ORDER :

1. Heard Mr. R.V. Nagabhushanam Rao, learned counsel for the petitioner and Mr. G. Venkateshwarlu, learned Standing Counsel for respondent Nos.1 and 2 and also Mr. M. Hamsa Raj, learned Standing Counsel for respondent No. 3. This writ petition was dismissed against respondent No. 4 vide order dated 19.03.2014.

2. This writ petition is filed to declare the proceedings No. 52.Q/6068-57, dated 22.04.2009; No. AP/Ins-1/52-6068-57, dated 11.02.2010; No. 52Q6058, dated 12.08.2010 and No. AP/Ins.1/52-6068-57/241/2010, dated 24.03.20211 of respondent Nos.1 and 2 as illegal and to set aside the same and for a consequential direction to the respondents to refund the amount of Rs.3,36,400/- together with interest to the petitioner.

3. The petitioner herein is a Company and had purchased assets offered for sale by respondent No. 3 in exercise of powers conferred upon it under Section-29 of the State Financial Corporations Act, 1951 (for short ‘Act, 1951’) belongs to respondent No. 4. A Sale deed was executed by respondent No. 3 in favour of the petitioner on 23.11.2004.

(i) According to respondent Nos.1 and 2, respondent No. 4 is due and liable to pay Rs.3,36,400/- towards ESI contributions. The petitioner being Transferee Company is liable to pay the same. According to the petitioner herein, it being an Auction Purchaser, it is not due and liable to pay dues of respondent Nos.1 and 2 Corporation in respect of respondent No. 4. Even then, respondent Nos.1 and 2 are claiming that the petitioner has to pay dues by way of issuing proceedings dated 22.04.2009; 11.02.2010; 12.08.2010 and 24.03.2011 demanding an amount of Rs.3,36,400/-.

(ii) Since respondent Nos.1 and 2 have issued proceedings to the petitioner’s banker-Andhra Bank, in exercise of powers conferred under Section-45G of the Employees' State Insurance Act, 1948 (for short ‘Act, 1948’), it has paid the said amount of Rs.3,36,400/- to respondent No. 1 ‘under protest’ by way of addressing letter dated 26.08.2010. Therefore, the petitioner is entitled for refund of the said amount. Thus, the petitioner sought to set aside the aforesaid proceedings and refund of the aforesaid amount from respondent Nos.1 and 2.

4. Whereas, respondent Nos.1 and 2 are claiming that the petitioner had purchased the Unit of respondent No. 4 which includes assets, plant and machinery and respondent No. 4 being transferee Company, it is liable to pay the dues to respondent Nos.1 and 2 Corporation in view of Section-93A of the Act, 1948. Thus, respondent Nos.1 and 2 have rightly issued the aforesaid proceedings and the petitioner paid the said amount. The petitioner is not entitled for any refund.

5. Respondent No. 3 has contended that it has extended the loan to respondent No. 4 for purchase of land, building, plant and machinery and thereafter it has committed default. Therefore, respondent No. 3 has conducted auction in terms of Section-29 of the Act, 1951.

6. There is no dispute that the petitioner herein is in the business of castings and respondent No. 4 is also in the same business. Respondent No. 4 has obtained loan from respondent No. 3 for purchase of land, construction of building, plant and machinery. It has constructed the building. Thereafter, it committed default in repayment of loan to respondent No. 3 and, therefore, respondent No. 3 had conducted auction in exercise of its powers under Section-29 of the Act, 1951. The petitioner participated in the said auction and stood as highest bidder. On receipt of entire sale consideration amount and after following due procedure, respondent No. 3 had executed a registered sale deed bearing document No. 4277 of 2004, dated 23.11.2004 in favour of the petitioner.

7. It is relevant to note that in the recitals of the said sale deed, it is specifically mentioned that respondent No. 3 had advanced term loan to respondent No. 4 for acquiring land, buildings, plant and machinery as per the terms and conditions of the Corporation. Respondent No. 4 committed de