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The Branch Manager, The Karnataka State Financial Corporation v/s M/s. Gayathri Agro Products, Karatagi

    Writ Appeal No. 1546 of 2015 (GM-KSFC)

    Decided On, 21 May 2015

    At, High Court of Karnataka


    For the Appellant: Veeresh R. Budihal, Advocate. For the Respondent: V.M. Sheelvant, Advocate.

Judgment Text

(Prayer: This writ appeal is filed under S.4 of the Karnataka High Court Act, praying to set aside the order passed in the Writ Petition No. 103642/2015 dated 12.05.2015.)

1. Sri V.M.Sheelvant, learned advocate, who appears in the pending writ petition, is directed to take notice for the respondent. Copy was served on him.

2. Though this appeal is listed today for preliminary nearing, with the consent of learned Advocates on both sides, is taken up for final hearing.

3. The respondent has filed W.P.No.103642/2015 against the appellant, to quash an order dated 18.03.2015, copy of which is marked as Annexure-E and asking for a mandamus to handover possession of the assets of M/s.Kotturu Basaveshwara Industries of Kartagi. 

4. An interim prayer seeking stay of Annexure-E and to direct the respondent to handover possession of M/s. Kotturu Basaveshwara Industries of Karatagi, Gangavathi Taluk, having been sought in the writ petition and learned Single Judge having passed an interim order, directing the appellant/KSFC to handover possession of the Rice Mill, forthwith, on the ground of payment of substantial amount and the undertaking of the writ petitioner, to pay the balance amount as well, feeling aggrieved, this writ appeal was filed.

5. The brief facts of the case, sans unnecessary details are, that M/s.Kotturu Basaveshwara Industries, a partnership firm, availed loan from the KSFC and became defaulter. The collateral security i.e., the rice mill in question, was taken-over by the KSFC, in exercise of power under Section 29 of the State Financial Corporations Act, 1951. The borrower suggested that its assets and liabilities could be transferred to the respondent. The proposal was accepted by the KSFC and was communicated to the respondent, on 05.09.2014, vide Annexure-B, by subjecting the respondent to deposit Rs. 1,19,46,650/- as down payment within ten days from 15.09.2014 and the balance loan liability of Rs.2,60,00,000/- of M/s. Kotturu Basaveswara Industries, to be transferred and to be paid on deferred payment basis, commencing from 10.03.2015, along with the applicable rate of interest. The respondent having accepted the proposal, made initial payment. However, payment was not in terms of the conditions stipulated in Annexure-B. On 18.03.2015, vide Annexure-E, the proposal given vide Annexure-B, was cancelled. The said communication having been assailed in writ petition No.103642/2015, learned Single Judge has passed the impugned order.

6. The main contention raised by Sri Veeresh R.Budihal, learned advocate is that the handing-over of possession of the rice mill in question, at an interlocutory stage, creates lot of adverse consequences. He submitted that at the interlocutory stage, a relief which is asked for and is available at stage of the disposal of the matter, ought not to have been granted. It was submitted that the extraordinary order passed by the learned Single Judge, impugned herein, being opposed to the record of the case and the settled principles of law, is liable to be set aside.

7. Sri V.M.Sheelvant, learned advocate, on the other hand submitted that substantial amount of Rs.1,19,46,650/- having been remitted to the KSFC and the respondent having undertaken to pay the balance amount of Rs.2,00,000/- as well, learned Single Judge is justified in passing the impugned order. He submitted that the learned Single Judge having exercised the discretion, no interference with the impugned order is called for.

8. Perused the Writ Petition No.103642/2015. Main prayer, at Column (b), being relevant, is extracted herein below for ready reference:

"b) Issue a writ in the nature of Mandamus or any other appropriate writ, order or direction directing the respondents to handover the possession of the assets of M/s.Kottur Basaveshwara Industries of Karatagi to petitioner forthwith in the interest of justice and equity". 

9. Considered the rival contentions and perused the record. Point for consideration is, whether an interim order which has the effect of a final order, can be passed at an interlocutory stage of the case?

10. With due respect, in our considered opinion, the approach of the learned Single Judge is judicially unsound and is indefensible. The final relief sought in the writ petition, extracted supra, has been granted as interim relief. Whether the writ petitioner is entitled to any relief has to be adjudicated at the time of final disposal of the writ petition. It is a settled proposition of law that final relief asked for should not be granted at an interlocutory stage. Apex Court has taken exception to the practice of granting an interim order, which practically would amount to giving principal relief sought in a case. Herein, learned Single Judge has not assigned any reason in support of the extraordinary order passed. In view of the well settled position of law, that by an interim order the final relief should not be granted, as has been erroneously

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done in the instant case, we have no other option than to allow this appeal. (Also see DAYANAND VEDIC VIDYALAYA SANCHALAK SAMITI VS. EDUCATION INSPECTOR, GREATER BOMBAY AND ANOTHER, (2007) 15 SCC 192). In the result, writ appeal is allowed and the impugned order is set aside. Since, the controversy between the parties lies within a narrow compass, we request the learned roster Judge to take up the writ petition on 15.06.2015 and decide the same with expedition. The Registry is directed to send the record, forthwith to Dharwad Bench.