JUDGMENT

K. RAMASWAMY, J.:—The appellant, Managing Partner of M/s. Shiva Rice Mill situated at Nagina, Dist. Bijnor in Uttar Pradesh, owned two plots bearing Nos. 208 and 220/2 admeasuring 18 and 8 Bishwas respectively purchased under a single sale deed. In Plot No. 208 in an extent of 2,700 sq. yards abutting Highway, near Railway Goods-Shed and one furlong to the Railway Station, a strategic location of importance, the rice mill was constructed by the partnership firm. The plot bearing No. 220/ 2 remained vacant and was not even valued in assessment of the partnership-firm hypothecated the rice mill to the U.P, Financial Corporation for short the Corporation. A loan of Rs. 4,28,000/ -, was sanctioned in 1979 and Rupees 3,70,660/ - was alone disbursed in 1980 which was repayable in elevan annual instalments up to 1991. The appellant repaid a sum of Rs. 9000/ - in December, 1981. Non-co-operation of the other partners and lack of working capital, due to failure to release the balance loan, landed the running mill into rough weather and defaults in payment were committed. While finding that interest was getting mounted, the appellant wrote repeated letters to the Corporation requesting to release Plot No. 220 so as to enable him to negotiate for private sale of it along with his two more plots to pay off the debt, It is his case that, pursuant to his letter dated December 22, 1983, on oral promise to release the plot, he paid a sum of Rs. 65,000/- and was received by the Corporation. He also promised to pay Rs. 50,000/- The Corporation did not release it. According to him, in his letter dated February 10, 1986, Annexure 6, as on March 31, 1986, the simple interest payable was Rupees 1,93,670/-, the principal amount was Rs. 3,70,660/- and expenses was Rupees 3,835/-. After deducting Rs. 65,000/ towards arrears of interest, the outstanding was Rupees 5,03,165/- and he Was ready and willing to pay the same in full satisfaction under "one time settlement scheme", provided compound interest is waived. The record also shows that in a meeting held in September, 1985 a decision to release the plot appears to have been reached by the Corporation and the Regional Manager was asked to be contacted. Ultimately, the Corporation did not acceed to that request but had taken possession of the hypotheca and got valued at Rs. 3,28,717.97 and published for sale inviting tenders. It is necessary to point out at this juncture that as per the plan filed on record which is not disputed that (a) Plot No. 221 faces the road, Plot No. 220 is in the middle and 219 is in the end towards north. They are contiguous; (b) The appellant in his letter submitted that the mill could not run due to lack of running capital and non-co-operation of other partners; and (c) Sketch plan clearly shows that Plots Nos. 219 and 221 could be used to carve out housing plots only if 220 was released. And that might have fetched good price to enable the appellant to clear off the arrears. Yet it was not accepted, because according to the affidavit of the Corporation the appellant could have sold other two plots. Several letters written by the appellant, thus, received no response. Instead recovery proceedings were initiated.

2. According to the purchasers, though the Corporation did not assert, that no response was evoked from public for several tenders called for. The last date to receive the tender in question was January 13, 1987. Deshbandhu Agarwal, the third respondent per self, his wife (since died) and his sons, respondents Nos. 4 and 5, submitted the tender on March 25, 1987 for a sum of Rs.2,00,000/- which was on negotiation accepted at Rs. 2,55,000/-. The Corporation agreed to receive 25 of the consideration, namely, Rs. 63,750/- as initial payment and the balance consideration in four years in equal half yearly instalments. Before accepting the tender no notice nor an opportunity in this regard was given to the appellant. The appellant, therefore, filed the writ pet