MUNISH JAIN Vs. STATE OF HARYANA AND ORS.

JUDGEMENT

(1.) THE company represented by Munish Jain as plaintiff ran into rough weather when it was unable to repay its debt. A business loan of Rs. 1.2 crores was taken from the Haryana Financial Corporation, Chandigarh [HFC] in the year 1998 -99 against the properties of the company as security by pledging the properties of the surety to the tune of about Rs. 61 lacs with the HFC. The company was also sanctioned a cash credit limit by the Punjab & Sind Bank, Pipli for about Rs. 40 lacs. The company was unable to repay the loan and the HFC came down and took possession of the company in the year 2002 including its pledged buildings, machinery, land etc. The company properties were put to auction in the year 2003.

(2.) THE present plaintiff was not one of the four original directors of the company i.e. M/s. Kurukshetra Paper Mills Private Limited. There was a parallel problem running against the company with respect to furnishing of C -forms respecting transactions involving tax liabilities under the Central Sales Tax Act, 1956 for the financial year 2001 -02. The assessing authority under the Haryana General Sales Tax Act, 1973 gave breathing time to the company to produce C -forms to claim refunds but there was failure to act even in the extended time granted by the assessing authority. The company was required to submit C -forms for Rs. 43,50,207/ - for the financial year 2001 -02 by 23rd February, 2005, i.e., at the time of assessment which it miserably failed to meet. The assessing authority allowed 3 months time to furnish C -forms by 11th July, 2005 but even then the plaintiff failed to furnish C -forms within the extended period though they were submitted after a gap of 16 months when C -forms were remitted on 7th November, 2006 worth Rs. 32,16,385/ - and later C Forms representing a sum of Rs. 58,300/ - thereby totalling an amount of Rs. 32,74,685/ -. However, the acceptance of these forms was rejected by the assessing authority since they were filed beyond the stipulated period. Consequently, the company was served summons to make payment of the amount due. The plaintiff made small payments ofRs. 70,000/ -, Rs. 50,000/ - and Rs. 20,000/ - in the year 2007.

(3.) IN defence of the suit, the respondent State of Haryana and the assessing authority filed written statement and they took the objection INTER ALIA that the civil court has no jurisdiction to try and entertain the suit. Even notice under Section 80 CPC was not served by the defendants or leave taken by the court to approach it directly for interim relief. The plaintiff had remedies available under the State Act and the Central Sales Tax which had not been availed or exhausted. The suit was dismissed and the appeal remained unsuccessful.