ANDHRA BANK LIMITED Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) The Petitioner in this writ petition, the Andhra Bank Limited, prays for a writ of mandamus or any other appropriate writ, order or direction directing respondent, Nos. 1 to 3 to remove their seals from godowns 1 and 3 and to enable the petitioner to deal with the entire stock of 51,654 bags of sugar in exercise of its rights as the pledgee. Respondents Nos. 1 to 3 are the State of Andhra Pradesh Revenue Divisional Officer, Masulipatnam and the Tahsildar, Divi Taluk, Avanigadda respectively, while the fourth respondent is the pledger M/s. Challapalli Sugars Limited.

(2.) Under the Andhra Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1961, the Government may by notification levy a tax at such rate not exceeding five rupees per metrictonne as may be prescribed on the purchase of cane required for use, consumption or sale in a factory. The Government had created such a levy (contemplated by section 21 of the said Act) and in that behalf the fourth respondent was due in a sum of Rs. 7,74,450-18 Ps., by the 15th of March, 1975. The arrears pertain tc the months of December, 1974, and January and February, 1975- Under rule 45 of the Rules framed under the said Act, the said purchase tax has to be paid into the local Government Treasury before the 15th day of each month by the occupier of the factory in respect of the sugarcane purchased for use, consumption or sale in the factory during the month immediately preceding. Admittedly, the said tax was not remitted as required by the Rule and hence it became an arrear recoverable as the arrears of land revenue by virtue of Section 21 (6) of the said Act along with an interest at the rate of 9 percent. per annum prescribed by sub-section (5) of section 21 of the said Act.

(3.) According to the petitioner, the fourth respondent pledged 51,654. bags of sugar stocked in godown 1 and 3 in favour of the petitioner and the documents evidencing the said pledge were executed on 22nd March, 1975. The loan advanced on the pledge of the said sugar was in the nature of and called "the key cash credit loan". The Andhra Bank agreed to advance a loan to the extent of seventy lakhs of rupees on the pledge of the said 51,654 bags io enable the fourth respondent to pay the amounts due to the cane growers which payments were made by the Bank itself directly to such growers at the instance of and in accordance with the documents furnished by the fourth respondent, while so, it is stated that on soth May, 1975 the Revenue Divisional Officer came to tbe said godown and attached and sealed the same contending that only 42,000 bags of sugar were pledged in favour of the petitioner and therefore, the remaining 9,664 bags of sugar are liable to be proceeded against for recovery of the said purchase tax and therefore he called upon the Bank to surrender the 9,654 bags. On the same day, the petitioner issued a registered notice to the Revenue Divisional Officer asserting that the quantum of sugar pledged with the Bank was not 42,000 bags only as contended by the Revenue Divisional Officer, but the entire quantity of 51,654 bags of sugar was pledged to it. The Revenue Divisional Officer replied on 18th June, 1875 stating that according to his information and record, only 42,000 bags of sugar were pledged to the Bank and that excess number of bags were not pledged and have been validly attached and he proposed to open the lock put on the godown No. 1 to facilitate the lifting of the above stock. He requested the Bank to put its lock again after he effects the removal of the said 9,654 bags. To this, the Bank replied on 18th June, 1975 reiterating its case and further stating 'please also note, if any excess quantity of stock is there, it is to cover the rest from variations in the market prices of free sugar.' On 20th May, 1975 a notice was also issued to the District Collector and Magistrate, Krishna by an Advocate on behalf of the petitioner-Bank reasserting its case and calling upon him to remove the seals placed by the Revenue Divisional Officer on godowns 1 and 3 immediately under advice to the bank and further intimating that in default thereof, the Government of Andhra Pradesh and its officers will be liable for loss and damages if any incurred by the Bank by the illegal and unjustified action of the Revenue Divisional Officer. It is then stated by the petitioner that the Revenue Divisional Officer called upon the Bank to place the true copies of the statements and other material in support of its assertion and accordingly it placed the said material before him on 21st June, 1975 under a covering letter of the same date. The said covering letter dated 21st June, 1975 from the Bank addressed to the Revenue Divisional Officer is supplied by way of material papers by the Bank and the said letter refers to a letter from the Revenue Divisional Officer, dated 19th June, 1975. However, the said letter of Revenue Divisional Officer has not been placed before me. Meanwhile the petitioner had approached this Court and had obtained interim orders and the said orders were also intimated to the Revenue Divisional Officer under the very same letter dated 21st June, 1975-