Judgment :- AR. LAKSHMANAN, J. 1. The prayer in W.P. No. 1091 of 1992 is to direct the Tamil Nadu Industrial Investment Corporation (hereinafter referred to as the Corporation) to accept the proposal of the petitioner/S. Balasubramanian dated 29-10-1991 for repayment of the term loan of Coimbatore Paper and Board Company, which had borrowed from the Corporation. W.P. No. 1092 of 1992 is to forbear the Corporation from accepting the bid amount of Rs. 1.57 lakhs pursuant to the auction of the assets of the Coimbatore Paper and Boards Company conducted on 4-10-1991 by the Corporation in exercise of its powers under S. 29 of the State Finance Corporation Act. Both the writ petitions were filed by one S. Balasubramanian, claiming to be the sole proprietor of Coimbatore Paper and Boards Company. 2. W.P. No. 1928 of 1992 is filed for a declaration that the sale of the factory premises bearing S.F. No. 29 in Deenampalayam Village, Thondamuthur, Coimbatore, pursuant to the auction conducted on 4-10-1991 by the Corporation is illegal and arbitrary. The prayer in W.P. No. 12203 of 1993 is to forbear the Corporation from selling the collateral security. Both these writ petitions have been filed by one M. Nagarajan as a retired partner of Coimbatore Paper and Board Company. 3. For appreciating the issues involved in all the writ petitions it is necessary to refer to the following relevant facts. A partnership firm called Coimbatore Paper and Boards Company consisting of P. Ramesh, M. Nagarajan, P. Balasubramaniam and M.P. Ramachandran as partners, was sanctioned a term loan of Rs. 5 lakhs by the Corporation on 21-1-1983. As security for the due repayment of the loan by the said company to the Corporation, one M. Nagarajan, who is the petitioner in W.P. Nos. 1928 of 1992 and 12203 of 1993, created a mortgage over his personal house property as collateral security in addition to the securities offered by the company including a mortgage on the factory premises in S.F. No. 29, Kalikkanaickenpalayam, Thondamuthur, Coimbatore. 4. Two of the partners of the borrower company viz., P. Balasubramainam and M.P. Ramachandran retired from the firm on 20-8-1983 after obtaining necessary permission and approval from the Corporation. Necessary security documents for the term loan were executed on 31-10-1983 by the firm represented by its partners and the firm availed a sum of Rs. 2.60 lakhs as loan. 4. Two of the partners of the borrower company viz., P. Balasubramainam and M.P. Ramachandran retired from the firm on 20-8-1983 after obtaining necessary permission and approval from the Corporation. Necessary security documents for the term loan were executed on 31-10-1983 by the firm represented by its partners and the firm availed a sum of Rs. 2.60 lakhs as loan. As already seen, M. Nagarajan has offered his house property as a collateral security in respect of the loan availed by the firm from the Corporation. The firm viz., the Coimbatore Paper and Boards Company did not keep up the schedule of repayment as agreed. At that stage, one S. Balasubramanian, petitioner in W.P. Nos. 1091 and 1092 of 1992 and Proprietor of B and B Equipments, submitted a proposal to the Corporation to take over the business of Coimbatore Paper and Boards Company as a sole proprietor. On 16-6-1988, the Corporation accepted the proposal submitted by S. Balasubramanian subject to the condition that the collateral security offered by M. Nagarajan should continue to remain as security till the entire loan is discharged. 5. It transpires that the said S. Balasubramanian could not comply with the said condition imposed by the Corporation. However, the said S. Balasubramanian gave another proposal on 9-8-1988 to the Corporation to take one G.R. Mohan as a partner and run the Coimbatore Paper and Boards Company as a partnership firm consisting of himself and the said G.R. Mohan. This proposal was not approved by the Corporation since it did not contain any provision for continuing the collateral security offered by M. Nagarajan. Since the borrower did not comply with the terms and conditions of loan in regard to repayment, the Corporation fore-closed the loan and brought the property offered by the borrower firm viz, the factory premises in S.F. No. 29, Thondamuthur, Coimbatore for public auction on 27-7-1990 in exercise of its powers vested tinder S. 29 of the State Finance Corporation Act. The highest bid was made by the petitioner S. Balasubramanian for Rs. 2.50 lakhs. Since the highest bid amount did not confirm to the norms laid down by the Corporation, the Corporation did not accept the bid of the petitioner S. Balasubramanian. 