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Judgment
Vinod K. Sharma, J.—The Petitioner has approached this Court with a prayer for issuance of a Writ in the nature of Certiorari, to quash the impugned Tender-cum-Public Auction notice dated 03.02.2006.
The impugned notice reads as under:
Whereas you had been sanctioned a Transport Loan of Rs. 1.82 Lakhs on 13.05.1993, where as you have failed to repay the loan. Whereas a foreclosure notice was already issued to you pursuant to which the assets belonging to your unit were taken possession by the Corporation u/s 29 of State Financial Corporations Act, 1951. Whereas it is proposed to hold a tender-cum-public auction in respect of the assets belonging to you and whereas wide publicity regarding the same has been given by release of advertisements in leading newspaper.
A set of Terms and conditions for sale, list of assets, tender form etc., are enclosed herewith to enable you to participate in the Tender-cum-Public auction, if you are so interested. The date of public auction and submission of tender etc., are given in the enclosed documents.
It is well settled law, that the Courts normally do not interfere with the exercise of Statutory powers by the Authorities under the Act. But, at the same time, it is also well settled, that when the action is arbitrary or amounts to colourable exercise of power, then, it is open to the Court, in exercise of writ jurisdiction to interfere with the proposed auction.
The admitted facts show, that the impugned notice is nothing, but a colourable exercise of power by the Corporation to harass a loanee.
The Petitioner was granted Transport loan, which was repayable as per the terms and conditions of the Agreement entered into between the parties. It is also not in dispute that the Petitioner was a defaulter and his account becomes non-operative.
In terms of Reserve Bank Guidelines issued to the Banks and adopted by the Respondent / Corporation, the Petitioner was offered one time settlement on 20.06.2003 by the Corporation, calling upon him to pay a sum of Rs. 47,564/- (Rupees Forty Seven Thousand Five Hundred and Sixty Four only).
The Petitioner was asked to deposit a sum of Rs. 11,891/- (Rupees Eleven Thousand Eight Hundred and Ninety One only) as initial payment to accept the proposal for one time settlement.
The Petitioner complied with the condition and subsequently, paid the whole amount, after one time settlement was accepted.
In spite of the amount, having been settled, instead of releasing the security of the Petitioner, the Respondents / Corporation issued a Tender-cum-Public Auction notice only on the ground that the Petitioner had sold the mortgaged property, without the permission of the Respondents / Corporation.
According to the Respondents / Corporation, it was fraudulent transaction, which entitle them to reject the one time settlement proposal.
The action of the Respondents / Corporation, on the face of it, is arbitrary, as already observed above, amounts to colourable exercise of power. There was no occasion for the Respondents / Corporation to cancel the settlement, after the whole amount was received and nothing remained due and payable by the Petitioner to the Respondents / Corporation.
The security should have been discharged immediately on settlement of the account.
The Respondents / Corporation cannot take benefit of its own wrong in not releasing the mortgaged property to cancel the one time settlement.
The impugned notice is, on the face of it, is arbitrary, which amounts to colourable exercise of power, not vested in Respondent / Corporation.
The writ petition is, accordingly, allowed, and the impugned notice 5 dated 03.02.2006 passed by the second Respondent is quashed.
Vide order dated 23.02.2006, the operation of the impugned Tender-cum-Public Auction Notice dated 03.02.2006 was stayed by this Court in W.P.M.P. No. 1929 of 2006 in W.P. No. 1748 of 2006, subject to payment of Rs. 30,000/- (Rupees Thirty Thousand only) to the second Respondent, which stood deposited.
In view of the acceptance of the writ petition, it is not open to the Respondents / Corporation now to retain this amount, any further.
Consequently, the Respondents / Corporation is directed to refund the amount of Rs. 30,000/- (Rupees Thirty Thousand only) to the Petitioner forthwith, but not later than seven days of the receipt of a certified copy of this order.
In case, the amount is not released within the stipulated time of seven days, the Respondents / Corporation shall pay to the Petitioner interest at the rate of 9% on this amount from the date of deposit till its refund.