M/s Ramesh Alumunium Industries vs The State of Bihar

Court
Patna High Court

IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.11682 of 2019
CNR No. BRHC010497842019
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M/s Ramesh Alumunium Industries Through its Proprietor Ramesh Prasad
(Male), aged about-66 years, S/o Babu Chand, Resident of Mohalla Gosai
bagh Lane, P.S.-Kotwali, District-Gaya.
... ... Petitioner/s
Versus
1. The State of Bihar through the Chairman Cum Managing Director, Bihar
State Financial Corporation, Frazer Road, Patna-1.
2. The Dy Manager, I/C (Zone-ii), Bihar State Financial Corporation, Frazer
Road, Patna-1.
3. The Branch Manager, Bihar State Financial Corporation, Gayawal Bigha,
Behind Dyal Petrol Pump, Gaya, District-Gaya.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr. Ravindra Kumar Sinha, Advocate
For the Respondent/s : M/s Mr.Raju Giri, Sr. Advocate
Harshvardhan
Rahul Kumar, Advocates
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CORAM: HONOURABLE JUSTICE SMT. G. ANUPAMA CHAKRAVARTHY
ORAL JUDGMENT
Date : 30-10-2026
1. That the present Writ application has
been filed for the following reliefs:-
"For quashing the order dated
25.3.2019 passed by the Chairman cum
Managing Director, Bihar State Financial
Corporation, Frazer Road, Patna-1 and for
issuance of any appropriate writ or writs,
order or orders, direction or directions as
your lordships may deem fit and proper."
2. The brief facts culled out of the Writ
petition are that the petitioner had obtained a

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loan of Rs. 4.80 lakhs from the Bihar State
Financial Corporation (hereinafter referred to as
the Corporation) in the year 1985 for running an
aluminium industry in the name of M/s Ramesh
Aluminium Industries, Gaya. However, due to
financial crisis and lack of electricity, the unit was
declared as a sick industry and was closed. The
petitioner submits that the Corporation auctioned
his unit in favour of "Shri Shyam Nandan" without
serving him any notice. Earlier, the petitioner had
challenged the auction order, before this Court in
CWJC No. 19041 of 2013, which was disposed of
on 25.10.2018, granting him liberty to approach
the Managing Director of the Corporation with a
proposal for repayment of the dues. The
petitioner, thereafter, submitted a representation
and applied for settlement under the "One Time
Settlement (OTS) Scheme, 2019", along with a
bank draft of Rs. 1,21,000/-. However, his
representation was rejected by order dated
25.03.2019. The petitioner has challenged the
said rejection and seeks restoration of his unit,

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expressing his willingness to settle the dues
under the OTS Scheme, 2019.
3. The Learned counsel for the petitioner
submits that the auction of the petitioner's unit
without proper notice is contrary to the principles
of natural justice. It is further submitted that the
petitioner is willing to settle the dues under the
OTS Scheme, 2019, and the rejection of his
representation deserves to be set aside.
4. A counter affidavit has been filed on
behalf of the respondent Corporation. The
Learned counsel for the respondents submits that
the petitioner committed persistent defaults in
repayment of the loan, despite repeated demand
notices and opportunities granted by the
Corporation. It is further submitted that the
mortgaged unit was advertised for sale on
several occasions and was ultimately sold in
favour of "Shri Shyam Nandan" for a
consideration of Rs. 30 lakhs after following the
prescribed procedure. The petitioner was also
given an opportunity to retain the unit by

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matching the terms and conditions of sale, but he
failed to avail the same. The possession of the
unit was thereafter handed over to the purchaser.
5. The Learned counsel for the
respondents further submits that the petitioner's
representation was duly considered pursuant to
the directions of this Court, but the petitioner
expressed his inability to clear the outstanding
dues of Rs. 4,44,04,895.10 and instead sought
settlement under the OTS Scheme, 2019, along
with restoration of the unit.
6. It is contended by the Learned counsel
for the respondents that the order dated
25.03.2019 was passed in accordance with law
and the applicable guidelines of the Corporation.
Since, the unit had already been sold and
possession handed over to the purchaser, its
restoration to the petitioner was not permissible
under the OTS Scheme, 2019. Accordingly, the
Learned counsel for the respondents submits that
the impugned order suffers from no illegality and
the Writ petition is liable to be dismissed.

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7. Heard the Learned counsel for the
parties and perused the materials available on
record.
8. Having considered the submissions
advanced on behalf of the parties and perused
the materials available on record, this Court finds
that the present Writ petition arises out of the
rejection of the petitioner's representation by
order dated 25.03.2019 and constitutes the
second round of litigation arising from the sale of
the petitioner's unit.
9. It is evident from the order dated
25.10.2018 passed in the earlier Writ petition,
being CWJC No. 19041 of 2013 (Annexure-5), that
the petitioner had sought consideration of his
willingness to settle the dues of the Corporation.
This Court had accordingly granted him liberty to
approach the Managing Director of the
Corporation with a proposal for liquidation of the
outstanding dues, with a direction that the same
be considered on its own merits and in
accordance with law. The said order did not set

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aside the auction sale or direct restoration of the
unit to the petitioner.
10. It further appears that the petitioner
has not demonstrated that the order passed in
the earlier round of litigation contained any
finding regarding the alleged non-service of
notice prior to the auction sale. The petitioner
cannot, in the present proceedings, seek to
reopen the concluded proceedings relating to the
sale of the unit merely on the basis of his
willingness to settle the outstanding dues.
11. It is pertinent to mention that the
Unit was sold to third party and rights are created
to "Shri Shyam Nandan". The petitioner has not
arrayed Shri Shyam Nandan as party to the Writ
petition, as his rights would be effected if any
order is passed in this Writ petition.
12. The records further indicate that the
petitioner's representation was considered by the
Corporation which was rejected by the impugned
order dated 25.03.2019. The petitioner has also
failed to establish that the said order violates the

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directions issued by this Court in the earlier Writ
petition or suffers from any illegality warranting
interference of this Court under Article 226 of the
Constitution of India. The mere submission of an
application under the OTS Scheme, 2019,
accompanied by a bank draft of Rs. 1,21,000/-,
does not, by itself, confer any enforceable right
upon the petitioner to seek restoration of the
unit, which had already been sold in favour of a
third party.
13. In view of the aforesaid facts and
circumstances, this Court finds no sufficient
ground to interfere with the impugned order
dated 25.03.2019. Accordingly, the Writ petition
is dismissed.
14. Pending application(s), if any, shall
stand disposed of.

(G. Anupama Chakravarthy, J)
Spd/-
AFR/NAFR NAFR
CAV DATE NA
Uploading Date 30.10.2026
Transmission Date