JUDGMENT :

(Prayer: Writ petition filed under Article 226 of the Constitution of India praying for issuance of a Writ of Mandamus calling for the records relating to the order dated 21.12.2020 passed in TIIC/Erode.FU/2020-2021 on the file of the first respondent herein and to quash the same as null and void, and forbearing the respondents from proceeding in any manner against the petitioner in respect of the land to an extent of 11216 ½ Sq.Ft., in Survey No.362/5 in Vellakovil Village in Kangeyam Taluk in Erode District.)

1. This writ petition has been filed challenging the action taken by the respondent Corporation bringing the subject property for auction sale pursuant to the notice issued to the partnership firm; the petitioner and other partners on 19.10.2020 and to forbear the respondents from proceeding further.

2. The case of the petitioner is that the partnership firm namely, M/s.Ranga Woolen Spinners sought for financial assistance from the Tamil Nadu Industrial Investment Corporation Limited (TIIC). The Corporation extended financial facilities to the partnership firm. At the time when the loan was paid to the firm, a mortgage deed was entered into on 25.03.1992 and the subject property was also one of the property that was mortgaged as a security for the repayment of loan. There was default in payment of the loan and hence, the loan was foreclosed on 17.07.1997. Thereafter, the Corporation also offered a one time settlement to the firm and the same did not go through. Therefore, the Corporation proceeded further and took symbolic possession of the mortgaged assets on 17.10.2002 by invoking their powers under Section 29 of the State Financial Corporations Act, 1951 (hereinafter referred to as 'the Act'). The physical possession of the properties was also taken on 27.07.2017.

3. The respondent Corporation thereafter attempted to bring the mortgaged properties for public auction and the same got challenged before this Court by the partnership firm and all those writ petitions were dismissed. Ultimately, the respondent Corporation made a valiant attempt to bring the property for auction sale and the auction was held on 22.01.2021 and the fourth respondent was the successful bidder and it is stated that a sale deed was also executed in her favour. Aggrieved by the same, the present writ petition has been filed before this Court.

4. The respondents 1 to 3 have filed a counter affidavit and the relevant portions in the counter affidavit are extracted hereunder:

“10. With regard to the averment made in paragraph 7 of the affidavit is denied as false. It is false to state that this respondent took symbolic possession of the mortgaged assets on 17.10.2007 by invoking their power under Section 29 of the State Financial Corporation Act. It is pertinent to note that this respondent is giving due notices and intimating the actions taken against the firm to the petitioner and the partners of her firm. This respondent Corporation after giving due notices took symbolic possession of mortgaged assets on 17.10.2002 and took physical possession of the same on 27.07.2007 under Section 29 of the State Financial Corporation Act.

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12. With regard to the averment made in paragraph 9 of the affidavit and denied as false. It is false to state that all the efforts taken by the said firm through its partners and herself were not successful. It is true that this respondent by their letter dated 19.10.2020 called upon to pay a sum of Rs.17.67 lakhs towards principal and Rs.2552.93 lakhs towards interest with other charges amounting to Rs.6.34 lakhs totaling Rs.2576.94 lakhs as on 19.10.2020 and further interest from 01.07.2020.

13. With regard to the averments made in paras 10 to 12 of the affidavit, all the allegations mentioned therein is true and correct. In the said letter dated 19.10.2020 this respondent had also categorically mentioned at page No.2 as “if you have any objection about the valuation, you may inform us within seven days from the dat