Judgment R.S.Garg, J. 1. This order shall finally dispose of LPA No. 1315 of 2001 (Shri Chandrama Singh V/s. Bihar State Financial Corpn. and Ors.), LPA No. 1446 of 2001 (The Bihar State Financial Corporation V/s. M/s. Ramji Rice Mill and Ors.). C.W.J.C. No. 11071 of 1998 (Shri Chandrama Singh V/s. Bihar State Financial Corpn. and Ors.), C.W.J.C. No. 9300 of 1998. (Shri Bipin Bihari Singh V/s. Bihar State Financial Corpn. and Ors.). 2. For proper appreciation of the facts it is necessary to refer to the chequered history of the matter. One M/s. Shri Ramji Rice Mills at Chhitani, Police Station-Dawat, District Rohtas applied for loan to the Bihar State Financial Corporation. In July, 1981 the said M/s. Shri Ramji applied for a term loan of Rs. 8.70 lacs and the same was sanctioned on 1-4-1982. out of the sanctioned amount, Rs. 5.18 lacs was disbursed upto 14-12-1984. The said M/s. Shri Ramji had mortgaged 1.99 acres of freehold land as security against the said term loan. According to M/s. Shri Ramji, who is petitioner in C.W.J.C. No. 13704/1999, he could arrange for some funds and came into production, in December, 1986. According to him the unit was badly damaged by cyclone and the same was to be reconstructed from loan-amount of Rs. 7.10 lacs sanctioned by the Corporation on 24-3-1988. According to him a sum of Rs. 1.92 lacs only was disbursed in their favour and the rest of the amount was adjusted towards the instalments due against the earlier sanctioned loan. According to him for the second loan he was required to mortgage 1.14 acres of his land. According to said M/s. Shri Ramji for obtaining total loan of Rs; 18.24 lacs they had to mortgage 3.18 acres of freehold land. On 15-2-1990 the Corporation issued a notice under Secs. 29 and 30 of the State Financial Corporations Act (Act for short) to the petitioner for liquidation of the dues within one month of the date of service of notice failing which the mortgage property would be auction sold. According to him the Managing Director, District Industries Center. Rohtas after getting the unit inspected recommended for rehabilitation of the unit, but unfortunately despite their best and sincere efforts the concerned Banks did not provide them any shelter and did not join the rehabilitation programme. According to him the Managing Director, District Industries Center. Rohtas after getting the unit inspected recommended for rehabilitation of the unit, but unfortunately despite their best and sincere efforts the concerned Banks did not provide them any shelter and did not join the rehabilitation programme. According to him the Corporation made advertisement for auction/sale of the unit on 4-3-1995 and after open bid the two highest bidders were called for negotiation and ultimately the bid in favour of Bipin Bihari Singh was accepted/knocked down on the offer amount of Rs. 38.70 lacs vide Memo. No. 2, dated 4-6-1996 on the condition to deposit 25% of the total consideration amount within one month and to pay the balance 75% within next five years by way of 10 half yearly instalments. The said M/s. Shri Ramji were given opportunity to retain the unit on the matching terms and conditions by making lump sum payment within 21 days from the date of issue of the letter. 3. It appears from all the concerned records that said Bipin Bihari Singh could not deposit the 25% of the amount in a period of two years, therefore, the offer made in favour of Bipin Bihari Singh was cancelled and on the same terms the offer was made to the second highest bidder Shri Chandrama Singh vide Memo. No. 545, dated 24-9-1998. The said Chandrama Singh revised his earlier offer and agreed to pay Rs. 38.70 lacs. The same was approved by the Executive Committee of the Corporation in its meeting dated 14-10-1998. Being aggrieved by the said decision offering the unit for Rs. 38.70 lacs to Chandrama Singh, the original promoters/M/s. Shri Ramji Rice Mills filed C.W.J.C. No. 1304 of 1999. Bipin Bihari Singh being aggrieved by Memo. No. 545 dated 24-9-1998 cancelling the sale made in favour of him has filed C.W.J.C. No. 9300/1998. It appears from the records that on 5-11-1999 in said C.W.J.C. No. 9300/ 1998 this Court ordered that the impugned order dated 24-9-1998 shall remain stayed provided the petitioner (Bipin Bihari Singh) deposits a sum of Rs. 3.87,000.00 with the respondent Bihar State Financial Corporation within three months. From the records it also appears that Bipin Bihari Singh, who was the successful bidder was required to deposit 25% of Rs. 38.70 lacs within one month from 4-6-1996. He had made a deposit