The discretion of financial institutions in rescheduling loans and the discretionary nature of writ jurisdiction in compelling performance of statutory duties.

M. KATJU, J.

( 1 ) THIS writ petition has been filed against the impugned order dated 20-1-2000 Annexure 19 to the writ petition by which the petitioner prayer for rehabilitation of its units have been rejected by the competent authority and the petitioner was directed to liquidate the liabilities of the respondent or give the proposal for one time settlement within fifteen days of the issuance of the letter failing which coercive steps will be taken for realisation of the dues of the Corporation.

( 2 ) WE have heard the learned counsels for the parties.

( 3 ) THE petitioner had taken a loan from the U. P. Financial Corporation but when it did not repay the same, proceedings under section 29 of the State Financial Corporation Act were initiated against it. The petitioner filed a suit before the Civil Judge, deoria along with an application for temporary injunction In which the Civil Judge on 29-10-1993 passed an order restraining the respondents from recovering any amount in question from the petitioner for a period of one year on the ground that rehabilitation proceeding is going on. Against that order the Financial Corporation filed a Civil Revision in this Court which was dismissed on the ground that the period of one year had expired and hence it was not necessary to decide the revision on merits. In that decision this Court also considered the plea of the petitioner under Section 22 of the Sick industrial Company Act 1985 and observed that the plaintiff can make an application before the Civil Court in this connection.

( 4 ) IN paragraph 7 of the writ petition it is alleged that the unit was declared sick in view of the decision taken in the meeting held under the chairmanship of the Commissioner, Gorakhpur dated 29-10-1993 vide Annexure 2 to the writ petition.

( 5 ) IN paragraph 8 of the writ petition it is alleged that the petitioner moved a proposal for rehabilitation of the unit on 14-3-1992 on which a meeting of the Bank authorities and U. P. Financial Corporation was held on 6-7-1993 and 21-10-1993. A letter dated 6-12-1993 was issued by the respondent No. 3 asking for certain information vide annexure 3 to the writ petition. It is alleged in paragraph 9 of the writ petition that subsequently the petitioners unit was inspected by the competent authorities for the purpose of providing working capital and rehabilitation but no concrete result was intimated to the petitioner. The State Government also framed certain guidelines for providing working capital and rehabilitation to the Sick units vide Annexures 4 and 5 to the writ petition. The Central Bank also filed a suit against the petitioner in which the U. P. Financial Corporation was also arrayed as a party and the Civil Judge, Deoria, passed an order restraining the respondent corporation from selling the petitioners unit for one year. Against the order of the Civil judge a civil revision was filed which was disposed of vide Annexure 1 to the writ petition, reference to which already been made above. The respondent No. 2 the U. P. Financial Corporation took possession of the petitioner unit on 25-9-1995. The petitioner filed writ petition No. 28074 of 1995 which was dismissed on 29-9-1995 vide Annexure 6 to the writ petition. In that judgment this court held that the U. P. Financial Corporation has taken a lenient view of the matter and has accommodated the petitioner to the extent possible and did not in fact takeover possession for a long time and had deferred the same as much as possible. However, it ultimately took over possession on 29-9-1995. It was also observed that the amount of loan had increased to practically an insurmountable extent and it is not reasonable to infer that the petitioner had any desire all through this time to make sincere effect either to run the factory or to pay the liability. The U. P. Financial Corporation has tried to accommodate the petitioner from 14-9-1993 to 25-9-1995. The Court held that taking over possession by the U. P. Fi