JUDGMENT :

SANJEEV PRAKASH SHARMA, ACJ.

1. By way of this appeal, the writ petitioner assails the judgment passed by the learned Single Judge whereby, he dismissed the writ petition rejecting the prayer made by the petitioner for quashing the notices issued by the respondent No.2-Rajasthan State Industrial Development and Investment Corporation Ltd. (for short, 'RIICO'), for recovery of the amount of Interest Free Sales Tax Loan (hereinafter referred as 'IFSTL') alleged to be outstanding as against the petitioner-company.

2. The brief facts which have come on record are that the petitioner-company earlier known as Modi Alkalies & Chemicals Limited had availed two loans for the period from 1985-1991 from RIICO as under:

"i. Interest Free Sales Tax Loan (IFSTL) under the IFSTL Scheme, 1976 of a sum of Rs. 257.53 lakhs.

ii. Term Loan (TL) of Rs. Rs.81.68 lakhs from the RIICO."

3. On 30 June, 2000, the company filed a reference under Sick Industrial Companies (Special Provisions) Act, 1985 (for brevity, 'SICA') before the Board for Industrial and Financial Reconstruction (for short, 'BIFR') and vide order dated 15th January, 2002, the petitioner-company was declared as a sick company within meanings of Section 3(1)(O) of SICA and Industrial Development Bank of India (IDBI) was appointed as the Operating Agency (OA).

4. A Rehabilitation Scheme was circulated by the BIFR on 22 September, 2006 and invited objections from all the creditors in terms of Sections 18 and 19 of the SICA. After receiving objections and considering the same, the BIFR sanctioned the Scheme on 30 November, 2006. RIICO only filed objections with respect to the secured term loan and the same were recorded in the Sanctioned Scheme. As regards IFSTL, neither the State Government nor RIICO filed objections and as per the Sanctioned Scheme relating to Government of Rajasthan, it was noticed as under:

"10.8 Government of Rajasthan :

1. ..................................

2. To Accept the repayment of 26.5% (Rs.40.48 Lakhs) of the existing Sales Tax Loan (Rs.152.76 Lakhs) in full and final settlement of the dues and to waive entire interest, penalty and balance of the sales tax loan. The settlement amount shall be paid over a period of 7 years in equal annual installments on interest free basis. The first such installment shall be paid at the end of one year from the date of sanction of scheme by BIFR."

5. Objections were raised by the IIBI Ltd., UTI and RIICO for reconsideration and modification of the Scheme which were rejected by the High Court vide its order dated 15th March, 2007 in terms of Section 391 of the Companies Act, 1956 (for short, Act of 1956) and the Rehabilitation Scheme was approved. The term loan was paid to the secured creditors and as per the settlement scheme, the State Government was to be paid 26.5% of the outstanding principal amount and the same attained finality. No appeal was preferred to the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) under the SICA. On 30 May, 2007, the RIICO issued the Non-Objection Certificate (NOC) for the term loan. However, it demanded from the petitioner to pay overdues of Rs.1,52,75,480/- towards principal and Rs.2,83,37,193/- towards interest with respect to the IFSTL.

6. The petitioner submitted objections for demand of such loan contending that the Rehabilitation Scheme had been brought into force and therefore, the IFSTL was not required to be paid as a whole, but only 26.5% of the principal amount was to be paid by the petitioner company. The RIICO, however, refused to accept the contention and sent the matter to the State Government for decision on the ground that it was the State which had disbursed the amount.

7. It is stated by the learned counsel that the company sent several letters to the RIICO to withdraw its claim of the IFSTL amount and to accept the amount as decided under the Scheme and grant its acceptance, however, the RIICO did not respond. In the meanwhile, it is stated that the