6. For the second time, the property was brought to sale during February, 1991. There was no bidder. The highest bid was made by the petitioner S. Balasubramanian for Rs. 2.50 lakhs. Since the highest bid amount did not confirm to the norms laid down by the Corporation, the Corporation did not accept the bid of the petitioner S. Balasubramanian. 6. For the second time, the property was brought to sale during February, 1991. There was no bidder. Therefore, for the third time the property was brought for auction on 6-8-1991 by the Corporation. Unfortunately, there was no bidder even in the third auction. Hence, the Corporation brought the property of the borrower firm for auction on 4-10-1991. One M. Palaniswami made an offer of Rs. 1.51 lakhs. Since the highest bid offered by M. Palaniswami was lower than the earlier bid offered by the petitioner S. Balasubramanian in the auction held on 27-7-1990, the Corporation did not immediately accept the offer of M. Palaniswami. 7. Meanwhile, the petitioner S. Balasubramanian paid a sum of Rs. 1 lakh on 29-10-1991 and offered to pay the balance principal of Rs. 1.60 lakhs before 15-12-1991 and take over and run the unit. The Corporation sent reminders on 2-12- 1991 and 9-12-1991 to the petitioner S. Balasubramanian calling upon him to remit the balance amount as undertaken by him. Unfortunately, he did not pay balance amount of Rs. 1.67 lakhs on or before 15-12-1991. Therefore, the Corporation sent a telegram on 18-12-1991 to him and requested him to pay the balance amount. There was no response from him. Therefore, left with no other option, the Corporation confirmed the sale in favour of M. Palaniswami, who made the highest bid in the auction held on 4-10-1991. On 20-1-1992 the sale deed was executed by the Corporation in favour of M. Palaniswami and possession of the unit was handed over to him on the very same day. It is thereafter, the petitioner S. Balasubramanian has filed W.P. Nos. 1091 and 1092 of 1992. 8. M. Nagarajan filed W.P. Nos. 1928 of 1992 and 12202 of 1993 for declaring the sale of the factory premises on 4-10-1991 as illegal and arbitrary and for forbearing the Corporation from selling the collateral security offered by him. It is thereafter, the petitioner S. Balasubramanian has filed W.P. Nos. 1091 and 1092 of 1992. 8. M. Nagarajan filed W.P. Nos. 1928 of 1992 and 12202 of 1993 for declaring the sale of the factory premises on 4-10-1991 as illegal and arbitrary and for forbearing the Corporation from selling the collateral security offered by him. It is seen that on 2-7-1993 in W.M.P. No. 18601 of 1993 in W.P. No. 12203 of 1993 a conditional order was passed by J. Kanakaraj, J., restraining the Corporation from selling the collateral security, the conditional order being the said M. Nagarajan should pay a sum of Rs. 1 lakh on or before 9-7-1993 to the Corporation. It is stated by Mr. A.L. Somayaji, learned Senior Counsel for the Corporation, that the said condition was not complied with by the petitioner M. Nagarajan. 9. Mrs. Nalini Chidambaram, learned Senior Counsel appearing for the petitioner, would place heavy reliance on the decision of the Supreme Court in Mahesh Chandra v. Regional Manager, U.P. Financial Corporation (A.I.R. 1993 S.C. 935) and a recent decision of ours and submit that the Corporation acted arbitrarily and unreasonably and the writ petitions should be allowed. 10. Mr. A.L. Somayaji, learned Senior Counsel for the Corporation would submit that there is no scope at all for applying the principles laid down in Mahesh Chandras case . According to him, the petitioner S. Balasubramanian has no locus standi to forbear the Corporation from accepting the highest bid amount offered by M. Palaniswami. It is submitted that the petitioners have initiated the above legal proceedings as a method to defeat the rights of the Corporation. He would place strong reliance on a decision of the Supreme Court reported in A.P. State Finance Corporation v. Gar Re-rolling Mills Judgment To-day, 1994(1) S.C. 586. 11. We have given our anxious consideration to the above submissions made by the learned Senior Counsel on either side. We have already noticed that the petitioner S. Balasubramanian made an offer to take over the unit and the Corporation agreed for the same on condition that the collateral security offered by M. Nagarajan should continue to remain as a collateral security till the entire loan is discharged. Admittedly, this condition was not complied with. Consequently, the proposal made by the petitioner S. Balasubramanian fell through. Admittedly, this condition was not complied with. Consequently, the proposal made by the petitioner S. Balasubramanian fell through. The subsequent proposal made by the said S. Balasubramanian on 9-8-1988 was not approved by the Corporation. Thereafter, the Corporation had fore-closed the loan and