UTKAL REFRACTORIES Vs. ORISSA STATE FINANCIAL

JUDGEMENT

(1.) Since a dispute was raised about maintainability of the appeal without deposit of the amount disputed in appeal or furnishing of security in respect thereof subject to direction of the Court, and it is of seminal importance, the matter was heard at length.

(2.) THE appeal is directed against an order passed by the learned District Judge, Sundargarh on an application filed by the Orissa State Financial Corporation (hereinafter referred to as 'the Corporation' Under Section 31 of the State Financial Corporations Act, 1951 (Act 63 of 1951) (hsreinafter referred to as 'the Act') - The appeal has been filed Under Section 32(9) of the Act.

(3.) SECTION 31 of the Act is a special provision for enforcement of claims by the State Financial Corporations. Where an 'industrial concern'' as defined in Section 2(c) of the Act, in breach of any agreement makes any default in repayment of any loan or advance or any installment thereof in meeting 'its obligation in relation to any guarantee given by the Corporation or otherwise fails to comply with the terms of its agreement with the Financial Corporation, or, where the Financial Corpo ration requires an industrial concern to make immediate repayment of any loan or advance Under Section 30 and the industrial concern fails to make such repayment, then, without prejudice to the provisions of Section 29 of the Act and of Section 69 of the Transfer of Property Act, (4 of 1882), any officer of Financial Corporation, generally or specially authorised by the Board in this behalf, may apply to the District Judge within the limits of whose jurisdiction the industrial concern carries on whole or a substantial part of its business, for. one or more of the reliefs as enumerated in Section 31. One of the reliefs is for sale of the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation as security for the loan or advance. In terms of Section 32(1), where an application is for the reliefs mentioned in Clauses (a) and (c) of Sub -section (1) of Section 31, the District Judge shall pass an ad interim order attaching the -security, or so much of the property of the industrial concern as would, on being sold realise in his estimate an amount equivalent in value to the outstanding liability of the industrial concern to the Financial Corporation together with the costs of the proceedings taken Under Section 31. In terms - of Sub -section (5) of Section 32, the District Judge after giving due notice to the defaulter can make the ad interim order absolute and direct sale of the attached property or transfer the management of the industrial corcern to the Financial Corporation or confirm the injunction.