Page 1 of 5

IN THE HIGH COURT OF ORISSA AT CUTTACK

W.P.(C) No.2113 of 2012

M/s. Balaji Ice & Cold Storage Pvt.

Ltd.

….

Petitioner

Mr. Jaydeep Pal, Advocate

-versus-

State of Odisha and others

….

Opposite Parties

Mr. B.K. Dash, Senior Advocate

for Opposite Party Nos.2 and 3

CORAM:

THE CHIEF JUSTICE

JUSTICE B. P. ROUTRAY

Order No.

ORDER

31.03.2021

04.

1. This petition points to the sad state of affairs of maintenance of

accounts by some of the State public finance corporations, in this case,

the Odisha State Finance Corporation (OSFC).

2. The background facts are that the Petitioner was on 18^th March

1989, sanctioned a loan of Rs.57,75,000/- by the OSFC. Interest was

to be charged at the rate of 13.5% per annum and the entire amount

was to be repaid within ten years with a three year moratorium period.

Availing such loan, the Petitioner set up a cold storage unit at a total

cost of Rs.90,60,000/-.

3. The Petitioner claims to have paid by 2001, more than

Rs.73,00,000/- towards principal and interest. According to the

Petitioner, after reconciliation of the loan ledger account in 2001, the

OSFC through its Branch Manager, Sambalpur/Bargarh Branch on

Page 2 of 5

18^th October 2011, demanded a sum of Rs.29,42,764/-. According to

the Petitioner, this was unjustified because on 22^nd April 2002, a letter

had been issued by the OSFC, Bargarh Branch to the Petitioner that

“there was no outstanding in its principal and interest account as per

the loan ledger.”

4. The Petitioner stated to have made an application on 4^th November

2011, for return of the mortgaged documents. However, the OSFC on

9^th December 2011, issued a recall notice under Section 30 of the State

Finance Corporation Act (SFC Act) stating that the mortgaged assets

of the Petitioner would be taken over if it defaulted in making

payment of the demanded sum.

5. Challenging the aforementioned notices dated 18^th October 2011

and 9^th December 2011, the Petitioner filed the present writ petition in

which notice was issued on 9^th February 2012, and an interim order

was passed directing that no coercive action would be taken in relation

to the seizure of the assets of the Petitioner.

6. A counter affidavit was filed by the OSFC more than eight years

later on 25^th November 2020 seeking to defend the demand notice

dated 18^th October 2011 and the recall notice dated 9^th December

2011. It is stated in the counter affidavit that on 3^rd February 2012,

prior to the interim order passed by this Court, OSFC took over

possession of the Petitioner’s industrial unit under Section 29 of the

SFC Act. According to the OSFC, the Petitioner had submitted a

compromise settlement proposal for release of the unit on payment of

Page 3 of 5

the outstanding principal amount against which the Petitioner paid

Rs.1,00,000/- on 11^th December, 2014. Subsequently, it was decided

by the OSFC to release the industrial unit of the Petitioner if the

Petitioner made a further payment of Rs.2,00,000/-. This was

communicated to the Petitioner on 19^th January, 2016.

7. In paragraph 17 of the reply affidavit, OSFC accepts that the

Petitioner has paid it Rs.124.68lakhs. While not denying that it issued

a letter dated 22^nd April 2002 to the Petitioner indicating that there

was Nil balance in the loan ledger, OSFC has tried to project that this

was “on the insistence of the Petitioner Company”. In the same breath,

it is tried to be projected that OSFC “has never issued any No Dues

Certificate (NDC) to the Petitioner Company as claimed by the

Petitioner”.

8. Strangely, the subject matter of the letter dated 22^nd April 2002 of

the OSFC states “issue of NDC in favour of the M/s. Balaji Ice Cold

Storage Pvt. Ltd., Bargarh (provisionally)”. There is in fact no denial

by OSFC in its reply