Section 29 recovery powers upheld where notice and sale publicity were given, and later overruling applied to pending matters.

Section 29 of the State Financial Corporations Act, 1951 permits a financial corporation to take over and sell an industrial concern on default, and judicial review in recovery matters is confined to statutory violation, unfairness, or breach of natural justice. On the facts, the corporation had issued a recall-cum-sale notice, given prior intimation, publicised the sale, and completed the process transparently; the challenge came too late and did not dislodge the record of notice and publicity. The earlier guidelines in Mahesh Chandra were treated as overruled by Jagadamba Oil Mills, and that overruling was applied to pending matters rather than confined prospectively. The seizure and sale were therefore upheld.

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Issues: Whether the respondent-corporation's seizure and sale of the petitioner's industrial unit under Section 29 of the State Financial Corporations Act, 1951 was illegal for want of notice, violation of natural justice, or non-compliance with the directions in Mahesh Chandra; and whether the later overruling in Jagadamba Oil Mills could be confined prospectively so as to preserve the earlier guidelines in the present case.

Analysis: The petitioner had defaulted in repayment and the corporation had issued a recall-cum-sale notice, followed by seizure, newspaper advertisement, tender finalisation, and sale. The record showed that notice had been issued and that the corporation had substantially followed fair procedure by giving prior intimation and wide publicity. The challenge was brought after the sale process had substantially concluded, without effectively disputing the notice or the sale advertisement at the relevant stage. The Court held that Section 29 empowered the corporation to take over and transfer the industrial concern on default, and that in commercial recovery matters judicial interference is confined to cases of statutory violation or unreasonableness. The earlier guidelines in Mahesh Chandra stood overruled by Jagadamba Oil Mills, and the overruling operated on pending matters; no basis existed for treating it as prospective only. On the facts, the corporation's action was found to be transparent, reasonable, and not shown to be contrary to statute or natural justice.

Conclusion: The seizure and sale were upheld; the writ petition failed.

Ratio Decidendi: In the exercise of powers under Section 29 of the State Financial Corporations Act, 1951, judicial review in recovery and sale matters is limited to statutory violation or unfairness, and an overruling by the Supreme Court applies to pending matters unless expressly made prospective.

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