PHARMADIA LABORATORIES NAGPUR AND ANOTHER Vs. MAHARASHTRA STATE FINANCE CORPORATION NAGPUR AND ANOTHER

JUDGEMENT

(1.) THIS is a revision application filed by M/s. Pharmadia Laboratories, Nagpur and Shri Ashok Kumar Madan Gopal Agrawal, Partner (hereinafter referred as "the debtors"), challenging the order dated 11th August. 1986. passed by the Joint District Judge. Nagpur, below application Exhibit 23 filed on behalf of the debtors requesting the Court to investigate the claim of the debtors under sub -section (6) of section 32 of the State Financial Corporation Act, 1951.

(2.) THE non -applicant the Maharashtra State Financial Corporation. Nagpur, filed an application under sections 31 and 32 of the Maharashtra State Financial Corporation Act (hereinafter referred to as "the Act") bearing No. MCA No. 405/85 in the Court of the District Judge. Nagpur, for recovery of the amount of Rs. 1,58,411.03. After filing the substantive application the non -applicant also made an application Exhibit 5 for ad interim injunction, attachment of the mortgaged and hypothecated property on 17 -1 -1986. The learned Trial Judge passed an order issuing ad interim injunction and attaching the mortgaged and hypothecated property with notice to the other side. On receiving the show cause notice the applicants filed reply to the said application Exhibit 5, denying the claim of the non -applicants and contending that the non -applicant No. 1 was not entitled to call upon the applicants/debtors to pay the whole of the loan amount in the absence of any ground under section 30 of the Act. On 12th June. 1986. the learned Judge heard the parties and passed an order that the order regarding an ad interim injunction and attachment of hypothecated and mortgaged property is made absolute. Thereafter on 11th August. 1986. the applicants -debtors filed applications under section 32 of the Act. making a prayer that in accordance with subsection (6) of section 32 of the Act. the claim of the non -applicant No. 1 requires to be investigated. On the same day the learned Judge heard the Advocates and passed an order that this is not the stage when the claim of the applicants could be investigated and so observing rejected Exhibit 23.

(3.) SHRI Paliwal appearing on behalf of the applicants had contended that the notice to show cause that was issued to the applicants was in respect of the application Exhibit 5 for ad interim injunction and the applicants had filed their objections to the said application. Shri Paliwal contended that sub -section (4) of section 32 of the Act contemplates giving of notice to show cause only on the point as to why the ad interim order of attachment should not be made absolute or the injunction confirmed. His contention is that the applicants filed their reply only to that limited extent and. therefore, the learned Judge was not justified in passing the further order, ordering the sale of hypothecated and mortgaged property without investigating the claim as required by sub -section (6) of section 32 of the Act. He. therefore, contended that the order of sale made by the learned Judge was without jurisdiction since it was made without investigation of the claim and the same should be set aside.