BALA PAPER MILLS BIHAR Vs. STATE OF BIHAR

JUDGEMENT

(1.) The present matter though has a chequered history but as the facts have been lucidly detailed in the order passed by the Hon'ble Single Judge, it is not necessary for us to repeat the very same exercise.

(2.) The facts necessary for disposal of these two appeals are that the present appellants M/s. Bala Paper Mills (Bihar) Pvt. Ltd., a Private Limited Company incorporated under the provisions of the Companies Act, 1956 in the year 1981 applied for the loan. The scheme was examined by the Bihar State Credit and Investment Corporation Limited (in short 'the BICICO') and the Technical Cell of the Bihar State Financial Corporation (in short 'the BSFC'). The appellants proposals were approved and the authorities sanctioned loan in favour of the appellants. The BSFC sanctioned Rs. 26 lacks while the BCICO sanctioned Rs. 46 lacs. The equitable mortgage agreement was executed in the year 1983 in favour of the BICICO and the BSFC and right of those authorities were created over the properties. The said Company went into production in the year 1985 but soon thereafter the factory was closed for several months. The Company remain closed till 1990 and thereafter as alleged by the appellants it came back into production in the year 1990 and started paying its dues to the BICICO and the BSFC. The proposal for rehabilitation made by the Appellant-Company was cancelled and as the unit could not pay the amount due, the BICICO took over the possession of the unit on 26.8.1996 along with its assets after making an inventory.

(3.) On 31.2.2002 the BICICO advertised the sale of property and ultimately accepted the higher, offer of Respondent M/s Patna Rolling Mills on 5.3.2002. The said M/s Patna Rolling Mills is Respondent No. 11 in C.W.J.C. No. 46702/2002 and the Respondent No, 7 in C.W.J.C. No. 10582/2002. The petitioner says that as the property before its settlement in favour of M/s Patna Rolling Mills was not offered to the original promoter/petitioner/appellant, the action taken by the respondents was patently bad.