The financial corporation's transfer of property under Section 29 is valid and confers full rights to the purchaser, irrespective of the original lessee's covenant breaches.

JUDGMENT :

ARINDAM SINHA, J.

1. Petitioner is purchaser from Odisha State Financial Corporation [(OSFC)/opposite party no.4]. The purchase was made by deed of transfer dated 29^th January, 2003 executed by the corporation in favour of petitioner. Three recital clauses and first witness clause are reproduced below.

“xx xx xx xx xx xx xx xx

Whereas the transferor has taken over possession of the industrial concern, M/s. Green Valley Limes (P) Ltd. on 21.11.96 with a view to exercising the right of the transferor to transfer and realize the mortgaged and hypothecated property Whereas the assets available at the time of takeover U/s.29 of the SFCs Act, 1951; were offered for transfer to general public by calling for offers Whereas the transferee offered to transfer the assets more fully described in the schedule below on outright transfer basis for a consideration of Rs.25,00,000.00 (Rupees Twenty five Lakh only).

xx xx xx xx xx xx xx xx

NOW THIS INDENTURE WITNESSETH AS FOLLOWS

That in consideration of Rs.25,00,000/- the transferee has paid the full amount i.e., Rs.25,00,000/- to the Corporation to which the Corporation duly hereby acknowledge and do hereby convey and transfer the right, title over the schedule land, building and other structures thereon with subservient right of light, air, passage to the public road and drainage and all other easement right which the borrower enjoyed to the exclusion of the borrower and his successor in favour of the transferee and the transferee being already in possession of the schedule property in terms of a separate agreement to transfer, shall be deemed to be the owner in possession from this day and shall enjoy all easement right as stated above.

xx xx xx xx xx xx xx xx”

(Emphasis supplied)

2. Mr. Dash, learned advocate appears on behalf of petitioner and submits, the corporation took possession of the industrial unit, in exercise of power under section 29 in State Financial Corporations Act, 1951. His client thereafter sought for settlement of the property, in its favour. There was direction by the administration to do so. A third party appealed against the direction and the Additional Sub-Collector passed order dated 27^th August, 2015 saying that the transfer is invalid. His client petitioned for revision. By impugned order dated 29^th April, 2020, the revision was disallowed.

3. Mr. Nayak, learned advocate appears on behalf of OSFC. He too submits, the appeal was at instance of a third party. It ought not to have been entertained. His client duly acted in exercise of power under section 29. He draws attention to letter dated 17^th August, 1999, written by his client to the Tahsildar. Text of the letter is reproduced below:

“With reference to the above, this is to inform you that the assets (land & building) of the erstwhile unit M/s. Green Valley (P) Ltd., Gochhapada Road, Phulbani were seized by the Corporation u/s.29 of SFCs Act 1951 on dated 21.11.96 due to non-payment of dues and subsequently sold in favour of M/s. Orissa Jesuit Society, Loyola Bhawan, 58, Forest Part, Bhubaneswar on outright purchase basis. The purchaser has taken over possession of the land and building on 20.7.99.

Now for transfer of title deed in the name of the purchaser, you are requested to inform us the cess dues lying against the old unit, so that appropriate action for payment of the said dues shall be taken at our end.”

4. Mr. Rout, learned advocate, Additional Standing Counsel appears on behalf of State. He draws attention to order dated 27^th August, 2015 made by the Additional Sub-Collector. He demonstrates from reasoning given therein that the lease was for industrial purpose.