IMPORTANT POINT
Disputed questions of fact cannot be resolved in writ jurisdiction.

Headnote:Constitution of India – Article 226 – Writ jurisdiction – Lis involving adjudication of disputed questions of fact – High Court rightly declined to entertain the petition – Respondent-IDCO directed to find out, by conducting enquiries, whether the land is properly used by one or other party for the purpose it was open – Also to enquire if by opening different firms or companies in different names in same premises, the same very land is mortgaged time and again to avail loan – After such enquiry, competent authority to pass appropriate order. (Para 18)
       Facts of the case:
       The 1st respondent-Orissa Industrial Infrastructure Development Corporation allotted Plot no. C/9, Industrial Estate, Cuttack on 18.3.1982 in favour of a partnership firm-M/s Prachi Vanijya (P) Ltd. on hire-purchase basis. A mortgage in favour of 2nd respondent-Orissa State Financial Corporation by M/s Prachi Vanijya was allowed by the 1st respondent to secure loan. The 1st respondent intimated the 2nd respondent on 27.11.1986 that the plot is transferred in favour of M/s Prachi Vanijya (P) Ltd. subject to payment of outstanding amount of Rs.97,888/- as on 30.11.1986.
       The 2nd respondent agreed to a change in name of M/s Prachi Vanijya to M/s Eastern Fans.
       Plot No. C/9, Industrial Estate, Cuttack along with the loan liability was transferred in the name of the M/s Eastern Fans, a partnership firm. Ever since the transfer of assets in favour of Eastern Fans, the unit was non-functional and the loan amount of 2nd respondent against Eastern Fans had mounted.
       The appellant company was incorporated on 22.3.1989 with three Directors, namely, Sri Purushottam Lal Kandoi, Sri Rakesh Jajodia and Sri Satya Narayan Swain with a share capital of Rs.5,00,000/-. The object of the Company was, inter alia, to undertake manufacturing Ferro Alloys.
       It was mutually agreed on 6.7.1989 that the appellant-company will take over the term loan liability of M/s Eastern Fans as against the complete transfer of all its assets in favour of the appellant company. The appellant company was asked to pay a sum of Rs.1,00,000/-as down payment towards the loan liability outstanding against M/s Eastern Fan (Prachi Vanijya), which was duly done.
       A revised sanction letter was issued by 2nd respondent on 21.3.1990 further clarifying that the appellant company was allowed to take over the entire assets and liabilities along with the accrued interest and other statutory dues.
       Pursuant to the letters dated 9.1.1990 and 21.3.1990, the appellant company became the owner of Plot No.C/9, Industrial Estate, Cuttack. All the assets and liabilities of M/s Eastern Fan were taken over by the appellant company on 31.3.1990 by making a down payment of Rs.1,00,000/-. The assets of M/s Eastern Fan became the assets of the appellant company which were reflected in the balance sheet of the appellant company.
       The appellant company took additional term loan from 2nd respondent for Rs.11,37,000/- which was sanctioned on 31.3.1992 on the said basis the appellant company has full rights over the plot in question.
       The deed of hypothecation covers the first term loan in consequence of takeover of M/s Eastern Fans of Rs.9,11,284.00/- and the additional term loan of Rs.11,37,000/-for new Ferro Alloys Plant of the appellant, both amounting to Rs.20,48,284.14/-and clearly refers to the Plot No.C/9, Industrial Estate, Cuttack with land and building. Thus, according to appellant, for all purposes the appellant company was treated as an owner of the Plot No.C/9, Industrial Estate, Cuttack.
       The appellant company has also setup a fresh unit for making Ferro Alloys in aluminium thermic process on 27.5.1997 and also taken facility of Letter of Credit from State Bank of India for Rs.1,50,000/-in the year 1992, which was renewed every year. It has also been sanctioned cash credit limit of Rs.40 lakhs by the State Bank of India in the year 1992 and the same was extended every year.
       2nd respondent also accepted the execution of Tripartite Agreement with the State Bank of India by letter dated 29.1.1998.
       The grievance of the appellant company is that despite several representations made to 1st respondent between 2003 and 2008 no action was taken by it to transfer the title of the said plot in favour of the appellant company.
       The High Court dismissed the writ petition as it involved adjudication of factual disputes.
       Finding of the Court:
       High Court rightly held that disputed questions of fact cannot be resolved in writ jurisdiction.
       Result: Appeal dismissed.

