Case: A.P. State Fin. Corpn Vs. Vajra Chemicals

to the decision taken by the Executive Director the representation of the petitioner was communicated to the Zonal Manager Sri P.V.B. Lakshminath, who had also concurred with the decision arrived at and made an endorsement to that effect on the said representation. The said representation was also sent to the concerned recovery area officer who had also signed on the said representation on the same date..................."I further state and submit that the decision taken by the Executive Director of this respondent-Corporation on 27.12.1993 was in the presence of Managing Director of Vajra Chemicals amounts to due communication of the decision to the M.D. of Vajra Chemicals". 17. It is therefore on record that fresh opportunity was given on 27.12.1993 to the 1st respondent company and there was "communication" of the decision arrived at to the Managing Director of the company on 27.12.1993 itself. It is more significant that the above facts stated in affidavits filed on behalf of the Corporation stood wholly unrebutted and no rejoinder was filed by the Company contradicting or denying the above facts. 18. Apart from the absence of a denial of the facts stated by the Corporation, there is in our view internal evidence in the endorsement of the Executive Director of the Corporation on the represented date 27.12.1993, that the decision taken at the meeting was reduced to writing after discussion and that concurrence of the Managing Director of the 1st respondent, Mr. Vijaya Kumar, was orally given. This can be easily inferred from the language employed in the said endorsement. We shall extract the same. It reads : "Discussed with the party. Please accept Rs. 0.30 lakhs as OTP for lifting the seizure subject to party making a further payment of Rs. 0.50 lakhs in March, 1991 for which PAD cheques may be collected. This is with a clear understanding that the loan account shall be settled on OTS (one-time settlement) within 6 months from the date of handing over the unit". 19. The use of the words `Discussed with the party and `clear understanding used in the endorsement are, in our opinion, sufficient material on record corroborating the two affidavits filed on behalf of the Corporation in the Writ Appeal. The Division Bench of the High Court was therefore in error in observing that there was no material to infer that the decision contained in the endorsement dated 27.12.1993 was communicated to the Company. 20. Summarising the position, we are of the view that the Division Bench of the High Court while allowing the Writ Appeal overlooked the fact that there was no pleading in the writ petition regarding the representation dated 27.12.1993 or the non-communication of any decision thereon. No rejoinder was filed by the 1st respondent to contradict the specific averments made in the Corporations affidavit as to what happened on 27.12.1993 in the Chambers of the Executive Director of the Corporation. There is internal evidence in the endorsement of the Executive Director of the Corporation which shows that the matter was discussed and an arrangement was arrived at in the presence of Mr. Vijaya Kumar and was reduced to writing and communicated to him and consequential directions were issued to the office of the Corporation to receive Rs. 30,000/- as outright payment and release the unit, and to receive Rs. 50,000/- by March, 1994, receive post-dated cheques and it was also agreed that the 1st respondent was to make a one-time settlement (OTS). The learned Judge therefore erred in entertaining and accepting a plea put forward by the 1st respondent-Company for the first time in the Writ Appeal for which there was no foundation in the pleading or affidavits of the 1st respondent Company.It is true that this Court does not normally interfere with findings of fact arrived at by the High Court. But where there is no pleading and where a factual issue is permitted to be raised for the first time in Writ Appeal and findings are given contrary to the affidavit filed by the opposite party and where no reference is made to the contents of the only crucial documents in the case, (the endorsement dated 27.12.1993 on the representation), this Court can and will interfere.21. We may also refer to the conduct of the 1st respondent which, in fact, estops it from approaching the Court. The certificate issued by the Vysya Bank, after the sale was made, shows that the 1st respondent-Company accepted the factum of the sale of the unit. In the additional affidavit of Sr. V. Ramchandra dated 10.9.1995 filed before the Division Bench it was stated that the certificate dated 3.7.1995 issued by the Vysya Bank shows that the 1st respondent was aware of the sale finally made by the Corporation and had accepted the sale. The certificate dated 3.7.1995 by the Bank read as follows :- "This is to certify that a demand loan availed by M/s Vajra Chemicals Pvt. Ltd. is outstanding with us wherein the balance amount together with interest accrued thereon upto 30th June, 1995 at Rs. 1,58,047.00 (Rs. One Lakh fifty eight thousand and forty seven only). This certificate is issued at the request of the Company." 