NATIONAL TEXTILE CORPN. (DR & P) LTD versus BANK OF RAJASTHAN & ORS.

Citation: [2008] 2 S.C.R. 123 · Decided: 28-01-2008 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Disposed off
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Judgment (excerpt)

[2008] 2 S.C.R. 123 
NATIONAL TEXTILE CORPN. (DR & P) LTD. 
A 
v. 
BANK OF RAJASTHAN & ORS. 
(Civil Appeal No. 721 of 2008 etc.) 
JANUARY 28, 2008 
B 
[DR. ARIJIT PASAYAT AND P. SATHASIVAM, JJ.] 
.,,. 
Sick Textile Undertakings (Nationalisation) Act, 1974 -
ss. 3, 4 and 5 - Liability to pay interest amounts occurring 
after appointed date - On loans - Question decided by High c 
Court without taking into consideration decisions passed by 
Supreme Court on the question - Held: Since the decisions 
of Supreme Court were not cited before High Court, matter 
remitted to High Court for deciding the issue after taking into 
consideration the decisions passed by Supreme Court. 
D 
In the present matters, the question for consideration 
was whether under the provisions of Sick Textile 
Undertakings (Nationalisation) Act, 1974 interest amounts 
occurring after the appointed date on loans advanced by 
Banks are to be paid in priority. 
E 
Appellant contended that High Court had decided the 
matters without taking into consideration the decisions 
passed in State Bank of Indore vs. Commissioner of Payment 
and Ors. 2004 (11) SCC 516 and in National Textile Corpm. 
F 
(Guj) Ltd. vs. State Bank of India and Ors. 2006 (7) SCC 542. 
Disposing of the appeals and remitting the matter to 
High Court, the Court 
HELD: There was no appearance before the High 
Court and, therefore, the relevance and applicability of the G 
)· 
two decisions passed by Supreme Court presently relied 
upon, had not been considered. Therefore, the impugned 
order is set aside and matter is remitted to the High Court 
to hear the matter afresh and decide the matter in the light 
123 
H 
+- t. 
124 
SUPREME COURT REPORTS 
[2008) 2 S.C.R. 
A of the cited decisions. The matter which has already been 
,,.._ 
remanded to the Commissioner by the impugned order 
• 
of the High Court shall be decided keeping in ·view the 
decisions cited. [Paras 11 and 12] [130-C, D, F] 
B 
State Bank of Indore vs. Commissioner of Payment and 
Ors. 2004 (11) SCC 516; National Textile Corprn. (Guj) Ltd. 
vs. State Bank of India and Ors. 2006 (7) SCC 542 - referred 
to. 
•f' 
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 721 
c of 2008. 
From the final Judgment and Order dated 21.07.2005 of 
the High Court of Judicature for Rajasthan, Jaipur Bench, Jaipur 
in S.B. Civil Writ Petition No. 8908 of 2002 
D 
WITH 
Civil Appeal No. 720 of 2008. 
G.E. Vahanvati, S.G., B. Sunita Rao for the Appellant. 
Shyam Diwan, Hemant Sharma, Ajay Kumar, Biju and 
E Anupam Lal Das for the Respondents. 
The Judgment of the Court was delivered by 
Dr. ARIJIT PASAYAT, J. 1. Leave granted. 
F 
2. Challenge in this appeal is to the judgment of Learned 
Single Judge of the Rajasthan High Court at Jaipur Bench 
dismissing this Civil Writ Petition filed by the appellant. 
,., 
~ 
3. Background facts in a nutshell are as follows: 
G 
The Sick Textile Undertaking Nationalisation Act, 1974 (in 
short the 'Act') became operative with effect from 1.4.197 4. One 
Textile Undertaking i.e. Mahalaxmi Mills Ltd. Bewar vested in 
--( 
the Central Government under the Act. The same was 
transferred to the National Textile Corporation (in short the 
'Corporation') and thereafter to the present appellant which is a 
H Subsidiary of the Corporation i.e. N~tional Textile Corporation 
---';--- -
NATIONAL TEXTILE CORPN. (DR & P) LTD. v. BANK 
125 
OF RAJASTHAN & ORS. [PASAYAT, J.] 
(Delhi, Punjab, Rajasthan) Ltd. Appellant's stand was that in A 
terms of Section 3 of the Act, with effect from the appointed 
date i.e. 1.4.1974, every sick textile undertaking and the right 
title and interest of the owner in relation to such textile undertaking 
stood vested absolutely in the Central Government and in turn 
to the Corporation. Section 4 of the Act sets out the general 8 
effects of vesting. Under Section 5 of the Act, deals with the 
.,,.. 
liability of the owner of the sick textile undertaking and clearly 
provides that every liability other than the liability specified in 
sub-section (2) of Section 5 of the owner of a sick textile 
undertaking in respect of any period prior to the appointed date c 
was a liability of the owner and shall be enforceable against 
him and not against the Central Government or the Corporation. 
On 25.5.1978, respondent-Bank filed claim before the 
Commissioner for Payment (in short the 'Commissioner') raising 
demand of about Rs.34. 72 lakhs. After examining the claim the D 
Commissioner allowed the c
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