of Rs. 3.87,000.00 with the respondent Bihar State Financial Corporation within three months. From the records it also appears that Bipin Bihari Singh, who was the successful bidder was required to deposit 25% of Rs. 38.70 lacs within one month from 4-6-1996. He had made a deposit of Rs. 20,000.00 towards earnest money, then on 11-12-1996 deposited Rs. 2.28 lacs and on 6-2-1997 deposited Rs. 62.000.00 , it would appear that from 4-6-1996 up to the date of filing of the writ application C.W.J.C. No. 9300/1998 on 12-11-1998 he had only deposited a sum of Rs.3.10 lacs and submitted before this Court that he was ready and willing to deposit Rs. 3.87 lacs, the balance amount towards the Initial 25%. 4. It appears that after the interim order was passed by this Court the Financial Corporation issued letter No. SAS/305 on 20-11-1998 informing the said Chandrama Singh that in compliance of the High Courts orders passed in C.W.J.C. No. 9300/1996 they were to take an action and in accordance with the letter from their head office communicated vide Memo. No. 685, dated 16-11-1998 they were to put a lock on the unit till further orders from the High Court. 5. Chandrama Singh being aggrieved by the said letter No. 685, dated 16-12-1998 has filed the writ application C.W.J.C. No. 11071 of 1998 on 9-12-1998. 6. It would appear from the records that Bipin Bihari Singh was not joined as a party respondent in C.W.J.C. No. 1304 of 1999 and Chandrama Singh alone was joined as a private respondent. The Financial Corporation was respondent Nos. 1 to 4 and Chandrama Singh was respondent No. 5. It was submitted by the petitioner before the learned single Judge in C.W.J.C. No. 1304 of 1999 that the order dated 24-9-1998 issued by the Financial Corporation in favour of Chandrama Singh was bad. It was submitted that the amount of Rs. 38.70 lacs was fixed in the year 1996 and the same could not represent the real value of the property in 1998 when the property was sold in favour of Chandrama Singh. It was also contended that the market value of the property in 1998 could not be less than Rs. 60 lacs. 38.70 lacs was fixed in the year 1996 and the same could not represent the real value of the property in 1998 when the property was sold in favour of Chandrama Singh. It was also contended that the market value of the property in 1998 could not be less than Rs. 60 lacs. It was also contended that before selling the property in favour of Chandrama Singh, the same ought to have been offered to the promoter/M/s. Shri Ramji on the identical/same terms and as the said petitioner was given only 21 days making a demand of full payment, the Financial Corporation acted contrary to the provisions of law and contrary to the judgments of the Supreme Court in the matter of Mahesh, Chandra V/s. The Regional Manager, U.P. Financial Corporation, reported in (1993) 2 SCC 279 : AIR 1993 SC 935 and as the Financial Corporation acted mala fide the offer made in favour of Chandrama Singh deserved to be quashed. The Financial Corporation submitted that the original promoters/M/s. Shri Ramji Rice Mills having not challenged the letter of advertisement/auction so also the Memo. No. 22, dated 4-6-1996 settling the property in favour of Bipin Bihari Singh for Rs. 38.70 lacs, the original promoters could not be allowed to challenge the second settlement. It was also submitted that if such games are allowed to be played by the original promoters under the garb of settlement of the property on the same/similar terms then no person would come forward to purchase the property of a defaulter. Chandrama Singh submitted before the learned single Judge that after settlement of the property in his favour he has spent a sum of Rs. 12 lacs for making the unit viable/operational and as the original promoter was a chronic and recalcitrant borrower and as there was no equity in his favour he would not be entitled to any relief. After hearing the parties the learned single Judge observed that the Corporation did not act in a fair manner, the actions of the Corporation were contrary to the law and were also contrary to the Judgment of the Supreme Court in the matter of Mahesh Chand. After hearing the parties the learned single Judge observed that the Corporation did not act in a fair manner, the actions of the Corporation were contrary to the law and were also contrary to the Judgment of the Supreme Court in the matter of Mahesh Chand. The learned single Judge set aside the settlement made in favour of Chandrama Singh and directed that the Corporation should immediately resume possession of the hypothecated property and proceed afresh strictly as per the guidelines of the Apex Court in the case of Mahesh Chand (supra). 