V.S.DAVE,J. - (1.) THE petitioner in this writ petition has prayed that the sale of machinery, finished products and raw material, etc., lying in the factory premises of the petitioner by respondent Nos. 1 to 5, effected in favour of respondent No. 8 for a sum of Rs. 35,000 even though the property was worth about Rs. 6,00,000 be set aside as being illegal and mala fide and in contravention of the procedures and guidelines framed by the Rajasthan Financial Corporation. The petitioner has based this prayer on a decision of their Lordships of the Supreme Court in Swastic Auto -mobiles v. Bihar State Financial Corporation, AIR 1989 SC 1551, wherein their Lordships set aside the sale of the security by the Bihar State Financial Corporation in exercise of its powers under the State Financial Corporations Act as it was found difficult for their Lordships to sustain as the security which was valued at over Rs. 20,00,000 had been sold for a small amount that was actually due to the debtor by the Corporation. Hence this court while appreciating the facts has only to consider as to whether, in the facts and circumstances of the present case, the aforesaid decision of their Lordships is applicable or not ?
(2.) THE admitted facts of the case are that the petitioner established an industry in the name and style of Messrs. Jaiguru Weaving Factory in Jaipur having got it registered with the Director of Industries as a small scale industrial unit on May 10, 1966. He applied for a loan for Rs. 25,000 from respondent No. 1 and in that respect made an application in the prescribed form. The petitioner in his application for grant of loan stated that if the loan amount was sanctioned, under the terms the petitioner shall maintain a minimum margin of 75% in respect of proposed plant and machinery. In other words 75% of the investment was to be of the petitioner. The agreement was signed on April 9, 1983, and the valuation of the plant and machinery was got done on April 19, 1983, on which date the valuation officer after personally seeing the plant and machinery stated that the realisable value of each item is mentioned in a separate report but the total of which comes to Rs. 1,32,665 which is correct to the best of his knowledge and belief. The petitioner as per the report had installed the following machines ; Lathe machine 12 feet, spinning machine, power press 10 H. P. motor, 3 H. P. motor, lathe machine 6 feet with motor and attachments, spinning lathe with motor and another spinning lathe heavy duty with motor.
(3.) ACCORDING to the petitioner he had invested Rs. 4,34,000 of which Rs. 5,60,000 was invested from his own resources, Rs. 25,000 were given by respondent No. 1 as loan and Rs. 50,000 were given as loan by the Bank of Rajasthan. The petitioner except for one instalment failed to pay the amount due and respondent No. 1, therefore, in exercise of the powers vested under Section 29 of the State Financial Corporations Act (hereinafter referred to as 'the SFC Act'), auctioned the machinery which is under challenge.;