9911796707
TMI Blog1997 (7) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent made a representation on 17.8.1992 and paid ₹ 25,000 and undertook to pay ₹ 25,000 in the 1st week of September, 1992 and balance of ₹ 1.50 lakhs before 31.12.1992 and other instalments in time. The Corporation sent telegram dated 2.3.1992 and letter dated 4.7.1992 requesting the 1st respondent to make payment. Recall-cum-sale notice was issued on 28.7.1992 for ₹ 9,87,250.79. As the 1st respondent did not avail of the opportunity, the Corporation exercised power under section 29 of the State Financial Corporations Act (hereinafter called the Act) and seized the unit belonging to the 1st respondent on 17.12,1992 and issued an advertisement on 22.2.1993 for sale of the unit. The 1st respondent paid an amount of ₹ 85,000 on 29.6.1993, gave one cheque dated 30.6.1993 for ₹ 20,000 and also gave two post dated cheques dated 21.7.1993 and 27.7.1993 for ₹ 30,000 each and requested the Corporation to release the unit and promised to pay the instalments in time. The Corporation lifted the seizure on 29.6.1993 and handed over the unit to the 1st respondent. However, the post dated cheques, when presented, were dishonoured by the Bank and no offe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertisement was issued on 2.3.1995 in the same two newspapers. Five offers were received, one for ₹ 24 lakhs by Mr. Shyam above mentioned. The Corporation negotiated with the bidders and one of them M/s. Vasant Organics (appellant in CA No. arising out of S.L.P. (C) No. 15260/1998) increase its offer for ₹ 26 lakhs during meetings on 9.3.1995, 11.3.1995 and 13.3.1995. At that stage, Mr. M.S. Shyam, withdrew from further negotiation and took back his deposit. So did another bidder Mr. Narasimha. Ultimately only M/s. Vasant Organics remained in the field with the highest offer at ₹ 26 lakhs and there was further negotiations with that party and the offer was increased to ₹ 20 lakhs finally. 4. On 13.5.1995, the Board of the Corporation approved the sale to M/s. Vasant Organism on condition of making 100% down payment of sale consideration out of which 35% was to go towards the loan straightaway and the balance consideration was to be treated as term-loan repayable within 3 years. Instead of availing the instalments, the said purchaser paid away the full consideration on 21.6.1993 and took possession of the unit. 5. It is also the case of the Corporation t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marised as follows : (i) There are two stages, on the facts of this case, at which the Corporation had to explain its conduct. Though initially, at the first stage it gave a notice proposing seizure on future default, there are certain subsequent negotiations for a one time settlement and i.e. at that stage, i.e. the second stage there was no independent notice except the one by which the Corporation conveyed its decision for sale, which was not sufficient in view of the ruling of this Court in Maharashtra Financial Corporation v. M/s. S. Board Mills, AIR (1994) SC 2657. (ii) Further on the representation submitted by the 1st respondent dated 27.12.1993, no communication of the concession granted was made by the Corporation to the Company and this precluded the Company from complying with the conditions noted in the Corporation's file and from bringing any other purchaser who could have offered something more. The decision of the Executive Director on the representation dated 27.12.1993 to give 6 months time to the 1st respondent-company being not communi-cated to the 1st respondent-company, the endorsement of the Executive Director of the Corporation on the represe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was right in relying on this fact. 13. So far as the first reason is concerned. We shall show presently that even at the second stage, at the stage when the 1st respondent Company proposed a one-time settlement on 27.12.93, sufficient oppor-tunity was given to the 1st respondent Company. We shall therefore ex-amine whether the 1st respondent has pleaded and proved that upon its representation dated 27.12.1993 no fresh opportunity was given and no communication was made to it about the endorsement of the Executive Director of the Corporation. 14. We shall initially refer to the pleadings of the parties. In the writ petition filed by the 1st respondent, it is stated that the unit was brought to sale in December, 1993, February and March 1994 and that when in 1995 sale notices were published and the purchaser offered ₹ 26 lakhs, the 1st respondent was not aware of any of the sale notice proceedings, it is merely stated that the appellant-Corporation ought to have given a final oppor-tunity to the loanee who has to be informed about the sale price and he must be given sufficient time to enable him to get a higher price than what has been offered in the public auction . The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utive Direc-tor of the Corporation and presented the representation. It is stated in this supplementary affidavit as follows : 1 am filing this additional counter affidavit to bring to the notice of the Hon'ble Court the action taken by the Corporation pursuant to the representation made by the Managing Director Sri Vijaya Kumar of M/s. Vajra Chemicals Pvt. Ltd. on 27.12.1993, which was duly considered by the Executive Director of this respondent Corporation. I stated and submit that I was personally present in the chambers of the Executive Director of this respondent-Corporation on 27.12.1993. I submit that the Managing Director of Vajra Chemicals Sri Vijaya Kumar, personally handed over the representation to the Executive Director, who has perused the same and after discussing the matter with me and the Managing Director of M/s. Vajra Chemicals, has taken a decision for lifting the seizure, subject to down payment of ₹ 30,000 and further subject to a payment of ₹ 50,000 in March 1994, for which the Managing Director of Vajra Chemicals, was asked to give post dated cheques. The decision taken by the Executive Director on 27.12.1993 was taken after the mat-ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving that there was no material to infer that the decision contained in the endorsement dated 27.12.93 was communicated to the Company. 20. Summarising the position, we are of the view that the Division Bench of the High Court while allowing the Writ Appeal overlooked the fact that there was no pleading in the writ petition regarding the repre-sentation dated 27.12.1993 or the non communication of any decision thereon. No rejoinder was filed by the 1st respondent to contradict the specific averments made in the Corporation's affidavit as to What hap-pened on 27.12,1993 in the Chambers of the Executive Director of the Corporation. There is internal evidence in the endorsement of the Execu-tive Director of the Corporation which shows that the matter was discussed and an arrangement was arrived at in the presence of Mr. Vijaya Kumar and was reduced to writing and communicated to him and consequential directions were issued to the office of the Corporation to receive ₹ 30,000 as out right payment and release the unit, and to receive ₹ 50,000 by March 1994, receive post dated cheques and it was also agreed that the 1st respondent was to make a one time settlement (OTS ..... X X X X Extracts X X X X X X X X Extracts X X X X
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