INDIAN BANK Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) The plaintiff-Indian Bank is the revision-petitioner herein. This civil revision petition is filed against the interlocutory order passed by the learned Principal Subordinate Judge, Visakhapatnam, in I.A. No. 997 of 1980 in O.S. No. 76 of 1979 on his file ordering payment of an amount of Rs. 33,648 being arrears of sales tax due to the 1st respondent herein - State of A.P. represented by the Deputy Commercial Tax Officer IV, from out of the amount lying to the credit of O.S. No. 76 of 1979.

(2.) The brief facts of the case are : The plaintiff-bank filed a suit for recovery of Rs. 7,09,296.72 against defendants 1 to 9. Defendants 2 to 7 are the directors of the first defendant-company. The defendants have started a heavy structural unit in the industrial estate situated at Tunglam village in Visakhapatnam district. Defendants 2 and 3 made an application to the Indian Bank, Cumbala Hill Branch, Bombay-26 for N.T.L. of Rs. 2.85 lakhs, open cash credit of Rs. 0.26 lakhs and clean supply bills of Ks. 0.45 lakhs. On the said application, the plaintiff-bank sanctioned the loan facility to the defendants on different items with conditions specified in the sanction letter. The first defendant-company resolved to accept the terms and conditions contained in the sanction letter dated March 26, 1974 and offer the securities as mentioned in the said sanction letter sanctioning the facilities by the bank. It was further resolved that the facilities will be secured by floating charge on all other assets of the company in favour of the bank and irrevocable joint and several personal guarantee of defendants 2 to 7. Under the said agreement, the first defendant-company had taken different loans and the same were not repaid. Therefore, the bank filed the suit for recovery of Rs. 7,09,296.72. There was also hypothecation of some of the assets of the first defendant-company, After filing the suit, the bank has filed a petition for appointment of a receiver for sale of the properties hypothecated and accordingly the court below ordered for sale of the hypothecated properties. The properties were sold and the amount realised was deposited to the credit of the suit.

(3.) The State Government represented by the Deputy Commercial Tax Officer IV has filed application I.A. No. 997 of 1980, stating that the first defendant was doing business in ferrous and non-ferrous metals and other electrical goods at plot No. "A" Industrial Estate, near B.H.P.V. Ltd., with a branch office at Himayathanagar, Hyderabad. It was registered as a dealer under the provisions of the A.P. General Sales Tax Act, 1957. It was liable to pay arrears of sales tax for the financial years 1974-75 and 1975-76 and the total amount comes to Rs. 33,648. Even though demand notice was issued, no payment was made. Hence, final notice was got served on the directors of the first defendant-company, but they did not respond to it.