7. Being aggrieved by the said order/judgment dated 17-10-2001 (Reported in (2001) 4 Pat LJR 732.) passed in C.W.J.C. No. 1304 of 1999 (M/s. Shri Ramji Rice Mill V/s. The Bihar State Financial Corporation), the Bihar State Financial Corporation has come in L.P.A. No. 1446 of 2001 and Chandrama Singh has come in L.P.A. No. 1315 of 2001. C.W.J.C. No. 11071/1998 was directed to be heard with C.W.J.C. No. 9300/98. 8. From the records of C.W.J.C. No. 9300/1998 it appears that on 23-6-1999 the Court tagged this writ application with C.W.J.C. No. 1304 of 1999. On 13-7-2001 C.W.J.C. No. 9300/1998 and C.W.J.C. No. 11071 of 1998 were dismissed in default. Thereafter these writ applications were tagged with L.P.A. 1446 of 2001. On 19-5-2003 this Court directed that C.W.J.C. No. 11071 of 1998 should also appear with the above-referred L.P.A. and C.W.J.C. No. 9300 of 1998, under these circumstances these four matters having a common nexus have been heard together and are being decided by this common order. 9. Before we proceed into the writ application of M/s. Shri Ramji Rice Mill we propose to take up C.W.J.C. No. 9300 of 1998 filed by Bipin Bihari Singh. Undisputedly vide Memo. No. 22. dated 4-6-1996 the property hypothecated with the Financial Corporation was sold in favour of Bipin Bihari Singh for a sum of Rs. 38.70 lacs. Undisputedly 25% of the said sale consideration was to be deposited within one month and the balance was to be deposited/ paid within five years by way of 10 half yearly instalments. From the writ application of Bipin Bihari Singh it would clearly appear that instead of making the deposit of initial 25% he was simply making applications to the Financial Corporation. On 11-12-1996 he deposited Rs. 2.28 lacs. This deposit was made much after the period of one month. From the writ application of Bipin Bihari Singh it would clearly appear that instead of making the deposit of initial 25% he was simply making applications to the Financial Corporation. On 11-12-1996 he deposited Rs. 2.28 lacs. This deposit was made much after the period of one month. He also wrote to the Branch Manager of the Financial Corporation that he would make deposit of the balance amount of margin money Rs. 2.14 lacs upto 25-12-1996 and Rs. 2.35 lacs upto 30-1-1997. Undisputedly he did not deposit the said amount as assured by him. Neither on 25-12-1996 nor on 30th January, 1997 he deposited any amount. On 25-1-1997 the Branch Manager wrote to Bipin Bihari Singh that the balance amount totalling to Rs. 4.49 lacs as assured by him be deposited up to 30th January. 1997. Bipin Bihari Singh deposited only Rs. 62,000.00 with the Financial Corporation on 6-2-1997. On 9-9-1997 the Financial Corporation asked the petitioner Bipin Bihari Singh to make the rest of the payment thereafter the said Bipin Bihari Singh on 15-9-1997 asked the Branch Manager that margin money be reduced to 15%. On 12-2-1998 and 27-2-1998 the Corporation asked the petitioner to make the payment and also asked him to show cause that why the amount deposited by him be not forfeited. On 10-3-1998 according to the petitioner Bipin Bihari Singh, he submitted his reply and again informed the Branch Manager that he was making arrangement of the amount. Even after the order dated 12-10-1998 was passed the said Bipin Bihari Singh did not chose to deposit the balance of initial amount and again prayed for time. 10. From this conduct of Bipin Bihari Singh, it would clearly appear that he was not ready and willing to respect his part of the agreement nor was ready and willing to deposit the money, it cannot be said by anybody that before cancelling his agreement/ offer/contract Financial Corporation acted in a hasty manner or did not act in accordance with law or was not acting bona fide. The offer was made in favour of Bipin Bihari Singh on 4-6-1996. He was required to deposit only 18% of the consideration money an amount of Rs. 6.97 lacs only in place of 25% of the total amount. The offer was made in favour of Bipin Bihari Singh on 4-6-1996. He was required to deposit only 18% of the consideration money an amount of Rs. 6.97 lacs only in place of 25% of the total amount. Within one month of the offer he did not deposit the money, the first deposit was made by him on 11-12-1996 i.e. almost after six months of the offer. One could understand the bona fides of Bipin Bihari Singh if he had deposited the initial amount on 11-12-1996. He assured the authorities that he would make the payment on 25-12-1996 and 30th January. 