Shailly vs State on 30 August, 2011

[Cites 17, Cited by 0]

Gujarat High Court

Shailly vs State on 30 August, 2011

Bench: S.J. Mukhopadhaya

  
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SCA/4393/2011	 37	JUDGMENT 
 
 

	

 

IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
 

 


 

SPECIAL
CIVIL APPLICATION No. 4393 of 2011
 

 
For
Approval and Signature:
 

  
HONOURABLE
THE CHIEF JUSTICE MR. S.J. MUKHOPADHAYA
 
HONOURABLE
MR.JUSTICE J.B.PARDIWALA 

 

 
=========================================================

 
	  
	 
	  
		 
			 

1
		
		 
			 

Whether
			Reporters of Local Papers may be allowed to see the judgment ?
		
	

 
	  
	 
	  
		 
			 

2
		
		 
			 

To be
			referred to the Reporter or not ?
		
	

 
	  
	 
	  
		 
			 

3
		
		 
			 

Whether
			their Lordships wish to see the fair copy of the judgment ?
		
	

 
	  
	 
	  
		 
			 

4
		
		 
			 

Whether
			this case involves a substantial question of law as to the
			interpretation of the constitution of India, 1950 or any order
			made thereunder ?
		
	

 
	  
	 
	  
		 
			 

5
		
		 
			 

Whether
			it is to be circulated to the civil judge ?
		
	

 

=========================================================

 

SHAILLY
CONSTRUCTION PVT LTD THRO.POA DEVDUTT RAMESHBHAI - Petitioner(s)
 

Versus
 

STATE
OF GUJARAT & 2 - Respondent(s)
 

=========================================================
 
Appearance
: 
MR
AJ YAGNIK for
Petitioner(s) : 1, 
GOVERNMENT PLEADER for Respondent(s) :
1, 
NOTICE SERVED BY DS for Respondent(s) : 2 - 3. 
MR DIPEN A
DESAI for Respondent(s) :
3, 
=========================================================


 
	  
	 
	  
		 
			 

CORAM
			: 
			
		
		 
			 

HONOURABLE
			THE CHIEF JUSTICE MR. S.J. MUKHOPADHAYA
		
	
	 
		 
		 
			 

and
		
	
	 
		 
		 
			 

HONOURABLE
			MR.JUSTICE J.B.PARDIWALA
		
	

 

 


 

Date
:30/08/2011 

 

CAV
JUDGMENT

(Per : HONOURABLE MR.JUSTICE J.B.PARDIWALA)

1. By way of the petition, under Article 226 of the Constitution as prayed for the following reliefs:

"9(A) to direct respondents to consider application of the petitioner Company for One Time Settlement of dues dated 25.10.2010 at Annexure-B under the One Time Settlement Scheme of the respondent State of Gujarat for Co-operative Banks in liquidation dated 19.05.2010 at Annexure-A with immediate effect;

(B) during the pendency and/or final disposal of the present petition be pleased to direct respondents to consider application of the petitioner Company for One Time Settlement of dues dated 25.10.2010 at Annexure-B under the One Time Settlement Scheme of the respondent State of Gujarat for Co-operative Bank in liquidation dated 19.05.2010 at Annexure-A with immediate effect;

(C) to pass such other and further order/s in the interest of justice."

The relief as prayed for by way of amendment dated 05.08.2011:

"9(D) to quash and set aside the order of respondent High Level Committee of rejection of application for one time settlement of outstanding dues of the petitioner company communicated through letter of respondent Liquidator dated 28.07.2011 at ANN:E. 9(E) to direct the respondent High Level Committee to reconsider the application for one time settlement of outstanding dues of the petitioner company in accordance with the law and as per the terms and conditions of the one time settlement scheme dated 19.5.2010.

9(F) In the alternative, be pleased to pass an order allowing application for one time settlement of outstanding dues of the petitioner company.

9(H) during the pendency and/or final disposal of the present petition, be pleased to stay operation, implementation and execution of the order of respondent High Level Committee rejecting application for one time settlement of outstanding dues of the petitioner company communicated by letter of respondent liquidator dated 28.07.2011."

2. The petitioner, a registered private limited construction company, preferred the present petition seeking directions against the respondents to consider and take final decision on its application for one time settlement of dues under the One Time Settlement Scheme for Cooperative Banks in liquidation of the respondent State of Gujarat dated 19.05.2010. Initially, when the petition was preferred, the petitioner is ready and wiling to pay an amount of Rs.2.75 crores by one stroke and the necessary finance has also been arranged. It was submitted that the amount of Rs.2.75 crores is based on the formula as stated in the O.T.S. Scheme. According to the petitioner, implementation of One Time Settlement Scheme floated by the respondent State of Gujarat would be binding upon the liquidator and the High Level Committee entrusted with the responsibility to consider and approve application for One Time Settlement of the respective borrower.

3. The matter was taken up for the first time on 06.04.2011, on 06.04.2011, this Court passed the following order:

"Let notice be issued on respondent Nos. 2 and 3. Direct notice is permitted.

Ms Manisha Lavkumar, learned AGP accepts and waives notice on behalf of the 1st respondent.

The respondents may file their affidavit within two weeks.

Post the matter on 29th April, 2011.

In the meantime, if the petitioner deposits an amount of Rs.2.75 Crores by one stroke, by submitting draft(s), the 3rd respondent - Liquidator, Charotar Nagarik Sahakari Bank will accept the same and keep in a separate interest bearing no lien account and the acknowledgment be handed over to the petitioners. By the next date, they should inform what is the rest amount due under the OTS."

4. When the matter was again taken up for further hearing on 29.04.2011, an affidavit was filed by respondent no.3 Charotar Nagrik Sahakari Bank and respondents prayed for time stating that the High Level Committee constituted by the Government in this regard will take appropriate decision whether to accept Rs.2.78 crores to us one time settlement or not.

5. On 23.06.2011, once again, State informed that there are around 480 cases pending before the High Level Committee and after 15 days they will assemble and take decision. This Court, therefore, passed an order on 23.06.2011 which reads as under:

"Learned AGP Mrs.Shah submits that there are 480 cases pending before the High Level Committee and after every 15 days they will assemble and take decision. They will also see to it that all the applications are being decided by this year. It is stated that the next date of meeting of the High Level Committee is to be held in the last week of June 2011.

In the circumstances, the respondents are directed to consider the case of the petitioner in the next meeting which is scheduled to be held in the last week of June 2011 and report the matter to this Court.

Let a copy of this order be handed over to the learned AGP for information to the Deputy Secretary, Agriculture and Cooperative Department, who is the Member Secretary to the High Level Committee, who will bring this matter to the notice of the Chairman, the Vice Chairman and the Members of the High Level Committee.

Post the matter on 8th July 2011 within ten cases."

6. Once again, on 08.07.2011 following order was passed:

"Learned AGP informs that the meeting is now adjourned for 14th July 2011.

The Member Secretary of the High Level Committee is directed to ensure that the meeting is held on or before 14th July 2011, failing which, this Court may impose heavy cost and may dispose of the case with suitable directions.

