SATISH CHANDRA, DEVI PRASAD SINGH, J. - (1.) THE brief facts giving rise to the present writ petitions filed under Article 226 of the Constitution of India, relate to repayment of loan by the borrower to the Pradeshiya Industrial and Investment Corporation, Uttar Pradesh (in short the PICUP), as well as auction and sale of the industry on account of default of payment of loan.
(2.) ORIGINALLY , M/s. U. P. Asbestos Limited (in short the UPAL) was engaged in manufacture and sale of asbestos sheets and cement from its industry situate at Mohanlalganj, Lucknow. It was enjoying the benefit of trade tax exemption under Section 4-A of Trade Tax Act, 1948 for a period of 8 years, vide letter dated 23. 10. 2000. Against the said exemption, under Section 8 (2-A) Tax Deferment Liability was granted and against that, the PICUP granted "interest free trade tax deferment loan" to UPAL for the period 1996-97 to 1999-2000. The properties were mortgaged and the second charge was created by the UPAL on all their movable and immovable assets, like assets of asbestos and cement unit. Upal sold its cement unit situate at Mohanlalganj, Luckow to M/s. U. P. Cement Limited (in short UPCL) after obtaining due permission from PICUP with the rider that second charge on the property of Upal shall continue with PICUP and the UPCL shall not claim benefit of the deferment loan for the period subsequent to the sale of cement unit to UPCL in terms of original agreement between the Upal and the PICUP.
(3.) SUBJECT to the above condition, a Memorandum of Understanding (in short MOU) was executed between the UPAL and UPCL. The cement unit of UPAL was sold to UPCL for Rs. 400 lakhs. Out of the sale consideration, Rs. 275 lakhs of balance amount of the term loan along with interest from the date of transfer of loan, was agreed to be paid by the UPCL to Industrial Development Bank of India (in short IDBI). The balance of amount of Rs. 125 lakhs was agreed to be paid to UPAL in instalments by 26. 11. 1999. Under the MOU dated 27. 7. 1999, the UPCL was to get possession of the cement unit after payment of sale consideration including expenses regarding compliance of formalities.;