Madhya Pradesh High Court
Uco Bank vs The State Of Madhya Pradesh on 28 April, 2022
Author: Sheel Nagu
Bench: Sheel Nagu, Maninder S. Bhatti
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IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE SHEEL NAGU
&
HON'BLE SHRI JUSTICE MANINDER S. BHATTI
WRIT PETITION No. 7509/2013
Between:-
UCO Bank
A Body Corporate Constituted under
The Banking Companies
(Acquisition & Transfer of Undertaking) Act,
1970 having its Head Office at 10, B.T.M. Sarani Kolkatta
and Branch amongst others at Asset Management Branch,
Ist floor, UCO Bank building,
B-Sector, Piplani, Bhopal (M.P.) Through
Power of Attorney holder Shri H.C. Gupta
Chief Manager, AMB Branch Bhopal M.P.
.....PETITIONER
(BY SHRI ATUL CHOUDHARI, ADVOCATE)
AND
State of M.P.
Through Finance Secretary
1. M.P. Government, Vallabh Bhawan
Bhopal (M.P.)
Additional Commissioner,
2. Commercial Tax, Office situated at
Moti Nagar, M.G. Road, Indore, M.P.
M/s Swagatika Impex Pvt Ltd.
G-36 Tower-2, Floor Valley, Office
Eastern Express Highway Thane (East)
3. 400601, Mumbai (Maharashtra) through
authorized signatory Shri Samir Kotgirwar
S/o Late Shri S.N. Kotgirwar, R/o E-4/383,
Arera Colony, Bhopal M.P.
4.Divisional Deputy Commissioner,
2
Commercial Tax, Bhopal Division M.P.
Commercial Tax Officer Cum
5. Additional Tehsildar, Circle-1,
Bhopal M.P.
.....RESPONDENTS
(BY SHRI SHEKHAR SHARMA, ADVOCATE AND SHRI ANKIT AGRAWAL,
GOVERNMENT ADVOCATE)
This appeal coming on for admission and interim relief this day,
Hon'ble Shri Justice Maninder S. Bhatti passed the following:
ORDER
( /04/2022) In the present petition originally the challenge was made to the communication dated 04/03/2013 issued by the respondent no.2 contained in Annexure P-2.
2. The factual matrix reveals that the petitioner/bank had extended a loan facility to one BTCL Company, Bhopal of Rs. 6 crore however, the said borrower turned defaulter and eventually the loan account was declared as non performing asset somewhere in the year 2006. In 2006, the petitioner/bank initiated the proceedings under sections 13 (2) and 13 (4) of the SARFAESI Act however, eventually the petitioner/bank by virtue of Rule 8 (1) of the Security Enforcement Rule entered in negotiation with the respondent no.3 who agreed to purchase the secured asset for a sum of Rs. 3 1 crore and 30 lacs however, the aforesaid mortgaged property for which the respondent no.3 had entered into negotiation with the petitioner had encumbrances and there were statutory dues of commercial tax and, thus, there was demand by the petitioner/bank against the respondent no.3 to pay the amount of the sale price as per their negotiation and simultaneously there were demand at the instance of the commercial tax authority. The same eventually gave birth to filing of a writ petition bearing no. W.P. No. 12623/2007 which was ultimately dismissed by the Single Bench of this Court vide order dated 19/06/2012. However, while dismissing the writ petition the Hon'ble Single Judge granted liberty to the petitioner i.e. the bank as well as the respondent no.3 herein to avail the remedy under section 33 (2) of the VAT Act, 2002. A writ appeal was also filed against this order and the Division Bench reiterated the same view by reserving the liberty to the bank as well as respondent no.3 herein to approach the commercial tax authority by way of an application under section 33 (2) of the VAT Act, 2002.
3. However, thereafter the Additional Commissioner, Commercial Tax issued the impugned notification dated 4/03/2013 by which the respondent no.3 was directed to deposit the arrears of the statutory dues before 31/03/2013 and upon deposit of the statutory dues the mortgaged property which was also attached by the commercial tax authority would be released and the sale deed would be executed in favour of the respondent no.3 by the 4 competent authority. However, during pendency of the petition the paragraphs 1, 2 and 3 of the impugned communication were deleted by subsequent communicated dated 29/07/2013 which is contained in Annexure R/1 to the return filed by the respondents 1, 2, 4 and 5. Upon deletion of paragraphs 1, 2 and 3 of the original impugned communicated dated 4/03/2013, the same virtually lost its efficacy and thus, the petitioner challenged the subsequent communication dated 29/07/2013 by amending the present writ petition.
