Prabha Shanker Mishra, CJ. - (1.) Since the proceeding under Article 226 of the Constitution of India has gone against the petitioner-appellants for reasons, inter alia, that no ground of ma/a fide is raised to question the validity of the notice which is issued under Section 29(1) of the State Financial Corporation Act, 1951 and after such sympathy which is ofter mixed up with equity, we have given our anxious consideration to the facts and the law on the subject. We are of the view that as repeatedly held by the courts. Section 29{1) of the State Financial Corporation Act, 1951 is a provision which the Corporation can alternatively use in lieu of a proceeding under Section '30 of the Act, The validity of the same cannot be questioned on any ground other than the ground that the notice is issued without jurisdiction and/or is vitiated by any round of mala fide. No ground of mala fide is raised. There is no ground also to show that the notice is non-est, for it is admitted that the petitioner-appellants are the borrowers and have defaulted in payment of the interest as well as the principal in accordance with law and the agreement with the Financial Corporation.
(2.) Sympathy, which is often, as we have indicated above, confused for equity, it appears, made the leraned single Judge to order that against the loan and interest thereon, the applicants shall produce a demand draft of Rs. 26,00,000/- and granted time for the said purpose. The appellants have, in the petition for stay before us, on the said event stated as follows: '38. On September 25, 1997 the learned trial Judge after hearing the learned Advocates appearing for the parties was pleased to direct your petitioners to make payment of Rs. 1.30,000/- to the said Corporation within October 15, 1997 and within 30th October, 1997 a further sum is to be paid totalling Rs. 2,00,000/- including mat of Rs. 1,30.000/- and in that case the said Corporation will review the position after giving opportunity of hearing. The learned trial Judge was also pleased to direct the matter to appear in the list one week after the vacation. His Lordship was also pleased to grant interim order of maintaining status quo in the meantime. The learned trial Judge was also pleased to direct your petitioner to pay a sum of Rs. 1,00,000/- by November 30, 1997 in case the matter is not heard out of the Hon'ble Court, The learned trial Judge was also pleased to grant liberty to the clients of Mr. Labiri. learned Advocate to make application for addition of parties. '39. Your petitioners state that challenging the said order of the Hon'ble Court dated September 25,1997 a Mandamus Appeal being M.A.T. No. 3527 of 1997 had been preferred before the Hon'ble Bench of this Hon'ble Court. On Jaunary 29, 1998 Their Lordships of the Hon'ble Justice Barin Ghosh was pleased to dismiss the said application for stay as well as the appeal itself. After the dismissal of the said appeal the writ application being W.P. No. 21808 (W) of 1997 had been mentioned before His Lordship the Hon'ble Justice Ruma Pal with notice to the learned Advocate for the respondents. '40. Your petitioners state that during the pendency of the above matter before His Lordship the Hon'ble Justice Ruma Pal the respondent authorities had taken possession of the rice mill on January 6, 1998. By doing so the respondents authorities intentionally and consciously made an attempt to frustrate the very porpose of the writ petition. During the pendency of the above matter before this Hon'ble Court your petitioners submitted a representation before the Chairman of the West Bengal Financial Corportion on Feburary 27, 1998 praying for one time settlement of the loan account. In such representation it was categorically stated that your petitionrs will pay-Rs. 10,11,000 towards principal and a sum of Rs. 10,00,000/- towards interest at a time so that the loan account of your petitioner may be settled by way of one time settlement. Your petiioners state that in similar circumstances the respondent Corporation had granted relief by making one time settlement by way of remission of interest and, therefore, your petitioners expected similar treatment from the respondents Corporation but the said representation was not considered and the same was kept pending.' A copy of the said representation for one time settlement is annexed hereto and marked with letter-J. '41. Your petitioners state that considering such representation for one time settlement (Annexure-J to the application) the respondent authorities had published a sale notice in daily Statesman in its issue dated March 7, 1998 for selling the rice mill to the interested parties. By publishing such sale notice the respondent authorities have made an attempt to sell the said rice mill which has been set up by the petitioner No. 1 after making huge investment from its limited resources and after taking financial assistance from the respondent Corporation as a small scale industries. Such action of the respondent authorities is contrary to its own policty in relation to the wave of industrialisation as propagated by the State Government. A copy of the sale notice as published in the daily Stateman on March 7, 1993 is annexed hereto and marked with letter-K. '42. Your petitioners state that in view of the said sale notice (Annexure-K to this application) your petitioner became very frightened as the source of livelihood on the basis of the said unit would be lost for ever, In view of such circumstances it was decided by your petitioners to modify the earlier proposal of settlement.