SAICOIR CONSUMER PRODUCTS PRIVATE LIMITED BANGALORE Vs. KARNATAKA STATE FINANCIAL CORPORATION RECOVERIES BANGALORE

JUDGEMENT

(1.) THE petitioner had borrowed from the 1st respondent a sum of Rs. 59,35,000. 00 hypothecating the land, building and machinery situate at plot No. 498, IV Floor, Peenya Industrial Area, Bangalore. It is seen that the loan was sanctioned on 6-10-1988. The petitioner thereafter defaulted the repayment. Show-cause notice was issued to the petitioner on 28-6-1991, by the 1st respondent to show-cause why proceedings under Section 29 of the State Financial Corporations Act should not be invoked. As the petitioner did not co-operate and discharge the arrears, on 1-8-1991 the 1st respondent repossessed the land, building and the machinery. It thereafter notified the mortgage property for sale in the advertisement dated 10-11-1991. At the sale held, after negotiation on 22-1-1992, (with different offerees) the 2nd respondent purchased the machineries for Rs. 25 lakhs whereas the 3rd respondent agreed to purchase the land and building for a sum of Rs. 81,00,000. 00. It is seen from Annexure-B issued by the 1st respondent that the machinery was handed over to the 2nd respondent in May, 1991. The sale in favour of the 3rd respondent was completed by acceptance of the their offer on 7-2-1992 (vide recital in Annexure-D agreement ). The petitioner has chosen to impugn these proceedings by filing the above writ petition on 24-11-1992.

(2.) IN this writ petition several contentions have been urged by the petitioner. To begin with, the petitioner details that he has spent considerable amount in improving the land and putting up the building for the need of the industry. The petitioner averred that the factory shed put up measures 169. 5 squares (1695 sq. metres) and the office premises measure 630 square metres (63 squares ). A detailed description is given by him of all the improvements effected in the property. He statea that the value of the building is Rs. 1. 10 crores. He further alleges that he has purchased the machineries and its value is Rs. 49. 44 lakhs; according to him its value would be Rs. 63 lakhs as on the date of sale. He then claims that the value of the assets taken over by the 1st respondent is rs. 1. 73 crores.

(3.) THE petitioner alleges that the assets have been sold for a paltry sum and the sale was without making due publication and was a secret affairs. It is alleged that only by Annexure-B, dated 10-6-1992 the petitioner became aware of the sale. He states that the machineries were sold to the 2nd respondent at a throw away price and no option was given to the petitioner to pay the amount on deferred payment basis as has been permitted to be done by the 3rd respondent. The paper publication, it is alleged, is defective as details of the property being sold is not given and it did not state whether the sale will be in lots or in entirety. The sale notice did not also give the valuation of the assets nor the upset price. The petitioner in essence challenges the sale and seeks the following relief: