MOON INDUSTRIES Vs. PUNJAB FINANCIAL CORPORATION

JUDGEMENT

(1.) PETITIONERS have sought issuance of a writ of certiorary for quashing recovery certificate dated 06. 10. 1993 Annexure P-5 issued by respondent No. 2 at the instance of respondent No. 1 to hand over the land, building and machinery to the petitioner taken over under Section 29 of the State Financial Corporation Act, 1951.

(2.) M/s Moon Industries, a partnership firm, set up the business of manufacturing P. V. C. Pipes at village Kurki Khurd, Tehsil Balachaur, Dist. Hoshiarpur. On 28. 05. 1984 as per averments made in the petition, on this industrial unit the petitioners spent about Rs. 4 lacs to raise a building over an area measuring 5 Kanals 2 Marias. For short of funds petitioners raised a loan of Rs. 13,50,000/- from the Punjab Financial Corporation by mortgaging the industrial unit on 14. 01. 1985. Copy of the mortgage deed is Annexure P-1. It is the case of the petitioners that as per terms of the mortgage deed duly executed by them they had been paying interest as per schedule but later on could not adhere to it as the unit became sick for want of availability of raw material as well as on account of disturbed conditions in the State of Punjab. This way the principal amount as well as interest due thereupon went on increasing. Since the petitioner failed to pay the instalments Punjab Financial Corporation -Respondent No. 1 took over the unit under Section 29 of the State Financial Corporation Act and has sold the same for a paltry sum of Rs. 8,80,000/- to Respondent No. 3. It is this action of the respondent which is being termed as illegal, arbitrary, against the principles of natural justice and unconstitutional and so prayed for setting aside the same.

(3.) THIS court while issuing notice of motion to the respondents restrained the respondents that auction proceedings be not finalised till further order.