CHINMAYA CHEMICALS P LTD Vs. ORISSA STATE FINANCIAL

JUDGEMENT

(1.) THE petitioner by filing the present writ application under Article 226 of the Constitution, seeks for a direction to the Orissa State Financial Corporation (for short 'Corporation') to make payment of a sum of Rs. 10,51,000/ - with 18 per cent interest from 2 -9 -93, the date on which the industrial unit was sold to opp. party No. 3.

(2.) THE managing partner of M/s. Chinmaya Chemicals (P) Limited and others established the said industrial unit for production of bleaching powder after availing of loan of Rs. 8,60,000/ - from the Corporation. Due to some unavoidable circumstances and marketing problem, it is alleged, the unit sustained huge loss for which loan could not be paid up within the stipulated time. Ultimately in exercise of power under Section 30 of the State Financial Corporation Act. 1951 (for short 'the Act'), the Corporation seized the unit and took over possession of all the assets against the total liability of 8.99 lakhs. The Corporation thereafter sold the unit to M/s. Mayor Cables Private Limited (opp. party No. 3) for Rs. 19.50 lakhs out of which the purchaser paid down payment of Rs. 8.50 lakhs. The Corporation then allowed instalments to opp. party No. 3 for making payment of the balance amount. It is urged that though opp. party No. 3 was willing to pay the entire amount, but the Corporation allowed deferred payment and, therefore, as per Sub -section (4) of Section 29 of the Act, the Corporation is obliged to refund amount due to the petitioner after discharge of the debt. Section 29(4) of the Act on the basis of which the petitioner has claimed the relief as aforesaid reads as under: