, ALWAYE-2. BY ADV. SRI.SHAJI P.CHALY RESPONDENT(S): -------------------------- 1. M/S. KERALA FINANCIAL CORPORATION, THIRUVANANTHAPURAM, REP. BY ITS MANAGING DIRECTOR. 2. CHIEF MANAGER, KFC, BRANCH OFFICE, IST FLOOR, FINANCE TOWERS, KALOOR, KOCHI-17. 3. M/S. KERALA STATE INDUSTRIAL DEVELOPMENT CORPORATION, THIRUVANANTHAPURAM, REP. BY ITS MANAGING DIRECTOR. 4. DEPUTY GENERAL MANAGER, KERALA STATE INDUSTRIAL DEVELOPMENT CORPORATION, 2ND FLOOR, CHOICE TOWERS, MANORAMA JUNCTION, COCHIN-16. 5. SPECIAL TAHSILDAR, REVENUE RECOVERY, TALUK OFFICE, ALUVA. ADV. SRI.M.M.SAYED MUHAMMED, SC, KFC FOR R1 & 2 SRI.M.PATHROSE MATTHAI (SR.) FOR R3 SRI.SAJI VARGHESE FOR R3 R5 BY GOVERNMENT PLEADER SHRI BEJOY CHANDRAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03/10/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K. M. JOSEPH, J. -------------------------------------- W.P.C. NO. 23636 OF 2008 L -------------------------------------- Dated this the 3rd October, 2008 JUDGMENT Petitioner has approached this Court seeking the following reliefs: “i. Issue a declaration that the respondents are estopped from declining the OTS amount of Rs.300 Lakhs arrived at in the inter institutional meeting held on 25.3.2008 and also shown in Ext.P12 towards full and final settlement of the amount due to KFC and KSIDC from the petitioner. ii. Issue a writ of mandamus or such other writ, direction or order directing the respondents to delete the additional conditions imposed in Ext.P12 since those conditions are illegal and not binding on the petitioner. iii. Issue a writ of certiorari or such other writ, direction or order quashing Ext.P17 decision taken by the third respondent Board in view of the fact that the decision to settle the account for Rs.300 lakhs was taken in the Inter Institutional meeting of the respondents. WPC.23636/08 L 2 iv. Issue a writ of certiorari or such other writ, direction or order quashing Ext.P20 order of attachment issued by the fifth respondent.” 2. Briefly put, the case of the petitioner is as follows: Petitioner is a Private Limited Company which provided direct employment to about 160 personnel besides indirect employment to about 200 persons. It came to be registered as a sick industrial unit under the SURP of the Government of Kerala on 24.6.1996. There were viable proposals for revival which were not taken into consideration by the KFC and KSIDC from which the petitioner had availed capital and to which the petitioner owed sums under the said transactions. Petitioner Company remained closed for twelve years. Revenue recovery proceedings were instituted against the Company. The promoters of the Company had offered to settle the dues of respondents 1 and 3, namely the KFC and KSIDC, besides the Bank of Baroda. According to petitioner, there was an Inter Institutional Meeting held on 15.6.2006 at the Cochin Office of WPC.23636/08 L 3 the KSIDC to consider the OTS proposal. Ext.P6 came to be issued thereafter. Petitioner issued Ext.P7 and there was another meeting on the basis of Ext.P9 revised proposal on 17.11.2007 which took certain decisions. Thereafter, again, there was yet another Inter Institutional Meeting on 25.3.2008. Ext.P12 came to be issued on 22.4.2008. It was issued by the KFC to the petitioner. It is stated, inter alia, that the Board of the KFC considered the matter and decided to settle the account and to accept the offer of Rs.300 Lakhs to be shared between the KFC and KSIDC at the ratio of loan outstanding as on 31.12.2007 and as per the usual norms subject to certain terms and conditions. Petitioner received Ext.P12 letter on 5.5.2008. Petitioner addressed Ext.P13 seeking certain clarifications. Petitioner thereafter proceeds to refer to other various developments and say that the petitioner is not liable to give an undertaking as required by the KFC. Exts.P14 to P16 are letters sent by the petitioner against the sanction in Ext.P12 order. Subsequently, Ext.P17 came to be issued by the fourth WPC.23636/08 L 4 respondent to which the petitioner sent Ext.P18. Ext.P19 is a letter issued by the KFC whereunder the petitioner was called for a meeting on 27.6.2008. Ext.P20 is the notice under Section 36 of the Revenue Recovery Act. It is accordingly that the petitioner has filed this Writ Petition. 