Judgment:
Navaniti Prasad Singh, J.
1. Heard.
2. Petitioner had taken certain term loans from the respondent- Bihar State Financial Corporation starting from the year 1980. In all, there were four term loans. It is not in dispute that on 19.12.1997, the branch of the Corporation, with which the petitioner had its dealing, informed the petitioner that so far as loan Account Nos. I, II and III are concerned, they have been liquidated. There remained only Account no IV in which also there is no dispute that as the Account stood, petitioner deposited the entire due on 21.3.2007. Thus, all four accounts were duly paid up and cleared. Now, the Corporation revised the account from the year 1980 and comes up with an additional demand of Rs. 22,70,856/-. This shocking state of affairs is the basis of challenge in the writ petition.
3. In the counter affidavit, the explanation given by the Corporation is virtually a saying that since 1981 its Account Section failed to charge interest Accordingly its stand is that the contractual rate of interest, though fixed, had to be varied depending on the availability of re-finance from the Industrial Development Bank of India on receipt of re- finance. It is not disputed that no intimation was given to the petitioner of any rate revision and it is admitted that the Corporation's Account Section did not correctly incorporate the rate change because of this difference in rate since 1981 various incentives which the petitioner had availed were to be denied or these were returned back. On additional liability since 1981 created interest and penal interest charge though accounts were cleared in 1997, huge liabilities were created by this process. It is not in dispute that the petitioner had done nothing to induce the mistake if any committed, petitioner is not to be blamed for these mistakes. It is now in the year 2007 that these mistakes are being realized and for these mistakes committed by the Corporation, the petitioner is being made to pay.
4. To this Court, this opinion of the Corporation shocks the conscious. The Corporation intends to say that yet its officer committed a mistake starting from 1981 so what you (petitioner) must now suffer the consequences of its mistake 27 years later. To me, there cannot be any say mere arbitrary and unfair. If such mistakes are committed by such responsible statutory Corporation, it is them who must suffer for their mistakes and they cannot make other suffer for their mistakes. All I can do is quote in the words of Hon'ble Chief Justice Chagla, a passage from the case of All India Groundnut Syndicate Ltd v. Commissioner of Income Tax, Bombay City since reported in : [1954]25ITR90(Bom) :.But the most surprising contention is put forward by the Department that because their own officer failed to discharge his statutory duty, the assessee is deprived of his right which the law has given to him under Sub-section (2) of Section 24. In other words, the Department wants to benefit from and wants to take advantage of its own default. It is an elementary principle of law that no person - we take it that the Income -tax Department is included in that definition- can put forward his own default in defence to a right asserted by the other party. A person cannot say that the party claiming the right is deprived of that right because 'I have committed a default and the right is lost because of that default....
I may also notice one thing that in the counter affidavit it is admitted that the concerned branch did issue a certificate in the year 1997 that the three accounts were settled and the matter was being referred to the Head Office, it took 10 years for the Head Office to wake up. Even a Civil Suit for such a recovery would have been grossly barred.
5. In that view of the matter, I find that it would be wholly inequitous to permit the respondent- Corporation to proceed further in the matter. Permitting such an action would be putting premium on inefficiency at the cost of the rights of the citizen. I accordingly direct that in view of the statements made in para 15 and para 17 of the counter affidavit itself, all accounts having been duly paid up, no further demand would raised against the petitioner. There being no other account of the petitioner with the Corporation, petitioner's liability towards the Corporations would fully stand discharged with all necessary consequences.
6. With the above observation and direction, this writ petition is allowed.