S.B. Sinha, J. - (1.) The 1st respondent herein had set up a small scale industrial unit. The appellant herein is an establishment constituted under the State Financial Corporation Act, 1951. An application for sanction of loan in the Corporation was submitted by the respondent-Company. It was approved. The necessary agreements for loan were executed in terms whereof the properties of the 1st respondent were mortgaged.
(2.) It was decided to expand the existing unit and procure some machinery therefore. The Respondent also placed orders for other and further equipments/machinery necessary for expansion of the said scheme. Allegedly, the Managing director of the Corporation visited the 1st respondents factory on 29.1.1988 and having satisfied himself that there existed justification for expansion of the capacity utilization had agreed to sanction an additional term loan to the tune of Rs. 15 lakhs on terms and conditions mentioned therein, some of which are as under: Clause 7 : The concern will have to submit the following papers before the execution of the legal documents: (a) Income Tax Clearance Certificate under Section 230(A) of the Income Tax Act, 1961 in respect of the Directors. (b) Original title deed in respect of land. (c) Valid SSI, Registration Certificate. Clause 24 : The concern shall have to submit D.G.T.D., Registration Certificate. The agreement w as registered on 31.3.1988, although no D.G.T.D. Certificate had been furnished. According to the 1st respondent, its unit being a small one, furnishing of such certificate was not necessary and in any event, the same was not granted by the authorities concerned. The Corporation refused to advance any amount on the terms that the 1st respondent had failed to furnish the said certificate, which according to it was necessary.
(3.) A writ petition was filed by the respondent before the Patna High Court which was marked as C.W.J.C. No. 1691/1990. On a finding that the Corporation has waived its right to insist upon the Respondent to furnish such certificate in view of the fact that the agreement was registered, the Corporation was directed to disburse the term loan to the respondent- Company. The Corporation is, thus, before us. Mr. M.P. Jha, learned Counsel appearing on behalf of the Corporation, submitted that in view of the fact that as the respondent did not fulfil its obligation to repay the amount in terms of agreement in respect of the loan taken by it on 10.3.1983, 20.3.1986 and 24.3.1987, no Writ of Mandamus could issue. It was submitted that the Allahabad Bank, from which the 1st respondent had also taken loan, has also filed a suit for recovery of the loan granted to it. Mr. S.B. Sanyal, learned Senior counsel appearing on behalf of the respondent, on the other hand, contended: i) The Corporation could not have refused to fulfil its solemn promise to advance the additional subsidy of Rs. 15 lakhs. ii) The requirement of furnishing of D.G.T.D. Registration Certificate was not applicable in the case of a Small Scale Industry and in any event, the Corporation having registered the said documents, the order sanctioning the amount could not have been refused to be honoured. ;