3. A Statement has been filed on behalf of the third respondent KSIDC. Therein, it is, inter alia, stated as follows: The valuation of the assets said to have been made by the KFC in 2004 is of no relevance or substance now. It is stated that the third respondent has issued Exts.P6 to P8 letters informing that the OTS proposal could be considered only after resolving the issue with KFC. By Ext.P8, the petitioner was specifically informed that the offer made by the petitioner is too low. A revaluation was done by the third respondent. The aggregate value of the land and buildings is Rs.7,64,73,250/=. It is stated that the said land and buildings are charged and mortgaged to the third respondent and the KFC. No part of the principal amount or interest on the loan has been paid by the WPC.23636/08 L 5 petitioner. It is also stated that the petitioner has not agreed to the conditions for settlement offered to it. The third respondent has also not agreed to accept any proposal or compromise. 4. Respondents 1 and 2 have also filed an Affidavit and they have produced Exts.R1(a) and R1(b). Ext.R1(a) is the Minutes of the Inter Institutional Meeting held on 17.11.2008 and Ext.R1(b) relates to the Minutes of the Inter Institutional Meeting held on 25.3.2008. In Ext.R1(b) it is, inter alia, stated that it was decided to place the revised request of OTS before the Board of KSIDC and KFC for taking a decision in the matter, subject to certain terms and conditions. 5. I heard Shri S.P. Chaly, learned counsel appearing for the petitioner, Shri M.M.Saidu Mohammed, learned standing counsel appearing for the KFC and also Shri M. pathros Mathai, learned senior counsel appearing for the KSIDC. 6. It is clear that the petitioner is a defaulter. Apparently, the petitioner was making attempts to settle the matter. There were meetings. In the meeting evidenced by Ext.R1(a), WPC.23636/08 L 6 apparently nothing fructified as the petitioner has not even given an offer which is acceptable. Then came the meeting held on 25.3.2008. This was made between the representatives of the respondents besides the Bank of Baroda and the petitioner. Certain things were agreed upon between the representatives subject to certain conditions. However, a perusal of Ext.R1(b) produced by respondents 1 and 2 would make it clear that the decision taken by the Inter Institutional Meeting would come into force only if they were ratified or virtually approved by the Board of Directors of respondents 1 and 3. This is clearly the agreement between the petitioner and the representatives of respondents 1 and 3. Ext.P17 would show that the Board of Directors of the third respondent did not deem it fit to accept the decision taken vide the Inter Institutional Meeting held on 25.3.2008. Without there being an approval by the Board of Directors and the third respondent, it is quite clear that the tentative decision by the representatives on 25.3.2008 could not have clothed it with effectiveness or made it binding on the third WPC.23636/08 L 7 respondent. In such circumstances, even though the first respondent may have issued Ext.P12, I see nothing in Ext.P12 which can have the effect of binding the third respondent. Counsel for first respondent would submit that Ext.P12 cannot be of any avail to the petitioner on two grounds: firstly, the other institution, namely the third respondent is not agreeable as evident from ext.P17. Further, he points out that certain conditions were stipulated in Ext.P12 which were not acceptable to the petitioner. Having regard to the facts present, I do not think that it may be open to the petitioner to seek the relief sought by it. 7. The existence of a legal right is the basis of issuance of a writ of mandamus. Petitioner has not established any legal right to have the OTS which was tentatively accepted, enforced against respondents 1 and 3. Besides, it would also appear that the petitioner itself was having some reservations against some of the conditions in Ext.P12. In such circumstances, there is not much merit in the Writ Petition and it is liable to be dismissed. WPC.23636/08 L 8 8. However, learned counsel for the petitioner would point out that subsequent to the filing of the Writ Petition, the petitioner has been invited to attend the Inter Institutional Meeting called by the third respondent on 15.9.2008 and the petitioner has also given its proposal. Accordingly, while rejecting the Writ Petition, I make it clear that this will not stand in the way of any settlement being arrived at between the parties. Sd/= K. M. JOSEPH, JUDGE kbk. // True Copy // PS to Judge