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of <h1>Illegal takeover of hotel by State Financial Corporation due to errors in recall notice and payment status. Compensation awarded.</h1> The petitioners challenged the Orissa State Financial Corporation's actions in seizing and auctioning a hotel due to alleged outstanding dues. Errors in ... Taking over of defaulters’ property Issues:1. Challenge to the action of Orissa State Financial Corporation in taking over possession of a hotel and selling it by auction.2. Validity of notice under section 30 of the State Financial Corporation Act asking for defaulted dues.3. Restoration of the hotel unit to legal heirs.4. Compensation for illegal takeover.5. Outstanding dues of a guarantor and calculation of payable amount.Analysis:1. The petitioners challenged the Orissa State Financial Corporation's actions in taking over possession of a hotel and selling it by auction. The late purchaser had liabilities transferred, and the unit was seized due to an alleged outstanding amount. However, discrepancies in the recall notice and the actual payment status raised concerns about the legality of the takeover.2. The validity of the notice under section 30 of the State Financial Corporation Act, asking for defaulted dues, was questioned. The Corporation admitted errors in the recall notice and the subsequent takeover, indicating improper procedures followed in seizing the property.3. The legal heirs of the deceased purchaser sought restoration of the hotel unit. Despite the acknowledgment of mistakes by the Corporation, the Court deemed restoration impractical due to the possession by a third party and significant investments made post-auction.4. Compensation for the illegal takeover was awarded to the legal heirs. The Court ordered the payment of the down payment amount with interest, considering that the investment made by the deceased had not yielded profits due to the premature demise.5. The outstanding dues of a guarantor were also addressed, with the Court directing the Corporation to calculate the payable amount based on the auction sale value and recover it from the proceeds payable to the legal heirs. The Court emphasized the need for accurate calculations and interest charges up to the takeover date.
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