{"id":130501,"date":"2009-03-06T00:00:00","date_gmt":"2009-03-05T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/usmatech-textile-engineers-pvt-vs-the-branch-manager-on-6-march-2009"},"modified":"2018-02-11T08:24:47","modified_gmt":"2018-02-11T02:54:47","slug":"usmatech-textile-engineers-pvt-vs-the-branch-manager-on-6-march-2009","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/usmatech-textile-engineers-pvt-vs-the-branch-manager-on-6-march-2009","title":{"rendered":"Usmatech Textile Engineers Pvt vs The Branch Manager on 6 March, 2009"},"content":{"rendered":"
Kerala High Court<\/div>\n
Usmatech Textile Engineers Pvt vs The Branch Manager on 6 March, 2009<\/div>\n
       \n\n  \n\n  \n\n \n \n  IN THE HIGH COURT OF KERALA AT ERNAKULAM\n\nWP(C).No. 2666 of 2009(P)\n\n\n1. USMATECH TEXTILE ENGINEERS PVT,LTD\n                      ...  Petitioner\n\n                        Vs\n\n\n\n1. THE BRANCH MANAGER,\n                       ...       Respondent\n\n2. THE KERALA FINANCIAL CORPORATION LTD,\n\n                For Petitioner  :SRI.C.C.THOMAS (SR.)\n\n                For Respondent  :SRI.S.SREEKUMAR,SC,KERALA FINANCIAL COR\n\nThe Hon'ble MR. Justice ANTONY DOMINIC\n\n Dated :06\/03\/2009\n\n O R D E R\n                       ANTONY DOMINIC, J.\n                  -------------------------\n                    W.P.(C.) No.2666 of 2009\n            ---------------------------------\n             Dated, this the 6th day of March, 2009\n\n                          J U D G M E N T\n<\/pre>\n
     Prayers in this writ petition are to quash Ext.P19 and declare<\/p>\n
that the petitioner Company is entitled to the benefit of Exts.P13,<\/p>\n
Recovery Policy for the Financial Year 2007-08, {hereinafter referred<\/p>\n
to as the One Time Settlement (OTS) scheme} as amended by<\/p>\n
Ext.P14, announced by the 2nd respondent, based on Ext.P8<\/p>\n
application made by the petitioner on 12\/12\/2007.<\/p>\n
     2.    The petitioner is a company incorporated under the<\/p>\n
Companies Act, 1956.       Pursuant to applications made by the<\/p>\n
Company, on 29\/12\/2000 and on 09\/11\/2001, the respondents had<\/p>\n
granted loan for a total amount of Rs.97.13 lakhs and for the<\/p>\n
security of which, the Company had mortgaged 1.25 acres of land<\/p>\n
and the improvements therein and also the residential property of<\/p>\n
the Managing Director, as additional collateral security. Though by<\/p>\n
about 2000, production was commenced in the factory set up by the<\/p>\n
Company, from the records it is evident that consequent on the<\/p>\n
losses suffered, the factory was closed in 2004 and that position<\/p>\n
WP(C) No.2666\/2009
\n                                   -2-<\/span><\/p>\n
continues even now. While so, payments were defaulted and finally,<\/p>\n
Ext.P1 application was made by the Company on 03\/12\/2005,<\/p>\n
requesting that it be given the benefit of OTS scheme to liquidate<\/p>\n
the liability. By Ext.P2, the respondents informed the petitioner that<\/p>\n
the request could not be considered for non-payment of the<\/p>\n
prescribed advance of 10%. At that stage, the Company approached<\/p>\n
this Court by filing WP(C) No.11393\/2005. That writ petition was<\/p>\n
disposed of by Ext.P3 judgment directing the respondents to<\/p>\n
consider Ext.P1, without insisting on remittance of the 10% as<\/p>\n
indicated in Ext.P2. Accordingly, the request of the Company for<\/p>\n
the benefit of OTS scheme was considered and by Ext.P6 dated<\/p>\n
29\/12\/2006, the petitioner was informed that its total liability was<\/p>\n
Rs.129.27 lakhs and as they had offered only Rs.28.58 lakhs, the<\/p>\n