had taken over the unit on 21-6-1990. The petitioner S. Balasubramanian made another vain attempt to purchase the unit the public auction conducted by the Corporation. In fact, the said S. Balasubramanian was given ample opportunity to pay the amounts as undertaken by him in his letter dated 29-10-1991. However, it is contended by the learned, Senior Counsel appearing for the Corporation, that he committed default and did not remit the balance sum of Rs. 1.67 lakhs either on 15-12-1991 as undertaken by him or subsequently which necessitated the Corporation to accept the highest bid of M. Palaniswami and confirm the sale in his favour. Necessary sale documents have been executed by the Corporation on 20-1-1992 in favour of M. Palaniswami and the possession of the unit was handed over to him. Hence, we are of the view that there is no infirmity in the action taken by the Corporation. 12. As rightly contended by Mr. A.L. Somayaji, learned Senior Counsel for the Corporation, S. Balasubramanian is not one of the partners of Coimbatore Paper and Boards Company, which has borrowed money from the Corporation. For the reasons mentioned supra, we are of the view that it is not open to him to ask for a mandamus to forbear the Corporation from accepting the bid of M. Palaniswami/5th respondent in W.P. No. 1928 of 1992. Consequently, we are of the view that W.P. No. 1092 of 1992 is liable to be dismissed. 13. Equally, it is not open to the petitioner S. Balasubramanian to seek a direction to accept the proposal made by him on 29-10-1991. It is seen that the Corporation accepted the above proposal of the petitioner S. Balasubramanian and gave time to him to pay the balance amount as undertaken by him in his proposal dated 29-10-1991. But, no payment was received from the petitioner S. Balasubramanian either on 15-12-1991 or subsequently. Thus, as rightly contended by the learned Senior Counsel for the Corporation, the petitioner S. Balasubramanian did not fulfil his own undertaking contained in the proposal submitted by him. Consequently, W.P. No. 1091 of 1992 is also liable to be dismissed. 14. But, no payment was received from the petitioner S. Balasubramanian either on 15-12-1991 or subsequently. Thus, as rightly contended by the learned Senior Counsel for the Corporation, the petitioner S. Balasubramanian did not fulfil his own undertaking contained in the proposal submitted by him. Consequently, W.P. No. 1091 of 1992 is also liable to be dismissed. 14. Next we will come to W.P. No. 12203 of 1993. So far as the prayer in this writ petition is concerned, it has to be held that M. Nagarajan, who offered his personal property as collateral security, has not complied with the conditional interim order dated 2-7-1993 in W.M.P. No. 18601 of 1993 in W.P. No. 12203 of 1993. Therefore, he cannot be granted any relief in W.P. No. 12203 of 1993. 15. When once a borrower has committed default in repaying the amount, it is always open to the Corporation to take recourse under S. 29 of the State Finance Corporation Act to realise the amounts due to it by bringing the collateral security for sale. We do not find any arbitrariness or unreasonableness in the action of the Corporation in bringing the collateral security for sale as contended by Mrs. Nalini Chidambaram, learned Senior counsel for the petitioners. Consequently, we hold that W.P. No. 12203 of 1993 is also liable to be dismissed. 16. With regard to W.P. No. 1928 of 1992, there is no ground for granting any relief to the petitioner M. Nagarajan. It is undoubtedly true that the action of the Corporation while exercising its powers under S. 29 of the State Finance Corporation Act, as laid down by the Supreme Court, should be fair and not unreasonable. We do not find any unreasonableness in the action of the Corporation in bringing the main security offered by the borrower for sale. The jurisdiction of this Court is discretionary and no one can claim the same as a matter of right. The relief under Art. 226 of the Constitution cannot at all be granted in favour of a person who is a chronic defaulter in the repayment of the loan. In this connection, it is useful and necessary to refer to the decision cited by the learned Senior Counsel for the Corporation Mr. A.L. Somayaji and reported in A.P. State Financial Corporation v. Gar Re-rolling Mills (1994 (2) S.C.C., 647 = Judgment To-day 1994 (1) S.C. 586). In this connection, it is useful and necessary to refer to the decision cited by the learned Senior Counsel for the Corporation Mr. A.L. Somayaji and reported in A.P. State Financial Corporation v. Gar Re-rolling Mills (1994 (2) S.C.C., 647 = Judgment To-day 1994 (1) S.C. 586). The following observations of the Supreme Court in paragraph 18 of its judgment