Rakesh Ranjan Prasad, J. - (1.) THE petitioner, a company registered under the Companies Act was sanctioned a term loan of Rs. 5.80 lakh by the Corporation, out of which the petitioner availed loan amount of Rs. 5.37 lakh on execution of certain documents but the petitioner failed to deposit dues in instalment in terms of the agreement. On account of default being made to the Corporation, a legal notice in terms of Sections 30 and 29 of the State Financial Corporation Act was issued on 23.1.1999. In spite of that, petitioner failed to repay the dues to the Corporation. Thereupon, a notice was issued in daily newspaper on 28.4.1995 and 3.5.1995 for putting the unit for auction sale. The Corporation received three offers and upon price negotiation, highest offer was made by M/s. Baba Food Products, respondent No. 5. In order to have better offer, again a notice was advertised on 28.1.2010 for sale of the unit. On receiving offer from the said respondent No. 5, M/s. Baba Food Products, sale of the unit/hypothecated assets was decided in favour of M/s. Baba Food Products being highest tenderer after observing certain formalities. Accordingly, a sale order was issued on 20.8.2010, copy of which was sent to the original promoter to retain the unit on matching terms and conditions of the sale order whereby the amount for sale had been fixed at Rs. 28 lakh excluding the dues of the RIADA. In the said sale order, stipulation was made that the purchaser shall make initial payment of cash Rs. 8 lakh within 21 days of the issuance of the sale deed. The rest of the amount shall be paid in four years in 16 instalments. But before 20.8.2010 when the sale order was issued, the Board of Directors in its meeting dated 11.9.2009/23.6.2010 had decided to implement "BSFC One Time Settlement Scheme, 2009". The said decision was communicated vide Circular No. /10 -11 under Memo No. 874 dated 17.8.2010 which has been annexed as Annexure 1. According to Clause 5.2 of the said scheme settlement amount would be 100% of the principal outstanding amount. Modalities of the payment were prescribed under Clause 5.3 whereby entire settlement amount was supposed to be paid with the application form or 25% of he amount along with application form and rest of 75% within one month from the date of filing of such application. As per the case of the petitioner, the petitioner within the time prescribed submitted its application on 1.9.2010 along with draft of Rs. 3 lakh being more than 25% of the settlement amount. The said application along with draft was accepted by the Bihar State Financial Corporation, respondent No. 1 on 1.9.2010. Thereupon the balance amount of Rs. 2,90,700/ - was deposited by the petitioner on 9.9.2010. In that manner, the petitioner did deposit a sum of Rs. 5,90,700/ - which is equivalent to 100% of the settlement amount, i.e. principal outstanding amount with 10% extra as prescribed under Clause 5.2 of the Circular.
(2.) UNDER the circumstances, the sale order issued on 20.8.2010 as contained in Annexure 2 has been sought to be quashed. Learned Counsel appearing for the petitioner submits that before a sale order dated 20.8.2010 was issued in favour of the respondent No. 5, M/s. Baba Food Products, petitioner in terms of "BSFC One Time Settlement Scheme, 2009" issued under memo No. 874 dated 17.8.2010, had made application for settlement and even as per one of the clauses deposited 25% of the total outstanding amount on 1.9.2010 and subsequently on 8.9.2010, rest of the balance amount was paid and thereby it was wholly illegal on the part of the respondent to pass sale order dated 20.8.2010 (Annexure 2) in favour of respondent No. 5 and, as such, sale order is quite illegal and is fit to be quashed.
(3.) LEARNED Counsel further submits that on one hand, stand of the respondent is that sale has been effected in favour of respondent No. 5 whereas under the said sale order offer is being made to the petitioner to retain the unit on matching terms and conditions of the sale order and, as such, sale can never be said to have been completed and thereby respondent No. 5, M/s. Baba Food Products cannot be said to have acquired any right, title or interest over the property in question.;