Post the matter on 21st July 2011 within five cases."

7. On 21.07.2011, the following order was passed:

"On 29th April, 2011 when respondents sought time to settle the matter, it was informed that the matter will be decided by the High Level Committee. On 23rd June, 2011, it was informed that the High Level Committee will decide the matter in the next meeting scheduled to be held in last week of June, 2011. They also provided a time schedule of meeting, according to which by this time, the High Level Committee was expected to hold atleast three meetings and ought to have decided minimum 150 cases i.e. 50 cases per meeting, as per their stand. On 8th July, 2011, learned AGP sought time on the ground that meeting is postponed for 14th July, 2011. The Court passed following order on 8th July, 2011.

"Learned AGP informs that the meeting is now adjourned for 14th July 2011.

The Member Secretary of the High Level Committee is directed to ensure that the meeting is held on or before 14th July 2011, failing which, this Court may impose heavy cost and may dispose of the case with suitable directions.

Post the matter on 21st July 2011 within five cases."

In spite of such orders, the High Level Committee has not decided the matter and therefore, in view of the order dated 8th July, 2011, we impose costs of Rs.20,000/- on respondent No.1 for payment in favour of Gujarat State Legal Services Authority, High Court Campus, Ahmedabad. We may mention that in spite of repeated orders, respondent No.1 or High Level Committee did not thought it fit to file any affidavit before the Court, nor give any explanation for such delay.

We allow time till 27th July, 2011 to the High Level Committee to hold its meeting and take a final decision, failing which the Court may impose further costs and pass final order. By the next date, learned Government Pleader will also provide the names of the Members of the High Level Committee before this Court. It will be open to the State Government to recover the aforesaid amount of costs from the Members of the High Level Committee.

Post the matter on 29th July, 2011 on the top of the list.

Let a copy of this order be handed over to learned Government Pleader for information to all the members of the High Level Committee."

8. On 05.08.2011, the respondents informed that the High Level Committee has rejected the proposal of One Time Settlement given by the petitioner.

9. In this view of the matter, we permitted the petitioner to amend the petition and challenge the decision of the High Level Committee. Accordingly, the petition was amended and the reliefs were also amended and prayers clause was also amended seeking challenge to the decision of the High Level Committee rejecting the proposal.

10. At this stage, it would be expedient to highlight few facts relevant for the purpose of deciding this petition:

10.1 The petitioner-Company availed of financial assistance to the tune of Rs.1.5 crores from the respondent Charotar Nagrik Sahakari Bank, now in liquidation with effect from 29.11.1999. Finance was availed of for the purpose of completing a residential tower known as "Shailly Towers" at Ambawadi, Ahmedabad. As against the financial assistance, the petitioner-Company offered few flats by way of security in the residential tower and other immovable property to the satisfaction of the respondent-Bank.

10.2 Due to earthquake in the year 2001, the scheme of residential tower could not be successfully completed. The petitioner was unable to repay the installment with interest at the rate of more than 18% per annum and by 2002 it became a default. The account was declared NPA.

10.3 Record reveals that an FIR was also registered by the then General Manager of respondent-Bank in liquidation in the year 2002 against the Directors and certain borrowers. One of the 26 borrowers named in the FIR is the petitioner-Company. Chargesheet against the Directors and certain borrowers was filed between 2003 and 2005. More than 9 years have lapsed since the registration of the FIR but till date, there has been no progress so far as the prosecution is concerned.

10.4 It appears that the Lavad Suit was filed by the respondent Bank in the year 2002 bearing Summary Lavad Case No.532 of 2002 before the learned Board of Nominees, wherein a judgment and decree passed on 25.10.2002 directing the respondent-Bank to pay an amount of Rs.2,07,97,725/- with interest.

10.5 Record reveals that on 19.05.2010, respondent no.1-State of Gujarat, in exercise of powers under Section 108 of the Gujarat Cooperative Societies Act introduced One Time Settlement Scheme for 43 Cooperative Banks in liquidation for specific objectives as stated in the introduction of the O.T. S. Scheme. The borrowers were expected to make their application for being considered under the Scheme on or before 31.12.2010 and the applications were to be considered by the Competent Authority as stated in this Scheme on or before 31.12.2011.

10.6 Record also reveals that the O.T.S. Scheme covers every cases including those borrowers against whom civil and criminal proceedings have been initiated by the bank in liquidation as well as those who are responsible for fraud etc. 10.7 Record also reveals that the case of the petitioner-Company is fully covered under the Scheme and they are entitled to the benefit of the Scheme.

No limitation or restriction stated in the Scheme is applicable to them. Looking to the terms and conditions of the O.T. S. Scheme, the case of the petitioner is fully and squarely covered under the Scheme. The petitioner-Company through its power of attorney preferred an application for being considered under One Time Settlement Scheme in question on 25.10.2010. Earlier a representative had made an identical application in June-2010. However, since the application was not as per the required format, a detailed application was made with all the documents on 25.10.2010. It appears that thereafter, the petitioner kept on preferring representations to the respondents some of them dated 28.10.2010, 10.10.2010, 28.11.2010 and 04.01.2011 stating that they are ready and willing to pay the amount under the O.T.S. by one stroke but there was no response at the end of the respondents.

10.8 It also appears that the High Level Committee has been constituted for this purpose. The Chairman of the High Level Committee is Minister for Agriculture and Cooperation, State of Gujarat and the Deputy Secretary (Finance) is an ex-officio of the High Level Committee. The case has to go before the High Level Committee as the amount to be repaid is more than Rs.1 crore.

11. It is evident from the number of orders passed by this Court time to time that initially, the High Level Committee refused to take up the matter and decide whether to accept the proposal or not. It is only when we imposed cost of Rs.20,000/- on respondent no.1, inspite of repeated orders, the High Level Committee did not think fit to file any affidavit before the Court nor given any explanation for such delay, ultimately, the decision was taken by the High Level Committee rejecting the proposal of One Time Settlement put-forward by the petitioner.

It is important to note that when the proposal was taken up for consideration, the petitioner had already deposited a sum of Rs.2.78 crores, since a long period of time.

12. We notice that on pure technicality, the High Level Committee thought fit to reject the proposal.

13. The petitioner was informed vide letter dated 28.07.2011 addressed by the respondent-Liquidator that the High Level Committee has rejected the proposal on the following grounds:

(i) As per the guidelines attached with the resolution dated 19.05.2010, more particularly, Clause-4 which prescribes the criteria for making an application of the petitioner was not found to be in accordance with the Clause-4 as in case of the company either a Director or Administrator or Guarantor can make an application, it is also specified that in case of guarantor only, the guarantor will have to make an application for O.T.S.

(ii) In the present case, the petitioner had not produced any resolution of the company which is passed by the Board of Directors of the Company stating that the company is willing to avail of O.T. S. Scheme of the State Government.

(iii) It is important to note that this technical objection was raised inspite of knowing that the company has deposited of Rs.2.78 crores. Another objection raised was that there is no authorization of the company in favour of the present petitioner. The power of attorney is given to the applicant by Directors of the Company.

