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Issues:
1. One-time settlement proposal by the Company rejected by AFC. 2. Authority to accept or reject proposals beyond policy decision. 3. Requirement of Board decision for proposals outside policy decision. Analysis: The judgment revolves around the rejection of a one-time settlement proposal by the Appellant Company by the Assam Financial Corporation (AFC). The AFC had sanctioned a term loan to the Company for establishing a manufacturing unit. The Company, facing financial difficulties, proposed a one-time settlement to clear its dues. Despite several communications between the parties, the AFC rejected the Company's proposal. The main contention raised was whether the rejection of the proposal, which exceeded the AFC's policy decision on settlements, required approval from the Board. The Court emphasized that decisions on proposals exceeding policy guidelines fall under the Board's jurisdiction. The Board must deliberate on such proposals before acceptance or rejection. In this case, the Court noted that the Board had not reviewed the Company's proposal dated 28-4-1995, which deviated from the AFC's policy decision. The judgment highlighted that if a proposal, though outside the policy, benefits the AFC, the Board can modify the policy and approve the settlement. Therefore, the Court directed the AFC's Board to reconsider the Company's proposal before proceeding with loan recovery under the State Financial Corporation Act. In conclusion, the appeal was disposed of, emphasizing the importance of the Board's involvement in deciding on proposals that exceed the organization's policy decisions. The judgment underscored the need for thorough consideration and decision-making by the Board in such matters to ensure fairness and adherence to legal procedures.
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