R. R. K. Trivedi, J. - (1.) IN this writ petition counter and rejoinder affidavits have been exchanged between the parties and learned counsel . for the parties have agreed that the writ petition may be heard and finally disposed of at this stage.
(2.) THIS petitioner has challenged the action of the respondent rerving on him a notice under section 29 of the U. P. Financial Corporation Act, 1951 (hereinafter referred to as the Act) and demanding from him Rs. 4 24298.60 alleging that the petitioner has committed contravention of the terms of the deed and has committed default in payment of the loan as per Schedule mentioned in the sale deed and thus he is liable to pay the aforesaid amount within the period stipulated in the notice failing which further action for the transfer of assests shall be taken. The facts, in brief, giving rise to the aforesaid controversy are that one M/s Raj Laxmi Textiles, Kanpur had taken loan from the U. P. F. C., hereinafter referred to as the Corporation, for establishing some industrial unit at Panki Industial Area no. H-44 and H-45. The unit was established. However, the borrower failed to pay the instalments. Consequently, action under section 29 of the Act was taken. The petitioner offered to purchase vacant land and building for a consideration of Rs. 3,40,000/-. The offer made by the petitioner was accepted on certain terms and conditions by the Corporation which was communicated vide letter dated 4-6-1986, annexure I to the writ petition. The terms and conditions contained in the aforesaid letter are being quoted below : 1. 25% shall be paid as down payment of the offered amount immediately. 2. The balance unpaid amount shall be paid in five years with the gestation period of one year in equal half yearly instalments which will near current rate of interest from the date of taking over the possession of the unit. 3. Statutory liabilities on the fixed assests, if any, shall be paid by you and the Corporation shall not be liable for the same. Besides the premium on land to UP SIDC and dues of UP SEB will also be payable by you. The unit may be transferred as per rules of the Corporation.
(3.) THE offer will remain vaiid up to one month from the date of this letter. Earnest money will be forfieted if you fail to deposit down payment within stipulated period. 4. As is clear from the aforesaid terms and conditions the offer made by the Corporation to transfer the land and building was to remain valid up to one month from the date of the letter and the petitioner was to comply with condition no. 1 within a period of one month- Petitioner deposited the requisite amount of Rs. 85,000/- by 12-6-1986. Thus he complied with his part of the obligation. THEreafter obligation on the part of the Corporation was to hand over possession and to execute a transfer deed. It appears that vacant possession of land and building was sought to be transferred on 21-6- 1986 but as several items of machinary were lying there, vacant possession could not be given and the petitioner was directed to take possession of the machines also lying therein and was required not to hand over the same to M/s Raj Laxmi Textiles without the permission of the Corporation. Shri Raj Kumar, owner of M/s Raj Laxmi Textiles in the meantime filed writ petition in this court challenging the action of the Corporation in which an interim order dated 10-7-1986 was passed to the following effect : "THE Financial Corporation will be entitled to sell half portion of the vacant land as has been offered by the petitioner. However, till 11th August, 1986, the factory and the remaining half portion of the land shall not be sold." 5. THE aforesaid interim order continued in effect up to 18-1-1988. THE effect of the interim order was that neither vacant possession of the land and building could be given to the petitioner nor the sale deed could be executed. After the stay order was vacated on 18 -1-1988, the sale deed was executed in favour of the petitioner on 5-2-1988. THE sale deed is annexure IV to the writ petition. A perusal of the sale deed will show that a repayment schedule of the remaining amount of Rs 2,50,000/- was contemplated between the parties and this amount could be paid by the petitioner in nine instalments by the period ending on 24-12-1991. Condition no. 3 of the transfer deed is also very relevant for the controversy between the parties which reads as under : "3. That the Vendor do hereby confirm that on and from the date of execution of these presents, the borrorwer and the Vendor shall be deemed to be mortgagee for balance unpaid amount till date of its payment with interest and other dues of properties, as mentioned in the schedule attached here to and the Vendee acquires good marketable title over the said property, to which the Borrower had hitherto possessed (Except charge of Vendor for unpaid amount as aforesaid)." In paragraph 7 of the sale deed, annexurr IV, also the date of possession has been mentioned as 21-6-1986. The respondent Corporation has served a notice dated 18-12-1989, annexure IX, on the petitioner under section 29 of the Act. The petitioner has impugned the validity of this notice on the ground that be had already paid Rs. 85,000/- and thus the principal amount shown as Rs 3,40,000/- in the notice is incorrect. The second contention is that the amount of interest has been illegally charged from the alleged date of possession, i.e. 21-6-1986 and the amount of interest shown is incorrect. The third challenge of the petitioner against the said notice is that he deposited certain amounts which have not been taken into account. The amount of such deposits is Rs. 61,250/- as shown in annexure 8 and 8-A to the writ petition;