ANDHRA PRADESH STATE FINANCIAL CORPORATION REPRESE Vs. DEVI VARAPRASAD STEELS PRIVATE LIMITED REPRESENTED

JUDGEMENT

(1.) This writ appeal is field by the A.P. State Financial Corporation questioning the legality and validity of the order of the learned single judge dated 29.7.1997 made in Writ Petition No.1010/1994 directing the appellant Corporation to pay interest to the respondent herein at the rate of 18% per annum on the sum of Rs.11,37,150-60 with effect from 1.4.1991 upto the date of payment.

(2.) The respondent herein had borrowed a sum of Rs.28,80,000.00 and in terms of the agreement, the respondent had to repay the loan amount in 13 equal half-yearly installments commencing from 11.9.1987. When the respondent committed default, statutory notice was issued under Sec. 29 of the State Financial Corporation Act and despite statutory notice, the respondent company did not repay the loan amount and the interest accrued thereon. Under those circumstances, the Corporation served Recall-cum-Sale Notices and finally seized the unit on 7.6.1989. Thereafter, The A.P.S.F.C. issued advertisement on 6.2.1991 calling for tenders from the prospective purchasers and in pursuance of that advertisement, one G. Seetha-ramaiah and others offered their bids. Ultimately, on 9.3.1991 the sale was knocked down in favour of the highest bidder, namely, the said G. Seetharamaiah for a sale consideration of Rs.57.00 lakhs.

(3.) There is no controversy between the parties that the sale price at which the sale was knocked down in favour of G. Seetharamaiah was in excess to the tune of Rs.11,37,150-60 over and above the liability of the respondent company. It is also admitted fact that the excess money payable to the respondent company out of the sale proceeds was in fact paid to the respondent company only through three cheques dated 6.2.1992, 17.2.1992 and 22.2.1992 through State Bank of India, Ongole. It is also an admitted fact that the Corporation permitted the highest bidder to pay 75% of the bid amount in instalments and it has collected interest from the highest bidder at the rate of 18%. Therefore, the only question for our consideration in this appeal is whether the learned judge was justified and acted legally in directing the appellant Corporation to pay interest at the rate of 18% on the sum of Rs.11,37,150-60 w.e.f. 1.4.1991 till remittance was effected.