- (1.) We have heard Sri A.K.Gupta, the learned counsel for the petitioner and Sri A.A.Khan, the learned counsel for the Uttar Pradesh Financial Corporation Ltd.(hereinafter referred to as the Corporation).
(2.) The facts leading to the filing of this writ petition is, that the Corporation gave a loan to M/s Hindustan Coir Products Ltd. and, in lieu thereof, the said company mortgaged its property situated at A-36, Industrial area Sikandrabad, District Bulandshahr. This company could not pay the loan amount and, accordingly, recovery proceedings under Section 29 of the State Financial Corporations Act, 1951 (hereinafter referred to as the Act) was initiated against the said company. The Corporation took possession of the mortgaged property, which was put to auction in which the petitioner's bid was accepted. The Corporation executed a sale deed dated 08.01.1992 in favour of the petitioner for a sum of Rs. 33.50 lakhs. Upon a down payment of Rs. 13.40 lakhs, the balance amount of Rs. 16.75 lakhs was to be paid by the petitioner in five installments. Much depends upon the recital made in the sale deed. Relevant paragraphs and Schedule-II of the sale deed are extracted hereunder: "3. The borrower for one reason or the other could not repay the said loan together with interest and other charges to the U.P. Financial Corporation as per schedule of repayment mentioned under the terms of mortgaged documents. The Corporation had accordingly initiated recovery proceedings under the provisions of section 29 of SFC's Act no. 63 of 1951 (Central Act) and in exercise of its power under the said section 29 of the SFC's Act decided to take over the physical possession of the said unit and to re-transfer the assets land building and plant and machinery (other than the share of the company if applicable) of the said Industrial concerned namely M/S Hindustan Coir Products Ltd. situated at A-36 Industial Area, Sikandrabad Bulandshahr in favour of Vendee M/S Super Coir India in consideration for a sum of Rs. 33.50 lacs out of the value of the land and building is Rs. 22.96 Lacs. 5.That the Vendor do hereby confirm that the property transferred through this sale deed in favour of the Vendee is free from all charges or encumbrances except the unpaid dues of the Vendor presently amounting to Rs. 16.75 lacs which is a part of the sale consideration together with interest at the rate of 21% per annum with quarterly rests payable on 20th March, 20th June, 20th September and 20th December, of each English Calender year and other charges which the Vendee has agreed to repay as per revised repayment programme (given at Annexure II) or as may be decided by the Vendor. Further 7.5% interest shall be charged extra for the defaulted period on the defaulted amount. The borrower shall also pay interest tax @ 3% or any rate which may be applicable on the gross amount of interest due on quarterly basis i.e. 20th March, 20th June, 20th September and 20th December every year or at the time of making payment on account interest, if the borrower fails to pay interest tax on the rates specified hereinbefore, the same shall be adjusted from the amount paid by the such borrower either on account of interest or principal. The interest tax shall be in addition to the rate of interest as agreed by the borrower hereinbefore. 9. In the event of purchaser fails to adhere the terms and conditioins of this agreement in the manner prejudicial to the interest of the Vendor, the Vendor without recourse in general law, shall be entitled to take over the possession of the assets hereunder in exercise of rights conferred under State Financial Corporation Act or U.P. Public Money Act, 1972 without being answerable (rest of the contents are not legible). JUDGEMENT_247_LAWS(ALL)12_2014_1.html
(3.) The petitioner alleges that upon the down payment of Rs. 13.40 lakhs, the possession of the property was given and since the last installment along with interest could not be paid by the petitioner, the proceedings under Section 29 of the Act was initiated. The Corporation, eventually, took possession of the unit in the year 2003 and sold of the property in the year 2005 for a sum of Rs. 110.25 lakhs. The petitioner approached the Corporation claiming the excess amount received by the Corporation from the sale of the property. Since the same was not done, the petitioner filed a writ petition no. 791 of 2007, which was disposed of by an order dated 12.01.2007 directing the Corporation to pass a speaking and reasoned order on the representation made by the petitioner. Based on the said direction of the Court, the Managing Director of the Corporation passed an order dated 09.04.2007 rejecting the request of the petitioner for refund of the excess amount. The petitioner, being aggrieved by the said order, has filed the present writ petition for the quashing the order of the Managing Director dated 09.04.2007 and for refund of the excess amount along with interest.;