(iv) An affidavit in reply has also been filed by the Deputy Secretary (Credit), Cooperation Department and Members Secretary of the High Level Committee. Stand taken in the affidavit in reply is as under:

"6. I say and submit that, the present petition is filed with a prayer to direct the respondent State Government to consider the application of the petitioner Company dated 25.10.2011 for One time Settlement (hereinafter referred to O.T.S. for the sake of brevity) under One Time Settlement Scheme of State of Gujarat.

7. I say and submit that, O.T.S. Scheme is declared by the State Government vide its Resolution dated 19.05.2010, for cooperative Banks which are in liquidation. A copy of the said Resolution dated 19.05.2010 is annexed herewith and marked as ANNEXURE-R-I to this Affidavit in Reply.

It is important to note that, various criteria are laid down in the above referred Resolution dated 19.05.2010, for making of an Application.

8. I say and submit that, Clause-4 of the Guidelines attached with the Resolution dated 19.05.2010 specifies the criteria for making an Application i.e. who can make an Application for O.T.S. is specified in Clause-4 of the Guidelines, which is reproduced hereinbelow:

"Clause-4:

Qualification for Application:

On the approval of the scheme:-

1. The bank creditors/account holders personally can apply or the person to whom the creditors had given power of attorney or in case when the creditor expires or in case of mental disability of the creditors is legal heirs can filed application.

2. In case of firm any partner of the firm or administrator or guarantor or in case of death of the partner his family members can apply.

3. In case of company any of the director or administrator or guarantor of the company can apply.

4. In case of guarantor only the guarantor can apply.

5. When the applicant applies under this scheme and thereafter any croft is there or if he given guarantee for the implementation of this scheme then the right will be automatically rejected from the initial."

9. I say and submit that, it is evident from the aforesaid Guidelines that, in case of a Company either a Director or Administrator or Guarantor can make an Application. It is also specified that in case of Guarantor only, the Guarantor will have to make an Application for O.T.S.

10. I say and submit that the present petitioner had also not produced any Resolution of the Company which is passed by the Board of Directors of the company stating that, the Company is willing to avail O.T.S. Scheme of the State Government.

It may kindly be noted that, there is no authorization by the Company in favour of the present petitioner. The Power of Attorney is given to the applicant by Directors of the Company.

11. I say and submit that, the present petitioner has contended in the Draft Amendment that, Liquidator and Scrutiny Committee had given positive opinion to the High Level Committee for acceptance of the Application of the petitioner for O.T.S. Scheme.

It is pertinent to note that, ultimately it is for the High Level Committee to take a final decision and any opinion of either by the liquidator or Scrutiny Committee is not binding on the High Level Committee and it is only the opinion which may be taken into consideration while deciding the final application by the High Level Committee.

12. I say and submit that, in case of the petitioner, the Application dated 25.10.2010 is made by one Shri Devdattbhai R. Vyas, who is a Power of Attorney Holder of Director of the Company. They are also Guarantors. Thus, the person who has made an Application for O.T.S. is not eligible to make an Application as per the above referred Guidelines.

13. I say and submit that, the Application of the petitioner was taken up for consideration before the High Level Committee, and the same Application is rejected. The same is conveyed to the petitioner by the Liquidator vide its letter dated 28.07.2011.

14. I say and submit that, the Application of the petitioner is rightly rejected, as it is not made by a person who is eligible for making an Application as per the Guidelines of the State Government enumerated in Resolution dated 19.05.2010.

15. It is also important to note that, the same Director had also given the Power of Attorney to one "Shri Navinbhai Mangaldas Patel" who had also given Application for O.T.S. on 12.12.2010. It is to be noted that, the aforesaid Application preferred by "Shri Navinbhai Mangaldas Patel" is also rejected by the High Level Committee in its meeting dated 25.07.2011.

16. I say and submit that, thus the Application of the petitioner is rightly rejected by the High Level Committee in its meeting dated 25.07.2011. If, the petitioner has any grievance against the aforesaid decision of the High Level Committee, he can prefer a Writ Petition separately as it is a new cause of action which has arisen and by challenging the aforesaid decision of High Level Committee by brining the Draft Amendment is nothing but expanding the scope of the petition. Thus, the petition is required to be rejected in the humble submission of the present deponent.

17. I say and submit that, considering contractual rate of interest, the company requires to pay Rs.6.29 crores to the Charotar Nagrik Sahakari Bank Ltd. now in liquidation.

18. I say and submit that, the Company is the debtor or a Cooperative Bank (Charotar Nagrik Cooperative Bank), now in liquidation. The Company is liable to pay full amount alongwith the interest taken by way of loan. The Company has agreed to abide by such terms while taking loan. The Company is therefore liable to pay entire amount with interest to the Bank.

19. I say and submit that the O.T.S. is discretion and a exception made from paying the full amount. It is not a right of a debtor to claim immunity from paying entire amount with interest. It is discretion and therefore, the company cannot claim as a matter of right. In the facts and circumstances of the case, it cannot be said that, the High Level Committee has exercise the discretion erroneously or illegally. Therefore, O.T.S. is a scheme of mutual consent and when either of the party is not accepting the term, the company who has taken a loan and who is a debtor cannot be forced upon the bank through High Level Committee to accept the settlement. This would be in the realm of contract by both the parties and it has to be by consent and when the High Level Committee finds that it is not agreeable and is desirous of not accepting the proposal of the applicant which suffers from grave defects, it cannot be said that, the respondents have acted arbitrarily, illegally or in a mala fide way."

(v) There is an affidavit in reply filed by respondent no.3 the General Manager of the Bank in liquidation. The stand taken by respondent no.3 in his affidavit in reply as under:

"5. At the outset, I say and submit that the petitioner has no right much less fundamental rights of the petitioner are violated by any action or inaction on the part of the respondents, and therefore, the present petition seeking protection of so-called fundamental rights is not maintainable and therefore, the same deserves to be dismissed.

6. At the outset, I say and submit that the following facts are necessary for proper adjudication of the present issue.

7. I say and submit that the petitioner-Company came to be granted financial assistance of Rs.1.50 crores by the respondent no.3-Bank on 29.11.1999.

8. I say and submit that thereafter, vide order dated 01.01.2002, the Board of Directors of the respondent no.3-Bank came to be removed and Administrator came to be appointed by the authorities.

9. I say and submit that in view of the huge defalcation of money running into crores of rupees by the then office bearers of the bank in connivance with the company and firms which have availed loans without appropriate mortgage and without submitting appropriate documents, criminal complaint came to be filed before the Anand Town Police Station bearing I-C.R.No.6/2002 for offences punishable under Sections 409, 468 and 114 of the Indian Penal Code. In the said FIR, the Directors of the petitioner-Company are also arraigned as accused persons and at present, the trial is going on.

10. I say and submit that since the petitioner-Company did not repay the outstanding amount of loan, the respondent no.3-Bank was constrained to file Lavad Suit No.532/2002 before the Board of Directors, Ahmedabad for recovery of outstanding amount of loan.

