PALOK BASU - (1.) The petitioner Pawan Kumar Jain admittedly a guarantor on behalf of respondent No. 4 M/s. Shri Gayatri Alloy Steels Pvt. Ltd. has challenged the citation dated 7-8-1997 for the sum of Rs. 2,02,22,741.99 paise which has been issued in accordance with the provisions contained in the Uttar Pradesh Public Moneys (Recovery of Dues) Act, 1972 (for short the Recovery Act).
(2.) Shri Ravi Kiran Jain assisted by Shri Pramod Kumar Jain has been heard at great length in support of this writ petition. Shri Murli Dhar, learned senior Advocate has argued the matter on behalf of the Paradeshiya Industrial Investment Corporation of U. P. Ltd. (for short, PICUP). Since the time ran out, in-fact the arguments proceeded and concluded for about half an hour more than the Court hours, the writ petition was dismissed with the order :- "For the reasons to be furnished on Monday the 1/09/1997, the writ petition is dismissed summarily."Hence the reasons are supplied.
(3.) Shri Ravi Kiran Jain has argued principally three points which are as under :-First argument of Shri Ravi Kiran Jain was that the present citation indicates an arbitrary action on the part of PICUP in as much as the action taken against the guarantor is unfair particularly because Section 29 proceedings under State Financial Corporation Act have been initiated against the original borrower M/s. Shri Gayatri Alloy Steels Pvt. Ltd., a company registered under the Indian Companies Act in which the petitioner was promotor director but had withdrawn himself by resignation later on. Shri Murli Dhar pointed out that while it is true that a notice has been issued under Section 29 of the State Financial Corporations Act, 1951 (for short the S.F.C. Act) but possession has not yet been taken over and the original borrower had not only failed to pay the principal amount with interest in due course of time but has also failed to honour and make payments in accordance with the one time settlement (O.T.S.).;