The court affirmed the authority of the OSFC to seize the property under Section 29 of the State Financial Corporation Act, 1951, and emphasized the importance of complying with the terms of the auction sale.

M. M. DAS, J.

( 1 ) THE petitioner in the present writ petition has prayed for quashing the letter dated 3-3-2005 under Annexure-4 by which the opp. party No. 1-Orissa state Financial Corporation (for short 'the o. S. F. C. ') required the petitioner to pay the entire outstanding dues and has further prayed to declare the action of the said opp. party No. 1 taken under Section 29 of the state Financial Corporation Act, 1951 (for short, 'the Act') as illegal.

( 2 ) AN advertisement was made by the deputy General Manager, O. S. F. C.- oppparty No. 2 for sale of an industrial unit situated at Jagatpur, Cuttack, pertaining to idco Plot No. D-21, Phase-II, New Industrial Estate on 21-3-2002. The petitioner participated in the said auction sale held by the O. S. F. C. and being the highest bidder, the O. S. F. C. negotiated with him for raising the price. The petitioner ultimately agreed to purchase the said property for a sale consideration of Rs. 9,51,000. 00 with a down payment of Rs. 2,51,000. 00. The petitioner alleges that by letter dated 26-3-2002, the o. S. F. C. agreed to sell the property on "as is where is basis" with the conditions that the total sale price would be Rs. 9,51,000. 00 out of which Rs- 2,15,000. 00 shall be paid as down payment and the balance amount shall be paid on deferred payment basis. The O. S. F. C. enumerated the conditions of sale in its letter dated 26-3-2002 (Annexure-1 ). The relevant conditions mentioned in the said letter are quoted below :

( 3 ) IN consideration of the above, undersigned is directed to inform you that it has been decided to sale the above industrial concern in your favour on as is where is basis subject to the following terms and conditions and other usual terms and conditions of the sale/loan agreement.

. 1. The total sale price of the above assets shall be Rs. 9,51,000. 00 (Rupees Nine i lacs Fifty One thousand) only with a down payment of Rs. 2,15,000. 00 on deferred payment basis. 2. The Corporation shall not be liable for any statutory dues lying outstanding against the above industrial concern for the period prior to or after the sale, 3. The Industrial concern shall be released in your favour by this branch after deposit of the entire down payment by Cash/ pay Order/bankers cheque/demand Draft favouring OSFC payable at Cuttack prior to execution of legal agreement.

( 4 ) THE sale formalities should be completed within 15 days from the date of issue of this letter. The sale shall lapse and the earnest money deposited as above shall be forfeited, if the sale formalities are not completed by the above time.

( 5 ) THE balance outstanding of Rs. 7,36,000. 00 (Rupees Seven lacs Thirty Six thousand) shall be repaid in 3 years including 2 months moratorium from the date of agreement.

( 6 ) THE interest at current rent shall be charged on quarterly rest payable in 31st march, 30th June, 30th September and 31 st december in each year during the currency of the loan.

( 7 ) THAT a penalty of @ 2% per annum shall be charged on defaulted amount of principal and Interest for the period of default. 1% of rebate shall be allowed for payment of Interest and repayment of Principal in time.

( 8 ) THE required amount of processing charge shall be deposited before documentation.

( 9 ) THE Industrial unit shall be insured comprehensively including earth quake and flood in the joint names of the Corporation and the industrial concern and the insurance policy for the 1st year should be submitted with OSFC within 15 days from the execution of documents,

( 10 ) YOU should give the personal guarantee for repayment of the dues of the Corporation.

( 11 ) OSFC shall have the right to vary the rate of interest in case there is any modification made by SIDBI/rbi/govt. of India of imposition of any surcharge, levies taxes, etc. as interest (sic) either by Govt. of financial institution (s ). 12 to 16 xxxxxx xxx

2. The Corporation reserves the right to recalling the entire loan outstanding toge