offer for settlement was unacceptable.\n<\/p>\n
      3.     Again the petitioner challenged Ext.P6 before this Court<\/p>\n
in WP(C) No.5271\/2007.        In that writ petition this Court passed<\/p>\n
Ext.P7 order dated 28\/09\/2007 directing the Company to make an<\/p>\n
immediate payment of Rs.40 lakhs and it was also directed that<\/p>\n
within six weeks from 01\/10\/2007, the balance amount due to the<\/p>\n
Corporation will also be paid. Further, the petitioner was also given<\/p>\n
WP(C) No.2666\/2009
\n                                  -3-<\/span><\/p>\n
the freedom to make an application seeking the benefit of OTS<\/p>\n
scheme, and it was directed that if payment was made as ordered,<\/p>\n
the application will be considered and the payment made will be<\/p>\n
given credit to the amount quantified towards the OTS amount. The<\/p>\n
petitioner states that thereupon, Rs.40 lakhs was paid and that they<\/p>\n
made Ext.P8, a request for the benefit of OTS scheme, praying inter<\/p>\n
alia for the adjustment of Rs.40 lakhs paid in pursuance to Ext.P7<\/p>\n
order.    Subsequently, again, Ext.P9 interim order was passed,<\/p>\n
directing a further remittance of Rs.60 lakhs, as offered by the<\/p>\n
petitioner, and it was also directed that the same should also be<\/p>\n
given credit, once OTS amount is quantified. It is admitted that this<\/p>\n
payment was made by the petitioner.\n<\/p>\n
      4.   Again Ext.P10 order was passed by this Court, where<\/p>\n
taking note of the tentative quantification of Rs.130 lakhs that the<\/p>\n
Corporation had made in the meanwhile, and holding that after<\/p>\n
giving credit to Rs.1 crore already paid, the balance OTS dues, which<\/p>\n
was remaining to be paid, was only Rs.30 lakhs, this Court ordered<\/p>\n
that the petitioner will be permitted to sell the industrial shed and<\/p>\n
machineries and thereafter, on the remittance of the balance Rs.30<\/p>\n
lakhs, the shed and the machinery will be allowed to be removed<\/p>\n
WP(C) No.2666\/2009
\n                                  -4-<\/span><\/p>\n
from the site. It is now admitted by both sides that as against Rs.30<\/p>\n
lakhs ordered to be paid in Ext.P10, only Rs.3.4 lakhs was paid.<\/p>\n
True, the learned counsel for the KFC has a case that by making<\/p>\n
payment of Rs.3.4 lakhs, the petitioner removed the shed and<\/p>\n
machineries, but however, this is disputed by the petitioner.<\/p>\n
       5.   Be that as it may, finally the Corporation issued Ext.P11,<\/p>\n
its final decision on Ext.P8 proposal made by the petitioner for the<\/p>\n
benefit of OTS scheme, intimating that as on 01\/05\/2008, the<\/p>\n
petitioner’s liability was Rs.157.58 lakhs and that in terms of<\/p>\n
Ext.P13, the Recovery Policy for 2007-08, the petitioner was entitled<\/p>\n
to a concession of only Rs.4.73 lakhs. WP(C) No.5271\/2007 was<\/p>\n
finally disposed of by this Court by Ext.P12 judgment.         Here, it<\/p>\n
should be stated that in the above writ petition, the Corporation was<\/p>\n
justifying Ext.P11 giving a concession of only Rs.4.73 lakhs to the<\/p>\n
petitioner, relying on Ext.P13, the OTS Scheme, on the basis of<\/p>\n
which the petitioner was classified under D2 category. According to<\/p>\n
the Corporation, those defaulters, who are classified under D2<\/p>\n
category under Ext.P13, the Recovery Policy 2007, were eligible for a<\/p>\n
maximum waiver of 50% of the penal interest only, and that in spite<\/p>\n
of it, the petitioner was given waiver of the entire penal interest viz.<\/p>\n
WP(C) No.2666\/2009
\n                                      -5-<\/span><\/p>\n
