TMI Blog1997 (1) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... on 29 of the State Financial Corporation Act, 1951 (hereinafter the Act of 1951). Having taken possession of the facilities of M/s. Diamond Marbles Pvt. Ltd., the Corporation held an auction and in this auction petitioner's bid was accepted and an agreement was executed between the Corporation and the petitioner-firm that the facilities of M/s. Diamond Marbles Pvt. Ltd. shall stand transferred to the petitioner-firm subject to condition that it will clear the liabilities of R.S.E.B. and P.H.E.D. and the dues of RIICO will be cleared by the Corporation. The agreement Ex. 1 makes a stipulation that the properties have been agreed to be sold free from all encumbrances except the charges of the Corporation and the RIICO. The agreement also take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. The facility was taken by the petitioner from the Corporation which has exercised its statutory powers under the State Financial Corporation Act of 1951 - a Central Act. The agreement between the Corporation and the petitioner makes petitioner liable to those charges which were due to R.S.E.B. and P.H.E.D. only. No other liability was agreed to be undertaken by the petitioner. 7.We have heard learned Counsel for the parties and have perused the record. The petitioner-firm took the facility under an agreement with the Corporation. The ownership of the factory remained with the Corporation now and even when it was styled as M/s. Diamond Marbles Pvt. Ltd. The only difference which has taken place is that earlier M/s. Diamond Marbles Pvt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannote payment for service rendered. A phrase free from all encumbrances is used in conjunction with the term 'charges'. In any case, a statutory, liability cannot be expected to be done away with by an inter-party agreement. Transaction of Corporation taking the facility of M/s. Diamond Marbles under Section 29 of the State Financial Corporation Act cannot do away with the liability of tax from the plant and machinery. Thus, the element of tax due remains un-affected by the act of taking over and subsequent transfer to the petitioner. 10.Now since the facility has changed hands without intervention of M/s. Diamond Marbles Pvt. Ltd., can the petitioner be saddled with the liability. Obviously Annx. 1 was an agreement between the Petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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