IN THE HIGH COURT OF JUDICATURE AT PATNA LPA No.143 of 2011 5 9.5.2011 Subodh Kumar Singh, son of Late Nagendra Singh, Purchaser of M/s Galaxy Enterprises, Bela Industrial Estate, P.S. Vishwavidyalay, District Darbhanga …. Petitioner/ Appellant Versus 1. The Bihar State Financial Corporation, Fraser Road, Patna through its Managing Director 2.The Managing Director, Bihar State Financial Corporation, Fraser Road, Patna 3. The Branch Manager, Bihar State Financial Corporation, Mithila Branch, New Indl. Estate, Bela, Darbhanga. … Respondents/ Respondents -------- For the Appellant : M/s Manik Vedsen with Subhash Chandra Bose, Advocates For the Respondents: M/s Y.V.Giri, Sr. Advocate, Raju Giri and Mrigendra Kumar Singh, Advocates -------- Heard learned counsel for the appellant and learned counsel for the Bihar State Financial Corporation. 2. Without going into unnecessary details, we may summarize the nature of dispute between the parties which led to filing of a writ petition by the appellant bearing CWJC No.1896 of 2006 which has been dismissed by the order under appeal. 3. The Writ Court has noticed that the petitioner/ appellant claimed that he could be charged interest only - 2 - at the rate of 13.5 per cent as per policy decision of the Corporation governing interest from the borrowers. After noticing that in the sale order made in favour of the petitioner the interest rate was clearly mentioned at 18.5 per cent per annum and the letter of protest by the petitioner against such interest dated 17.4.1996 was rejected by the respondents on 24.5.1996, the Writ Court held that petitioner was liable to pay the dues with interest at the rate of 18.5 per cent as mentioned in the sale order. 4. Learned counsel for the appellant submitted that interest as per policy of the Corporation mentioned in Annexure-10 to the writ petition, was 13.5 per cent per annum for any loan upto Rs.2 lakhs and demand of 18.5 per cent interest from the petitioner was unconsonable and the petitioner took no further steps against mentioning of 18.5 per cent interest in the sale letter because in the book of accounts relating to loan account of the petitioner, the Corporation charged only 13.5 per cent interest and after several years when the petitioner applied for no dues certificate, the book of accounts was - 3 - revised on the basis of 18.5 per cent interest raising additional demand of more than Rs.2 lakhs leading to filing of the writ petition in the year 2006. 5. We gave sufficient opportunity to the Corporation to show any prescribed rate of interest governing cases like that of the petitioner who had purchased a sick unit auction sold for default in payment. Except a decision of the Managing Director that in such cases a lower rate of interest applicable to the defaulting unit would no longer be available and the current rate of interest would be charged which was 18 per cent in 1995, no other document was shown to justify charging of current rate of interest at the rate of 18.5 per cent per annum. In order to explain Annexure – 10, the Board has taken the stand that rate of interest mentioned therein is only for new borrowers and not for purchasers of defaulting units. Such a plea could have been easily defended and supported by placing before us any policy decision to show that in or around 1995 or even earlier there was a decision to treat fresh borrowers and purchasers of defaulting units differently. But no such - 4 - decision by way of formal policy decision is available prior to 2002. Such a decision finds support only from a letter dated 2.2.2002 produced before us as Annexure- C/4 to a supplementary affidavit filed in this appeal. 6. The said supplementary affidavit brings on record a further development by way of document annexed as Annexure – C/5 series which show that a scheme for One Time Settlement was issued and as per communication dated 31.8.2010 desirous borrowers covered by the scheme could apply up to 15.11.2010. The application for BSFC OTS Scheme 2009 filed by the petitioner/ appellant has also been brought on record to show that he agreed to abide by the terms and conditions of the scheme and accepted them unconditionally. It appears that at the relevant time the dues against the appellant were found to be Rs.6,01,525.00 and as per the scheme the petitioner/ appellant paid Rs.99.500 and the Corporation withdrew the entire balance interest of Rs.5,01,025. According to the respondent Corporation, the benefit under the scheme was taken by the petitioner/ appellant without any protest. On the other hand, - 5 - learned counsel for the appellant has submitted that while paying Rs.99,500/-, a clear protest was expressed by the appellant through a letter. However, the form of application enclosed with the supplementary counter affidavit is not in dispute and it shows that the petitioner/ appellant agreed to abide by the terms of the scheme and to accept them unconditionally. Hence, the protest letter at the time of payment of payable amount under the scheme cannot be of much substance especially when at the relevant time the writ petition in question was still pending and no leave was obtained from the court that petitioner may apply for OTS without prejudice to his claims in the writ petition. 7. In the aforesaid facts and circumstances, although we are not fully satisfied with the stand taken by the Corporation to justify the rate of interest charged from the petitioner at 18.5 per cent per annum, we are of the considered view that in the light of subsequent agreement between the parties in the form of one time settlement, the rights and liabilities of the parties must be allowed to rest as concluded by the agreement. It would - 6 - not be proper for us to exercise writ jurisdiction in such a situation. This appeal is, therefore, dismissed but without costs. sk (Shiva Kirti Singh, J.) (Dr Ravi Ranjan, J.)