- (1.) THE petitioner in this case has challenged the vires of Section 29 of the State Financial Corporations Act, 1951 (hereinafter referred to as "the Act"), and, consequently in quashing the notice issued under Section 29 of the Act dated October 19, 1989 (annexure P-10), besides being arbitrary and erroneous.
(2.) THE facts giving rise to this writ petition are as follows : The petitioner is registered partnership firm and one of its partners, namely, K. K. Bhandari, who had filed the writ petition floated the present partnership concern known as Hans Tools Co. at Mohali. On February 23, 1979, the petitioner was allotted a two-acre plot at Mohali by the Estate Officer, Urban Estates, Punjab (respondent No. 2), for a consideration of Rs. 1,59,720 which was payable in instalments. The petitioner, being in need of financial assistance, approached the Punjab Financial Corporation (respondent No. 1) constituted under the Act for a term loan of Rs. 13 lakhs and for special capital assistance to the tune of Rs. 72,000. The Corporation (respondent No. 1) agreed to the grant of a loan of Rs. 12,30,000 and Rs. 72,000 as special capital assistance subject to mortgage of immovable property. A regular mortgage deed in respect of plot No. A-13, Phase VI, Mohali, which was allotted to Sh. K. K. Bhandari, a partner of the petitioner-firm, as aforementioned, was executed on March 31, 1980, between the petitioner and the respondent-Corporation, which is annexure P-l. Out of the sum of Rs. 12,30,000 being the loan amount, the actual loan disbursed to the petitioner was Rs. 10,56,000, while the special capital assistance paid to it by respondent No. 3, the Central Bank of India, Sector 17-B, Chandigarh, was Rs. 72,000.
(3.) THE amount of the loan and the special capital assistance as aforementioned was to be repaid by the petitioner in 17 half-yearly instalments, the first instalment beginning on September 15, 1981, and the last one to be paid on September 15, 1989. However, the petitioner could not adhere to the schedule of repayment of various instalments and applied for rescheduling of the instalments to the Corporation and sought the assistance of respondent No. 3, the bank, for raising further loans in order to nurse its unit. Respondent No. 3 agreed to give the assistance subject to a no objection certificate from the Corporation regarding creation of a second charge. The Corporation gave a no objection certificate to the petitioner regarding the creation of a second charge in favour of respondent No. 3 as per the terms and conditions mentioned therein.;