1997 but he did not. Even on 6-2-1997 he deposited only Rs. 62.000.00 . It was just contrary to the assurances given by him and was also contrary to the terms of the offer. It would also appear from the records that from 6-2-1997, time upto 24-9-1998 was extended in his favour under one pretext or the other. Even on 12-10-1998 when the order was passed against his interest the said Bipin Bihari Singh did not come out of his slumber and did not propose to make the deposits. He came to this Court on 12-11 -1998 and simply submitted that he was ready and willing to deposit the balance amount of Rs. 3.87 lacs. The conduct of Bipin Blhari Singh would simply exhibit that he is a man, who does not respect his own words. He is ready and willing to violate the terms of the agreement and could play fraud with the authorities. It would also appear from his conduct that even on 12-10-1998 he did not possess sufficient money to make the initial deposit. 11. At this stage we will stop for a moment and would resume this matter after sometime. 12. In the matter of Mahesh Chandra, AIR 1993 SC 935 (supra) the Supreme Court has issued certain directions. The said directions were in fact on the basis of the facts of that particular case. Even if those directions are taken to be of general application then too this Court must look into the subsequent judgment of the Supreme Court, reported in (1995) 2 SCC 754 : 1995 AIR SCW 254. U.P. Financial Corporation V/s. Naini Oxygen and Acetylene Gas Company Limited. Even if those directions are taken to be of general application then too this Court must look into the subsequent judgment of the Supreme Court, reported in (1995) 2 SCC 754 : 1995 AIR SCW 254. U.P. Financial Corporation V/s. Naini Oxygen and Acetylene Gas Company Limited. In the said matter the Supreme Court observed that the Corporation in-discharge of its function is free to act according to its own right and unless its decision is shown to mala fide, even a wrong decision taken by it is not open to challenge. 13. The learned single Judge has observed that as the unit was not offered on similar/same terms to the promoters but they were required to deposit the entire amount within 21 days the mala fides must be presumed. In our opinion the approach of the learned single Judge cannot be said to be absolutely correct. The learned single Judge proceeded on the assumption that in the year 1998 Financial Corporation did not offer the unit to the original promoters on the same terms therefore, they were acting mala fide. The learned single Judge did not appreciate that the property was proposed to be auctioned after a long wrangle and in view of the fact that the original promoters became chronic defaulters. The Corporation had issued the notice to the original promoters on 15-2-1990 that if the dues were not paid they would be constrained to auction sale the property. It would also appear from the records that the advertisement for sale was made on 4-3-1995 and after open bid two highest bidders were called for negotiations. Immediately after the advertisement the original promoters did not come to this Court. After the property was settled in favour of Bipin Bihari Singh vide Memo. No. 22, dated 4-6-1996 the original promoters did not come to this Court nor did challenge the action of the Financial Corporation. They were satisfied and content with the settlement of the property in favour of Bipin Bihari Singh. If they were so satisfied and the property could be purchased by Bipin Bihari Singh for Rs. 38.70 lacs then how can they raise an objection against settlement of the same property on the same terms for the same amount. They were satisfied and content with the settlement of the property in favour of Bipin Bihari Singh. If they were so satisfied and the property could be purchased by Bipin Bihari Singh for Rs. 38.70 lacs then how can they raise an objection against settlement of the same property on the same terms for the same amount. The learned single Judge did not appreciate the fact that the original promoters having not challenged the settlement dated 4-6-1996 in favour of Bipin Bihari Singh had missed the bus and could not seek a reservation subsequent to the bus leaving the stand. It would also appear from the records that the original promoters are seeking to challenge the Financial Corporation resolution dated 14-10-1998 settling the property on the same terms in favour of Chandrama Singh. We are unable to understand that how can one challenge the subsequent settlement if he did not propose to