11. I say and submit that the said suit came to be decreed by the Board of Nominees, Ahmedabad vide its order dated 25.10.2002 whereby the learned Board of Nominees directed that the petitioner-Company and its Directors are jointly and severally liable to repay an amount of Rs.2,07,97,725/- with interest at the rate of 23% to the respondent no.3-Bank.

12. I say and submit that thereafter, vide order dated 28.07.2003, the Registrar, Cooperative Societies, State of Gujarat passed an order of taking the respondent no.3-Bank into liquidation and appointed Liquidator to manage the affairs of the respondent no.3-Bank.

13. It is pertinent to note that earlier the petitioner-Company through power of attorney holder Shri Navinbhai M. Patel preferred an application for availing the benefit of one time settlement scheme which came to be rejected by the State Government.

14. I say and submit that thereafter, another application came to be submitted by the power of attorney holder Shri Devdattbhai Vyas on 25.10.2010 for availing the benefit of one time settlement scheme.

15. It is relevant to state that the another application was filed by Shri Navinbhai M. Patel, claiming to power of attorney holder of four Directors viz. (i) Amrishbhai Vyas, (ii) Hemalben Vyas, (iii) Saurabhbhai Patel and (iv) Minalben Patel.

16. I say and submit that therefore, two different applications have been received from two different power of attorney holders for claiming benefit of one time settlement scheme.

17. I say and submit that the respondent no.3-Bank, along with its proposal dated 01.04.2011 forwarded the aforesaid application to Joint Registrar (Liquidation), State of Gujarat to consider their applications for grant of benefit of one time settlement scheme.

18. I say and submit that as per the record of the bank, as on December-2010, the total outstanding due to be paid by the petitioner-Company considering contractual rate of interest comes to Rs.6.29 crores, whereas as per the prevailing one time settlement scheme, the total outstanding comes to Rs.2.78 crores subject to the said application of the petitioner-Company being granted by the High Level Committee of the State Government.

19. I say and submit that pursuant to the order passed by this Hon'ble Court dated 06.04.2011 in present petition, the petitioner-Company has deposited an amount of Rs.2.75 crores with the respondent no.3-Bank which has been deposited in a separate account as directed by this Hon'ble Court."

14. From the affidavit in reply filed by respondent no.3 at-least one fact is clear that as per the prevailing One Time Settlement Scheme, the total outstanding dues payable are Rs.2.78 crores and pursuant to the orders passed by us dated 06.04.2011, the petitioner-Company deposited the entire amount of Rs.2.78 crores with respondent no.3-Bank which has been further deposited in a separate no lien account as directed by us.

15. It is noticed on factual background that we are left to decide as to whether the decision of the High Level Committee deserves to be quashed and set aside and appropriate directions should be issued to accept the proposal once and for all or not.

16. We have heard learned Senior Counsel Mr.Mihir Joshi appearing with Mr.A.J. Yajgnik for the petitioner and learned Government Pleader Mr.Prakash Jani for the State Government and learned advocate Mr. Dipan Desai for the Bank.

17. Learned counsel for the petitioner submitted that at no point of time, the office of the liquidator has asked for any explanation in connection with the application/proposal for One Time Settlement under the One Time Settlement Scheme. In other words, at no point of time, office of the respondent, liquidator has raised questions about maintainability of the application in view of requirement stated in the One Time Settlement Scheme. If, at all, there were technical objections, the same should have been intimated well in time allowing petitioner-Company to do the needful.

As the application/proposal of the petitioner-Company through power of attorney of the Directors was forwarded after scrutiny for the final consideration of by High Level Committee, it is obvious that there were no objections regarding its maintainability and validity.

18. Learned counsel for the petitioner further submitted that all the four Directors namely (a) Saurabh Patel (b) Minal Patel (c) Amrish Vyas and (d) Hetal Vyas of Shailly Construction Pvt. Ltd. are personal guarantors as well. Therefore, looking to the requirement as to who can make an application for One Time Settlement under the One Time Settlement Scheme in question, it is very clear that in case of company being a borrower-

(a) the Director;

(b) the Administrator; and

In view of above, if a power of attorney holder of four Directors who are individual guarantors has made an application then such application is certainly maintainable treating it to be the application not from the company at the most, but by the power of attorney holder of the guarantors.

19. He further submitted that the application dated 25.10.2010 for One Time Settlement of the dues under the One Time Settlement Scheme of the respondent State of Gujarat is actually made by one Mr.Devdutt R. Vyas as a Power of Attorney of Shri Amrish R. Vyas, Director of the petitioner Shailly Construction Pvt. Ltd. along with other three Directors Shri Amrish R. Vyas as a Director also is a guarantor.

20. He further submitted that from the memo of SLP filed by respondent State of Gujarat challenging the orders dated 08.07.2011 and 21.07.2011 passed by this Hon'ble Court in the present petition, it came to the knowledge that earlier power of attorney Mr.Navin Patel also has made an application for One Time Settlement on 21.12.2010. In the affidavit of respondent Liquidator what is only stated is two applications for One Time Settlement and not the dates of the respective applications.

That Mr.Saurabh Patel, one of the Directors of Shailly Construction Pvt. Ltd., after his deportation of India and after he was released on bail by the learned Metropolitan Court, made an application before the office of respondent Liquidator that he will handle all the issues relating to One Time Settlement, since he is herein India and stationed in Ahmedabad. He has also stated in his application that power of attorney of Mr.Navin Patel should be considered as cancelled and that his application for One Time Settlement may not be attended to.

21. He further submitted that whether there is one or two applications for One Time Settlement do not make any difference, what is to be derived is that borrowers are inclined to opt for One Time Settlement of dues under the One Time Settlement Scheme. Second application for One Time Settlement does not invalidate the first application. In sum and substance, what matter is application for One Time Settlement and expression of intention to pay the dues as per the terms and conditions of One Time Settlement Scheme in case the application is allowed.

22. He further submitted that the question as to in whose favour the document after discharge of entire debt under the One Time Settlement is to be given is absolutely premature because the very question arises only after the dues are paid and not prior thereto.

In the present case, entire dues have been paid to the tune of Rs.2,78,50,000/- in April-2011. The receipt of payment of entire dues before even the application is considered to establish bonafide categorically show that the payment is made by and on behalf of Mr.Devdutt Vyas, power of attorney holder of all the four Directors of Shailly Construction Pvt. Ltd.

23. He further submitted that all the payments have been made by way of demand draft and/or bankers' cheque. Therefore, there is no uncertainty and question mark as to who has made payment and how.

In case, after receiving payment, if the respondent Liquidator has any question as to in whose favour and to whom on discharge of debt, the original documents of properties given by way of mortgage are to be handed over, then he can certainly choose not to handover documents to the power of attorney laying down a condition that same shall be handed over to the Managing Director of Shailly Construction Pvt. Ltd. or for that matter the one who has actually mortgaged the property. Therefore, in whose favour documents on discharge of debts are to be handed over is an issue that cannot come in the way of taking a decision as to whether application is maintainable or not and application should be allowed or not. That is an issue that will arise only if the application is allowed and not prior thereto.

