VINOD K. SHARMA, J.

1. State Industries Promotion Corporation of Tamil Nadu Limited, a company registered under the Companies Act and having its registered office at No.19-A, Rukmani Lakshmipathy Road, Egmore, Chennai 600 008, a notified financial institution defined under the State Financial Corporations Act, 1951, has filed this petition under section 31 (aa) of the State Financial Corporation Act, 1951, for recovery of Rs.8,49,46,899.50/-(Rupees eight crores forty nine lakhs forty six thousand eight hundred and ninety nine and paise fifty only) together with future interest @ 14.5% per annum from 1.3.2001 till relalisation and for costs.

2. M/s.Hannis Aromatics (P) Limited, respondent No.1 herein, registered under the Companies Act, approached the petitioner for loan assistance for construction of building and purchase of machinery. The respondent No.1 was sanctioned term loan of Rs.80,00,000/- (Rupees eighty lakhs only) on 30.1.1985. On request of the respondent No.1, second term loan of Rs.10,00,000/-(Rupees ten lakhs only) was sanctioned on 31.8.1998. In addition, the respondent No.1 was also granted IDBI Seed Capital Soft loan of Rs.10,00,000/- (Rupees ten lakhs only