22. From the above certificate of the bank, it is clear that the 1st respondent Company wanted that the balance amount remaining after adjusting the dues to the Corporation, should go in discharge of the Companys dues to the Vysya Bank. The 1st respondent Company was not able to explain what was the occasion for the Company to ask the Vysya Bank to move the Corporation. The sale of the unit was on 13.3.1995, the same was approved by the Board of the Corporation on 13.5.1995 and the purchaser had deposited the entire sale consideration on 21.6.1995. It is not in dispute that the Corporation has paid the Vysya Bank the amount covered by the certificate out of the balance of the sale proceeds that remained with the Corporation. This conduct of the company precludes it from questioning the sale.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]20. Summarising the position, we are of the view that the Division Bench of the High Court while allowing the Writ Appeal overlooked the fact that there was no pleading in the writ petition regarding the representation dated 27.12.1993 or theof any decision thereon. No rejoinder was filed by the 1st respondent to contradict the specific averments made in the Corporations affidavit as to what happened on 27.12.1993 in the Chambers of the Executive Director of the Corporation. There is internal evidence in the endorsement of the Executive Director of the Corporation which shows that the matter was discussed and an arrangement was arrived at in the presence of Mr. Vijaya Kumar and was reduced to writing and communicated to him and consequential directions were issued to the office of the Corporation to receive Rs. 30,000/as outright payment and release the unit, and to receive Rs. 50,000/by March, 1994, receivecheques and it was also agreed that the 1st respondent was to make asettlement (OTS). The learned Judge therefore erred in entertaining and accepting a plea put forward by the 1stfor the first time in the Writ Appeal for which there was no foundation in the pleading or affidavits of the 1st respondent Company.It is true that this Court does not normally interfere with findings of fact arrived at by the High Court. But where there is no pleading and where a factual issue is permitted to be raised for the first time in Writ Appeal and findings are given contrary to the affidavit filed by the opposite party and where no reference is made to the contents of the only crucial documents in the case, (the endorsement dated 27.12.1993 on the representation), this Court can and will interfere.21. We may also refer to the conduct of the 1st respondent which, in fact, estops it from approaching the Court. The certificate issued by the Vysya Bank, after the sale was made, shows that the 1staccepted the factum of the sale of the unit. In the additional affidavit of Sr. V. Ramchandra dated 10.9.1995 filed before the Division Bench it was stated that the certificate dated 3.7.1995 issued by the Vysya Bank shows that the 1st respondent was aware of the sale finally made by the Corporation and had accepted the sale. The certificate dated 3.7.1995 by the Bank read as followsis to certify that a demand loan availed by M/s Vajra Chemicals Pvt. Ltd. is outstanding with us wherein the balance amount together with interest accrued thereon upto 30th June, 1995 at Rs. 1,58,047.00 (Rs. One Lakh fifty eight thousand and forty seven only). This certificate is issued at the request of the Company.From the above certificate of the bank, it is clear that the 1st respondent Company wanted that the balance amount remaining after adjusting the dues to the Corporation, should go in discharge of the Companys dues to the Vysya Bank. The 1st respondent Company was not able to explain what was the occasion for the Company to ask the Vysya Bank to move the Corporation. The sale of the unit was on 13.3.1995, the same was approved by the Board of the Corporation on 13.5.1995 and the purchaser had deposited the entire sale consideration on 21.6.1995. It is not in dispute that the Corporation has paid the Vysya Bank the amount covered by the certificate out of the balance of the sale proceeds that remained with the Corporation. This conduct of the company precludes it from questioning the sale.