challenge the first settlement. Be that as it may, the fact is that the first settlement was not challenged. At this stage it would also be necessary to observe that the learned Single Judge was swayed away by the fact that the Financial Corporation simply granted 21 days time to the original promoter to make the full payments. From the order passed by the learned Single Judge it does not appear that any offer was made by the original promoters that they were ready and willing to make the payment of the amount in lump sum or on the same terms on which property was settled to Bipin Bihari Singh. In fact from the prayer clause of the writ application it would appear that they were seeking a writ against the Financial Corporation to transfer the unit in their favour on the same terms and conditions on which it was offered to Chandrama Singh. They were requesting the Court to issue a direction against the Corporation to rescheduling the remaining arrears to be recovered in instalments from the promoters. 14. At this stage it would be necessary for us to observe that the promoters were chronic defaulters. They had taken the loan long back, they did not pay the instalments. For payment of the instalments they had taken yet another loan. A part of the second loan was adjusted towards the first loan and some amount was used by them as mobilization amount. They had taken the loan long back, they did not pay the instalments. For payment of the instalments they had taken yet another loan. A part of the second loan was adjusted towards the first loan and some amount was used by them as mobilization amount. If a borrower is unable to make payment of the loan taken by him then it would be fool hardy on part of the creditor to give the same property for a lessor price to the same defaulter borrower rescheduling the payment of the money. It would be too much to expect from the creditor that in stead of recovering the full money from the borrower he would adjust the hypothecated property in favour of the borrower for a lessor amount and would again extend the facility of the instalments. 15. In our opinion the learned Single Judge was not justified in interfering with the matter. 16. It would also be necessary for us to 2004 Pat./9 XI G-39 record that this matter came up for hearing on number of occasions. Shri Ram Balak Mahto and Shri S. S. Dwivedi, Senior Counsel appeared for .Chandrama Singh, Shri Rajendra Prasad Singh, Senior Advocate appeared for Bipin Bihari Singh, Dr. Sadanand Jha. Senior counsel appeared for original promoters/M/s. Shri Ramji Rice Mills and Shri P. K. Shahi appeared for the Financial Corporation. This Court taking into consideration the manner in which the litigation was going on and the property was under the clouds enquired from the respective parties to give their offers in the open Court. Shri Ram Balak Mahto, learned senior counsel informed the Court that his client Chandrama Singh was ready and willing to make the offer of Rs. 50 lacs apart from whatever has been deposited by him. Shri Rajendra Prasad Singh informed (sic) that his client was not in the race and he was pressing his writ application for refund of the amount deposited with the Financial Corporation and the amount deposited under the directions of this Court. Dr. S. N. Jha, sought for time to seek instructions in the matter. Later on Dr. S. N. Jha informed the Court that M/s. Ramji Rice Mills were ready and willing to pay Rs. 50 lacs. Shri Ram Balak Mahto, Sr. Counsel informed the Court that Chandrama Singh was ready and willing to pay Rs. 61 lacs. Dr. Dr. S. N. Jha, sought for time to seek instructions in the matter. Later on Dr. S. N. Jha informed the Court that M/s. Ramji Rice Mills were ready and willing to pay Rs. 50 lacs. Shri Ram Balak Mahto, Sr. Counsel informed the Court that Chandrama Singh was ready and willing to pay Rs. 61 lacs. Dr. S. N. Jha prayed for time to seek further instructions: When this case was again taken up Dr. S. N. Jha informed the Court that original promoters are ready and willing to pay Rs. 61 lacs. To counter this offer Shri Ram Balak Mahto Informed the Court that his offer was Rs. 61 lacs in addition to whatever has been deposited by him. He informed the Court that Chandrama Singh had already deposited Rs. 15 lacs with the Corporation therefore, his offer is for Rs. 76 lacs. Surprised and shocked with the offers coming from the original promoters and the purchaser we again enquired from the original promoters that this Court was inclined to make settlement in their favour provided they were ready and willing to accept the