PATNA HIGH COURT
B.L.Yadav and Shashank Kr.Singh JJ.
Taj Singh Latahmana
Versus
State Of Bihar
Civil Writ Jurisdiction Case No. 8725 of 1994 ;
Decided On : JANUARY 25, 1995
PUBLIC INTEREST LITIGATION - STATE FINANCIAL CORPORATION ACT, 1951 - SECTIONS 29 AND 30 - INTERPRETATION AND APPLICATION - WRIT PETITION - MAINTAINABILITY - CLEAN HANDS DOCTRINE - PROMISSORY ESTOPPEL - APPLICABILITY.
Fact of the Case:
Numerous entrepreneurs obtained loans from the Bihar State Financial Corporation (BSFC) and executed separate agreements. However, the BSFC allegedly failed to disburse the full sanctioned loans and initiated proceedings under Sections 29 and 30 of the State Financial Corporation Act, 1951, against the entrepreneurs for recovery of dues.
Finding of the Court:
1. Public Interest Litigation (PIL) is not maintainable in cases involving individual disputes, particularly when the petitioners have not come to court with clean hands and clean objectives. 2. The provisions of Sections 29 and 30 of the State Financial Corporation Act, 1951, can be applied only when the necessary facts and circumstances exist. 3. The Doctrine of Promissory Estoppel is not applicable in the present case as the factual foundation to attract its application was not laid in the petitions.
Issues: 1. Whether PIL is maintainable in cases involving individual disputes where the petitioners have not come to court with clean hands and clean objectives? 2. Whether the provisions of Sections 29 and 30 of the State Financial Corporation Act, 1951, can be applied without considering the specific facts and circumstances of each case? 3. Whether the Doctrine of Promissory Estoppel is applicable in the present case?
Ratio Decidendi: 1. PIL is a discretionary remedy and should not be entertained when the petitioners have not come to court with clean hands and clean objectives. 2. The provisions of Sections 29 and 30 of the State Financial Corporation Act, 1951, can be applied only when the necessary facts and circumstances exist, such as default in repayment of loans or violation of the terms of the loan agreements. 3. The Doctrine of Promissory Estoppel is not applicable in the present case as the petitioners have not laid the factual foundation to attract its application.
Final Decision: The court dismissed all three writ petitions, holding that they were not maintainable as PIL and that there were no grounds for interference under Article 226 of the Constitution.
B. L. Yadav, J.
1. These three analogous writ petitions have been filed under Article 226 of the Constitution of India as Public Interest Litigation (for short P. I. L) and the points involved are similar in nature. Hence it is convenient to dispose them of by this common judgment. These petitions would, however, be referred as first, second and third writ petitions.
2. In the first writ petition filed by Dr. Taj Singh Lakshmana (in person ). Chairman of the Bihar Sick Industries Association the petitioners has stated that about 7000 Entreoreneurs have obtained separate loans from the bihar State Financial Corporation, Frazer Road, Patna (respondent No.2)and separate agreements have been executed in respect of all the Entrepreneurs. But those agreements have not been filed and only one of them was shown in the Court. Nothing can be ascertained with certainty from the alleged prayer made in paragraph 10 of the first writ petition. However, the prayer in the first writ petion is that this Court may treat this petition as a regular writ petition against the Bihar State Financial Corporation (for short "the b S F. C ") and to take necessary action against Shri A. K. Singh, Managing director, B. S. F C (respondent No.2), so that any allegation stated by the petitioner, if contested by the said respondent, shall bs proved by him with concrete evidence and supporting documents. Further prayer is that the b S F C. may bs restrained from taking any action against those entrepreneurs whom the B S B. C. had failed to disburse the full sanctioned loans. The next part of the relief appears to be that this Court may writ off the entire interest and other charges accumulated during the past many years against the aforesaid 7000 entrepreneurs, who have obtained loans from the B S. F C. and have not paid the amount as agreed upon and that only principal amount may be left to be paid by the promoters after deducting the amount already paid by them.
3. The aforesaid 7000 entrepreneurs obtained different loans from the b S. F C. (respondent No.2) and executed different agreements. It appears that part of the loan was disbursed to all the entrepreneurs, but the entiae amount was not disbursed and when they went for further relief of the loan, they were exploited as the petitioner or the entrepreneurs refused to pay bribe (vide paragraph 2 of the first writ petition ).
4. The petitioner, Or. Taj Singh Lakshmana, Chairman of the Bihar sick Industries Association has appeared in person. He strenuously contented that the respondent-BSFC is deliberately delaying to disburse the sanctioned loan for the last two years and thereafter the promoters are directed to apply for the second loan which they would sanction and would adjust against the overdues of the first loan. After failure of the entrepreneurs in these three writ petitions to make payment, proceedings under Sections 29 and 30 of the state Financial Corporation Act, 1951 (for short "the Act") are initiated and the assets in the unit are sold to the collaborators at a price equal to the total amount due from the owner. Under the said Act the B. S F. C. was to act under the Regional Development Bank for assistance to the small and the medium scale Industries of Bihar. The B S. F. C. can ascertain whether the units obtaining loans, have necessery working capital and can also have a watch on the working and performance of the unit. In paragraph 9 of the first writ petition it has been stated that the debased office of the b. S. F. C. threw all the prescribed norms and objectives to the winds and started acting worse than the traditional viilage money lenders. It was further urged that a Committee be set up by the High Court to decide all the matters pertaining to these writ petitions and Committee may submit a report.
5. When the judgment was almost dictated a detailed written argument was also filed. We have perused the same. Nothing new was added. It was in the form of a Rejoinder Affidavi
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