(Annexure-J to this application) by making payment of Rs. 26.00.000 at a time to the said Corporation for the interest of one time settlement of the loan account. By a letter dated March 25, 1998 your petiitoners made a representation to the respondent No. 4 in modification of the earlier proposal dated February 27, 1998 whereby and whereunder your petitioners had proposed to make payment of Rs. 26,00,000/- at a time to the respondent Corporation for the interest of one time settlement of loan account. A copy of the said modified proposal of your petitioners dated March 25, 1998 is annexed hereto and marked with letter-L. '43. Your petitioners state that on March 27, 1998 the writ petition being W.P. No. 21808 (W) of 1997 was taken up for hearing before His Lordship the Hon'ble Justice Ruma Pal. At the said hearing it was submitted on behalf of your petitioners that the proposal (Annexure-J to this application) may be considered by the respondent Corporation. It was further submitted that in view of the payment of Rs. 10,71,000/- by your petitioners against the principal sum of Rs. 20,82.000/- the said proposals of your petitioners may be considered for the ends of justice and for the rescue of your petitioners from such difficulty. '44. Your petitioners state that the learned trial Judge without directing the respondents to consider the said modified proposal (Annexure-L to this application) had directed your petiioner to bring a bank Draft to the tune of Rs. 26.00,000/- beofre this Hon'ble Court on April 1, 1998 to show bona fide. Your petitioners state that the learned trial Judge should have considered the hardship of your petitioners in bringing a Bank Draft of Rs. 26,00,000/- within a period of four days as and when the financial structure or the economy is not strong and. therefore, it was an impossible feature on the part of the petitiners in producing a Bank Draft of Rs, 26,00,000/- within the said period. '45. Your petitioners state that on April 6, 1998 the above matter came up for hearing before His Lordship the Hon'ble Justice Ruma pal and it was submitted on behalf of your petitioners that in absence of full and final settlement of the loan account it is not possible for your petitioners to produce a Bank Guranatee of Rs 26,00,000/- before, this Hon'ble Court, it was futher submitted that the proposal for making settlement of the loan account cannot be frustrated by directing, your petioners to make payment of Rs, 26,00,000/- to the repondent Corporation. Your petitioners state that the unit of your petitoners has become very sick but still then your petitioners made their best effort to collect manoey by taking loan for the interest of one time settlement but in view of the non-finalisation of the proposal of one time settlement your petitioners became very much upset in making payment of such amount of Rs. 26,00,000/- to the said Corporation, "46. Your petitioners state that as the said Bank Draft of Rs 26,00,000/- could not be produced by your petitioners before the Hon'ble Court on April 1, 1998 the leraned trial Judge was pleased to dismiss the writ petition without allowing your petitioners to make further submissions and the same had caused a serious prejudice to your petitoners. 47, Your petitioners state that the learned trial Judge failed to appreciate that in view of the modified proposal of the petitioners for making one time settlement of the loan account by making payment of Rs. 26,00,000/-, no consideration has been effected by the respondent authorities and. therefore the learned trial Judge should have directed the respondents to consider the said proposal of the petitioners for marking full and final settlement of the Can account instead of directing the petition ers to make payment of the said sum of Rs. 26,00,000/- by was of a Bank Draft by keeping pending the consideration of such propos all '48. Your petitioners state that the learnad trial Judge failed to appreciate that this Hon'ble Court in exercise of its, Writ Jurisdiction cannot take responsibility for settlement of the loan account on the basis of the modified proposal of the petitioners by making payment of Rs. 26,00,000A by way of Bank Draft towards showing bona fide in absence of any settlement ot the account should have directed the respondent Corporation to consider the said modified proposal at the earliest opportunity. '49. Your petitioners state that the learned trial Judge faded to appreciate that during the pendency of the above writ petition in this Hon'ble Court the respondent Corporation had taken possession of the unit of petitioners and thereafter a public notification for selling the unit in Daily Statesman in its issue dated March, 7, 199S and in that view of the matter the learned trial Judge should have directed the respondent Corporation to consider the said proposal of the petitioners regarding settlement of the loan account without causing any frustration of the proposal of the petitioners. '50. Your petitioner state that the learned trial Judge failed to appreciate the true aspects of the proposal of die petitioners for making one time settlement of the loan account by way of remission of interest accrued in such loan account in as much as the petitioners have been highly affected by not starting the unit well within time due to various reasons but still then the petitioners have made payment of Rs. 10,71,000/- against the principal loan of Rs. 20,82,000/- to the respondent Corporation and, therefore, the order of the learned trial Judge is wholly untenable in the facts and circumstances of the case. 51. Your petitioners state that the leaned trial Judge failed to appreciate that due to non-consideration of the proposal regarding one time settlement of the loan account and in absence of finalisation of the same the right and interest of the petitioners have been seriously jeopardised in view of the directions of the learned trial Judge for making payment of Rs. 26,00,000/- to the respondent Corporation and, therefore, the order of the learned trial Judge is wholly bad in law and the same is liable to be set aside. '52. Your petitioners state that the order of the learned trial Judge is wholly bad in law and the same is liable to be set aside in as much as the learned trial Judge should have directed the respondent Corporation to consider the proposal of the petitioners for making one time settlement instead of directing the petitioners to bring a Bank Draft of Rs. 26,00.000/- to this Hon'ble Court and the same had created a great difficulty to the petitioners in producing such Bank Draft without the final settlement of the loan account as proposed by the petitioners.
(3.) Before us. however, it is urged and a letter issued by the Financial Corporation is sought to be introduced accordingly that the petitioner-appellants as one time settlement have agreed to pay Rs. 26,00,000/- and without considering the same, and it appear, going by the earlier offer of the petitioner-appellants to pay Rs. 20,00,000/- the Corporation has rejected the proposal, but called upon the petitioner-appellants for further discussions.;