24. He further submitted that as the application for One Time Settlement is made through power of attorney not of Shailly Construction Pvt. Ltd. but of Directors in their individual capacity, it is obviously that stamp of the company may not be there on the application. Therefore, this ground in itself cannot invalidate and make non maintainable the application for One Time Settlement.

25. He further submitted that even if the application is treated as one file by Shailly Construction Pvt. Ltd. through power of attorney of its Director and same does not have the stamp of the company then at the most it may be a technical and completion of formality. However, it cannot invalidate the application, particularly when as per the scheme, after scrutiny respondent liquidator has forwarded the application for consideration by High Level Committee.

26. He further submitted that the purpose and object of One Time Settlement Scheme is to ensure that recoveries are made from the borrowers of Cooperative Banks in liquidation, which have failed to recover sufficient outstanding amount from the borrowers in past. Therefore, the present scheme of 2010 makes available benefits of One Time Settlement even to the willful defaulter and those who have committed fraud and malfeasance. The petitioner craves liberty to read the scheme so as to derive its true purpose and object at the time of argument.

27. He further submitted that in view of the above, the reasons given by the High Level Committee and communicated through respondent liquidator for rejection of the application for One Time Settlement of dues is in direct contravention of purpose and object of One Time Settlement Scheme itself. In other words, instead of facilitating a borrower to repay the outstanding amount and thereby make successful recovery within the terms and conditions of the scheme, the reasons given for rejection amount to frustrating the scheme itself by the High Level Committee. The reasons given are not germane to the terms and conditions of the One Time Settlement Scheme and its true purpose and objection. Therefore, rejection of the application of One Time Settlement on technical ground is devoid of merit, truth and substance and hence, illegal and unlawful.

28. He further submitted that on merit, the application for One Time Settlement is squarely within the terms and conditions of the scheme and deserves to be allowed and accepted. The application is made within the time, entire amount is paid before even the application is accepted to prove bonafide. And when the benefit of the scheme is to be extended to those cases of fraud, willful default and malfeasance, in other words, as stated in the scheme to all borrower including those against whom criminal cases are pending, then application of the applicant cannot be rejected by any means. Since, it could not have been rejected on legitimate grounds, it is sought to be rejected on technical grounds, which are not sound, rational and logical. Any reasonable man would come to conclusion that the reasons for the rejection of application are unreasonable. Therefore, the sub committee of three members of the High Level Committee after the application was forwarded has also approved the application and placed it for the consideration for ultimately approval by the Principal Secretary and the Minister for Cooperation. If the record and proceedings of the One Time Settlement Application of the petitioner company made through power of attorney of Directors is called for, it will be clear that rejection of the application is not on merit, but on extraneous and malafide ground.

29. He further submitted that rejection of the application for One Time Settlement in question is based on premeditated grounds. The rejection is not on merit but on technical grounds which are not germane to the terms and conditions of the scheme and are therefore extraneous in every repeat. The petitioner-Company is ready and willing to complete the formality and remove technical ground if required without prejudice to its rights and contentions and submissions stated herein the present petition.

30. Learned counsel in support of his contentions relied upon some case law. Reliance has been placed on the judgment of the Supreme Court in case of Sardar Associates & others Vs. Punjab and Sindh Bank and others reported in (2009) 8 SCC 257. This judgment of the Supreme Court in the case of Sardar Associates (supra) has been relied upon to fortify the contentions that if a term of the guidelines issued in the One Time Settlement Scheme, a right is created in the borrower then, this Court would be justified in issuing a writ of mandamus .

31. Learned counsel has also relied upon the judgment of the Supreme Court in case of the Comptroller and Auditor General of India, Gian Prakash, New Delhi and another Vs. K.S. Jagannathan and another reported in AIR 1987 SC 537(1). Relying on this judgment of the Supreme Court in the case of the Comptroller and Auditor General of India (supra), learned counsel submitted that this is a fit and proper case where this Court may issue a writ of mandamus or a writ in the nature of mandamus to pass orders and give directions to compel the performance in a proper case and lawful manner of the discretion conferred upon the High Level Committee.

32. Per contra, learned counsels for the respondents submitted that One Time Settlement Scheme issued by the Reserve Bank of India do not have any statutory rules. Therefore, such schemes do not confer any statutory right on a borrower to seek their enforcement by issuance of the mandamus nor it creates any corresponding legal duty on the financial institution.

33. Learned counsel further submitted that therefore, there must be a legal right with the party asking for the writ of compel performance to some statutory duties cast upon the authorities. The petitioner has not been able to throw light that there is any statute or rule having the force or law which casts a duty on the High Level Committee to accept the proposal of One Time Settlement made by borrower.

34. He further submitted that therefore, the prayer made by the petitioner that this Court should issue a writ of mandamus to the respondents to accept the proposal of One Time Settlement made by them cannot be granted as it does not come within the principles of which writ of mandamus can be issued under Article 226 of the Constitution of India.

35. We have given our anxious thoughts and considerations to the rival contentions of the respective parties. We shall now proceed to examine merits of the rival contentions and decide whether a writ of mandamus be issued or any other appropriate directions under Article 226 of the Constitution commanding the respondents to accept the proposal of the petitioner for One Time Settlement or not.

36. We have noticed that the High Level Committee adopted a very hyper technical approach while dealing with the case on hand and ignored the basic principles/objectives of the scheme which intended to give benefit to the defaulters. This reflects a typical bureaucratic approach in dealing with the matter which could be sorted out in the circumstances, without raising objection on pure technicalities. We are highly disappointed with the manner in which the High Level Committee has conducted itself. We fail to understand that instead of giving true effect to the object of the One Time Settlement Scheme, in its true letter and spirit the committee has frustrated the entire object by rejecting the proposal on pure technicalities. There is no dispute with the fact that OTS scheme is in force. There is also no dispute with the fact that the same was introduced and given effect to with a particular object and the object being to see that State recovers the amount of all NPA Accounts. The fact that as per the OTS Scheme a sum of Rs.2.78 crores is the amount which the petitioners are obliged to pay and which they have already deposited was sufficient for the High Level Committee to exercise the discretion in a manner which would serve the object of the scheme. We can understand that the High Level Committee could have justifiably rejected the proposal if the petitioners would have put their own terms and conditions de-hors the necessary requirements as per the scheme. We could have understood if the petitioners would have put forward the proposal conditionally and was not ready and willing to deposit the amount determined as per the OTS Scheme. Perhaps under such circumstances the High Level Committee may be justified in saying that since the offer is conditional, they are not accepting the same. However, the situation over here is all together different. Settlement proposal under the Scheme was put forward by the petitioners and the entire amount determined as per the scheme i.e. Rs.2.78 crores has been deposited. We have noticed that the technicality in to which the High Level Committee has entered into will not serve any good purpose. They should be mainly concerned with the amount they would receive as per the OTS Scheme. If a Company is a defaulter and if one of the Directors of the company wants to pay the amount on behalf of the entire Company, then we do not understand why the High Level Committee is concerned about other Directors. It is for the Directors inter-se thereafter to resolve their disputes as individual director had not obtained the loan, it was the company as a legal entity who had obtained the loan. Whether X pays or Y pays, hardly matters as long as the payment of requisite amount is as per the calculation of the Bank and the High Level Committee.

