- (1.) Leave granted.
(2.) The question in this civil appeal by special leave is - whether Bihar State Industrial Credit and Investment Corporation Limited (hereinafter referred to as "BICICO") acted mala fide and in breach of Section 29 of the State Financial Corporation Act, 1951 by transferring the assets of the debtor company on 19-3-2002 and executing the agreement dated 26-4-2002 with M/s. Stichworth Exports Pvt. Ltd. (respondent No. 4).
(3.) The facts giving rise to this appeal are as follows : In 1982, a company by the name M/s. Katihar Flour Mills (P) Ltd. was incorporated to take over the assets and business of a partnership firm M/s. Katihar Flour Mills, a business conducted by Jeloka group. The said company was promoted by Gopi Krishna Jeloka (since deceased), Binod Jeloka and Pradeep Jeloka (since deceased). The company is engaged in the business of manufacturing, processing, buying and selling of all kinds of grains and wheat products. The flour mill is the main asset of the company. It is located in Katihar, Bihar. On 16-5-1988, a term loan of Rs. 90 lacs was taken by the said company from BICICO, a State Financial Corporation within the meaning of the State Financial Corporation Act, 1951 (hereinafter referred to as "the 1951 Act") and a charge was registered under the Companies Act, 1956. At this stage, it is important to mention that Central Bank of India had advanced working capital of Rs. 1.40 crores to the company and therefore, had a second charge on the plant and machinery of the company. On 20-10-1993, an agreement was approved by the share-holder of the company in terms of which three directors belonging to Jeloka group resigned and three nominees of the Jain group were inducted. Under the said agreement, 50% of the paid up capital was transferred to Jain group, which deployed Rs. 1.24 crores in the company. Accordingly, the appellant became a share-holder of the company. In January, 2001, Central Bank of India Instituted case No. 2 of 2001 against the company and its directors for recovery of its dues amounting to Rs. 1.47 crores and for enforcement of security. On 2-2-2002, BICICO respondent No. 2 gave notice under Sections 29 and 30 of the 1951 Act for recovery of its dues of Rs. 28.85 lacs. On 22-2-2002, respondent No. 2 issued a sale notice for auction of the flour-mill at Katihar in Bihar. Under the said notice, the last date for submitting tenders was 21-3-2002. The tenders were to be opened on 22-3-2002. On 17-3-2002, the Jeloka Group wrote a letter to respondent No. 2 that the company has approached a financier M/s. Stichworth Exports Pvt. Ltd. who was willing to pay the dues of respondent No. 2 against transfer of the assets of the company in their favour. By a take over notice dated 18-3-2002, respondent No. 2 took possession of the assets of the company. The possession receipt was signed by respondent No. 3. On 19-3-2002, M/s. Stichworth Exports Pvt. Ltd., respondent No. 4, wrote a letter to respondent No. 2 offering to acquire the assets of the company for Rs. 28.85 lacs plus the dues of Central Bank of India amounting to Rs. 1.70 crores. On the same day, respondent No. 4 made a down payment of Rs. 28.85 lacs and the assets were handed over by respondent No. 2 to respondent No. 4. On 20-3-2002, the appellant herein met the law officer of respondent No. 2. Pursuant to the sale notice dated 22-2-2002, the appellant submits his tender on 21-3-2002. He deposits Rs. 1 lac as earnest money. On 22-3-2002, he pays Rs. 28.85 lacs representing the entire dues of respondent No. 2. Despite payment of the full dues by the appellant, respondent No. 2 enters into agreement of sale of assets in favour of respondent No. 4. Aggrieved, appellant moves the High Court on 21-5-2002 under Article 226 of the Constitution inter alia challenging the validity of the agreement on the ground of collusion between respondents Nos. 2, 3 and 4. On 22-5-2002, respondent No. 2 returns the earnest money paid by the appellant alleging that he has withdrawn his tender. The appeal therefrom was also dismissed on 3-9-2002. Hence, the appellant, representing the Jain group, has come before this Court in appeal by special leave.;