PENGUINE TEXTILES LIMITED Vs. ANDHRA PRADESH STATE FINANCIAL CORPORATION
LAWS(APH)-1971-3-29
HIGH COURT OF ANDHRA PRADESH
Decided on March 24,1971

PENGUINE TEXTILES LTD. Appellant
VERSUS
ANDHRA PRADESH STATE FINANCIAL CORPORATION Respondents

JUDGEMENT

- (1.) This petition raises a question relating to the scope of Article 228 of the Constitution.
(2.) The Andhra Pradesh State Financial Corporation had lent a sum of Rs. 20 lakhs to the Penguine Textiles Ltd., on the hypothecation of their machinery another security under an agreement under which it was stipulated that the amount borrowed should be repaid in ten equal installments with interest with a further condition that in default of payment of any of the instalments the entire amount will become recoverable. Alleging such a default the Financial Corporation filed a petition O.P. No. 43/70 before the Chief Judge; City Civil Court, Hyderabad, for the recovery of the entire amount as per the provisions of sections 31 and 32 of the State Financial Corporation Act. The respondent company while setting out the reasons for its inability to repay the loan in terms of the agreement also further contended that Sections 31 and 32 of the State Financial Corporation Act (hereinafter referred to as the Act) offended Articles , 14, 19 and 31 of the Constitution of India. The Court framed the following points for determination: 1. Whether Sections 31 and 32 of the State Financial Corporation Act offend Articles 14,19 and 31 of the Constitution? 2. Whether the petitioner is not entitled to recover the amounts mentioned in the petition?
(3.) the respondent company filed a petition before the Court to decide the issues relating to the validity of Sections 31 and 32 of the Act. but that was dismissed. It was then come forward with this petition under Section 24 of the Code of Civil Procedure for withdrawing that case and deciding it in the High Court as provided under Article 228 of the Constitution. This is resisted on the ground that there are no bona fides in this petition and that the company was interested only in delaying the matter and thereby causing loss and damage to the Corporation.;


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