Civil Appeal No. _______of 2022
Arising out of SLP (C) No. 3537 of 2018
Civil Appeal No. _______of 2022
Arising out of SLP (C) No. 12724 of 2018)
J U D G M E N T
Hrishikesh Roy, J.
Leave granted.
1. Heard Mr. T. Srinivasa Murthy, the learned counsel appearing for the appellants. Also heard Mr. Balbir
Singh, the learned Additional Solicitor General of India appearing for respondent-State. The U.P State Sugar Corporation (respondent no.2) for short “the UPSSCL”, is represented by Mr. Pradeep Misra, the learned counsel.
2. For the sake of convenience, we will take the facts of SLP(C) No. 3525 of 2018, for the purpose of this judgment: –
The appellants were the writ petitioners before the High Court who were unsuccessful in their challenge to the order dated 7.6.2016 whereby the liability for payment of Rs.2,14,169/- duty, Rs. 2,41,169/-penalty, and Rs.1,40,459/- interest, amounting to Rs. 5,68,797/- is declared to be borne by M/s Wave Industries Pvt. Ltd. (Purchaser) and not by the Seller i.e. “UPSSCL”.
3. This appeal relates to the Amroha sugar mill which was one of the four loss making sugar mills owned and operated by the UPSSCL. For the unit at Amroha, a Slump Sale Agreement dated 17.7.2010 was entered into, followed by the sale deed dated 4.10.2010, between the UPSSCL and the appellant.
4. The above arrangements were preceded by the advertisement dated 29.6.2009 in the newspaper proposing slump sale of the loss making sugar mills of UPSSCL. A pre-bid meeting was next held on 10.7.2009 with the prospective buyers where, inter alia, concern was raised on outstanding liabilities against the units on sale. The appellant submitted bid for Rs.13.94 crores for the Amroha Unit and as per Clause 12 of the Slump Sale Agreement dated 17.7.2010, all liabilities referred to in the said clause, accruing before the date of signing agreement were to be borne by the Seller and those of subsequent period, were to be borne by the Purchaser. The sale agreement was registered accordingly on 9.8.2010 and possession of the Amroha unit was taken over by the appellant on 17.8.2010 and since then the appellant has been managing the unit. Subsequent to the Slump Sale Agreement, formal sale deed was executed on 4.10.2010 and in Clause 9 thereof it was made clear that the seller shall be liable to bear all assessments, rents, rates, taxes, outgoing and impositions of whatsoever nature
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relating to the Unit upto the signing date and thereafter these will be the liability of the purchaser. The dispute here relates to liability of unpaid duty, penalty, and interest. When recovery proceeding relating to the period prior to 17.7.2010 was initiated by the respective departments, the appellant filed a writ petition before the Lucknow Bench of the High Court of Allahabad and the said Writ Petition No.2587(M/B) of 2013 was disposed of by the High Court on 22.3.2013, with a direction to the State Government to afford hearing to the purchasers and decide their representation, with a speaking order.
5. The appellants representation was disposed of on 7.6.2016 by declaring that the purchaser is liable for the outstanding liabilities in respect of the sugar unit at Amroha upto 30.11.2011. The payable duty with penalty and interest was quantified at Rs.5,68,797/- and the issue to be decided in this appeal is whether those outstanding liabilities are to be discharged by the seller or the purchaser.
6. Before we proceed further it would be proper to take note of certain defined terms in the Slump Sale Agreement dated 17.7.2010:
