Khatim Reza, J. – Heard Mr. Arun Kumar Sinha, Advocate assisted by Mr. Pravin Prabhakar, learned counsel for the appellants and Mr. Binod Kumar Singh, Advocate assisted by Ms. Vagisha Pragya Vackanavi, learned counsel for the respondents in First Appeal No. 272 of 1999. Heard Mr. Rajnandan Prasad, learned counsel for the appellants, Mr. Binod Kumar Singh, learned senior counsel for the respondent nos. 1 & 2 and Mr. Arun Kumar Sinha, learned counsel for the respondent no. 3 in First Appeal No. 268 of 1999.

2. The present two appeals arise out of judgment and decree dated 19.05.1999 passed in Title Suit No. 39 of 1996 by learned Sub-Judge-5th, Begusarai.

3. First Appeal No. 268 of 1999 has been filed by Bihar State Financial Corporation (hereinafter referred to as ‘the Corporation’), defendant nos. 1 & 2/appellants, whereas First Appeal No. 272 of 1999 has been preferred by the intervenor defendant/appellants.

4. The plaintiffs are original respondent nos. 1 & 2 in First Appeal No. 272 of 1999 and defendant nos. 1 & 2 are the appellants in First Appeal No. 268 of 1999 and original defendant no. 3 is the respondent in First Appeal No. 268 of 1999 whereas in First Appeal No. 272 of 1999, intervenor/defendant is the appellant and the plaintiffs are original respondent nos. 1 & 2 and defendant nos. 1 & 2 are respondent nos. 3 & 4 respectively.

5. The plaintiffs filed the aforesaid Title Suit for declaration that the intervenor/defendant did not derive any right, title, interest or have possession by virtue of auction sale dated 18.03.1996 and also that the delivery of possession is void. It was further prayed to set aside auction sale and delivery of possession with a declaration that the plaintiffs have got title and interest in the suit property, and further for declaration that defendant had no right to auction sale the said property under Section 29 and 30 of the Bihar State Financial Corporation Act and also sought mandatory injunction directing the defendant Corporation to put the plaintiffs back in possession of the suit premises.

6. As per the case of the plaintiffs, the defendant Corporation is established under the State Financial Corporation Act, 1951 (hereinafter referred to as ‘the Act’) to promote industrialisation in the State of Bihar by establishing and developing industries and by getting the project of each industry completed and also by maintaining working capital of each industry through some financial banks.

7. Further case of the plaintiffs is that on 05.01.1982, the plaintiffs applied for sanction of Rs. 15,00,000/- loan for its Motel Industry at Begusarai. The Corporation wrongly and illegally estimated the total project of the industry at Rs. 12.50 lakhs and sanctioned a loan of Rs. 8.50 lakhs only on 29.05.1982 to the plaintiffs and according to the terms of the loan, promoter’s contribution i.e., of the plaintiffs was to be Rs. 2 lakhs. It is further contended that the plaintiffs deposited original title deeds of land and buildings on 24.09.1982 for creating equitable mortgage of the same in favour of defendant Corporation. On 02.12.1982, the partner of the plaintiffs executed document in favour of defendant Corporation. The defendant Corporation realised its mistake concerning sanction of the said loan and on 12.07.1984, sanctioned another loan amounting to Rs. 3.15 lakhs and both the loans were repayable in installments, last installment was being payable on 01.01.1993. It is further pleaded that even out of total sanctioned loan of Rs. 11.65 lakhs, Rs. 8.29 lakhs only was disbursed to the plaintiffs and about three lakhs rupees was adjusted towards alleged due of the defendants, on account of interest from the very beginning of the loan, as a result of which the total project of the plaintiffs could not be completed.

8. Further case of the plaintiffs is that after service of notice under Section 29 and 30 of the Act, the matter was finally settled on 06.11.1990 in terms of order passed in C.W.J.C. No. 6104 of