KARNATAKA STATE FINANCIAL CORPORATION Vs. APPELLATE AUTHORITY FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION

JUDGEMENT

(1.) This writ petition by Karnataka State Financial Corporation CKSFC for short) is directed against the order dated 05.06.2007 (Annexure-M) passed by the Appellate Authority for Industrial and Financial Reconstruction, New Delhi, rejecting the petitioner's Appeal No.304/06. By the impugned order, the Appellate Authority has confirmed the order dated 20.09.2006 (Annexure-L) passed by the Board for Industrial and Financial Reconstruction ('BIFR' for short) in Case No.321/1998 directing the petitioner - KSFC to issue a 'no dues certificate" to respondent No.3 - a Sick Industrial Company.

(2.) I have heard the learned Counsel appearing for the parties and perused the orders passed by the BIFR and the Appellate Authority which are produced as Annexures-L and M respectively.

(3.) The case of the petitioner - KSFC is that it had leased a Diesel Generator Set (3.8 MW/4750 KVA) which was purchased for Rs.10.33 crores to respondent No.3-Company and in that connection, respondent. No.3- Company is due to the petitioner- KSFC to the tune of Rs.17 crores; and it had never agreed for a 'one-time settlement' for Rs.210 lakhs and hence the direction issued to it as per the orders at Annexures L and M to issue a no dues certificate' is not, justified. The Assistant General Manager (HP & FS) of the petitioner - KSFC has filed his affidavit dated 27.11.2009 in this Court stating that the Board of the petitioner Corporation has not approved any 'one-time settlement' to respondent. No.3-Company. The ease of respondent No. 3-Company is that the KSFC has received Rs.210 lakhs as a 'one-time settlement' towards the amount due from it. It is stated that the aforesaid Diesel Generator set was later sold to a third party for Rs.210 lakhs with the approval of the petitioner - KSFC.