The main legal point established in the judgment is that any order or action in contravention of an interim court order is a nullity, and the court cannot issue a direction to a financial institution to reach a one-time settlement.

JUDGMENT

B. S. CHAUHAN, C. J.

( 1 ) THIS writ petition has been filed for a direction quashing the order dated 10-3-2004 (Annex.-l) of the orissa State Financial Corporation (hereinafter called 'the Corporation') intimating the petitioner that due to non-payment of the dues, the physical possession of the mortgaged hypothecated assets of Hotel Puja at Koida had been taken under Section 29 of the State Financial Corporations Act, 1951 (hereinafter called 'the Act') on 2-3-2004; and also for quashing sale notice dated 13-1-2005 (Annex.-8 ).

( 2 ) THE facts and circumstances giving rise to this case are that the petitioner had taken a loan of Rs. 8 lakhs in the year 1999. The loan agreement was executed on 28-4-1999 by mortgaging the property in dispute as financial security. The petitioner, Shri Uttam Prasad gupta along with Smt. Chinmayee Gupta and miss Rita Gupta also executed personal guarantee bond to the Corporation. Petitioner availed loan, however, did not pay the instalments. Therefore, the opposite party-Corporation cancelled the undisbursed loan vide letter dated 24-1-2004. Due to non-payment of Corporations dues, the demand notice dated 24-1-2004 was issued to the petitioner giving him opportunity to clear up the demanded dues of Rs. 2,84,337. 74 within the stipulated period. Petitioner neither paid any amount nor made any response to the said demand notice, the opposite party No. 2 issued the notice recalling the entire loan liability under Section 30 of the Act vide letter dated 6-2-2004 giving further opportunity to the petitioner to pay the entire dues of the Corporation within the stipulated period. The petitioner did not pay the same within the time stipulated. Therefore, proceedings under the Act were initiated by the Corporation and physical possession of the mortgaged hypothecated assets was taken. As the petitioner adopted an indifferent attitude altogether, sale notice (Annex-8) was issued, of which the petitioner had full knowledge. The sale notice was also published in the newspapers. Opposite Party No. 3 was the sole person who responded to the said sale notice and after negotiation, the property had been sold to him over and above the upset price. Hence this writ petition.

( 3 ) DR. A. K. Rath, learned counsel appearing for the petitioner submitted that in the facts and circumstances of the case, as the sale has been conducted in violation of the statutory requirements and in case there was only one bidder, instead of setting the property with him by negotiation, a fresh notice of sale should have been issued. Auction cannot be held with one bidder. Further, petitioner had always been willing to pay the loan, but his offer for one time settlement was not at all accepted by the opposite parties. The sale has been executed in favour of opposite party No. 3 by opposite party No. 2 in violation of the interim order passed by this Court dated 16-4-2004 by which opposite party No. 2 was restrained to alienate the property by any means in favour of any other person. Therefore, petitioner is entitled for the relief sought.

( 4 ) ON the other hand Ms. S. L. Patnaik, learned counsel for the Corporation and Mr. Sarangi learned counsel appearing for opposite party No. 3 have argued that Court cannot issue direction to reach One Time Settlement (OTS ). The property had been settled in favour of the opposite party No. 3 strictly in accordance with law. Petitioner had full knowledge of sale notice. He ought to have challenged it within time. Petitioner filed the original writ petition, but relief for quashing the sale notice was not sought. Thereafter, he moved an application for amendment. Even in that application quashing of sale notice was not sought, rather prayer for adding certain grounds had been made. The said application for amendment was allowed and petitioner was asked to file a consolidated petition. He has introduced the prayer which has never been sought and allowed in the application for amendment. The c