In cases involving disputes over the terms and breach of a loan agreement, the appropriate remedy for aggrieved parties is to file a suit in a regular Civil Court rather than seeking relief through a writ petition under Art. 226 of the Constitution.

( 1 ) THE petitioner took a loan from the U. P. Finance Corporation (hereinafter referred to as the Corporation ). Proceedings were initiated by the Corporation for the recovery of the loan. The petitioner approached this Court with a writ petition under Art. 226 of the Constitution. In that petition a direction was given to the Corporation to dispose of the representation already made by the petitioner with speaking order. A further direction was given that till the representation was disposed of recovery by adopting coercive process shall not be resorted to. The representation has been rejected. The petitioner has again approached this Court with a writ petition.

( 2 ) IN main, two prayers have been made. The first is : the respondents should be commanded to dispose of the representation dated 29th April, 1985, of the petitioner in accordance with law. The second is that the respondents may be commanded to fulfil all the obligations contained in the agreement on the basis of which loan had been advanced to the petitioner. The implied prayer, therefore, is that the respondents should be directed not to initiate any recovery proceedings before fulfilling the promise or obligations made by them in the agreements.

( 3 ) AFFIDAVITS have been exchanged between the parties. Though the petition has not been formally admitted, yet it is ripe for hearing. Hence it is being disposed of finally with the consent of the counsel for the parties.

( 4 ) IN the writ petition, the material averments made by the petitioner are these. The corporation sanctioned a loan in the amount of Rs. 4,11,000/- to the petitioner. Some amount was paid by the Corporation, but a substantial amount was withheld. The agreement provided for a period of two years as gestation period. It was stipulated that the recovery of the loan would commence only after the gestation period. The petitioner completed all the formalities regarding the sanction of the loan. In anticipation of the actual receipt of the loan from the Corporation, the petitioner invested a sum of Rs. 56,000/- of its own. On account of the delay in the payment of the loan the petitioner suffered substantial loss. The first instalment was received by the petitioner on 11th Dec. , 1980, followed by two further instalments. The disbursement of the further instalments was delayed. The total amount disbursed was Rs. 3,44,900/-, but the actual amount which came in the hands of the petitioner was Rs. 3,00,303. 32 as a sum of Rs. 44,596. 78/- had been deducted by the Corporation towards interest etc. Interest could not be charged by the Corporation unless the whole amount had been disburshed by it to the petitioner as interest became payable only on the receipt of the entire amount of the loan sanctioned. The entire amount of the loan sanctioned was not disbursed by the Corporation. The petitioner made a representation for the grant of an additional loan. During the pendency of that representation, the Corporation commenced proceedings for the realisation of the amount disbursed to the petitioner. The Corporation was estopped from doing so. Moreover, the financial position of the petitioner was not such so as to enable it to pay any amount to the Corporation. The Corporation threatened the petitioner with the realisation of the amount by adopting coercive process. The two notices issued by the Corporation on 13th Feb. , 1984 and 9th Oct. , 1984, to the petitioner were illegal. On 29th April, 1985, the petitioner made a representation to the Corporation. The said representation had not been disposed of. Faced with that situation, the petitioner preferred a writ petition No. 15680 of 1984 in the Court. That writ petition was disposed of finally on 15th Jan, 1985. On 10th December, 1984, during the pendency of the said writ petition, the Corporation called upon the petitioner to pay a sum of Rs. 3,88,424. 38 p. within 30 days of the receipt of its notice by the petitioner. Before this Court, the counsel for the

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