1. This writ petition is directed against the order bearing letter No. 281, dated 8-5-1997 (Annexure 21), of the Board of Directors, Bihar State Financial Corporation (respondents Nos. 2 to 7), whereby application of the petitioner company for one-time Settlement (OTS for short), has been rejected, and for the further direction to restrain the respondents from taking any coercive step including taking possession of Hotel Mayur situate on Frazer Road, Patna, or in any manner giving effect to the impugned order dated 8-5-1997.

2. The petitioner company had initially started its business as a partnership firm. The firm constructed a building on the land given on lease by respondent No. 19, situate on Frazer Road, in the township of Patna. The petitioner company is engaged in the business of hotel and restaurant set up in the said building, and portion of which has been let out on commercial basis. The firm had applied for financial accommodation with respondent No. 2 for construction of the hotel building and setting up the business, and an amount of Rs. 9.90 lacs was sanctioned and paid on 31-3-1975. The last instalment toward repayment of the loan amount was payable on 1-6-1987. The firm was further sanctioned and paid another loan of Rs. 5 lacs on 13-3-1978, and the last instalment was payable on 1-6-1988. The firm was converted into a Private Limited Company with effect from 19-6-1979, and a further loan of Rs. 5.57 lacs was sanctioned and paid to the petitioner company, the last instalment of which was payable on 1-1-1991. The petitioner never paid the dues of the Corporation as per agreement though it was althrough in good business, was earning well, the payment was completely stopped after 9-11-1992, and the overdues on the said three loan accounts accumulated to a staggering sum of Rs. one Crore (approx).

3. Failure or refusal on the part of the petitioner company to pay its debts has engaged it in a continuous chain of writ petitions before this Court. The petitioner preferred CWJC No. 5518 of 1994, before this Court which was directed against the Corporations notice dated 28-6-1994, issued under Sec. 29 of the State Financial Corporations Act, 1951 (hereinafter referred to as the Act). This Court passed the order dated 30-6-1994, directing the petitioner to deposit Rs. 5 lacs by 14-7-1994, and a further sum of Rs. 10 lacs by 28-7-1994, and, in the meantime, the parties were required to take steps for settlement of the dispute. The petitioner did not deposit the amount at all and withdrew the writ petition on 7-7-1994. In the meantime, the respondent Corporation had come out with a scheme for settlement of the dues of its defaulters of the Corporation bearing Circular No. 01/MDC/93.94, 22-7-1993 (Annexure 1), known as the Scheme of one - Time Settlement, which would be discussed at the appropriate stage. The petitioner preferred CWJC No. 8998 of 1994 before this Court for the direction to the Corporation to make one-time settlement with respect to the petitioners dues in terms of the said policy, and also to quash the order by which the sale had been finalised. A learned single Judge of this Court has passed an interim order dated 1-11-1994 (Annexure 5), directing the petitioner to deposit Rs. 9.10 lacs by 2-11-1994, in which event the Corporation was directed to hand over possession of the hotel back to the petitioner. The money was deposited in time, and possession of the hotel was restored to the petitioner. This Court had also directed the petitioner on 1-11-1994 to deposit a further sum of Rs. 6 lacs by 1-12-1994, which the petitioner deposited after hiccups and extension granted by this Court. At a later stage of the proceeding in CWJC No. 8998 of 1994, this Court directed the petitioner to deposit a sum of Rs. 15 lacs which it declined to do. However, the Court had directed the Corporation to consider the petitioners application for one-time settlement.

4. Under the aforesaid scheme for OTS (Annexure 1), t