Rs.4.73 lakhs. Contradicting this assertion of the Corporation, the<\/p>\n
petitioner, along with I.A.No.9490\/2008, produced circular No.59<\/p>\n
dated 01\/12\/2007, which is Ext.P14 herein, by which the Recovery<\/p>\n
Policy 2007 (Ext.P13) was amended and providing that those<\/p>\n
defaulters falling under D1 & D2 categories are also entitled to<\/p>\n
additional benefits as per the OTS scheme.\n<\/p>\n
      6.    While    disposing      of   WP(C)      No.5271\/2007,       these<\/p>\n
contentions were dealt with by this Court in paragraphs 4 & 5 of the<\/p>\n
judgment, a copy of which is Ext.P12 in this writ petition.<\/p>\n
Thereafter taking into account the fact that Ext.P11, disposing of<\/p>\n
Ext.P8 application made by the petitioner for OTS scheme, was<\/p>\n
issued without taking into account the circular No.59 dated<\/p>\n
01\/12\/2007, this Court held that Ext.P11 deserves to be invalidated<\/p>\n
for that reason and that the matter needs to be re-considered. On<\/p>\n
this basis, WP(C) No.5271\/2007 was disposed of by Ext.P12<\/p>\n
judgment dated 19\/11\/2008 with the following directions:-<\/p>\n
            “8.   The request of the petitioner for OTS made by
\n      Ext.P31 application dated 12\/12\/2007, shall be reconsidered by
\n      the Corporation in the light of Recovery Policy dated 05\/09\/07 as
\n      amended by Circular No.59 dated 01\/12\/2007 and in the light of
\n      the rules untrammeled by Ext.P16 and order dated 14\/05\/2008.<\/p><\/blockquote>\n
      On such reconsideration, if the petitioner is found to be eligible<\/p>\n
WP(C) No.2666\/2009
\n                                       -6-<\/span><\/p>\n
     for the benefit, the liability shall be quantified and from the
\n     amount that is quantified to be payable, Rs.1 crore paid by the
\n     petitioner pursuant to orders dated 28\/09\/07 and 17\/03\/2008
\n     and Rs.3.4 lakhs paid on 23\/10\/2008 towards the value of the
\n     machinery sold shall be given credit. Thereafter, the balance as
\n     found due will be demanded from the petitioner, which shall be
\n     paid also.\n<\/p>\n
            9.    It is directed that both parties shall maintain status
\n     quo in regard to the assets, until a decision is taken, as ordered
\n     above. It is also directed that the Corporation shall decide the
\n     matter in the manner as directed, as expeditiously as possible, at
\n     any rate within 6 weeks of receipt of a copy of this judgment.”<\/p>\n
     7.     In pursuance to Ext.P12 judgment, the petitioner made<\/p>\n
Ext.P15 representation and finally the representation has been<\/p>\n
considered and Ext.P19 order dated 16\/01\/2009 has been issued.<\/p>\n
In so far as the claim of the petitioner for the benefit of Circular<\/p>\n
No.59 (Ext.P14) is concerned, the same has been dealt with in<\/p>\n
Ext.P19 in the following manner :-\n<\/p>\n
            “As far as the first condition is taken, it cannot be said that
\n     promoters are unable to run the unit. The unit is owned by private
\n     limited company having three Directors.        The company and its
\n     Directors are affluent and is borne out of the fact that the
\n     company could raise Rs.40 lakhs as per the order dated
\n     28\/09\/2007 in WP(C) No.5271\/07 and remitted on 06\/10\/2007
\n     without creating any liability on the E.M.property.        Thereafter
\n     another sum of Rs.60 lakhs was paid on 25\/03\/2008. This shows<\/p>\n
WP(C) No.2666\/2009
\n                                       -7-<\/span><\/p>\n
      that the company has sufficient liquidity and could run the unit.