4. The submission of the learned counsel for the petitioner is to the effect that the subsequent communication dated 29/07/2013 issued by the Additional Commissioner, Commercial Tax, Indore M.P. is bad in the eye of law and as much as the same recognizes the respondent no.3 as buyer of the property. Counsel for the petitioner submits that since the respondent no.3 did not deposit the amount of consideration which was agreed to during the course of process of negotiation narrated hereinabove, the respondent no.3 had already lost rights as regards the property and the respondent no.3 could not have been recognized as buyer of the property and thus, submits that since the impugned communication dated 29/07/2013 confers the status of a buyer upon the respondent no.3 therefore, the same is being assailed in view of the subsequent event.
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5. Per contra, counsel for the respondent no.3 submits that he deposited a sum of Rs 60 lacs out of total consideration of Rs. 1 crore and 30 lacs. The counsel also submits that he was not apprised of the charge over the secured asset and thus, he was unduly saddled with the liability to clear the statutory dues as well. Counsel for the respondents submits at the bar that he is ready to clear entire statutory dues pertaining to commercial tax outstanding as on date. However, the counsel submits that in terms of the order passed in earlier round of litigation dated 19/06/2012 in W.P. No. 12623/2007 respondent no.3 had moved an application under section 33 (2) of the VAT Act, 2002 but the same was turned down by the Commissioner, Commercial Tax. The said order is also on the record as Annexure P/4 to the writ petition. Be that as it may, the counsel submits that notwithstanding this order the respondent no.3 is ready to clear all the statutory dues of commercial tax.
6. Counsel for the State submits that petition in fact virtually has rendered infructuous upon deletion of paragraph 1, 2 and 3 of the communication dated 4/03/2013 which was originally challenged in the present petition and the subsequent communication which is being sought to be challenged by way of amendment is innocuous one and thus, the counsel for the respondent submits that writ petition having rendered infructuous, deserves to be dismissed.
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7. We have heard learned counsel for the parties.
8. Upon perusal of the record and the submissions advanced by the rival parties, the controversy in the present case with regard to dues of the bank as well as the commercial tax authority was taken note of by learned Singe Judge in earlier round of litigation which culminated vide order dated 19/06/2012 passed in W.P. No. 12623/2007 granting liberty to petitioner/bank as well as the respondent no.3 to approach the Commercial Tax Authority under section 33 (2) of the VAT Act, 2002 which provides that the Commissioner may forego the right of first charge against the property sold however, it is needless to emphasize that such an exercise is subject to the conditions which are further incorporated in clause A and B of Section 33 (2) of VAT Act. The order of the learned Single Judge was affirmed by the Division Bench. It is also relevant to mention at this juncture that Division Bench also observed that the bank as well as commercial sales tax officer were justified in issuing letters dated 9/07/2007 and 3/08/2007 (these were challenged in the earlier round of litigation) thus, it is a case where the petitioner herein has not challenged either the order passed by the Single Judge in W.P. No. 12623/2007 or the order dated 30/10/2014 passed in writ appeal 865/2008. 7
9. We have been apprised of by the counsel for the petitioner that bank is not in a position to proceed under the SARFAECI Act on account of interim order of status-quo in the present case.
10. Therefore, since the matter remained pending for almost a period of 9 years before this Court, we deem it proper to direct the petitioner as well as respondent no.3 herein to move an application under section 33 (2) of the VAT Act, 2002 before the Commissioner, Commercial Tax taking all possible grounds including ground and objection to their respective rival claims. The petitioner/bank shall also have liberty to raise the objections as regards the right of the respondent no.3 to deposit the commercial tax dues. On such application being filed by the petitioner as well as respondent no.3, Additional Commissioner, Commercial Tax, Indore i.e. respondent no.2 herein shall consider and decide both the applications of the petitioner and respondent no.3 respectively within a period of three months without being influenced by its earlier order dated 31/10/2012 which is contained in Annexure P/4 to the writ petition. We also clarify that the petitioner/bank shall be at liberty to proceed under the SARFAECI Act, if so advised for recovery of dues pertaining to property in question against the respondent no.3.
11. At the cost of repetition, it is also once again reiterated that this Court has not expressed any opinion as regards the rights of the rival parties or the 8 merit of the case. However, so far as the subsequent communication dated 29/07/2013 which has been challenged by way of amendment application is concerned, the same shall be kept in abeyance till the disposal of aforesaid applications to be moved by the petitioner and respondent no.3 under section 33 (2) of the VAT Act, 2002.
12. With the aforesaid observation, the writ petition stands disposed of.
( SHEEL NAGU) (MANINDER S. BHATTI )
JUDGE JUDGE
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Digitally signed by NAVEEN
NAGDEVE
Date: 2022.04.28 17:50:32 +05'30'