Bhagwan Din, J. - (1.) The petitioner set up an industry in the name and style of 'M/s. Pushp Engineering Works' in the Industrial Estate, Etah which was registered under the Industries Act. At the request of the petitioner, the U. P. Financial Corporation (hereinafter referred to as the 'Corporation') sanctioned a loan of Rs. 4,97,000 on 12.1.1989. The terms and conditions of the loan and the manner of repayment of the loan are contained in the agreement and hypothecation deed executed by the petitioner. Later on the proposal of the loan was cancelled to the extent of Rs. 81,000 for want of adequate security and requisite papers, namely, registration certificate and Chartered Accountant's certificate, etc. Thus, an amount of Rs. 4,16,000 only was disbursed to the petitioner. The petitioner did not make any payment as stipulated in the agreement and hypothecation deed whereupon the Corporation took steps on 1.2.1993 to take over the unit under Section 29 of the State Financial Corporations Act (hereinafter referred to as the 'Act') for recovery of an amount of Rs. 5,72,824. The officers of the Corporation inspected the unit and found that the plant and machinery of the unit was removed by the petitioner from the mortgaged site. Therefore, the Corporation lodged a report on 17.12.1993 with the local police. On 16.11.1995 the possession of the unit was taken over by the Corporation, Before the Corporation took the possession of the unit, it once inspected the unit and found that the petitioner had removed certain more assets from the site. Therefore, the Corporation lodged another report on 31.1.1996. The Corporation by a public notice invited persons interested to purchase the assets of the unit disclosed therein. The respondent No. 3, on coming to know about the taking over of the possession of the unit for disposal by sale, offered to purchase the unit for Rs. 4,00,000. The Corporation did not accept the offer as such and issued a tender notice by advertisement in the daily newspaper 'Dainik Jagran' on 24.3.1996. In pursuance thereof, one Ram Narain Misra, the owner of M/s. Ganga Machinery Works offered Rs. 4,35,000 as cost of the unit. The offer as such was approved on 6.4.1996. In the meantime, the petitioner contacted the authorities of the Corporation at Head Quarter and made a proposal of one time settlement. The Corporation through a telegram informed the petitioner to deposit Rs. 2,00,000 latest by 13.5.1996 positively, if he was interested in his O.T.S. proposal. The petitioner did not react to the call of the Corporation. The Corporation, therefore, considered that the petitioner was not really interested for settlement. So also Ram Narain Misra, the owner of M/s. Ganga Machinery Works disappeared. Seemingly no option was left with the Corporation except to call the respondent No. 3 for negotiation so as to reach to the level of Rs. 5,75,824 which was due against the petitioner. Ultimately, a negotiation was arrived at for Rs. 4,75,000. The petitioner Instead of depositing Rs. 2,00,000 under the O.T.S. scheme, filed a Writ Petition No. 18430 of 1996 and sought relief that a writ, order or direction in the nature of mandamus be issued commanding the respondents (General Manager, Regional Manager, Corporation and General Manager (Industries) Etah) to give a proposal demanding 1/4 of the total loan plus 50% of the simple interest accrued on it, in four equal six monthly instalments for bringing the industry of the petitioner under O.T.S. Scheme and also to issue a writ, direction or order in the nature of mandamus commanding them to restore the possession of the industry to him. The relief sought was grounded on the claims that the telegram did not specify or indicate that in case the amount will be deposited, the industry will be brought under O.T.S. Scheme. Therefore, depositing of the said amount on the basis of the telegram will prejudice the Interest of the petitioner, that the amount demanded by the Corporation was excessive, the petitioner may be asked to deposit Rs. 1,35,000 only. So also no reasonable time was granted to him to deposit the said amount. The Court, by an interim order dated 23.5.1996, directed to deposit Rs. 2,00,000. The petitioner did not deposit the money even after the order of the Court, hence the Corporation had no option except to approve the offer made by the respondent No. 3 and sell the unit in his favour. The Corporation sold the unit in favour of the respondent No. 3 and handed over possession thereof. Thus, the chapter was finally closed.
(2.) Battled petitioner refused to lose the battle and once again tried his luck by means of this petition on the plea that the papers having been sent to the Collector for necessary recovery by public auction, the sale of the factory by private negotiation to respondent No. 3 is, therefore, against the law, discriminatory and arbitrary, that the petitioner has been deprived of his right to challenge the sale proceedings by auction and save his factory by depositing the dues and that the factory has been sold grossly for a low amount whereas the assets of the factory were more than Rs. 10,00,000 and the offer of the respondent No. 3 was only for Rs. 4,75,000. It is prayed that the respondents may be directed to cancel the sale of the factory which has been done by private negotiation and the Corporation be directed to send the papers to the Collector for recovery of its dues by public auction.
(3.) The respondent No. 3 promptly filed a counter-affidavit. The contents and contours of the counter-affidavit are that the Corporation very fairly with all bona fides acted in strict compliance of the provisions of the Act. The Corporation gave opportunity to the petitioner to enter into O.T.S. Scheme but it backed out and not even honour the order of the Court made in the Writ Petition No. 18430 of 1996. The Corporation, therefore, approved the offer of the respondent No. 3 and transferred the possession of the unit to him.;