Allahabad HC directs Noida Administration to reconsider its decision on penalizing bank

Allahabad HC directs Noida Administration to reconsider its decision on penalizing bank

The Allahabad High Court (HC) directed the Gautam Budh Nagar District Administration (Noida Admin) to reconsider its decision related to the imposition of a penalty for non-payment of dues by the Bank of Maharashtra (Bank)

In 2012, a plot was allotted in Sector 52 by the Noida Admin to the Bank for Rs 10.36 Crores. The Noida Admin executed a registered lease deed in favor of the bank after receiving due payment. The possession certificate was issued on the payment of stamp duty of Rs 66.10 Lakhs.

The district assistant commissioner (Asst. Commissioner) collected Rs. 82.89 Lakhs for stamp dues. As an amount of Rs 66.10 lakhs was paid by the bank as the stamp duty, in 2014 the Asst. Commissioner issued a notice to the bank and claimed of Rs. 16.79 lakhs for the remaining amount of the stamp duty and also imposed a 100% penalty.

It was contended that the cost of the plot was calculated at the market value and not according to the authority allotted amount and the bank approached the court for resolving the said issue.

Due to certain reasons on the date of hearing before the court, the advocate for the bank failed to appear and the additional district magistrate (ADM) Justice Keshav Kumar passed an ex-parte order against the bank. The ADM passed an order against the bank for payment of the deficit with a penalty of Rs 33.58 lakhs.

An appeal was made before the HC by the bank wherein it was submitted that the bank was ready to deposit the deficit amount for the stamp duty however requested the court to hear the matter on the merits of the case.

The HC stated that in the interest of justice, the bank should not suffer for the reason that the advocate cannot appear before the ADM due to certain reasons. It stated that the Noida admin should reconsider its decision of penalizing the bank.

The HC Judge Mahesh Chandra Tripathi set aside the order of the ADM and directed that the matter be decided afresh. The bank was directed to deposit the outstanding amount with a nationalized bank and stated that any deposit would be subject to the final outcome of ADM proceedings.