M.K.SODHI, J. - (1.) The Punjab Financial Corporation (for short, 'the Corporation') sanctioned in July, 1979 a loan of Rs. 5 lacs to the petitioner which had set up a rice sheller in village Pulpukhta, Tehsil Dasuya, District Hoshiarpur. However, a sum of Rs. 4.5 lacs only was availed and in order to secure the loan the petitioner had mortgaged with the' Corporation the land and rice sheller set up thereon. The agreed rate of interest was 16.5 per cent and the loan was repayable in half yearly instalments commencing from 16/12/1979. A sum of Rs. 1,48,879.00 is said to have been repaid to the Corporation and thereafter the petitioner defaulted in the payment of instalments and could not adhere to the agreed schedule of payment. The Corporation recalled the loan under Section 30 of the State Financial Corporations Act, 1951 (hereinafter called 'the Act') and thereafter filed a petition before the District Judge under Section 31 of the Act for the recovery of Rs. 5,27,328.92 Ps. along with future interest at the agreed rate by the sale of the mortgaged property. The petitioner was allowed on 10/10/1983. The order of the District Judge was executed by putting the mortgaged property to sale by a public auction. On 19/07/1984 the Corporation was granted permission to participate in the auction proceedings. The mortgaged property was purchased by the Corporation on 7/07/1985 for Rs. 3.97 lacs and the amount was credited to the account of the petitioner. The sale in favour of the Corporation was confirmed by the Court on 19/08/1985 and a sale certificate was issued in its favour on 4/02/1986. It is further not in dispute that the Corporation took possession of the property in March, 1986.
(2.) The Corporation having become the absolute owner of the property, advertised the same for sale. An advertisement appeared in the press on J 7/06/1986 but the sale did not go through. On learning that the Corporation intended to sell the property through an auction the petitioner approached the Corporation to settle the matter and return the property to it. Negotiations started between the parties. The petitioner claims that in pursuance of the verbal direction issued by the then Managing Director of the Corporation it deposited in June, 1986 a sum of Rs. 50,000.00 by way of a bank draft which was credited to the account of the petitioner only in January, 1987. It appears that during the course of negotiations which were yet to be finalised the bank draft was kept by the Corporation and when its validity was about to expire it was got encashed and the amount credited to the account of the petitioner. The negotiations did not materialise as is clear from the letter dated 11/08/1986 (Annexure P6 with the writ petition) which is a letter written by the petitioner to the Corporation. It was stated therein that a sum of Rs. 50,000.00 had been deposited with the Corporation as earnest money along with an offer to buy the unit back but since the same had not been accepted by the Corporation the petitioner requested the return of the bank draft or the amount of Rs. 50,000.00. It is further claimed by the petitioner that negotiations between the parties for the purchase of the property by the petitioner continued though this fact is disputed on behalf of the Corporation and there is nothing on the record to indicate anything either way. The Corporation published another auction notice on 31/10/1989 in 'the Daily Tribunal' and auctioned the property on 4/11/1989. It has been purchased by one Shri Yog Raj Puri for Rs. 4.05 lacs.
(3.) The petitioner then filed the present petition in the year 1989 claiming that the Corporation having negotiated with it for the return of the property and having accepted Rs. 50,000.00 in pursuance thereof, it was estopped from selling the property to any one else. Notice of motion was issued for 15/01/1990 on which date it was ordered that the auction held in favour of the purchaser be not confirmed till further orders. While the petition was pending in this Court the petitioner addressed a detailed letter/representation to the Governor of Punjab as the State was under President's rule who marked the same to the Managing Director of the Corporation on the basis of which negotiations again started between the parties. In the affidavit filed before the Governor it was alleged by the petitioner that the terms and conditions for the purchase of the property by it had been settled in pursuance of which he had deposited Rs. 50,000.00 in June, 1986 and that the Corporation was acting unfairly in selling the property to another party. Negotiations again failed. The present petition was also dismissed in limine by this. Court on 5/03/1991. The petitioner filed a Special Leave Petition No. 6702 of 1991 in the Supreme Court. The learned Judges of the Apex Court after granting special leave allowed the appeal, set aside the order of this Court and remanded the case of rehearing and disposal by a reasoned order in accordance with law. Status quo as it existed on 26/08/1991 was ordered to be maintained for a period of four weeks. Thereafter when the petitioner came up for motion hearing again on 27/09/1991 it was admitted and stay in terms of the order passed by the Apex Court was ordered to continue. The net result is that the property stands auctioned and Mr. Yog Raj Puri respondent has purchased it but the auction in his favour has not so far been finalised in view of the interim orders passed by the Court.;