S.N.JHA, J.

1. This Letters Patent Appeal is directed against the judgment and order of a learned single Judge of this Court dated 25-6-99 in CWJC No. 9667 of 1998 dismissing the appellants writ petition.

2. The dispute relates to the sale of the mortgaged assets of M/s. Rama Rice Mill situate at Banauli within Chenari P.S. of Rohtas District, at the instance of the Bihar State Financial Corporation (the Corporation, for short) under the provisions of the State Financial Corporations Act, 1951 (the Act for short). The appellant filed the abovementioned writ petition seeking, initially, a mandamus commanding the Corporation not to sell the mill in favour of any third party including respondent No. 3 Md. Azim, and consequential directions. By amendment, later, he prayed for quashing the order dated 24-9-98 regarding sale of the mill in favour of respondent No. 3 and the sale agreement dated 14-11-98 entered into with him i.e. respondent No. 3.

3. The case of the appellant, as stated in the writ petition, briefly, is as follows:One Chandra Shekhar Choubey and other partners established the mill i.e. M/s. Rama Rice Mill in the year 1978 after investing amount of Rs. 30 to 40 lacs. They made further investments in order to modernise the mill. However, as they needed more money, they approached the Corporation for grant of term loan. On 13-3-87 the Corporation sanctioned loan of Rs. 11.30 lacs. Another loan of Rs. 5.60 lacs was sanctioned on 2-7-88. However, amount of Rs. 2.20 lacs only was sanctioned as subsidy as working capital. Out of the said sanctioned amounts, Rs. 11.30 lacs and Rs. 4.86 lacs only were disbursed. It is said that due to paucity of fund and internal disputes between the partners the mill could not go into production and the amount of loan started mounting. In the year 1991 Chandrashekhar Choubey died. The loan repayment schedule was re-scheduled in the year 1994 but the dues could not be paid. The mill was put on auction sale in 1994. The Corporation entered into negotiation with one Sunil Kumar Singh and Akhilesh Kumar Singh without giving any opportunity to the partners. The appellant later came to know that an order had been passed for sale of the mill to respondent No. 3. On 12-10-98 he approached the Managing Director of the Corporation seeking a weeks time to enable him to deposit money after consulting other partners. He filed another application before the Managing Director on 20-10-98 seeking permission to deposit the money. Despite the said application and offer, he learnt, the Executive Committee of the Corporation vide resolution dated 31-10-98 had decided to sell the unit to respondent No. 3. On 10-11-98 he filed the writ petition. According to the petitioner the market value of the assets of the Mill was not less than Rs. 80 lacs and the proposed sale without giving him further opportunity to retain the unit was contrary to the law laid down by the Supreme Court in Mahesh Chandras case, AIR 1993 SC 935 : (1993) 2 SCC 279.

4. The Corporation filed two counter-affidavits. It stated that two term loans were sanctioned to M/s. Rama Rice Mill under two loan accounts for Rs. 17 lacs during 1987-88. The unit, however, could avail of Rs. 16.27 lacs only. The unit did not pay the instalment, as a result, the balance outstanding mounted to Rs. 43.49 lacs as on 31-5-96. In view of the successive defaults committed by the unit, the mortgaged assets of the unit were advertised for sale on 4-3-95 in the Hindustan Times. The unit was again advertised for sale in 1997. The sale notice was published in the Hindustan Times on 10-1-97 and the Hindustan (Hindi) on 24-1-97. Two offers by (i) Sunil Kumar Singh and Akhilesh Kumar Singh, and (ii) Md. Azim were received pursuant to the said sale notice. They offered respectively Rs. 40 lacs and 39.75 lacs. Decision was taken to sell the unit to the former for Rs. 40 lacs. However, as they failed to make the initial cash down payment the sale order was later withdr