Pinaki Chandra Ghose, CJ.

1. This Writ Appeal by the appellant-writ petitioner is directed against the order of the learned Single Judge dated 21.8.2012 in W.P.No.6842 of 2000 dismissing the writ petition filed by the appellant to declare the action of the Mandal Revenue Officer, Khairatabad Mandal – 2nd respondent in initiating proceedings No.A2/39/98 dated 6.1.2000 under the provisions of the A.P. Revenue Recovery Act, 1864 for payment of Rs.56.80 lakhs with interest at 6% p.a. payable to the Andhra Pradesh Industrial Development Corporation Limited, Hyderabad without deciding his liability to the Corporation as arbitrary, illegal and without jurisdiction.

2. The parties will be referred to by their status in the writ petition.

Brief facts leading to the controversy are:

(a) M/s Rama Organics Private Limited, Hyderabad (for short ‘the Company’) dealing in bulk drugs was initially incorporated by three promoter Directors, namely, Mr.P. Seshagiri Rao, Mr. A. Nageswara Rao and Dr. A.K. Chatterjee. Andhra Pradesh Industrial Development Corporation (for short ‘the Corporation’) sanctioned term loan of Rs.56.80 lakhs to the Company on 13.11.1984 and another term loan of Rs.12.45 lakhs on 26.2.1985. Dr. A.K. Chaterjee as Managing Director of the Company gave personal guarantee to the above loans. On 29.12.1987 the appellant was inducted as Director in place of Dr. A.K. Chatterjee and he executed personal guarantees for the aforesaid loans on 17.8.1988.

(b) It appears that the company had failed to discharge the loans, consequently, according to the list of chronological events filed by the petitioner, demand letters were issued by the Corporation for payment of outstanding loan amount before taking action under Section 29 of the State Financial Corporation Act (for short ‘the SFC Act’) to the principal debtor and the guarantors including the petitioner on 12.1.1989, 8.3.1989, 9.3.1989 and 16.6.1989. But, neither the petitioner nor the Corporation filed those letters. On 6.10.1989 the petitioner resigned as Director and requested to relive him immediately and to take steps to relieve him from all his personal guarantees/undertakings provided to various financial institutions. In the Board meeting of the Company held on 16.10.1989 the resignation of the petitioner was accepted and the Managing Director was requested to relieve him from all his personal guarantees and undertakings. It was also resolved to co-opt Lt. Col. (Retd.) K.S. Rao as a director in the place of the petitioner and resolved that he will furnish all guarantees/undertakings originally furnished by the petitioner to the Corporation and other institutions and that the shares of the value of Rs.4,80,000 of the petitioner be transferred to the Directors subject to the approval of the Corporation and other institutions. According to the petitioner, again on 07/18.10.1989 demand was made for payment of outstanding loan amount from the Company.

(c) On 28.3.1990 letter was addressed to the Managing Director of the Company intimating that steps are being taken for recovery of an amount of Rs.75,81,000/-by way of sale of the Unit under Section 29 of the SFC Act as per the proforma of sale notice enclosed thereto. Copy of the said letter was marked to petitioner and other directors except Sri K.S. Rao. By letter dated 16.4.1990 petitioner replied that he is no longer Director of the Company and in his place Sri K.S. Rao was appointed as director. The Corporation issued another demand notice dated 28.5.1992 for Rs.71,27,180/-to the Managing Director of the Company, copy of which was marked to the petitioner. The assets of the company were seized on 3.7.92. Petitioner submitted replies on 13.7.1992 and 17.8.1992 denying his liability and ultimately the assets were sold for consideration of Rs.61.00 lakhs on 29.12.1993. On 25.11.1994, the Corporation relieved Dr. A.K. Chaterjee from his personal guarantee.

(d) On 22.3.1996, for the first time, a letter of demand was ad