- (1.) Leave granted. This is an appeal for setting aside the order dated 21-11-2008 passed by the Punjab and Haryana High Court whereby it allowed the writ petition filed by the respondent, quashed the action taken by the appellant Corporation under Section 29 of the State Financial Corporations Act, 1951 (for short "the Act") for recovery of its dues and also directed review of all pending cases in which penal interest has been compounded.
(2.) On an application made by the respondent for grant of loan for setting up an industrial unit in District Gurdaspur (Punjab), the appellant Corporation sanctioned a term loan of Rs 24.25 lakhs. For securing repayment of the loan, the respondent mortgaged immovable properties in favour of the appellant Corporation. As per the terms of agreement executed between the parties, the respondent was required to repay the loan together with interest on specified dates but it failed to adhere to the time schedule and a sum of Rs 2.70 lakhs only was deposited till 2002. Therefore, after issuing notice under Section 29 of the Act, the appellant Corporation took possession of the unit. This action was followed by notices dated 2-12-2002, 3-3-2003, 30-5-2003 and 29-8-2003, whereby the respondent was repeatedly called upon to pay the outstanding dues.
(3.) The respondent not only ignored the notices but also failed to avail the concession offered by the appellant Corporation vide letter dated 10-9-2004 to reduce the rate of interest and reschedule the payment of the outstanding dues. The attitude of non-cooperation adopted by the respondent in the matter of repayment of loan and interest forced the appellant Corporation to issue notice dated 26-6-2007 under Section 29 of the Act for taking over collateral security.;