Telangana HC Directs Reassessment of Compensation in SCCL Land Case

Writ applicability to private firm up for consideration

Justice Moushumi Bhattacharya of the Telangana High Court will continue to hear the maintainability of a writ plea against a public limited company, which allegedly rejected one time settlement (OTS) proposal without following the RBI framework for compromise settlements and technical write-offs. The judge is dealing with a writ plea filed by Mandava Holdings Pvt. Ltd., which is engaged in the business of management consultancy and other allied business activities. The petitioner filed the writ plea challenging the actions of PTC India Financial Services Ltd in rejecting the OTS proposal in respect of the petitioner’s subsidiary company in corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016. It is the case of the petitioner that after negotiations and discussions with the management of the respondent company, the petitioner submitted a proposal for OTS for repayment of the earnest money deposit, which was rejected by the respondent company. Senior counsel S. Niranjan Reddy, virtually appearing for PTC India Financial Services, challenged the maintainability of the writ plea on the ground that the company was not a public body and the subsidiary company, which is a corporate debtor, was not a party to the writ plea. Senior counsel inter alia also contended that OTS is not a right and the respondent company cannot be forced to enter into the same. It was also pointed out that the RBI circular was only prospective in nature and cannot be applied in retrospective effect. After hearing the senior counsel at length, the judge posted the matter for further hearing.

Tribal welfare dept directed to 18% interest on repayment of dues

Justice Surepalli Nanda of the Telangana High Court dismissed a petition filed by the state tribal welfare department seeking a review of imposition of 18 per cent interest on repayment of dues. Earlier, a writ plea was filed by B. Sanjeeva Reddy seeking a direction against the chief engineer and others of the department for repayment of dues of over `20 lakh along with interest at an annual rate of 18 per cent. The petitioner argued that non-payment of dues along with the interest amount was contrary to the provisions of the agreement between the parties. It is the case of the petitioner that he was entrusted with the construction of a youth training centre at Bellampally, Adilabad district, for `30 lakh. The petitioner successfully completed the work in all respects without any complaints within the agreement period. Despite the due compliance, the petitioner alleged that an amount of `18,45,562 towards fixed security deposit (FSD) and `2.5 lakh for want of quality control (QC) totalling `20,95,5621, were retained by the respondent authorities. The petitioner after completion of the work approached the respondents many times but all in vain. Aggrieved, the petitioner filed a civil suit at Warangal, claiming the principal amount together with interest at 18 per cent per annum. In the said suit, the respondent authorities, through their written statement, agreed that they are ready to pay the amount due as and when the funds are released. Since the respondents agreed to pay the amount, the writ plea was allowed in August 2021 directing the respondents to pay the amount payable to the petitioner with 18 per cent interest per annum within a period of four weeks from the date of receipt of a copy of the order. However, the respondent authorities failed to comply with the order due to which the petitioner filed a contempt case. On the specific directions of the court, the respondent authorities fulfilled the payment of the principal amount but approached the court with a review plea against the imposition of 18 per cent interest, seeking a reduction in the interest imposed to nine per cent. The government pleader, appearing for the respondent authorities, submitted that there was an error apparent on behalf of the previous counsel for not having appraised the court upon the order of the division bench of the Telangana High Court reducing the amount of interest payable by a government department significantly. It was the plea of the petitioner that after agreeing to pay the amount of interest of 18 per cent before the civil court as well as the High Court in the writ plea, the respondent authorities cannot seek a review at this stage of the matter. Additionally, this review was being filed after lapse of over three years from the date of passing of the writ order. Considering the averments of both the parties and taking into account the facts and circumstances of the case, the judge observed that there is no error apparent on the face of record of this particular case in light of the fact that the respondent authorities agreed to pay the amount of interest at 18 per cent per annum before the civil court and High Court on an earlier occasion, The judge also observed that the respondents authorities could not take the plea for review or reduction of the interest amount at this stage. Accordingly, he judge dismissed the review plea of the respondent authorities and directed them to comply with the earlier order directing them to pay 18 per cent interest as payable to the petitioner within four weeks from the receipt of the copy of the order.