- (1.) B. M. Lal, J. Heard learned counsel for the parties.
(2.) BY this petition under Article 226 of the Constitution, petitioner has prayed for issuance of an order, direction or writ in the nature of certiorari quashing the sale of the Unit M/s. Modern Rice Mills, Bindki, Fatehpur executed in favour of respondent No. 3 Sri Ved Prakash Gupta by the respondent Nos. 1 and 2, the U. P Financial Corporation, Kanpur and Sri L. N. Pandey, Deputy General Manager (Recovery), U. P. Financial Corporation, Kanpur. It appears that the petitioner M/s. Bharat Modern Rice Mills, Fatehpur approached the U. P. Financial Corporation (for short the Corporation) for a term loan to run a Rice Mill which was sanctioned by the Corporation to the tune of Rs. 3. 34 lacs in the year 1973. An agree ment was arrived at between the petitioner and the Corporation according to which in the event of default in the payment of loan, the Corporation was entitled to recover the entire loan. It further appears that for certain reasons petitioner could not repay a single paisa towards the said load in accordance with the terms and conditions of the said agreement despite opportunities for the same. Conse quently notices under Section 29 of State Financial Corporation Act were served on the petitioner and the possession of the Unit was taken over by the Corporation after completing necessary formalities. Ultimately on 30-12-1988 an advertisement was published in local daily newspaper 'dainik Jagtan' Kanpur for the sale of the Unit and the offers received in pursuance thereof were opened before a Divisional Committee of the Corporation and lastly the Unit was sold and possession was handed over to the respondent No. 3 by the Corporation. Hence this petition.
(3.) LEARNED counsel for the petitioner contended that entire proceed ings under Section 29 of the Act are illegal in as much as the respondent No. 1 did not apply its mind to the various courses open to it under Section 29 of the Act and the respondent No. 1 did not consider even the course of leasing out the mill after taking it over, to the petitioner to run it for a season. Learned counsel further contended that the whole exercise of the provisions of Section 29 of the Act is arbitrary and unreasonable and the provisions of Section 29 of the Act are ultra vires.;