\n      Moreover the company has no contention before the Hon’ble High
\n      Court or before the OTS committee that the company is unable to
\n      run the unit.    No explanation much less satisfactory has been
\n      made either in the written request dated 12\/12\/2007 for OTS
\n      benefit or at the time of personal hearing that company had paid
\n      Rs.103.40 lakhs and it is entitled to OTS. Hence the company
\n      does not fall under Clause (a).\n<\/p><\/blockquote>\n
      Admittedly, Clause (b) does not apply as none of the directors are
\n      sick or dead. Admittedly Clause (c) it is pertinent to refer to the
\n      petition filed by the company in the Hon’ble High Court in the bail
\n      application that the value of assets mortgaged to the Corporation
\n      is more than Rs.4 Crores. The company could raise Rs.40 lakhs on
\n      06\/10\/2007 in pursuance of order dated 28\/09\/2007 and another
\n      sum of Rs.60 lakhs on 25\/03\/2008. This shows that the company
\n      and its directors are not in financial difficulties more over one of
\n      the director is a leading Doctor practicing in reputed Hospitals. At
\n      the time of personal hearing also the company had no case that
\n      the company or its Directors are in financial difficulties.\n<\/p><\/blockquote>\n
             As far as Clause (d) the company has not pointed out any
\n      genuine reasons beyond its control. Nothing has been stated at
\n      the time of hearing to give the benefit of Clause (d) as well.”\n<\/p><\/blockquote>\n
It is challenging Ext.P19 and seeking the reliefs mentioned earlier,<\/p>\n
this writ petition has been filed.\n<\/p>\n
      8.     The learned counsel for the petitioner challenges<\/p>\n
Ext.P19. According to him, the petitioner is entitled to the benefit<\/p>\n
of Clauses (a) & (d) of Ext.P14, Circular No.59, amending Ext.P13<\/p>\n
Recovery Policy for the year 2007-08.              It is stated that Ext.P19<\/p>\n
WP(C) No.2666\/2009
\n                                 -8-<\/span><\/p>\n
reflects that the endeavour was only to reject his claim for the<\/p>\n
benefit of OTS scheme.\n<\/p>\n
      9.   Counter affidavit has been filed by the respondents.<\/p>\n
According to the respondents, OTS benefit is given considering the<\/p>\n
repaying capacity and the value of the assets of the Company. It is<\/p>\n
stated that the Directors themselves have declared that the<\/p>\n
Company has assets of more than Rs.4 crores and this statement is<\/p>\n
said to have been made in a bail application filed by them before<\/p>\n
this Court. They have also produced Exts.R1(a), R1(b) and R1(c)<\/p>\n
containing the details of the assets of the Managing Director and<\/p>\n
two Directors of the petitioner Company. It is stated that these<\/p>\n
documents disclose that these persons are holding substantial<\/p>\n
assets and therefore, they cannot claim the benefit of OTS scheme,<\/p>\n
which is normally available to the persons, who are indigent.<\/p>\n
      10.  It is stated that despite all these, the Corporation<\/p>\n
categorized the petitioner under D2 category as per the OTS Scheme<\/p>\n
and extended the benefit of full waiver of penal interest. In so far<\/p>\n
as the benefit of Clause 1(a) of Ext.P14 claimed by the petitioner is<\/p>\n
concerned, reference is made to Ext.R1(d), the bio-data of the<\/p>\n
Managing Director of the Company, and it is contended that the<\/p>\n
WP(C) No.2666\/2009
\n                                  -9-<\/span><\/p>\n
Managing Director is a technically competent person capable of<\/p>\n
running the industrial unit. According to them, the closure of the<\/p>\n
unit does not indicate the inability to run the unit. In so far as<\/p>\n
Clause 1(b) of Ext.P14 is concerned, it is stated that the Directors<\/p>\n
are very much alive that the petitioner has no case that any of its<\/p>\n
Directors are sick. In so far as Clause 1(c) of Ext.P14 is concerned,<\/p>\n
it is contended in the counter affidavit, that the petitioner has no<\/p>\n
case that the company as well as the Directors are not financially<\/p>\n
sound and that on the otherhand they possess assets worth crores.<\/p>\n
In so far as Clause 1(d), it is stated that the petitioner could not<\/p>\n
bring out any genuine reason in order to attract this Clause. In<\/p>\n
short, what is stated in the affidavit is that the petitioner is not<\/p>\n
entitled to any further benefit than what has already been extended<\/p>\n