In the case of Comptroller and Auditor General of India (supra), Supreme Court in paras-18, 19 and 20 held as under:-

"18. The first contention urged by learned Counsel for the Appellants was that the Division Bench of the High Court could not issue a writ of mandamus to direct a public authority to exercise its discretion in a particular manner. There is a basic fallacy underlying this submission - both with respect to the order of the Division Bench and the purpose and scope of the writ of mandamus. The High Court had not issued a writ of mandamus. A writ of mandamus was the relief prayed for by the Respondents in their writ petition. What the Division Bench did was to issue directions to the Appellants in the exercise of its jurisdictions under Art. 226 of the Constitution. Under Art. 226 of the Constitution, every High Court has the power to issue to any person or authority, including in appropriate cases, any Government, throughout the territories in relation to which it exercises jurisdiction, directions, orders, or writs including writs in the nature of habeas corpus, mandamus, quo warranto and certiorari, or any of them, for the enforcement of the Fundamental Rights conferred by Part III of the Constitution or for any other purpose. In Dwarkanath V/s. Income-Tax Officer, Special Circle, Kanpur, (1965) 3 SCR 536, 540 this Court pointed out that Art. 226 is designedly couched in a wide language in order not to confine the power conferred by it only to the power to issue prerogative writs as understood in England, such wide language being used to enable the High Courts "to reach injustice wherever it is found" and "to mould the reliefs to meet the peculiar and complicated requirements of this country." In Hochtief Gammon V/s. State of Orissa, (1976) 1 SCR 667 this Court held that the powers of the courts in England as regards the control which the Judiciary has over the Executive indicate the minimum limit to which the courts in this country would be prepared to go in considering the validity of orders passed by the Government or its officers.

19. Even had the Division Bench issued a writ of mandamus giving the directions which it did, if circumstances of the case justified such directions, the High Court would have been entitled in law to do so for even the courts in England could have issued a writ of mandamus giving such directions. Almost a hundred and thirty years ago. Martin, B., in Mayor of Rochester V/s. Regina 1858 E B & E 1024, 1032, 1034 said :

"But, were there no authority upon the subject, we should be prepared upon principle to affirm the Judgement of the Court of Queen's Bench. That Court has power, by the prerogative writ of mandamus, to amend all errors which tend to the oppression of the subject or other misgovernment, and ought to be used when the law has provided no specific remedy, and justice and good government require that there ought to be one for the execution of the common law or the provisions of a statute : Comyn's Digest, Mandamus (A)... Instead of being astute to discover reasons for not applying this great constitutional remedy for error and misgovernment, we think it our duty to be vigilant to apply it in every case to which, by any reasonable construction, it can be made applicable."

The principle enunciated in the above case was approved and followed in The King V/s. Revising Barrister for the Borough of Hanley (1912) 3 KB 518, 528-9, 531. In Hochtief Gammon's Case, this Court pointed out that the powers of the Courts in relation to the orders of the Government or an officer of the Government who has been conferred any power under any statute, which apparently confers on them absolute discretionary powers, are not confined to cases where such power is exercised or refused to be exercised on irrelevant considerations or on erroneous ground or mala fide, and in such a case a party would be entitled to move the High Court for a writ of mandamus. In Padfield V/s. Minister of Agriculture, Fisheries and Food 1968 AC 997 the House of Lords held that where Parliament had conferred a discretion on the Minister of Agriculture, Fisheries and Food, to appoint a committee of investigation so that it could be used to promote the policy and objects of the Agricultural Marketing Act, 1958, which were to be determined by the construction of the Act which was a matter of law for the court and though there might be reasons which would justify the Minister in refusing to refer a complaint to a committee of investigation, the Minister's discretion was not unlimited and if it appeared that the effect of his refusal to appoint a committee of investigation was to frustrate the policy of the Act, the court was entitled to interfere by an order of mandamus. In Halsbury's Laws of England, it is stated that the purpose of an order of mandamus "is to remedy defects of justice; and accordingly it will issue, to the end that justice may be done, in all cases where there is a specific legal right and no specific legal remedy for enforcing that right; and it may issue in cases where, although there is an alternative legal remedy, yet that mode of redress is less convenient, beneficial and effectual."

20. There is thus no doubt that the High Courts in India exercising their jurisdiction under Art. 226 have the power to issue a writ of mandamus or a writ in the nature of mandamus or to pass orders and give necessary directions where the Government or a public authority has failed to exercise or has wrongly exercised the discretion conferred upon it by a statute or a rule or a policy decision of the Government or has exercised such discretion mala fide or on irrelevant considerations or by ignoring the relevant considerations and materials or in such a manner as to frustrate the object of conferring such discretion or the policy for implementing which such discretion has been conferred. In all such cases and in any other fit and proper case a High Court can, in the exercise of its jurisdiction under Art. 226, issue a writ of mandamus or a writ in the nature of mandamus or pass orders and give directions to compel the performance in a proper and lawful manner of the discretion conferred upon the Government or a public authority, and in a proper case, in order to prevent injustice resulting to the concerned parties, the Court may itself pass an order or give directions which the Government or the public authority should have passed or given had it properly and lawfully exercised its discretion."

37. In a recent pronouncement of the Supreme Court in the case of Secretary, Cannanore District Muslim Education, Kanpur Vs. State of Kerala and others reported in 2010 SCW 2977, Supreme Court has very exhaustively considered the subject of writ of mandamus. The Supreme Court in Paras-35 to 50 held as under:-

"35. While dismissing the writ petition the Hon'ble High Court with respect, had taken a rather restricted view of the writ of Mandamus. The writ of Mandamus was originally a common law remedy, based on Royal Authority. In England, the writ is widely used in public law to prevent failure of justice in a wide variety of cases.

36. In England this writ was and still remains a prerogative writ. In America it is a writ of right. (Law of Mandamus by S.S. Merrill, Chicago, T.H. Flood and Company, 1892, para 62, page 71).

37. About this writ, SA de Smith in `Judicial Review of Administrative Action', 2nd edn., pp 378 & 379 said that this writ was devised to prevent disorder from a failure of justice and defect of police and was used to compel the performance of a specific duty.

38. About this writ in 1762 Lord Mansfield observed that `within the past century it had been liberally interposed for the benefit of the subject and advancement of justice'.

39. The exact observations of Lord Mansfield about this writ has been quoted in Wade's `Administrative Law, Tenth Edition' and those observations are still relevant in understanding the scope of Mandamus. Those observations are quoted below:-

"It was introduced, to prevent disorder from a failure of justice, and defect of police. Therefore it ought to be used upon all occasions where the law has established no specific remedy, and where in justice and good government there ought to be one.....The value of the matter, or the degree of its importance to the public police, is not scrupulously weighed. If there be a right, and no other specific remedy, this should not be denied. Writs of mandamus have been granted, to admit lecturers, clerks, sextons, and scavengers & c., to restore an alderman to precedency, an attorney to practice in an inferior court,& c.".

