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1986 Supreme(AP) 520
Andhra Pradesh High Court
Judges : A.RAGHUVIR, G.RADHA KRISHNA RAO, SARDAR ALI KHAN
K.Subba Reddy - Appellant
Versus
A.P.State Financial Corporation - Respondent
W.P.No.235/82
Decided On : 12-16-86
Advocates Appeared :
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Headnote:STATE FINANCIAL CORPORATION ACT, 1951, Secs. 29 and 31 - Default in payment of Loan granted by State Financial Corporation to an industrial concern Decree obtained by Corporation in a Civil Court under Sec. 31 - Bars action by Corporation under Sec.29.
Held : On a fair reading of Section 29 and Sec.31, it is clear that in case of default or breach of an agreement committed by an industrial concern, two remedies are available to the Financial Corporation, one under Sec. 29 and another under Sec. 31 of the Act. It can resort to the remedy available under Sec. 29 or to the provisions of Sec. 31 for enforcement of the claims by the Financial Corporation. The choice in a given set of circumstances for availing the remedies available under See 29 or Sec.31 is of the Financial Corporation itself. The term "without Prejudice to the provisions of Sec. 29 of the Act" as used in 31 of the Act makes it clear that it is not obligatory on the part of the Financial Corporation to invoke only the special provisions of enforcement of the claims under Section 31, It can certainly resort to Sec. 29 of the Act without invoking the provisions of Section 31 of the Act for realisation of the amount due to it Section 29 does not merely confer right, but provides a se If-contained remedy also to the Financial Corporation for the enforcement of which it need not invoke the provisions of Section 31 of the Act.
In this case, having invoked the jurisdiction of the District Judge under Section 3q of the Pct and obtained a decree, the Corporation cannot invoke the provisions of Sec. 29 of the Act. Once the choice is ma de and necessary steps are taken, which in this case have culminated in the passing of a decree, the Financial Corporation cannot resort to the remedies available under Sec. 29 of the Act, which will result in a complete negation of what has been done after taking steps for enforcement of the claims by the Financial Corporation under Sec.31 of the Act.
( 1 ) A Division Bench of this High Court entertained some doubt about the opinion expressed by another Division Bench in Srinivasa Kandasari Sugar v. State, AIR 1976 Andh Pra 93 about the guidelines provided for implementation of the provisions of S. 29 of the State Financial Corporation Act, 1951 (for short "the Act. ") and has referred the matter for consideration of a Full Bench for an authoritative pronouncement on the subject. Therefore, the entire W. P. No. 255 of 1982 has been referred to the Full Bench for a decision on the facts as well as the law applicable to the case.
( 2 ) SINCE the entire W. P. has been referred to the Full Bench for a decision on the merits of the case, it becomes necessary to give a brief account of the facts of the case to indicate the controversy involved in the matter.
( 3 ) THE petitioner had applied for a loan of Rs. 99,500/- to the Andhra Pradesh State Financial Corporation (for short "the Corporation") for carrying on business of manufacturing agricultural implements at Koritipadu village in Amaravathi Road, Guntur. The petitioner executed a mortgage deed with the respondent-Corporation on 27-12-1966 thereby creating a charge on its properties in favour of the Corporation. Thereafter, the allegation made is that the petitioner was being harassed by the respondent-Corporation unnecessarily thus hampering smooth running of the industrial unit. Finally the respondent-Corporation filed a petition under S. 31 (1) of the Act, O. P. No. 211/69 before the District Judge. Guntur, for directing the mortgaged property to be sold for realising a sum of Rs. 1,09,02019 together with interest at 8% p. a. compoundable every half year from 28-9-1969 onwards. The District Judge allowed the petition vide order dated 7-9-1971, stipulating the future rate of interest at 6% p. a. on the principal sum of Rs. 99,500/ -. The petitioner preferred C. M. A. No. 176 of 1972 to the High Court against the said order which was dismissed and the Cross-objections filed by the respondent-Corporation were upheld. It is stated that the petitioner paid several amounts towards the dues to the Corporation in pursuance of the order of the district Judge, Guntur. In the month of June, 1981, the petitioner wrote to the Managing Director of the Corporation requesting him to intimate the exact amount due and also to accept the amount due in installments and also offered to pay a sum of Rs. 50. 000/- towards the first installment to the Corporation. However, no reply was given to the petitioner, who wrote another letter on 14-7-1981 to the Managing Director of the Corporation requesting that he may be granted facility of instalments in accordance with the letter written by him earlier.
( 4 ) WHILE the petitioner was pursuing with the respondent-Corporation for grant of facility of installments, a notice was published in EENADU Telugu newspaper to the effect that the industrial unit of the petitioner viz. Kisan Development Corporation, with its machinery would be sold and tenders were invited before 7-1-1982 for purchasing the same. It is further stated in the notice that the purchase amount should be paid within 30 days from 7-1-1982. In this Writ Petition the petitioner challenges the proposed action of bringing the industrial unit to sale by the respondent-Corporation without following the procedure prescribed under S. 32 (a) of the Act. The case of the petitioner is that the provisions of the Civil P. C. which are expressly made applicable to such sales under S. 32 (a) of the Act, are being short-circuited by the respondent-Corporation by issuing the notice to bring the Kisan Development Corporation with its machinery, etc. , to sale. It may also be stated that in pursuance of the aforesaid notice published in Eenadu newspaper the 3rd respondent in the Writ Petition gave his offer to purchase the land and factory for Rs. 2,05,000/- and deposited Rs. 52,000/- on 12-1-1982. Nevertheless, it seems that the balan
