- (1.) In this writ petition, challenge is for quashing of the order dated 19.7.2011 (Annexure P-1) by which the Specified Authority has issued a certificate of recovery of Rs. 2894.73 lacs along with interest at the rate of 18.5% per annum with quarterly rests with effect from 1.4.2012 alongwith other incidental charges under Section 32-G of the State Financial Corporation Act, 1951 (hereafter referred to as "the Act") to be recovered as arrears of land revenue from the petitioner. Further prayer of the petitioner is to quash letter dated 4.8.2011 (Annexure P-14) issued by respondent No. 1 to respondent No. 3 to recover the amount as arrears of land revenue from the persons mentioned therein. The facts for the decision of this case as pleaded in the petition may be noticed as under:- In the year 1975, respondent No. 1-Punjab State Industrial Development Corporation Ltd. (hereinafter referred to as "the Corporation") got a letter of intent from the Government of India for establishing a project in the State of Punjab for manufacturing of 5500 MT per annum of High Tension Porcelain Insulators. Accordingly, a financial collaboration agreement was entered into between the parties on 6.6.1977 whereby they agreed to incorporate a new company namely respondent no. 4-Punjab Ceramics Limited (hereinafter referred to as "the company") for carrying on this business. As per Clause 9 of the agreement, the public issue of shares was made by the company and the equity share of the capital was to be contributed 50:50 by each party and as per Clause 10, the share of respondent No. 1 and petitioner was to be 26% and 25% respectively and the remaining 49% was to be offered to the public. The share capital of the Company was to be Rs. 1 crore divided into 8 lacs equity shares of Rs. 10/- each and 20,000 preference shares of Rs. 100/- each. Thereafter, the company approached various financial institutions including IFCI for financial assistance. Vide letter dated 14.4.1979, IFCI informed that it is agreeable in principle to provide the loan facilities subject to special conditions besides its usual terms and conditions applicable to the grant of financial assistance. As per terms and conditions of the IFCI in its letter dated 14.4.1979, special conditions were set out and Clause 6 required the Corporation and the petitioner to give certain undertakings whereby they gave the same on 22.5.1980 and 27.5.1980 to the extent that they would make arrangement acceptable to the Corporation for meeting the shortfall if any in the resources of the borrower completing the project and/or for working capital.
(2.) In pursuance of the above, the said undertaking was got incorporated into the agreement dated 6.6.1977. The project could not be commissioned in time which resulted in cost overrun and shortfall of funds for implementation of the project. On 10.2.1980, the Director (Technical) wrote to respondent No. 1 seeking assistance of a bridge loan of Rs. 40 lacs as the project was at the stage of completion. The Corporation conceded to this request and an agreement was entered into between the Corporation and the company dated 17.2.1982. Accordingly, bridge loan of Rs. 40 lacs was sanctioned and disbursed by the Corporation to the company in terms of the bridge loan agreement dated 17.2.1982 for the purpose of setting up of a ceramics insulators manufacturing unit at Dabwali Road, Bathinda, Punjab. As per the terms of the agreement, it was provided that the loan was repayable before 30th June, 1982 or earlier and that the company would utilize the proceeds of the bridging loan for acquiring, creating block assets towards the implementation of its project. In pursuance of the terms of the bridge loan agreement, deeds of guarantees dated 22.5.1980/14.4.1980 were executed by the petitioner herein and some of the promoters of the Company namely Sh. Ravinder Singh as Directors on behalf of the company. The company went into losses and in July, 1984 the Corporation sold all of its equity holding in the company to the petitioner and no demand of repayment of loan was made by the end of June, 1982 which was the date for repayment or any time later at the time of the sale of shares to the petitioner in 1984.
(3.) The Company for meeting its costs overrun adjusted the advance of Rs. 40 lacs advanced by the Corporation and an amount of Rs. 1,05,60,000/- by the petitioner and the Corporation for the first time requested the petitioner to repay the amount of Rs. 40 lacs alongwith interest but no demand was raised upon the company. The petitioner replied to the said letter refuting the said demand and any of the liability to make the payment of the same. On 27.12.1985, the company wrote to the Corporation stating that out of total overrun of Rs. 1,81,52,000/- the liability of the Corporation was 51% amounting to Rs. 92,53,960/- while that of the petitioner was 49% only. The company thereafter required the Corporation that after adjustment of Rs. 40 lacs, the Corporation should reimburse the balance of Rs. 52,53,960/- only. The Corporation issued notice under Sections 433/434 of the Companies Act, 1956 to the company asking for the payment of Rs. 40 lacs and the company replied to the notice vide communication dated 20.8.1986 that the liability of the Corporation of the cost overrun was Rs. 92,53,960/- and after giving an adjustment of Rs. 40 lacs the company demanded that the balance amount of Rs. 52,53,960/- be reimbursed to it. The Corporation proceeded to file winding up proceedings against the company before this Court which was allowed vide order dated 6.5.1988 but the said order was set aside in Company Appeal No. 8 of 1989 vide order dated 6.5.1989 by this Court wherein various observations were made including that the petition for winding up of the company had been filed to pressurize for enforcing payments.;