40. De Smith in Judicial Review, Sixth Edition has also acknowledged the contribution of Lord Mansfield which led to the development of law on Writ of Mandamus. The speech of Lord Mansfield in R Vs. Blooer, (1760) 2 Burr, runs as under:

"a prerogative writ flowing from the King himself, sitting in his court, superintending the police and preserving the peace of this country".(See De Smith's Judicial Review 6th Edition, Sweet and Maxwell page 795 para 15- 036.

41. Almost a century ago, Darling J quoted the observations in Rex Vs. The Justices of Denbighshire, (1803) 4 East, 142, in The King Vs. The Revising Barrister etc. [(1912) 3 King's Bench 518] which explains the wide sweep of Mandamus. The relevant observations are:

"..Instead of being astute to discover reasons for not applying this great constitutional remedy for error and misgovernment, we think it our duty to be vigilant to apply it in every case to which, by any reasonable construction, it can be made applicable...."

42. At page 531 of the report, Channell, J said about Mandamus:

"It is most useful jurisdiction which enables this Court to set right mistakes".

43. In Dwarka Nath Vs. Income Tax Officer, Special Circle, D. Ward, Kanpur and another - AIR 1966 SC 81, a three-judge Bench of this Court commenting on the High Court's jurisdiction under Article 226 opined that this Article is deliberately couched in comprehensive language so that it confers wide power on High Court to `reach injustice wherever it is found'.

44. Delivering the judgment Justice Subba Rao (as His Lordship then was) held that the Constitution designedly used such wide language in describing the nature of the power. The learned Judge further held that the High court can issue writs in the nature of prerogative writs as understood in England; but the learned Judge added that the scope of these writs in India has been widened by the use of the expression "nature".

45. Learned Judge made it very clear that the said expression does not equate the writs that can be issued in India with those in England but only draws an analogy from them. The learned Judge then clarifies the entire position as follows:

"..It enables the High Courts to mould the reliefs to meet the peculiar and complicated requirements of this country. Any attempt to equate the scope of the power of the High Court under Article 226 of the Constituion with that of the English Courts to issue prerogative writs is to introduce the unnecessary procedural restrictions grown over the years in a comparatively small country like England with a unitary form of Government to a vast country like India functioning under a federal structure. Such a construction defeats the purpose of the article itself...."

46. Same view was also expressed subsequently by this Court in J.R. Raghupathy etc. Vs. State of A.P. and Ors. - AIR 1988 SC 1681. Speaking for the Bench, Justice A.P. Sen, after an exhaustive analysis of the trend of Administrative Law in England, gave His Lordship's opinion in paragraph (29) at page 1697 thus:

"29. Much of the above discussion is of little or academic interest as the jurisdiction of the High Court to grant an appropriate writ, direction or order under Article 226 of the Constitution is not subject to the archaic constraints on which prerogative writs were issued in England. Most of the cases in which the English courts had earlier enunciated their limited power to pass on the legality of the exercise of the prerogative were decided at a time when the Courts took a generally rather circumscribed view of their ability to review Ministerial statutory discretion. The decision of the House of Lords in Padfield's case (1968 AC 997) marks the emergence of the interventionist judicial attitude that has characterized many recent judgments."

47. In the Constitution Bench judgment of this Court in Life Insurance Corporation of India vs. Escorts Limited and others, [(1986) 1 SCC 264], this Court expressed the same opinion that in Constitution and Administrative Law, law in India forged ahead of the law in England (para 101, page

344).

48. This Court has also taken a very broad view of the writ of Mandamus in several decisions. In the case of The Comptroller and Auditor General of India, Gian Prakash, New Delhi and another Vs. K.S. Jagannathan and another - (AIR 1987 SC 537), a three-Judge Bench of this Court referred to Halsbury's Laws of England, Fourth Edition, Volume I paragraph 89 to illustrate the range of this remedy and quoted with approval the following passage from Halsbury about the efficacy of Mandamus:

"..is to remedy defects of justice and accordingly it will issue, to the end that justice may be done, in all cases where there is a specific legal right and no specific legal remedy for enforcing that right, and it may issue in cases where, although there is an alternative legal remedy yet that mode of redress is less convenient beneficial and effectual."

(See para 19, page 546 of the report)

49. In paragraph 20, in the same page of the report, this Court further held:

"...and in a proper case, in order to prevent injustice resulting to the concerned parties, the Court may itself pass an order or give directions which the Government or the public authority should have passed or given had it property and lawfully exercised its discretion"

50. In a subsequent judgment also in Shri Anadi Mukta Sadguru Shree Muktajee Vandasjiswami Suvarna Jayanti Mahotsav Smarak Trust and Ors. Vs. V.R. Rudani and Ors. - AIR 1989 SC 1607, this Court examined the development of the law of Mandamus and held as under:

"21. ..........mandamus cannot be denied on the ground that the duty to be enforced is not imposed by the statute. Commenting on the development of this law, Professor De Smith states: "To be enforceable by mandamus a public duty does not necessarily have to be one imposed by statute. It may be sufficient for the duty to have been imposed by charter common law, custom or even contract." (Judicial Review of Administrative Act 4th Ed. P. 540). We share this view. The judicial control over the fast expanding maze of bodies affecting the rights of the people should not be put into water-tight compartment. It should remain flexible to meet the requirements of variable circumstances. Mandamus is a very wide remedy which must be easily available `to reach injustice wherever it is found'. Technicalities should not come in the way of granting that relief under Article 226. We, therefore, reject the contention urged for the appellants on the maintainability of the writ petition." (See page 1613 para 21)."

38. In the case of Sardar Associates (supra), Supreme Court in paras-42 to 50 held as under:-

"42. If in terms of the guidelines issued by the Reserve Bank of India a right is created in a borrower, we see no reason as to why a writ of mandamus could not be issued. We would assume, as has been contended by Mr. Singh, that while exercising its power under Article 226 of the Constitution of India, the High Courts may or may not issue such a direction but the same, in our opinion, by itself, would not mean that the High Court would be correct in interfering with an order passed by the Appellate Tribunal which was entitled to consider the effect of such one time settlement.

43. The question pertaining to the present matter is regarding whether or not a circular issued by a statutory body for the governance and regulation of certain agreements confers a legal right upon the aggrieved party in case of non-compliance or complete and absolute deviation from the said guidelines by the body formulating such circulars. Alternately, can the aggrieved party, then, claim its right of judicial review under Article 32 or 226 to quash the said circular in case of discriminatory application of such rules/guidelines so mentioned in the circular.

44. In Union of India and Anr. V/s. Azadi Bachao Andolan and Anr [(2004) 10 SCC 1], it was held that a circular issued by the Central Board of Direct Taxes(CBDT) was not inconsistent with the provisions of the Income-Tax Act and was valid and efficacious. The assessing officers chose to ignore the guidelines and hence the CBDT was justified in issuing "appropriate guidelines" under Circular No. 789. The said Circular does not in any way crib, confine or cabin the powers of the assessing officers with regard to any particular assessment. It merely formulates broad guidelines to be applied in the matter of assessment of the assesses covered by the provisions of the Indo - Mauritius Double Taxation Avoidance Convention, 1983.

