TaxTMI 
TaxTMI 
2012 (10) TMI 295
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....vailed off by complying with the terms and conditions stipulated therein. The further question is whether the High Court was right in ordering dispossession of the appellant (auction purchaser) and put 1st respondent back in possession. 4. This case has a chequered history, therefore, it is necessary to examine the facts at some length to appreciate the real controversy between the parties and to reach a proper and just decision, on facts as well as on law. OSFC, 2nd respondent herein, disbursed a term loan of Rs. 51,27,200/- and loan in lieu of subsidy of Rs. 23.30 lakhs to 1st respondent for establishing a hotel project at Janugarji, Balasore in the State of Odisha. The project was jointly financed by OSFC and IPICOL, for which 1st respondent had entered into a loan agreement and mortgaged the title deeds and extended a registered lease deed dated 8.2.1988. Lease was valid for a period of 25 years with a renewable clause. There was default in repayment of the loan amount, which led OSFC issuing a demand notice to 1st respondent on 7.2.1991, followed by a recall notice dated 30.11.1991. The respondent was also served with a show cause notice dated 16.12.1994 followed by recall no....
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....ve lacs only) and the resultant sacrifice(s) by way of waiver is Rs. 1,88,21,099 (Rupees one crore twelve lakhs seventeen thousand five hundred twenty nine only on account of funded interest and Rs.76,03,570/- (Rupees seventy six lakhs three thousand five hundred seventy only) on account of overdue interest. (b) The OTS amount shall be paid within a period of 1 year from the date of this letter as per the schedule given below: Rs. 6,75,000 towards 25% of upfront payment (including initial payment made by you) within 30 days and balance 75% amounting to Rs. 33,75,000/- within a period of 1 year in 4 quarterly instalments, carrying simple interest @ 14% p.a. on reducing balance. (c) The above OTS is subject to cancellation, if it is found that you have provided incorrect details and information or suppression of any material facts for getting the sanction of OTS. The decision of IPICOL is final in this regard. (d) In case of non payment, IPICOL shall have the right of requital." 7. We notice that despite of waiver of Rs. 2,26,85,800 and Rs. 1,88,21,099 by OSFC and IPICOL respectively, 1st respondent did not comply with the terms and conditions of the OTS scheme....
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....he return of the draft to the 1st respondent since the amount was due to both OSFC and IPICOL. The Court was informed by OSFC that 1st respondent had not availed of the earlier proposal for OTS and no new OTS scheme was available, still the Court passed the following order: "The learned counsel for the Corporations submits that the earlier proposal for one-time settlement had been considered by both the Corporations and the matter had been settled. But the petitioner did not pay the amount for which it had to be cancelled and, at present there is no scheme for one-time settlement. Be that as it may, the Petitioner having defaulted in payment of huge amount we dispose of the writ petition directing that the petitioner may deposit a sum of Rs. 50,00,000/- (Rupees fifty lakhs) each before each of the two Corporations by 20.6.2010 and applications shall be filed before both the Corporation for settlement of the dues. If any such application is filed the same shall be considered on its own merit by both the Corporations either separately or jointly provided there is any scheme available for such settlement by the Corporations. In the event, the Petitioner fails to deposit the aforesa....
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....irected to deposit Rs. 50,00,000/- (Rupees fifty lakhs) each with the two Corporations, the same was not complied with. In course of hearing of this review petition, the petitioner has offered only Rs. 40,00,000/- (Rupees forty lakhs) to be deposited with the two Corporations against the outstanding dues of more than seven crore. We are, therefore, of the view that the petitioner has no intention to clear the dues of the two Corporations which had financed for establishing a hotel. In the meantime possession of the said hotel has been taken by OSFC under section 29 of the State Financial Corporation Act and the same has been advertised for sale. The sale notice, a copy whereof was produced before us shows that the loanee can appear before the DDAC on the date fixed i.e. 29th of September, 2010 for the purpose of getting release the seized asset." [Emphasis supplied] 13. 1st respondent then submitted a proposal to DDAC, which was considered by DDAC on 29.9.2010 and the order was communicated to the 1st respondent. 14. DDAC, in pursuance to the auction notification in the newspapers, received altogether 9 bids and, after negotiations with the auctioneers, the offer of the appellant....
