2003 (9) TMI 552 - HC - Companies Law

Summary

Issues Involved:
1. Quashing of the sale deed dated 10-8-2002.
2. Request for a writ of mandamus for a one-time settlement.
3. Allegations of arbitrary and mala fide actions by the respondents.
4. Compliance with procedural requirements for the sale of the property.
5. Petitioner's entitlement to relief under writ jurisdiction.

Detailed Analysis:

1. Quashing of the Sale Deed Dated 10-8-2002:
The petitioner sought to quash the sale deed executed by the Karnataka State Financial Corporation Ltd. (the Corporation) in favor of the third respondent. The petitioner claimed the sale was conducted without proper notice and in an arbitrary manner. The respondents countered that the sale was within their powers under Section 29 of the State Financial Corporations Act, 1951, and was necessitated by the petitioner's default in loan repayment. The property had been advertised for sale multiple times, and the petitioner was aware but failed to make timely payments to avoid the sale.

2. Request for a Writ of Mandamus for a One-Time Settlement:
The petitioner requested a writ of mandamus to direct the Corporation to consider his proposal for a one-time settlement. The respondents argued that the petitioner had not demonstrated bona fide interest in pursuing this settlement, as he failed to make the required payments despite several opportunities. The court noted that a one-time settlement is not a statutory right but a concession, and the petitioner had not shown that the Corporation acted arbitrarily in rejecting his offer.

3. Allegations of Arbitrary and Mala Fide Actions by the Respondents:
The petitioner alleged that the respondents acted arbitrarily and with mala fide intent by proceeding with the sale without responding to his settlement proposal. The respondents provided evidence that they had communicated with the petitioner about the sale and his settlement offers, but the petitioner did not comply with the payment requirements. The court found no evidence of arbitrariness or mala fide actions, noting that the respondents had acted within their legal powers and provided the petitioner with multiple opportunities to settle the dues.

4. Compliance with Procedural Requirements for the Sale of the Property:
The petitioner contended that the sale was not conducted in a fair manner, arguing that it was not sold in a public auction. The court found this submission unconvincing, as the property had been advertised for sale in public auctions, and the highest offer was obtained through a negotiated settlement, which was to the petitioner's advantage. The court concluded that the sale procedure was fair and in accordance with the relevant requirements.

5. Petitioner's Entitlement to Relief under Writ Jurisdiction:
The court examined whether the petitioner was entitled to any relief under writ jurisdiction. The court concluded that the petitioner had suppressed material facts and misrepresented the situation. The petitioner's conduct lacked bona fides, and he had not made use of the various opportunities provided by the respondents to settle the loan. Consequently, the court found no merit in the petitioner's claims and dismissed the writ petition.

Conclusion:
The court dismissed the writ petition, finding no justification for interfering with the actions of the respondents. The petitioner's claims were unsupported by evidence, and the respondents had acted within their legal rights and procedures. The sale deed dated 10-8-2002 was upheld, and the petitioner's request for a one-time settlement was denied. The court emphasized the petitioner's lack of bona fide conduct and failure to comply with payment requirements as key factors in its decision.