45. In CIT v. Anjum M.H. Ghaswala, it was pointed out that the circulars issued by CBDT under Section 119 of the Income Tax Act have statutory force and would be binding on every income-tax authority although such may not be the case with regard to press releases issue by the CBDT for information of the public.

46. In UCO Bank v. CIT, this Court opined that "the circulars as contemplated therein cannot be adverse to the assessee" (SCC p.605, para 9). Thus, the authority which wields the power for its own advantage when required to wield it in a manner it considers just by relaxing the rigour of the law or in other permissible manners as laid down in Section 119. The power is given for the purpose of just, proper and efficient management of the work of assessment and in public interest.

47. In BSNL v. BPL Mobile Cellular Ltd. it was held that (SCC p.617, para

39) "39... The direction contained in the said circular letters are relevant for the officers who are authorised not only to grant licenses but also enter into contracts and prepare bills. The circular letters having no statutory force undoubtedly would not govern the contract".

48. A distinction, thus, must be made between statutory and non-statutory guidelines. A distinction must also be made between the circular which are relevant but not binding on the third parties and which are imperative in character.

49. As regards the Reserve Bank of India guidelines, it was the direction of the Appellate Tribunal that the Respondent-Bank should settle the case of the appellants under the RBI guidelines through a One Time Settlement and should invite a proposal for settlement and recovery of the agreed amount.

50. The Appellate Tribunal in passing its order followed the dicta laid down in Constitution Bench judgment in Central Bank of India (supra), wherein it was held that: (SCC p.404, para 56) "56. ....RBI directive have not only statutory flavour, any contravention thereof or any default in compliance therewith is punishable under sub- section (4) of S. 46 of the Banking Regulation Act, 1949".

39. In the aforesaid view of the matter, we are of the view that High Level Committee constituted by the State Government to look into the cases of One Time Settlement as per the scheme has failed to exercise the discretion conferred upon it, while rejecting the proposal for One Time Settlement on irrelevant considerations and technicalities and thereby, frustrated the object of conferring such discretion or the policy for exercising such discretion. We are of the view that this is a fit and proper case to issue a writ of mandamus or a writ in the nature of mandamus or pass orders and give directions to compel the performance in a proper and lawful manner of discretion conferred upon the High Level Committee.

40. In the result, the petition succeeds. Special Civil Application No.4393 of 2011 is hereby allowed. The order of respondent High Level Committee rejecting the application preferred by the petitioner for One Time Settlement of outstanding dues of the petitioner company communicated through letter of the respondent Official Liquidator dated 28.07.2011 is hereby quashed and set aside. The High Level Committee is hereby directed to accept a sum of Rs.2,78,50,000/- (already deposited with the bank) as a part of One Time Settlement pursuant to the scheme of the respondent State of Gujarat for Cooperative Banks in liquidation dated 19.05.2010. After the necessary orders are passed in this regard by the High Level Committee pursuant to the directions which have issued, the respondent bank is directed to issue No Due Certificate in favour of the petitioner and close the chapter.

(S.J. Mukhopadhaya, CJ.) (J.B. Pardiwala, J.) koshti/ IN THE HIGH COURT OF GUJARAT AT AHMEDABAD MISC.

CIVIL APPLICATION No. 2178 of 2011 IN SPECIAL CIVIL APPLICATION No. 4393 of 2011 For Approval and Signature:

HONOURABLE THE CHIEF JUSTICE MR. S.J. MUKHOPADHAYA HONOURABLE MR.JUSTICE J.B.PARDIWALA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ?

To be referred to the Reporter or not ?

Whether their Lordships wish to see the fair copy of the judgment ?

Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?

Whether it is to be circulated to the civil judge ?

========================================================= THE STATE OF GUJARAT AND OTHERS- Applicants(s) Versus SHAILLY CONSTRUCTION PVT. LTD. - Respondent(s) ========================================================= Appearance :

MR PRAKASH JANI G.P. for the applicants None for Respondent ========================================================= CORAM :

HONOURABLE THE CHIEF JUSTICE MR. S.J. MUKHOPADHAYA and HONOURABLE MR.JUSTICE J.B.PARDIWALA Date : 30/08/2011 CAV JUDGMENT (Per : HONOURABLE MR.JUSTICE J.B.PARDIWALA)

1. This is an application preferred by the applicants State of Gujarat with a prayer to recall the order passed by this Court dated 21.07.2011 in Special Civil Application No.4393 of 2011 to the extent of waiving the cost of Rs.20,000/- imposed on the applicants. The order dated 21.07.2011 passed by this Court reads as under:-

"On 29th April, 2011 when respondents sought time to settle the matter, it was informed that the matter will be decided by the High Level Committee. On 23rd June, 2011, it was informed that the High Level Committee will decide the matter in the next meeting scheduled to be held in last week of June, 2011. They also provided a time schedule of meeting, according to which by this time, the High Level Committee was expected to hold atleast three meetings and ought to have decided minimum 150 cases i.e. 50 cases per meeting, as per their stand. On 8th July, 2011, learned AGP sought time on the ground that meeting is postponed for 14th July, 2011. The Court passed following order on 8th July, 2011.

"Learned AGP informs that the meeting is now adjourned for 14th July 2011.

The Member Secretary of the High Level Committee is directed to ensure that the meeting is held on or before 14th July 2011, failing which, this Court may impose heavy cost and may dispose of the case with suitable directions.

Post the matter on 21st July 2011 within five cases."

In spite of such orders, the High Level Committee has not decided the matter and therefore, in view of the order dated 8th July, 2011, we impose costs of Rs. 20,000/- on respondent No.1 for payment in favour of Gujarat State Legal Services Authority, High Court Campus, Ahmedabad. We may mention that in spite of repeated orders, respondent No.1 or High Level Committee did not thought it fit to file any affidavit before the Court, nor give any explanation for such delay.

Post the matter on 29th July, 2011 on the top of the list.

Let a copy of this order be handed over to learned Government Pleader for information to all the members of the High Level Committee."

2. We have heard learned G.P. Mr.Prakash Jani for the applicants.

3. Learned G.P. submitted that due to some administrative reasons and some urgent unavoidable circumstances meeting could not be convened on 14.07.2011 and the same was postponed.

4. He further submitted that there was no intention on the part of the State Government as well as the High Level Committee constituted under the Gujarat Cooperative Societies Act, 1961 and rules famed thereunder not to convene the meeting and take appropriate decision.

5. He therefore respectfully prayed that the order of cost of Rs.20,000/- imposed on respondent no.1 may kindly be recalled or waived.

6. Having heard learned G.P. for the applicants and taking into consideration the facts and circumstances of the case, we recall part of the order dated 21.07.2011 imposing cost of Rs.20,000/- on applicant no.1-original respondent no.1 for payment in favour of the Gujarat State Legal Services Authority, High Court Campus, Ahmedabad.

7. In this view of the matter, the application is allowed to the aforesaid extent and the same is disposed of accordingly. No order as to costs.

(S.J. Mukhopadhaya, CJ.) (J.B. Pardiwala, J.) koshti/ Top

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