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....ounsel also pointed out that the conditions stipulated in the above mentioned orders were also not complied with by 1st respondent, consequently, the only course open to 1st respondent was to pay the entire amount demanded by OSFC and IPICOL. The 1st respondent did not pay the amount demanded, hence, Section 29 of SFC Act was rightly invoked. 17. Ms. Shubhranshu Padhi, learned counsel appearing for the appellant in SLP(C) No. 1125 of 2012 fully supported the arguments advanced by the learned senior counsel Shri C.A. Sundaram and explained the various steps taken by OSFC which resulted in invoking Section 29 of SFC Act. 18. Shri Ashok Panigrahi, learned counsel appearing on behalf of the respondent, however, supported the judgment of the Hon'ble Court and submitted that there is no justification in interfering with the judgment of the Hon'ble Court, since the conditions laid down in OTS Scheme were onerous and that procedures were not followed for the sale of the mortgaged properties. 19. We express our strong disapproval of the manner in which the Division Bench of the High Court has virtually sat in judgment over the judgment of another co-ordinate Bench. We are of the view tha....
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....r conditions like period of payment, interest etc. (3) The 1st respondent had failed to comply with those conditions imposed, consequently, OSFC and IPICOL had to withdraw the benefits extended under the OTS scheme. (4) OSFC lodged another OTS scheme in the year 2007. Opportunity was given to 1st respondent again to avail of the benefit of that scheme. OSFC on 04.10.2007 requested 1st respondent to pay the settlement amount of Rs. 1,16,21,200/- with delayed payment of interest within 10 days. The benefit of the said scheme was not availed of by 1st respondent, consequently OSFC on 28.12.2007 withdrew that offer as well and advised 1st respondent to pay the entire dues as per the agreement, failing which it was informed that recovery proceedings would be initiated. (5) 1st respondent filed a Writ Petition No. 13376 of 2008 to quash the demand notice dated 22.08.2008 where it was pointed out by OSFC that 1st respondent had not availed of all the benefits of the OTS scheme extended by the Corporation, consequently they had to cancel the said scheme. Further, it was also stated that in spite of public notification and their intimation and frequent requests, 1st res....
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.... was issued to the appellant, who had paid the entire amount by 11.10.2010. (12) Sale Memo, Agreement to Sale was executed with the appellant on 11.10.2010 and possession was handed over to the appellant on that date. (13) 1st respondent then on 11.10.2010 filed the present WRIT Petition No. 17711 of 2010. 22. We are of the view that the above mentioned facts had considerable bearing for rendering a just and proper judgment in writ petition No. 17711 of 2010, but those vital facts were completely overlooked by the Division Bench and it had also ignored the binding judgment of the co-ordinate Bench rendered in writ petition No. 13376 of 2008 and the order passed in Review Petition No. 99 of 2010 and the steps taken by the Corporations as permitted by the Division Bench. 23. A 3-Judge Bench of this Court in Haryana Financial Corpn. v. Jagdamba Oil Mills [2002] 3 SCC 496 while dealing with the scope of Section 29 of SFC Act held as follows: "6. The Corporation as an instrumentality of the State deals with public money. There can be no doubt that the approach has to be public oriented. It can operate effectively if there is regular realization of the instalments. While....
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....tter has been decided." 26. We are of the view that the principles laid down by this Court in the above judgments apply to the case on hand, if the facts are properly appreciated. The Division Bench, in the impugned judgment, took the view that the Corporations had not followed the guidelines laid down by this Court in Kerala Financial Corpn. v. Vincent Paul [2012] 114 SCL 91/22 taxmann.com 148 (SC). In our view, this is factually incorrect. This Court, in the above judgment, indicated that the authority concerned should serve to the borrower a notice of 30 days for sale of immovable assets. In this case, Corporation had issued the recall notice dated 08.07.2010 with a request to pay the entire outstanding dues within 30 days otherwise, failing which, it was stated that action under section 29 of SFC Act would be initiated against the 1st respondent. Seizure order was issued by the Corporation and the entire assets of the unit were taken over under Section 29 of the Act on 15.09.2010 which was after the expiry of 30 days from the date of notice dated 08.07.2010. Therefore the guidelines laid down in the above referred judgment have also been complied with. Even otherwise, the guid....