JUDGMENT

SUDHANSU JYOTI MUKHOPADHAYA, J.

Leave granted.

2. This appeal has been preferred by the appellant-M/s. Swati Ferro Alloys Pvt. Ltd. against the judgment dated 18th April, 2012 passed by the Division Bench of High Court of Orissa at Cuttack in WP(C) No.16790 of 2008. By the impugned judgment, the High Court observed and held as follows:

“Admittedly the land in question belongs to IDCO and the same was leased out in favour of one M/s Prachi Vanijya (P) Ltd. for manufacturing of Konark Fans, which was mortgagable right in favour of OSFC and other financial institutions.

Latter on M/s Prachi Vanijya changed its name to M/s Eastern Fan. Opposite parties 3 to 6 are the legal heirs of one Satya Narayan Swain, who was stated to be one of the partners of said M/s Eastern Fan and according to the petitioner, said Satya Narayan Swain had agreed to transfer the land in favour of the petitioner.

Learned counsel for the IDCO seriously disputed the aforesaid transaction and submits that though the opposite parties 3 to 6 are the legal heirs of one of the partners of the M/s Eastern Fan, the said M/s Eastern Fan has not been made a party.

Counsel for the opposite parties 3 to 5 also dispute transaction. Learned counsel for OSFC submits that they have no role to play as the land till date belongs to IDCO.

This writ application is full disputed facts and the prayer made in the writ application cannot be granted in a proceeding under Article 226 of the Constitution of India as factual disputes cannot be decided in this proceeding.

The writ application is accordingly dismissed.

It is open for the parties to approach the Civil Court, if it so desires.”

3. The factual matrix of the case is as follows:

The 1st respondent-Orissa Industrial Infrastructure Development Corporation (‘IDCO’ for short) allotted Plot no. C/9, Industrial Estate, Cuttack on 18.3.1982 in favour of a partnership firm-M/s Prachi Vanijya (P) Ltd. on hire-purchase basis. A mortgage in favour of 2nd respondent-Orissa State Financial Corporation by M/s Prachi Vanijya was allowed by the 1st respondent to secure loan. The 1st respondent intimated the 2nd respondent on 27.11.1986 that the plot is transferred in favour of M/s Prachi Vanijya (P) Ltd. subject to payment of outstanding amount of Rs.97,888/- as on 30.11.1986.

4. The case of the appellant is that the assets of M/s Prachi Vanijya (P) Ltd. comprising of land and building, shed and fan machines situated at C/9, Industrial Estate, Cuttack were purchased along with a loan liability of Rs.6,60,000/-of the 2nd respondent by M/s Eastern Fans on 5.12.1987, of which Sri Satya Narayan Swain was the Managing Partner. M/s Prachi Vanijya requested the 1st respondent to give no objection to change its name as M/s Eastern Fan. The 1st respondent vide its letter dated 5.12.1987 informed that it has no objection to change of the name subject to receipt of recommendation from the 2nd respondent.

5. The 2nd respondent on 16.12.1987 intimated that it has agreed to a change in name of M/s Prachi Vanijya to M/s Eastern Fans. Thus, Plot No. C/9, Industrial Estate, Cuttack along with the loan liability was transferred in the name of the M/s Eastern Fans, a partnership firm. Ever since the transfer of assets in favour of Eastern Fans, the unit was non-functional and the loan amount of 2nd respondent against Eastern Fans had mounted and it had become impossible for Sri Satya Narayan Swain to run M/s Eastern Fans due to excessive paucity of funds. Sri Swain thus approached and persuaded Sri Purushottam Lal Kandoi, Director of the appellant company-M/s Swati Ferro Alloys Pvt. Ltd. for relieving him of the loan burden of 2nd respondent.

6. Pursuant to discussion between the parties, the appellant company was incorporated on 22.3.1989 with three Directors, namely, Sri Purushottam Lal Kandoi, Sri Rakesh Jajodia and Sri Satya Narayan Swain with a share capital of Rs.5,00,000/-. The object of the Company was, inter alia, to undertake manufacturing Ferro Alloys.

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2015 Supreme(SC) 6

IMPORTANT POINTDisputed questions of fact cannot be resolved in writ jurisdiction.

IMPORTANT POINT
Disputed questions of fact cannot be resolved in writ jurisdiction.