can be usefully referred to: “There is no equity in favour of a defaulting party which may justify interference by the Courts in exercise of its equitable extraordinary jurisdiction under Art. 226 of the Constitution to assist it in not repaying its debts. The aim of equity is to promote honesty and not to frustrate the legitimate rights of the Corporation which after advancing the loan takes steps to recover its dues from the defaulting party. A Court of equity, when exercising its equitable jurisdiction, under Art. 226 must so ac t as to prevent perpetration of a legal fraud and the Courts are obliged to do justice by promotion of good faith, as far as it lies within their power. Equity is always known to defend the law from crafty evasions and new subtleties invented to evade law. Since, the Legislature enacted Ss. 29 and 31 with a view to aid the Corporation to recover its legitimate dues, etc., from the defaulting party, the saving clause in S. 31, preserving the rights under S. 29 by giving up the pursuit under S. 31, preserving the rights under S. 29 by giving up the pursuit under S. 31 at any stage of the proceedings is available to the Corporation. The two provisions must be so harmonised as to facilitate the Corporation to recover its dues from the dafaulting party. The Act was enacted by Parliament with a view to promote industrialisation and offer assistance by giving financial assistance in the shape of loans and advances etc., repayable in easy instalments. The corporation has to recover the loans and advances, so as to be able to give financial assistance to other industries and unless it recovers its dues, the money will not remain in circulation for long. The corporation has to recover the loans and advances, so as to be able to give financial assistance to other industries and unless it recovers its dues, the money will not remain in circulation for long. It is with this end in view that Parliament gave the corporation the right to proceed under S. 31, preserving at the same time its rights and remedy under S. 29, so that the Corporations are not choked by the defaulting debtors by adopting frustrating or dilatory tactics in the proceedings in the Court initiated under S. 31 of the Act.” 17. Admittedly, none of the writ petitions has been filed by the borrower of the firm. M. Nagarajan has filed the writ petitions as a retired partner of Coimbatore Paper and Boards company and it is his claim that S. Balasubramanian and G.R. Mohan have became partners of the firm. The Corporation has not recognised the reconstitution of the firm inducting S. Balasubramanian and G.R. Mohan as partners. Surprisingly, S. Balasubramanian would claim to be the sole proprietor of the concern in his writ petitions. Thus, there is inconsistency in the claim of S. Balasubramanian and M. Nagarajan in their respective writ petitions. There are no merits or bona fides in the writ petitions. The have been filed, as rightly urged by M.A.L. Somayaji, learned Senior Counsel for the corporation, to frustrate the recovery action initiated by the Corporation. 18. The decision of the highest Court in Mahesh Chandras case will not be of any assistance to the petitioners. That was a case in which the borrower made a request to the financial Corporation to release one of the plots to enable him to negotiate for private sale to pay off its debts. But the Corporation was not acceding to the said request, which was found to be arbitrary and unreasonable by the Supreme Court. In the present case, the borrower firm has not taken any steps to pay the debts due to the Corporation. We have already noticed that the borrower has accepted the sale of the unit by the Corporation and has not come to this Court challenging the above action of the Corporation. The petitioner S. Balasubramanian, who was unsuccessful in taking over the unit and who is not in any way concerned with the borrower firm, has filed the writ petitions raising untenable contentions and pleas. The petitioner S. Balasubramanian, who was unsuccessful in taking over the unit and who is not in any way concerned with the borrower firm, has filed the writ petitions raising untenable contentions and pleas. In our view, he has no locus standi to challenge the sale of the unit. So far as M. Nagarajan is concerned, he has not filed the writ petitions for and on behalf of the borrower firm. The only person who can, if at all, be aggrieved by the sale of the unit is the borrower firm, who apparently has no grievance against the sale of the unit. In view of the above discussion, we hold that W.P. No. 1928 of 1992 also deserves to be dismissed. 19. For the fore-going reasons, all the four writ petitions are dismissed. However, there will be no order as to costs.