( 1 ) THESE appeals are against the judgment of the Andhra Pradesh High Court dated 8/6/2001.

( 2 ) BRIEFLY stated, the facts are as follows: in Andhra Pradesh, there was a company known as "hyderabad Allwyn Ltd. " In this Company, the Government of Andhra Pradesh was a major shareholder. The Company suffered huge losses and became a sick company. Therefore, the matter was taken up before the Board for Industrial and Financial Reconstruction (BIFR ).

( 3 ) WHILE the matter was before BIFR, negotiations took place with the appellants for the purpose of reviving at least the Refrigeration Department of that Company. A memorandum of understanding was entered into on 28/3/1993, which, inter alia, provided as under:

"hal has been incurring losses for the past few years and the Government of Andhra Pradesh has decided to disinvest its holding and inter alia privatise HAL with a view to making it a viable unit and achieving the following objectives: (a) To secure the public interest by reviving HAL, balancing the drain on the States exchequer and consequential denial of use of the States finances for other State and public purposes and objectives and obviating allocations of the State budget to HAL, as contrasted with the consequences of continued retention of the shareholding and management of HAL as a government company. (b) To avoid bankruptcy of HAL and consequential loss of employment in the State of Andhra Pradesh and loss of capital of the State of Andhra Pradesh by initiating measures of privatisation. (c) To ensure the commitment on the part of the new owner to maintain and fully utilise the existing production capacities at reasonable level and to ensure the growth and stability of HAL in the long run. "

( 4 ) BY this MOU, it was agreed that all the business interests and undertaking of the Refrigeration Department would be transferred to and taken over by the appellants by virtue of an amalgamation on the terms and conditions set out in MOU. MOU clarified that it would take effect from 29/3/1993 provided the Scheme of Amalgamation was approved by BIFR.

( 5 ) THEREAFTER, a draft scheme was prepared and circulated to all the parties. The draft scheme inter alia provided for certain waivers and concessions. One of the concessions was a deferment of sales tax for a period of seven years from the date of final order passed by BIFR approving the Scheme.

( 6 ) THE Scheme was placed before BIFR. After giving notice to all interested parties and after hearing objections BIFR sanctioned the Scheme on 4/4/1994. The sanctioned Scheme contained the following two clauses which are relevant for our purpose:

"13. (b) (3) Unpaid statutory dues like sales tax to be funded and the amount so funded to have a moratorium of 2 years (1994-95 and 1995-96) for repayment of such dues and payment of interest thereon. Thereafter, repayment to be made in 20 equal quarterly instalments with interest at 6% p. a. 13. (b) (4) Deferment of sales tax liabilities in respect of the products manufactured at Sanatnagar and Nandalur factories for a period of 7 years from the date of the final order from BIFR approving this Scheme. "

( 7 ) THE Government issued GO No. 66 dated 20/1/1994, wherein it was provided as follows:

"the sales tax deferral will be up to a maximum of 50% of the fresh monies which amounts to Rs 18. 50 crores to be brought in by M/s Voltas for the rehabilitation of the Refrigeration Division as per the sanctioned scheme of BIFR. Sales tax up to the above ceiling will be deferred for a period of 7 years. "

( 8 ) HOWEVER, by another GO bearing No. 119 dated 18/8/1995, the Government substituted the abovementioned clauses of the earlier GO by the following:

"the sales tax deferral shall be limited to the maximum of 50% of the fresh monies to be brought in by M/s Voltas Limited for rehabilitation of the Refrigeration Division as per the sanctioned Scheme of the Board for Industrial and Financial Reconstruction of Rs 18,50 crores, whichever is less. The