The main legal point established in the judgment is the interpretation and application of section 29 of the State Financial Corporation Act, 1951, which grants the Corporation the right to take over assets and deal with the property in the event of default by the industrial concern.

JUDGMENT

D. Dash, J. - The Appellants by filing this Appeal under Section-100 of the Code of Civil Procedure (for short, 'the Code') have assailed the judgment and decree passed by the learned Addl. District Judge, Berhampur in RFA No. 11 of 2011 (RFA No. 87/05-GDC). These Appellants being the Plaintiffs had filed the suit i.e. Title Suit No. 41 of 1996 in the court of learned Civil Judge (Junior Division), Berhampur. In the said suit, they had sought for a declaration that the seizure of the Industrial Unit not fit to have the run as made by the Respondent No.1 i.e. Orissa State Financial Corporation (hereinafter, called as 'the OSFC') and its officials who are the other Respondents-Defendants is illegal with further prayer for direction to them not to dispose of the said unit in simultaneously holding that the action of the Respondent No.1- OSFC (Defendant No.1) in rescinding the contract is illegal. It has also been prayed to declare that the Respondent No.1 (OSFC) has no further legal claim against the Appellants (Plaintiffs). The Defendant No. 4 has been impleaded as such during pendency of the suit as the unit in question was purchased by him pursuant to the auction held by the Respondent No. 1 and its officials. The suit has been decreed and the following order has been passed:-

'It is hereby declared that the seizure of the suit unit and the inventory made by the defendant nos.1 to3 on 11-10-1995 is illegal.

The auction sale of the suit unit in favour of the defendant no.4 is illegal and void in the eye of law. The conveyance deed bearing no.181 of 1997 executed in favour of defendant no.4 is also illegal and not binding on the plaintiffs.

The defendants no.1 to 3 have rescind the contract with the plaintiffs with regard to the loan advanced to the plaintiffs and the Corporation has no legal claim against the plaintiffs.'

(Perhaps meaning thereby that the action of Defendant Nos. 1 to 3 in rescinding the contract with regard to the loan advanced to the Plaintiffs being illegal the Defendant No.1- OSFC has no legal claim against the Plaintiffs).

2. The Respondent Nos.1 and 2 (Defendant Nos. 1 and 2) being aggrieved by the said judgment filed the Appeal under section 96 of the Code which came to be heard by the learned Additional District Judge, Berhampur. The said Appeal has been allowed and the suit filed by the Appellants as the Plaintiffs has been dismissed which is now impugned in the present Appeal.

It may be stated here that the Plaintiff No. 1 is a proprietorship which is represented by its proprietor and that proprietor has come to stand as Plaintiff No.2

3. For the sake of convenience, in order to avoid confusion and bring in clarity, the parties hereinafter have been referred to, as they have been arraigned in the Trial Court.

4. Plaintiffs' case:-

The Plaintiff applied for loan from Defendant No.1 and having executed necessary documents availed certain amount out of the sanctioned loan for establishing the Saw Mill. The Plaintiff No.1 again wanted further loan from the Defendant No.1 and also executed other documents in that regard which was released on phase wise. The Plaintiff was asked to file required Forest Clearance Certificate to enable Defendant No. 1 to release further amount towards the loan for purchase of the machineries for running the Saw Mill. It is stated that the Forest Officials declined give the clearance unless the machineries are purchased. So the Plaintiffs requested to Defendant No. 1 to release the loan to purchase the machineries on priority basis. When the Defendant No. 1 stated that they would not go beyond the deed of hypothecation and as such release the loan and instead forest clearance, the Plaintiff thus could not avail the loan in full from the Defendant No.1. It is submitted that for the said action, the Plaintiff having not been able to get the loan in full suffered loss and remained in a fix. The Defendant No. 1 citing the default of the payment of loan proceeded in taking acti