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1995 Supreme(All) 1092
IN THE HIGH COURT OF ALLAHABAD
R. A. SHARMA, O. P. JAIN
RAM BHAROSEY LAL - Appellant
Versus
U.P.FINANCIAL CORPORATION, KANPUR - Respondents
C. M. W. P. 5554 Of 1988
Decided On : 10/31/1995
S.K.Varma
The guidelines laid down in Mahesh Chandra v. Regional Manager, U. P. Financial Corporation, (1993) 2 SCC 279: AIR 1993 SC 935, were not mandatory and could be departed from in appropriate cases.
Headnote:
FINANCIAL CORPORATION - SALE OF PROPERTY - GUIDELINES - FAIRNESS - PUBLIC AUCTION - TENDER - ONE TIME SETTLEMENT - REHABILITATION PACKAGE - THIRD PARTY PURCHASER - VALUATION - ADEQUACY - PRESUMPTION OF UNFAIRNESS.
Fact of the Case:
Petitioner, a retired Indian Army Officer, took a loan from the respondent Corporation to set up a Dairy industry. Due to unsuccessful venture, he was unable to repay the loan. The Corporation served a notice under S. 29 of State Financial Corporation Act and published an advertisement inviting offers for the purchase of the mortgaged property. The property was sold to respondent No. 3 for Rs. 1,10,000. Petitioner challenged the sale, alleging no public auction, no valuation, no effort to make the Dairy Unit viable, and no information about the highest bid.
Finding of the Court:
The Court held that the Corporation had acted fairly and reasonably in selling the property. The guidelines laid down in Mahesh Chandra v. Regional Manager, U. P. Financial Corporation, (1993) 2 SCC 279: AIR 1993 SC 935, were not mandatory and could be departed from in appropriate cases. The Court also held that the petitioner had not made any genuine offer of "one Time Settlement" or requested a rehabilitation package. He had not offered to purchase the property himself or brought any third party willing to purchase the property for an amount exceeding Rs. 1,10,000.
Issues: 1. Whether the Corporation had acted fairly and reasonably in selling the property? 2. Whether the petitioner had made any genuine offer of "one Time Settlement" or requested a rehabilitation package? 3. Whether the petitioner had offered to purchase the property himself or brought any third party willing to purchase the property for an amount exceeding Rs. 1,10,000?
Ratio Decidendi: 1. The guidelines laid down in Mahesh Chandra v. Regional Manager, U. P. Financial Corporation, (1993) 2 SCC 279: AIR 1993 SC 935, were not mandatory and could be departed from in appropriate cases. 2. The petitioner had not made any genuine offer of "one Time Settlement" or requested a rehabilitation package. 3. The petitioner had not offered to purchase the property himself or brought any third party willing to purchase the property for an amount exceeding Rs. 1,10,000.
Final Decision: The writ petition was dismissed.
( 1 ) PETITIONER Ram Bharosey Lal who is a retired Officer of Indian Army took a loan of Rs. 75611-40 P. from the respondent Corporation for setting up a. Dairy industry. For some reasons the venture was not successful and the petitioner was unable to repay the instalments to U. P. Financial Corporation (hereinafter called the Corporation ). After some correspondence between the petitioner and the Corporation a notice - Annexure 7 under S. 29 of State Financial Corporation Act was served on the petitioner. When the loan was not repaid in spite of notice, the Corporation published an advertisement in a daily newspaper amar Ujala dated 14-9-1997. By this advertisement intending purchasers were invited to give their offers for the purchase of the property mentioned in the advertisement. It may be mentioned that the property was mortgaged by the petitioner with the Corporation at the time when the loan was sanctioned. The property belonging to the petitioner was sold by the Corporation to respondent No. 3 M/ s. Shakti Agency for a sum of Rs. 1,10,000. 00.
( 2 ) THE present writ petition has been filed with a prayer that the sale deed dated 26-2-1988 executed by the Corporation in favourof respondent No. 3 may be called from the office of the Sub-Registrar, Badaun and may be quashed. The petitioner has also prayed that notice Annexure 7 dated 20-10-1987 may also be quashed and respondents may be directed not to interfere with the possession of the petitioner.
( 3 ) THE grounds on which the sale proceedings have been challenged are that no public auction was held, that no valuation was got done, that no effort was made by the Corporation to make the Dairy Unit of the petitioner viable and that no information was given to the petitioner that the highest bid of Rs. 1,10,000. 00 is going to be accepted and in this way the petitioner was deprived of an opportunity to produce some persons who, may have given a higher bid.
( 4 ) THE Corporation has filed a counter affidavit and purchaser Sanjay Kumar has been ordered to be impleaded as respondent No. 5 vide order dated 18-7-1995.
( 5 ) WE have heard learned counsel for the parties and have gone through the record.
( 6 ) THE first contention on behalf of the petitioner is that no information was given to him after issue of notice Annexure 7. This allegation has been controverted in Para 20 of the counter affidavit wherein it is stated that after the publication of the advertisement in the newspaper the Corporation again issued/ registered letter dated 21-11-1987 and that the officials of the Corporation personally contacted the petitioner on 16-10-1987 but the petitioner was neither interested in running the unit nor he was inclined to pay anything. In the rejoinder affidavit the petitioner has denied having received letter dated 21-11-1987. It is ,however, admitted that notice under S. 29 of State Financial Corporation Act was received by the petitioner.
( 7 ) THE learned counsel for the petitioner has argued that it was incumbent on the Corporation to have disposed of the property by public auction. It is also argued that the guidelines given in the case of Mahesh Chandra v. Regional Manager, U. P. Financial Corporation, (1993) 2 SCC 279: AIR 1993 SC 935, have not been followed. These guidelines are as under:1)"sale of a unit should always be made by public auction. 2) Valuation of a unit for purpose of determining adequacy of offer or for determining if bid offered was adequate, should always be, intimated the unit holder to enable him to file objection if any as he is vitally interested in getting the maximum price. 3) If tenders are invited then the highest price on which tender is to be accepted must be intimated to the unit holder. 4) a) If unit holder is willing to offer the sale price, as the tenderer, then he should be offered same facility and unit, should be transferred to him. And the arrears remaining thereafter should be rescheduled to be recovered in instalme