by the Respondents.\n<\/p>\n
      11.   The learned counsel for the respondents also placed<\/p>\n
reliance on Clause 17 of Ext.P13 providing that the amounts<\/p>\n
prescribed for settlement in the table are only minimum amounts<\/p>\n
and that all concerned shall negotiate for higher amounts<\/p>\n
depending on the value of available securities, solvency and<\/p>\n
repaying capacity of the borrowers \/ guarantors \/ co-obligants \/<\/p>\n
WP(C) No.2666\/2009
\n                                  -10-<\/span><\/p>\n
legal heirs. Reliance was also placed on the judgment of the Apex<\/p>\n
Court in U.P.Financial Corporation v. Gem Cap (India) Pvt. Ltd. And<\/p>\n
Others<\/a> (1993(2) SCC 299) and Haryana Financial Corporation and<\/p>\n
Another v. Jagadamba Oil Mills And Another<\/a> (2002(3) SCC 496).<\/p>\n
The learned counsel also placed reliance on the Division Bench<\/p>\n
judgment of the Allahabad High Court in Mahesh Chand Agarwal &<\/p>\n
Anr. v. Union of India & Ors. (AIR 2007 Allahabad 119). According<\/p>\n
to him, Ext.P14 is only a guideline conferring discretionary power on<\/p>\n
the Corporation and that the benefit of the scheme cannot be<\/p>\n
claimed as a matter of right and that too by taking recourse to a writ<\/p>\n
of mandamus.\n<\/p>\n
      12.   I have considered the submissions made by both sides.<\/p>\n
      13.   Before Ext.P12 judgment was rendered by this Court in<\/p>\n
WP(C) No.5271\/2007, the Corporation had already assessed the<\/p>\n
eligibility of the petitioner for the benefit of OTS scheme on the<\/p>\n
basis of Ext.P13, the Recovery Policy for the financial year 2007-08.<\/p>\n
Applying the standards laid down in Ext.P13 scheme, the<\/p>\n
Corporation had classified the petitioner under D2. On this basis,<\/p>\n
the Corporation assessed the eligibility of the petitioner for<\/p>\n
concessions and held that the petitioner was entitled to waiver of<\/p>\n
WP(C) No.2666\/2009
\n                                      -11-<\/span><\/p>\n
50% of the penal interest. This was communicated to the petitioner<\/p>\n
as per Ext.P11 dated 14\/05\/2008.             Therefore, the fact that the<\/p>\n
petitioner was eligible for the benefit of Ext.P13 scheme and that<\/p>\n
the petitioner was entitled the benefit to those categorised under D2<\/p>\n
cannot be disputed at this stage.\n<\/p>\n
      14.   However, when the eligibility of the petitioner was<\/p>\n
assessed and Ext.P11 was issued in May, 2008, the Corporation did<\/p>\n
not take into account the amendment made to Ext.P13, by Ext.P14<\/p>\n
dated 01\/12\/2007 and in fact this document was suppressed<\/p>\n
before this Court.         As per this amendment, those who are<\/p>\n
categorized under S2, D1 & D2 were also eligible for the benefit of<\/p>\n
OTS scheme provided they satisfy any of the four conditions<\/p>\n
specified in paragraph 1 of Ext.P14, which reads as under:-<\/p>\n
            “1)    It is decided to extend the OTS benefit to S2, D1 &
\n      D2 cases also in the best interest of the Corporation on satisfying
\n      any of the following conditions.\n<\/p><\/blockquote>\n
            (a)    the promoter(s) is\/are unable to run the unit.\n<\/p><\/blockquote>\n
            (b)    Owners\/co-obligants are dead or sick\n            (c)    Owners\/co-obligants are in financial difficulties and\n            (d)    Other genuine reasons,       beyond the control      of the\n            entrepreneur \/ legal heirs.\"\n\n<\/pre>\n
The claim of the petitioner is mainly for the benefit of Clause 1(a) of<\/p>\n
Ext.P14, which extends the benefit of OTS scheme to those<\/p>\n
WP(C) No.2666\/2009
\n                                    -12-<\/span><\/p>\n
classified under D2 category, provided the promoter is unable to<\/p>\n
run the unit.<\/p><\/blockquote>\n
      15.   In this case, the admitted factual position is that though<\/p>\n
the Company commenced production in 2002, the factory was<\/p>\n
closed in 2004 and has not been reopened so far. By that time loss<\/p>\n
was incurred and default was committed in repayments and<\/p>\n
ultimately by Ext.P1 dated 03\/12\/2005 that the petitioner had<\/p>\n
applied for settling the liability under OTS Scheme. When Ext.P14<\/p>\n
provides for extension of the benefit of Ext.P13 OTS Scheme in a<\/p>\n
case where the promoter is unable to run the unit, the inability of<\/p>\n
the promoter has to be appreciated in a pragmatic sense.<\/p>\n
