SUVARNA CEMENTS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The 1st petitioner is a Public Limited Company registered under the Companies Act, 1956, of which the 2nd petitioner is the Managing Director, engaged in the business of manufacture and sale of cement. The petitioner has established a cement factory at Mellacheruvu in Nalgonda District with capacity to manufacture 2 lakh tonnes of cement per annum. The raw material required for manufacture of cement is limestone. Therefore, the petitioner-company in order to operate its cement plant has taken 350 acres of limestone mines on lease basis from the Government of Andhra Pradesh in the year 1986 and a deed of lease was executed on 24-4-1986. Among other terms and conditions, the said lease provides for payment of interest at 24% per annum on the amount due and payable to the Government.

(2.) The Assistant Director of Mines and Geology, Nalgonda, the 3rd respondent herein, has issued a demand notice dated 1-9-1998 to the Managing Director of the petitioner-Company directing the company to clear off the outstanding dues of Rs.60,41,136/- for the year 1997-98, which includes a sum of Rs. 47,68,281/- towards interest for delayed payment of dues, immediately. Similarly, the 3rd respondent has also issued another demand notice dated 20-5-1999 to clear off the dues of Rs.64,24,938/- for the year 1997-98, which includes a sum of Rs. 40,77,256/- towards interest for delayed payment.

(3.) The petitioner, pleading that it has become a sick industry and has no capacity to pay the dues demanded in the above two demand notices and the demand made by the 3rd respondent towards interest is not legal, has filed this writ petition. The prayer in the writ petition reads-