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- Challenge to judgment and order directing payment of residue money from sale of factory - Interpretation of Section 29(4) of the State Financial Corporations Act, 1951 Issue 1: Challenge to judgment and order directing payment of residue money from sale of factory The Gujarat State Financial Corporation challenged the judgment directing it to pay the residue of the money received from the sale of a factory, "R.K. Textiles," to the petitioner. The factory was sold for Rs. 7,50,000, with an initial deposit of Rs. 2,50,000, and the remaining amount was to be paid within two years. The Corporation was directed to pay the residue to the petitioner after adjusting dues and costs. The appellant argued that as the full sale price was not received, there was no residue amount available for payment to the petitioner. However, the Court held that once the property is sold, the money received is held in trust by the Corporation and must be applied as per Section 29(4) of the Act. The Court dismissed the appeal, upholding the direction to pay the residue amount to the petitioner. Issue 2: Interpretation of Section 29(4) of the State Financial Corporations Act, 1951 Section 29 of the Act provides the Financial Corporation with rights in case of default by an industrial concern. Sub-section (4) states that money received by the Corporation shall be held in trust to pay costs, charges, and debts due, with the residue to be paid to the entitled person. The Court interpreted the term "money received," stating that when property is sold, the amount realized is considered received by the Corporation. Even if part of the amount is treated as a loan to the purchaser, the entire consideration should be treated as money received. Therefore, the Court held that the Corporation must pay the residue amount to the petitioner after adjusting costs and charges. The Court dismissed the appeal and rejected the request for continuing interim relief due to the prolonged litigation.
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