Otherwise, to deny the benefit there must be material to conclude<\/p>\n
that the factory has been closed for malafide reasons. There is no<\/p>\n
material in this case leading to such an inference. On the material<\/p>\n
produced, I have no reason to think that an entrepreneur like the<\/p>\n
petitioner would have left the unit closed since 2004 without any<\/p>\n
reason.\n<\/p>\n
      16.   The 1st respondent on the other hand disputes the claim<\/p>\n
of the petitioner of its inability to run the unit, mainly relying on the<\/p>\n
payments that the petitioner made pursuant to Exts.P7 and P9<\/p>\n
WP(C) No.2666\/2009
\n                                   -13-<\/span><\/p>\n
interim orders, Exts.R1(a) to R1(c), the bio-data of the Directors of<\/p>\n
the Company, which also contains the details of the assets and<\/p>\n
liabilities of the persons concerned and Ext.R1(d) is the bio-data of<\/p>\n
the Managing Director of the Company, containing his age,<\/p>\n
educational qualification, experience etc.     On this basis, it is<\/p>\n
contended that the case of inability canvassed by the petitioner is<\/p>\n
incorrect. Although the learned counsel for the petitioner argued<\/p>\n
that the Directors do not possess the assets indicated in the<\/p>\n
statement of assets and liabilities, in my view a pronouncement on<\/p>\n
this contention is unwarranted. What is contemplated in Clause 1(a)<\/p>\n
is the inability of the promoters to run the unit. In my view, this<\/p>\n
provision has to be viewed in a commercial and pragmatic sense,<\/p>\n
and the inability to run the unit is the commercial inability which can<\/p>\n
be spelt out when the unit itself is making losses leading to its<\/p>\n
closure. Otherwise there must be material to conclude that the loss<\/p>\n
and closure is deliberate and manipulated, which is absent in this<\/p>\n
case. Further to say that payments made following Exts.P7 & P9<\/p>\n
show the affluence of the promoters, to say the least, is perverse, in<\/p>\n
as    much     those   payments     were   made   under     compelling<\/p>\n
circumstances and on the specific directions that it will be adjusted<\/p>\n
WP(C) No.2666\/2009
\n                                   -14-<\/span><\/p>\n
towards OTS liability. In my view, Clause 1(a) is attracted in this<\/p>\n
case and therefore, the argument of the Corporation that the<\/p>\n
petitioner is not eligible for the benefit of Clause 1(a) of Ext.P14 is<\/p>\n
totally incorrect.\n<\/p>\n
      17.   Shri.Sreekumar, the learned counsel for the respondent<\/p>\n
Corporation relied on the judgments referred to above. In so far as<\/p>\n
the judgments in U.P.Financial Corporation v. Gem Cap (India) Pvt.<\/p>\n
Ltd. And Others<\/a> (1993(2) SCC 299) and Haryana Financial<\/p>\n
Corporation and Another        v. Jagadamba Oil Mills And Another<\/a><\/p>\n
(2002(3) SCC 496) are concerned, these are cases where in exercise<\/p>\n
of powers under Article 226 of the Constitution of India, the<\/p>\n
respective High Courts interfered with the proceedings initiated by<\/p>\n
the State Financial Corporations concerned, invoking their right<\/p>\n
under Section 29 of the State Financial Corporations Act. In the<\/p>\n
facts of these cases, dealing with the law that is applicable, the<\/p>\n
Apex Court held that the steps taken by the Corporation for<\/p>\n
realising its dues, should not have been interfered with. In my view,<\/p>\n
the law laid down in these two judgments can be of no application<\/p>\n
to the facts of this case for the reason, that in this case, admittedly,<\/p>\n
the Corporation had floated the OTS scheme, the benefit of which<\/p>\n
WP(C) No.2666\/2009
\n                                   -15-<\/span><\/p>\n
alone is claimed by the petitioner. If the rejection of the application<\/p>\n
made by the petitioner was on erroneous grounds, this Court is<\/p>\n
perfectly justified in interfering with such illegal rejection, and<\/p>\n
directing that the benefit of the Scheme should be extended to the<\/p>\n
petitioner, if they otherwise deserve the same.      The next is the<\/p>\n
decision of the Allahabad High Court in Mahesh Chand Agarwal &<\/p>\n
Anr. v. Union of India & Ors. (AIR 2007 Allahabad 119). That again<\/p>\n
was a case, where the High Court held that in the absence of an OTS<\/p>\n
scheme, the Court cannot compel the Financial Corporation to settle<\/p>\n
