The Corporation's actions under Section 29 of the State Financial Corporations Act were found to be in accordance with due process, and the claims regarding specific machinery were not tenable as the Corporation had not seized such machinery.

P. K. MOHANTY, J.

( 1 ) IN all the three writ petitions common question of law and fact being involved, on the prayer and with the consent of the learned counsel for the parties, they have been taken up together for hearing and are being disposed of by this common order.

( 2 ) ONE Manu Tandan, Director of M/s. Ashoka Health Care (P) Ltd. is the writ petitioner in O. J. C. No. 1ll 16 of 1999 with a prayer to quash the seizure of the Industrial Unit by the State Financial Corporation and for a direction to release the same in favour of the petitioner's company. The writ petitioner claims that M/s. Ashoka health Care (P) Ltd. had set up a hospital at bhubaneswar availing a term loan from opposite party No. 1, the State Financial corporation. On default of payment of the loan dues, said unit was seized by the Corporation on 8-2-1999 but no notice as prescribed under the Rules had been served on the petitioner and the seizure was done behind his back. While admitting default in payment of the instalments, default has been explained on the ground that the project being new, there was loss which led to nonpayment of the dues of the Corporation. However, the petitioner has admitted receipt of the letter dated 19-8-1999, in which it was informed that the assets of the Company are being sold at a price of Rs. 60 lakhs at a down payment of Rs. 15 lakhs in favour of opposite party No. 2. The main grievance of the writ petitioner is that the unit has been seized and is being sold without giving an opportunity to the petitioner to release the Unit on the terms ahd conditions fixed by the Corporation. Opposite party No. 1 has however disputed and denied the allegations with regard to issuance of notice and affording of reasonable opportunity to the petitioner to make repayment of the loan to the corporation. It is, therefore, the specific case that M/s. Ashoka Health Care Pvt. Ltd. having failed to make payment of the dues of the Corporation to the tune of Rs. 2. 55 crores including interest and having violated the terms by removing some of the machinery without prior permission, the Corporation had no other alternative than to exercise its power under Section 29 of the State Financial Corporations Act. It is stated that prior to the seizure of the Unit, the loan recall notice was issued on 12-3-1998 and after seizure of the Unit, a notice was issued on 22-7-1999 to all the Directors of the Company including the petitioner for settlement of the loan dues and release of the Unit by attending the D. A. C. meeting of the Corporation scheduled to be held on 31-7-1999. It is further submitted that due to consistent default, demand notice was issued on 22-1-1998 and loan recall notice was issued on 12-3-1998 by Regd. Post with A. D. , but the petitioner having not taken any steps, action under Section 29 of the State Financial Corporations Act has been taken. However, it has been stated in Para 5 that the possession of the assets of the Unit was taken over on 8-2-1999 in presence of the representatives of the petitioner-Company and it was found that about 25 numbers of hypothecated machinery/assets were missing from the Unit. On enquiry, the representatives of the Company informed the officials of the Corporation that these assets have been shifted to their Corporate office at Hyderabad. The removal of assets was found to be unauthorized and without permission of the Corporation, for which the corporation lodged an F. I. R. on 16-2-1999 in Nayapalli Police Station, Bhubaneswar for taking necessary action. The recall notice dated 12-3-1998, F. I. R. for removal of assets dated 12-2-1999 and intimation for appearing in person or through his authorized representative before the D. A. C. Meeting scheduled to be held on 31 - 7-1999 have been annexed as Annexures A, B and C respectively. It has, however, been stated that m/s. Ashoka Health Care Pvt. Ltd. entered into an agreement with M/s. CDR Medical industries Ltd. , which nominated Sri jaganmohan R