B SANJEEVA REDDY Vs. GOVERNMENT OF A P

JUDGEMENT

(1.) This writ petition is filed seeking writ of Mandamus or for declaring the action of the 1st respondent in directing the 2nd respondent to keep in abeyance the payment of Rs. 10.00 Lakhs to the petitioner towards loan for reconstruction of M/s. Saroja Theatre at Thotlavalluru, as illegal, arbitrary and for consequential direction to the 2nd respondent to forthwith release and disburse the amount of Rs. 10.00 Lakhs, as per the loan sanction dated: 30-11-1994.

(2.) The facts, in nut-shell, are that: the petitioner constructed a temporary theatre in the year 1985 in the name and style of M/s. Saroja Theatre. The theatre was constructed on the leased land. In February, 1989, the petitioner obtained necessary permission as required under A.P. Cinemas (Regulation) Act, 1955, from the District Collector, Krishna for construction of permanent theatre and by 1990, 90% of construction was completed by spending Rs.20.00 Lakhs. While so, on 9-5-1990 there was a massive cyclonic storm in the coastal districts of Andhra Pradesh. Entire area suffered for three consecutive days on account of severe cyclone. There was huge loss of life and property. The cinema theatre which was near completion was damaged completely on account of the impact of cyclone. The petitioner submits that one theatre M/s Sri Sai Mahal, Kavali was also damaged due to cyclonic effect and as such it made an application to the Government for sanction of Rs.10.00 Lakhs for construction of the theatre and the same was granted to the said theatre. Having come to know of the same, the petitioner also made a similar request on 26-8-1991 for a loan of Rs. 10.00 Lakhs to under-take reconstruction of the damaged theatre. On the application made by the petitioner, the 1st respondent sought for a report from the District Collector, Krishna who by his report dated: 20-1-1992 recommended to the 1st respondent for grant and release of Rs.10.00 Lakhs loan. The 1st respondent addressed a letter on 20-7-1994 directing the 2nd respondent to take action for grant of loan as a special case. On the directions of the 2nd respondent, the petitioner furnished necessary documents for issuing sanction order. The 2nd respondent is a company registered under the Companies Act and established for the purpose of encouraging film industry, including construction of Cinema Theatres in the State of A.P. The petitioner submits that the Board of Directors of the 2nd respondent hi their 136 Meeting passed resolution dated: 26-8-1994 resolving to sanction a sum of Rs. 10.00 Lakhs as term loan for the purpose of re-construction of M/s. Saroja Theatre, Thotlavalhru. The 2nd respondent sought for clarification regarding placing of additional funds which was agreed by the Government. Accordingly, the 1st respondent issued G.O.Ms.No.547, GAD (I&PR) Department, dated: 11-11-1994 according sanction for release of additional amount of Rs.10.00 Lakhs to the 2nd respondent during the current financial year 1994-95 to enable the 2nd respondent-Corporation to sanction loan to the petitioner. It was also directed in the said G.O. that the loan shall be extended as per the usual terms and conditions. The 3rd respondent was authorised to draw the amount sanctioned by the Government and place at the disposal of the 2nd respondent. Accordingly a sum of Rs.10.00 Lakhs was drawn by the 3rd respondent and was placed at the disposal of the 2nd respondent. The 2nd respondent, in its turn issued loan sanction order on 3-11-1994. In the said order, the petitioner was directed to execute a Memorandum of deposit of title deeds for mortgaging the theatre along with the land and a deed of Hypothecation for the properties, as security for the loan amount of Rs. 10.00 Lakhs. Further, the petitioner was also asked to insure all the properties with National Insurance Company. In regard to the terms and conditions of the loan sanction order, the petitioner purchased adhesive stamp s worth Rs.30,000-00 and affixed the same on the deed of Hypothecation and the same was executed between the petitioner and the 2nd respondent. Subsequently the petitioner also deposited the title deeds of the original registered sale-deed dated: 26-7-1985 in respect of 35 cents of land. The petitioner also insured the properties by paying more than Rs.8,000.00 towards Insurance premium. On 14-12-1994 the 2nd respondent prepared a cheque for a sum of Rs. 10.00 Lakhs and the same is pending disbursement to the petitioner. However, on 19-12-1994 the 2nd respondent informed the petitioner that the 1st respondent directed it to keep in abeyance the payment of Rs. 10.00 Lakhs. Through Memo bearing No.T.M.No.2380/I&PR/ A1/94-1, dated: 14-12-1994 the 1st respondent sent a communication to the 2nd respondent informing that the Government proposes to review all major decisions taken after 1-10-1994 like recruitments in large-scale, awarding of contracts/tenders and giving purchase orders etc. Similar Memos were also issued to other Government Corporations. The petitioner submits that the said Memo is not applicable to him, inasmuch as his case is not covered by it and also the decision was also taken much prior to 1-10-1994.

(3.) It is the case of the petitioner that the Board of Directors approved the sanction on 20-7-1994 and the Chief Minister also ratified the action on 22-8-1994 and the resolution was passed 01 26-8-1994 requesting the Government to release additional funds. Therefore, entire process was completed much earlier to 1-10-1994. It is also the case of the petitioner that after the sanction order was issued by the 2nd respondent he has complied with all the requirements viz., execution of Deed of Hypothecation by spending an amount of Rs.30,000.00, Deposit of Titledeeds. And also spending of his share of capital. Thus the petitioner submits that he acted on the promise made by the respondents and hence the respondents cannot resile at this point of time after the petitioner has acted upon the sanction order.