the liabilities, otherwise than in terms of the agreement between the<\/p>\n
parties. Here again unlike the case dealt with by the Allahabad High<\/p>\n
Court, what the petitioner herein claims is the benefit of the OTS<\/p>\n
scheme floated and implemented by the respondent Corporation.<\/p>\n
Therefore, the three judgments relied on by the learned counsel for<\/p>\n
the respondent Corporation are totally irrelevant in so far as this<\/p>\n
case is concerned. In this context, I should also make reference to<\/p>\n
Exts.P16 & P17 proceedings of the respondent Corporation itself,<\/p>\n
produced by the petitioner, where about 200 similar defaulters have<\/p>\n
been given the benefit of OTS scheme and the petitioner has in<\/p>\n
specific terms contended that they have been discriminated. In the<\/p>\n
WP(C) No.2666\/2009
\n                                  -16-<\/span><\/p>\n
counter affidavit filed, this contention of the petitioner is sought to<\/p>\n
be brushed aside by making a general and vague statement that<\/p>\n
each case is to be dealt with on its own merit.    It may be true that<\/p>\n
there is an element of discretion conferred on the respondents. But,<\/p>\n
it being    an   instrumentality of    state,  cannot    exercise   the<\/p>\n
discretionary power discriminatively or capriciously, I am also not<\/p>\n
impressed with the argument that none can claim the benefit of the<\/p>\n
scheme as a matter of right. Therefore, on the facts of this case, I<\/p>\n
am satisfied that the petitioner is entitled to the benefit of Ext.P13,<\/p>\n
giving the benefit of Clause 1(a) of Ext.P14, and by rejecting the<\/p>\n
claim of the petitioner as per Ext.P19, the Corporation acted<\/p>\n
arbitrarily.\n<\/p>\n
      18.   Ordinarily, in a case of this nature, if Ext.P19 is held<\/p>\n
erroneous, the course to be adopted is to set aside the same and to<\/p>\n
direct the respondents to reconsider the matter in accordance with<\/p>\n
the scheme floated by it. But, in this case, as already noticed, this is<\/p>\n
the 3rd round of litigation and on a reading of Ext.P19, I am satisfied<\/p>\n
that injustice has been done to the petitioner on unreasonable<\/p>\n
grounds. Therefore, I do not think it proper to remit the matter for<\/p>\n
reconsideration.     For these reasons, I direct the respondent<\/p>\n
WP(C) No.2666\/2009
\n                                 -17-<\/span><\/p>\n
Corporation to extend the benefit of Ext.P13 OTS Scheme, treating<\/p>\n
the petitioner’s case as one coming under Clause 1(a) of Ext.P14.<\/p>\n
Orders shall be passed on Ext.P8 application made by the petitioner<\/p>\n
in the light of the above, as expeditiously as possible, at any rate,<\/p>\n
within four weeks of production of a copy of this judgment.<\/p>\n
     19.   Needless to say that Rs.40 lakhs paid by the petitioner in<\/p>\n
pursuance to Ext.P7, Rs.60 lakhs paid by the petitioner in pursuance<\/p>\n
to Ext.P9 and Rs.3.4 lakhs paid by the petitioner on the disposal of<\/p>\n
the industrial shed, will be given credit to the amount found to be<\/p>\n
due from the petitioner towards the liability under the OTS scheme.<\/p>\n
     20.   It is directed that both the parties shall maintain status<\/p>\n
quo in regard to the assets of the Company until a decision is taken<\/p>\n
as ordered above.\n<\/p>\n
     The writ petition is disposed of as above.\n<\/p>\n<\/p>\n
                                       (ANTONY DOMINIC, JUDGE)
\njg<\/p>\n","protected":false},"excerpt":{"rendered":"
Kerala High Court Usmatech Textile Engineers Pvt vs The Branch Manager on 6 March, 2009 IN THE HIGH COURT OF KERALA AT ERNAKULAM WP(C).No. 2666 of 2009(P) 1. USMATECH TEXTILE ENGINEERS PVT,LTD … Petitioner Vs 1. THE BRANCH MANAGER, … Respondent 2. THE KERALA FINANCIAL CORPORATION LTD, For Petitioner :SRI.C.C.THOMAS (SR.) For Respondent :SRI.S.SREEKUMAR,SC,KERALA FINANCIAL […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,21],"tags":[],"class_list":["post-130501","post","type-post","status-publish","format-standard","hentry","category-high-court","category-kerala-high-court"],"yoast_head":"\nUsmatech Textile Engineers Pvt vs The Branch Manager on 6 March, 2009 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/usmatech-textile-engineers-pvt-vs-the-branch-manager-on-6-march-2009\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Usmatech Textile Engineers Pvt vs The Branch Manager on 6 March, 2009 - 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