Permod Kohli, J. - (1.) The petitioners herein had secured loan of Rs. 2,77,000/- for purchase of a truck from the Punjab State Financial Corporation (hereinafter referred to as "the Corporation") in the category of Ex-Servicemen. One Mansa Singh and Jaswant Singh stood as guarantors in respect of the aforesaid loan and also mortgaged their agricultural land as security. The Corporation filed application under Section 31 (i) (aa) of the State Financial Corporation Act, 1951 for recovery of the loan amount and interest accrued thereon in the Court of Additional District Judge, Fatehgarh Sahib. This application was allowed by the Additional District Judge vide judgment dated 19.12.2002 and an execution petition was filed by the respondent No.2 for recovery of the amount allowed by the court. The first execution application was dismissed for default and an application for its restoration also came to he dismissed. In the meanwhile, petitioner No.1 was offered the benefit of SEMFEX OTS scheme of the Corporation as a one time settlement. Petitioner No.1 was asked to pay an amount of Rs. 3,27,270/-. He paid an amount of Rs. 1.00 lac, but failed to pay the balance amount. On the further of for by the Corporation, the petitioner No.1 deposited the entire outstanding amount on 25.9.2007 against a proper receipt. It seems that under the arrangement between the State Government and the Corporation simple interest due an the loan amount was payable by the State Government. In so far as petitioner No.1 is concerned, he deposited the entire amount payable by him under the OTS Scheme. Petitioner No.1 requested for release of charge over the mortgaged property and to issue No Due Certificate vide representation dated 13.2.2008 which was followed by further representations. The grievance of the petitioner No.1 is that despite payment of the entire amount under the OTS Scheme, respondent-Corporation has failed to release the charge and also to withdraw legal cases against him. Petitioner No.1 has also placed on record information sought under RTO Act to demonstrate that in similarly situated cases, No Due Certificates have already been issued. This petition has accordingly been filed seeking a direction to the Corporation to issue No Due Certificate and also to release the security documents and to withdraw legal cases.
(2.) The Corporation in its reply has simply stated that the State Government was required to pay the simple interest on the loan amount and on failure of the State Government to pay interest, the documents could not be released. It has further been mentioned that in the meeting dated 23.11.2007, it has been decided to release the documents on payment of the interest amount by the State Government.
(3.) During the course of the argument, learned counsel for the petitioners has placed on record a letter dated 31.10.2011 where under the Corporation has committed to issue No Due Certificate and also to return the original documents, subject to withdrawal of the present case filed by the petitioners. He has also been asked to deposit Rs. 7,500/- on account of legal fee. Today the State of Punjab has also filed a short reply. In para 3 of the reply, it is stated that the action on the prayer of the petitioners is to be taken by respondents No.1 and 2. As regards the liability of the State Government is concerned, it is stated that in case any proposal is received from the Administrative Department and the Finance Department, the same shall be considered as per law. Learned counsel appearing for the Corporation has vehemently argued that the Corporation is entitled to interest from the State Government and unless the interest amount is released by the State Government, the Corporation is not bound to release the documents.;