Court dismisses writ petition against M.P.F.C. for liabilities settlement & interest payment. Defaulters must resolve accounting issues amicably.

The court dismissed the writ petition seeking mandamus against M.P.F.C. for settlement of liabilities, recovery of dues, and payment of interest. The court held that the petitioner, a defaulter who did not contest the takeover, could not address accounting issues through a writ petition but should resolve them amicably or through a lawsuit. Emphasizing the importance of fair dealings in loan disbursement and timely repayments, the court found no merit in the petition, stating that the matter fell outside writ jurisdiction. Costs were not awarded in this case.

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Issues:
Claiming mandamus against M.P.F.C. under article 226 of the Constitution of India for settlement of liability, recovery of dues, and payment of interest.

Analysis:
1. The petitioner sought three reliefs through a writ petition, including mandamus against M.P.F.C. for settling liabilities, recovering dues, and paying interest. The petitioner's counsel argued that M.P.F.C. should have appointed a Commissioner to take inventory for settling accounts.

2. The court noted that the case involved the takeover of the unit by M.P.F.C. under section 29 of the State Financial Corporation Act due to the petitioner's default in repaying outstanding dues. The court highlighted that the petitioner did not challenge the takeover itself but was concerned about the accounting method used by M.P.F.C. to determine the liability.

3. Referring to the Supreme Court's decision in State Financial Corpn. v. Jagdamba Oil Mills, the court emphasized the importance of fair dealings in loan disbursement and timely repayments by borrowers. The court highlighted that non-payment by defaulters could hinder financial assistance to deserving borrowers and emphasized the need for corporations to act fairly while recovering dues.

4. The court concluded that the petitioner was indeed a defaulter who had failed to repay the loan and had not contested the action taken under section 29 of the Act. Therefore, the court held that the question of accounting could not be addressed through a writ petition but should be resolved amicably or through a lawsuit for settlement of accounts.

5. Ultimately, the court found no merit in the writ petition and dismissed it, emphasizing that the petitioner's failure to repay the loan and challenge the takeover precluded the matter from being a subject of writ jurisdiction. The court also noted that costs were not awarded in this case.

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