- (1.) Petitioners have invoked writ jurisdiction of this Court challenging the action of the respondents taking over the unit of the petitioners under Section 29 of the State Financial Corporation Act.
(2.) Brief facts of the present case inter alia are that petitioner No.1 has taken a loan of Rs.38.60 lacs from Punjab State Industrial Development Corporation Limited-respondent No.2; petitioner has also availed a term loan of Rs.30.00 lacs from Punjab Financial Corporationrespondent No.1; petitioner No.1 has committed default in making payment of the loan amount along with interest, therefore, unit of the petitioner was taken over by respondent No.1 under Section 29 of the State Financial Corporation Act on 16.6.1995. On 16.6.1995 Rs.40,82,935/- were outstanding against the petitioner. On the request of the petitioners, respondent No.1 has granted benefit of One-time Settlement Scheme (hereinafter referred as 'O.T.S.') in a meeting held on 4.9.1995 and it was decided that petitioner No.1 would pay entire principal outstanding amount along with simple interest at documented rate within one year in instalments; last instalment was to be paid on or before 4.9.1996; petitioners had to furnish fresh collateral security by submitting title deed of immovable property; however, petitioners could not honour first O.T.S. for one reason or another; as per petitioners, despite deposit of title deed for the fresh collateral security and payment of first instalment of 25% of the amount settled possession of the unit was not restored, while as per the respondents, petitioners failed to furnish fresh collateral security and failed to supply title deed and further failed to make payment as per schedule of O.T.S. However, it is not in dispute that during the pendency of the present writ petition, pursuant to interim order dated 1.5.2002 passed by this Court, a joint meeting of the parties was held on 10.5.2002; in the meeting it was decided that company would pay Rs.48.20 lacs to respondent No.1 against the outstanding amount of Rs.97.43 lacs with further interest from 1.6.2002 and shall also pay Rs.31.50 lacs to PSIDC-respondent No.2 against the outstanding amount of Rs.92.67 lacs with further interest from 1.6.2002. However, petitioner was successful in making payment to respondent No.1, therefore, loan amount with respondent No.1 was adjusted and respondent No.1 had issued 'No Due Certificate' to the petitioner. Since, petitioner has failed to repay the amount to respondent No.2, as per the O.T.S., as decided in the meeting dated 10.5.2002, on the request of respondent No.2, possession and control of the unit was handed over to respondent No.2 by respondent No.1 in accordance with the tripartite agreement.
(3.) Mr. A.K. Jain, learned counsel appearing for the petitioners, has vehemently argued that handing over possession of the unit by respondent No.1 to respondent No.2 is not legal and petitioners are entitled for possession of the unit since petitioners have cleared the loan amount of respondent No.1. He has further argued that had possession of the unit been restored to the petitioners by respondent No.1, petitioners would have paid entire amount to respondent No.2 also. Mr. Jain further stated that if possession is restored to the petitioners and time is re-scheduled by this Court, entire payment shall be made.;