D.M.Patnaik, J. - (1.) The petitioner-Bank challenges the action of the Orissa State Financial Corporation for auction sale of the assets of M/s. UtKal Ferro Alloys Pvt. Limited (for short, the 'Company') to opposite party No. 5,
(2.) The Orissa State Financial Corporation (for short, the 'O.S.F.C.') sanctioned a loan of rupees 11 lakhs and 8 thousand, the Industrial Promotion and Investment Corporation (in short, the 'l.P.C.O.L.') sanctioned a loan of rupees 3 lakhs and the petitioner-Bank sanctioned credit limit upto rupees 92 lakhs to the opposite party-Company for setting up its factory at Rairangpur in the district of Mayurbhanj against valuable securities both movables and immovables. By a common agreement dated 11.7.1979 it was agreed by all the above parties that the properties so mortgaged to O.S.F.C. shall be first charge and for the loan advanced by the petitioner-Bank it shall be the second charge, to be enforced by the petitioner-Bank.
(3.) When the company defaulted in repay ing the loan the latter seized the unit on 5,9.87 and sale notice was published on 11.9.87. This time the sale to one Arun Kumar could not be materialised and was cancelled and the second sale notice was published on 7.3.95 in the Economic Times and this time opposite party No. 6 offered rupees 27 lakhs with a down payment of rupees five lakhs and rest amount for payment within seven years. This was accepted by the O.S.F.C. The petitioner's case is. such valuable assets have been sold away for a meagre sum of rupees 27 lakhs for which the petitioner- Bank is at great loss. It is alleged that such a low offer has come because of the utter inaction of the O.S.F.C. in not giving wide publicity for sale to attract potential businessmen to purchase a highly sophisticated and technologically advanced unit. It is also alleged that although under the agreement dated 11.7.1979 the petitioner Bank was entitled to a prior notice for sale. Had it been done, it could have fetched a buyer of its choice. The sale is claimed to be invalid in the absence of such a notice as provided under the agreement. It, therefore, prays to set aside the same.;