( 1 ) THE petitioner M/s Flair Heals Pharmaceuticals is a property concerned of Himanshu Mehta has filed the present petitioner. The petitioner is a young entrepreneur and in order to start the petitioner-firm, he had applied for loan from respondent No. 1-Gujarat State Finance Corpoaration (hereinafter referred to as "gsec")- The respondent no. 1-GSFC, sanctioned loan of Rs. 8 lacs by its letter dated 30th December, 1991. The said amount of Rs. 8 lacs was to be repaid within a period of 8 years and in 27 quarterly instalments. The petitioner was also granted moratorium of 18 months. He was also advised to secure State subsidy of Rs. 87,000/ -. The petitioner thereafter started his unit by creating mortage in favour of GSFC. By application dt. 19. 5. 92, he had asked GSFC, to kindly grant loan of Rs. 1. 5 lacs. The petitioner was granted a subsidy of Rs. 31,800/- under the Capital Investment Subsidy Scheme 1994-95. Both subsidies were partially disbursed in November 1994. It is the case of the petitioner that notice dated 13th April, 1994 was issued by GSFC calling upon him to pay Rs. 1,39,305/ -. He addressed letter dated 29. 4. 94 expressing therein various difficulties faced by the petitioner and to consider his case sympathetically. Thereafter, he was served with the notice dated 27th june, 1994 by the State Financial Corporation Act. By the said notice, he was called upon to pay the entire amount of Rs. 8,42,173/- which were due from him on 1st June, 1994. It is his case that in the meantime on 30th April, 1994, the Officers of Food and Drugs department, Gandhinagar had inspected his factory and had passed the order of seizure of certain finished goods which were worth Rs. 3 lacs. On 9th July 1994, he had written to the respondent No. 1 about his practical difficulties and had requested to bear with him for some more time. On 29th May 1995, i. e. , 10 months after his letter of 9-7-94 the possession of the factory premises of the petitioner was taken over by respondent No. 1-GSFC. On 23rd June 1995, an advertisement for public auction-sale was issued for sale of the said factory. But at the time of said auction-sale as no adequate price was offered, auction-sale actually did not take place. Therefore, he applied on 26th June 1995 for re-schedulement to pay the loan, but without considering the said application, the respondent No. 1 issued a public advertisement for auction-sale of the unit of the petitioner and sought offers till September 7, 1995. The offer of respondent No. 2 for Rs. 2,61,000/- was accepted and he was put in possession of the said unit. It is the claim of the petitioner that the decision of respondent No. 1-GSFC in putting the property of the petitioner for Auction is unconstitutional, illegal and bad in law. The respondent No. 1 had not followed any procedure as required by Sec. 29 of the Financial Corporation Act as well as the principles laid down by the Supreme Court in the case of Mahesh Chandra vs. Regional Manager, U. P. Financial Corporation and Ors. , AIR 1993 Supreme Court 935. The property is also sold for grossly inadequate amount. He, therefore, seeks a Writ of mandamus for quashing and setting aside the decision of the respondent No. 1 in selling his property in favour of the respondent No. 2 and to direct the respondents to hand over the said property to the petitioner in terms and conditions which the court thinks just and proper.

( 2 ) THE claim of the petitioner is resisted by respondent No. 1- GSFC by filing its affidavit-in-reply. It is contended that the action taken by the respondent No. 1 is within the purview of the provisions of the State Financial Corporation Act, 1951 and this is not a fit case for interference of the High Court by exercising powers under Art. 226 of the constitution of India with their statutory action against the petitioner. It is contended that they had given sufficient and ample opportunities to the petitioner to come out of his financial