2003 (3) TMI 140 - HC - Central Excise

Summary

Issues:
1. Failure to grant 24% interest on the deposit
2. Delay in handing over possession of assets
3. Legal challenges from State Bank and Central Excise Department
4. Dispute over interest payment

Analysis:
1. The petitioner sought a writ of mandamus for not receiving 24% interest on a deposit made with the 1st respondent. The petitioner's bid for a unit was accepted for Rs. 76 lacs, of which Rs. 15,20,000 was paid as a deposit on 31-3-1992. The 1st respondent did not deliver possession, citing issues with the State Bank and Central Excise Department. The petitioner argued that interest should be paid from the deposit date until possession delivery, as per the sale confirmation letter terms.

2. Despite the sale confirmation, possession was not handed over to the petitioner due to disputes with the State Bank and Central Excise Department. Legal challenges were faced, including a writ petition by the State Bank claiming an underpriced sale. The court dismissed the bank's petition and directed possession delivery to the petitioner. The Central Excise Department later demanded a significant sum from the petitioner, leading to further legal proceedings.

3. The petitioner's counsel contended that the sale being statutory under the State Financial Corporations Act obligated possession delivery post-confirmation. The Central Excise Department's distraint order preventing possession transfer was deemed illegal, as it should pursue the petitioner for dues. The court ruled that the Department could not restrain possession delivery based on arrears without due process against the petitioner.

4. The court found that the sale was confirmed, and the possession delay was unjustified. It stated that interest claims were contractual matters beyond its jurisdiction under Article 226. The court allowed the writ petition, directing possession transfer within four weeks, subject to sales order conditions. The Rule Nisi was made absolute by the Hon'ble Dr. Davinder Gupta, the Chief Justice, on March 7, 2003.