NAGAMANICKAM Vs. BRANCH MANAGER

JUDGEMENT

(1.) THIS writ petition has been filed praying for the issue of a writ of mandamus or any other appropriate writ or direction in the nature of writ forbearing the respondent from proceeding under Section 29 of the State Financial Corporations Act, 1951 in respect of the mortgage created by the petitioner on 16.07.1987 in favour of the respondent.

(2.) THE petitioner was running a Textile manufacturing factory at No.4/1, Vitalapuri Street, B.Kumarapalayam - 638 183. The said business was run as a proprietary business and the petitioner availed a loan of Rs.19.70 lakhs from the respondent corporation. He committed default of payment of the installments and hence the respondent approached the District Judge, Salem under Section 31 of the State Financial Corporations Act, 1951 by filing a petition in F.O.P.63/97. The same came to be dismissed for default on 13.06.2003. Thereafter, by a notice dated 09.02.2004, the petitioner was called upon by the respondent to come for a settlement offering some concession by way of one time settlement. But the petitioner did not avail the opportunity. Again on 14.08.2006, another notice was issued giving an option to the petitioner to make payment of a sum of Rs.6,02,961/ - as one time settlement. but, it was not responded. Again another letter was addressed on 20.11.2006 reducing the amount to be paid by the petitioner for one time settlement to Rs.5,66,306/ -. As there was a calculation mistake, another letter dated 12.10.2006 was addressed to the petitioner that he could pay a sum of Rs.5,86,269/ - as one time settlement to wipe off his debt due to the respondent corporation. Instead of availing the opportunity offered to the petitioner , he issued a lawyer's notice on 20.11.2006 contending that there was no legally enforceble liability or debt as the claim was barred by limitation. The said notice was replied pointing out the fact that the petitioner's power agent by name Giri had made a payment of Rs.30,000/ - on 22.08.2006 and hence, the claim of the petitioner in his notice that the liability/debt was barred by limitation could not be accepted.

(3.) THE respondent resists the petition by filing a counter affidavit in which the steps taken by the respondent were narrated for the recovery of the amount due to it and the evasive methods adopted by the petitioner even though offers were made for payment of a lesser amount than what was due, as one time settlement. It has also been contended that the filing of a petition before the District Court under Section 31 of the State Financial Corporations Act will not be a bar for invoking Section 29 of the Said Act. The respondent has also averred in the counter affidavit that when the possession of the unit was taken by the respondent and the machineries were brought for sale through public auction, the petitioner approached the High Court and obtained an order of Stay and that after getting the Stay vacated, the machineries were brought for sale and a sum of Rs.6,65,000/ - was realized through the auction sale conducted on 06.04.1992 which was confirmed on 10.04.1992. It has also been contended that though a substantial concession had been extended for one time settlement, the petitioner did not avail the offer of one time settlement and with a view to evade payment, the petitioner has approached this Court with the present writ petition and the writ petition lacks in bonafide. It has been pointed out in the counter affidavit that though the petitioner was directed to deposit Rs.10,00,000/ - for the grant of interim order, the petitioner has not chosen to do so. Based on the said avements, the respondent has prayed for dismissal of the writ petition.