SYNDICATE BANK Vs. ESTATE OFFICER

JUDGEMENT

(1.) ALL these appeals have been filed by the Syndicate Bank against the common judgment passed by the Division Bench of the High Court of Andhra Pradesh on 6thAugust, 2003, dismissing the several writ petitions filed by the Bank.

(2.) BRIEFLY stated the facts leading to the filing of the Special Leave Petitions are that M/s. United Auto Tractors Private Limited, (for short 'the Company') one of the common respondents in all these appeals, applied to the Government of Andhra Pradesh for allotment of 100 acres of land in the industrial area for setting up of an industry for manufacturing agricultural tractors and implements. The Government of Andhra Pradesh by its letter dated 18thJuly, 1972 written by the Director of Industries allotted 51 acres of land in Nacharam Industrial Development Area, Hyderabad, to the company for setting up of the said industry. An Agreement was entered into on 3rd August, 1972 between the Government of Andhra Pradesh and the Company which required the company to pay to the Government the cost of the land plus development charges as determined by the Government. As a condition precedent to place the Company in possession of the plot, an initial payment of not less than Rs. 2,46,840/- being 50% of the costs, was required to be paid. The Company agreed to execute a promissory note in favour of the Government for the balance unpaid cost of the land plus development charges.

(3.) IN pursuance of a policy decision, the Government of Andhra Pradesh issued orders, being GOMs No. 1162 dated 4thDecember, 1973, directing the transfer of all the industrial estates and development areas, including the industrial area in question, to the Andhra Pradesh INdustrial INfrastructure Corporation Ltd. (for short 'the APIICL') with effect from 1st January, 1974. Consequently, the industrial area with which we are concerned, together with all the rights in the land, stood vested in the APIICL. The APIICL immediately required the Company to take note of the vesting of the land in the Corporation and demanded payment of the balance 50% cost of the land. The Company however, failed to pay the same within the stipulated time. On the other hand, the Syndicate Bank appears to have advanced several loans to the Company subject to mortgage of the allotted land by deposit of Title Deeds. The Syndicate Bank treated the "No Objection Letter" of the Director of INdustries dated 18th July, 1972 as the Title Deeds. Since the Company failed to discharge its obligations to the Syndicate Bank, proceedings were taken by the Bank for recovery in the Debts Recovery Tribunal, Bangalore, (for short 'the Tribunal') of the amount advanced to the Company for purchase of machinery and movable s which were hypothecated in favour of the Bank as security. The Tribunal allowed the Bank's application on 18th October, 1996 and held that the Bank was entitled to recover a sum of Rs. 2,57,10,393/- from the Company and its Directors, including the Managing Director, jointly and severally, with costs, current and future interest on the principal amount at the rate of 21.5% per annum with quarterly rests from the dated of the application to the date of realization. The Tribunal accordingly issued a Recovery Certificate dated 30th December, 1996, certifying that in default of such payments as aforesaid, the amount due would be recoverable by sale of the hypothecated movables or mortgaged immovable properties.