Writ interference with State Financial Corporation sale under statutory powers requires proven illegality, unfairness, or supported mala fides.

A State Financial Corporation's exercise of power under section 29 of the State Financial Corporations Act to take over and sell a defaulting industrial unit was upheld in writ proceedings. Prior notice before sale was not held to be mandatory under the provision, and notices had in fact been issued with wide publicity. Judicial interference under Articles 226 and 227 was found appropriate only on proof of statutory violation, unfairness, unreasonableness, or supported allegations of mala fides. The petitioner failed to lay a factual foundation for mala fides, did not show circumstances beyond its control preventing repayment, and could not establish illegality from the sale price alone.

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Issues: Whether the Corporation's action in taking over and selling the industrial unit under its statutory powers was liable to be interfered with in writ jurisdiction on the grounds of want of prior notice, alleged mala fides, and alleged inadequacy of sale price.

Analysis: The Corporation acted under section 29 of the State Financial Corporations Act, 1951, which empowers it, on default, to take over possession and transfer the secured property by sale or lease. The provision does not require prior notice before sale, though notices were in fact issued on several occasions and wide publicity was given. Interference under Articles 226 and 227 is warranted only where the Corporation acts unfairly, unreasonably, or in violation of statute. Mere assertion of mala fides is insufficient without specific pleadings and supporting material. The petitioner failed to show that any circumstance beyond its control prevented repayment, and no factual foundation was laid to establish mala fides. The sale price could not by itself establish illegality, particularly when the assessment was earlier in time and the property had further deteriorated. The absence of a specific prayer to set aside the sale also prevented grant of effective relief.

Conclusion: The challenge to the Corporation's action failed, and the petitioner was not entitled to relief.

Final Conclusion: The writ petition was dismissed because the Corporation's exercise of statutory power to realise its dues was found lawful and no case for judicial interference was made out.

Ratio Decidendi: In proceedings challenging sale by a State Financial Corporation under section 29, writ interference is not justified in the absence of statutory violation, specific and supported allegations of mala fides, or demonstrable unfairness in the sale process.

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