unit for Rs. 76 lacs. Dr. S. N. Jha prayed for time. When the case was again taken up Dr. S. N. Jha. learned senior counsel for original promoters/M/s. Shri Ramji Rice Mill informed the Court that his client was not ready to pay anything beyond Rs. 61 lacs. At this stage we enquired from Shri Ram Balak Mahto that what would be the mode of payment, and what would be the terms for settlement, Shri Ram Balak Mahto, learned senior counsel for Chandrama Singh Informed the Court.. that within one month from the date of final order Chandrama Singh would deposit Rs. 15 lacs in cash with the Corporation and the balance amount of Rs, 46 lacs would be paid by Chandrama Singh within five years in equal half yearly instalments with interest. Me also informed the Court that said Chandrama Singh would not alienate the property but however, may mortgage the same without affecting the rights, title and interest of the Financial Corporation. 17. Me also informed the Court that said Chandrama Singh would not alienate the property but however, may mortgage the same without affecting the rights, title and interest of the Financial Corporation. 17. Taking into consideration the totality of the circumstances and the offers by which are bewildered, we are of the opinion that the Interest of all concerned would be properly protected if the property is allowed to be sold in favour of Chandrama Singh for a total sum of Rs- 76 lacs. Despite our sincere and best efforts and persuasion to the original promoters to purchase the property at Rs. 76 lacs and that too on the similar terms the original promoter is not ready and willing to purchase the property and as the other purchaser has dropped out of the race we think that instead of directing fresh auction and put everything in jeopardy, the property must be settled in favour of Chandrama Singh. 18. So far as the claim of Bipin Bihari Singh for refund is concerned we must reject the same immediately. In the earlier paragraphs of this judgment have already discussed his conduct. Such a man is not entitled to a discretionary relief in the equity jurisdiction of this Court. His writ application for the refund is dismissed- But, however, it is directed that the amount of Rs. 3.87 lacs deposited by him under the directions of this Court vide order dated 5" 11 -1998 be refunded to him with 9% simple interest from the date of its deposit. The Financial Corporation is hereby directed to refund the amount to Bipin Bihari Singh within four months from today. 19. As the original promoters are not ready and willing to settlement of property on equal terms their writ application cannot be allowed, it deserves to and is accordingly dismissed. Accordingly L.P.A. No. 1315 of 2001 and 1446 of 2001 are allowed. 20. The writ application C.W.J.C. No. 11071 of 1998 filed by Chandrama Singh does not need any further orders because the writ application filed by Bipin Bihari Singh has already been dismissed and this Court is directing that the property be settled for Rs, 76 lacs in favour of Chandrama Singh. 21. Within one month from today Chandrama Singh shall deposit a sum of Rs. 15 lacs with the Bihar State Financial Corporation. 21. Within one month from today Chandrama Singh shall deposit a sum of Rs. 15 lacs with the Bihar State Financial Corporation. It is also made clear that within same period he shall also see that the deposits made by him are to the tune, of Rs. 30 lacs. If he has made any less deposits on earlier occasions then he will seek instructions/directions from the Bihar State Financial Corporation and would deposit the said amount also. It is made clear that further agreement would be drawn 111 favour of Chandrama Singh, if a total deposit of Rs. 30 lacs is made with the Bihar State Financial Corporation. If the said amount of Rs. 15 lacs is not deposited within one, month from today then earlier deposit would stand forfeited and the settlement made, in favour of Chandrama Singh, would also stand cancelled and the Corporation would be entitled to take possession of and reauction the property. If the initial deposits as directed above are made then the Bihar State Financial Corporation and Chandrama Singh would execute an agreement settling the remaining terms specially that the balance amount shall be paid within live years in 10 half yearly or 20 quarterly instalments at the same rate of interest proposed in Memo. No. 545 dated 24-9-1998. 22. The writ application C.W.J.C. No. 9300 of 1998 filed by Bipin Bihari Singh and Writ Application C.W.J.C. No. 1304 of 1999 filed by original promoters/M/s. Shri Ramji Rice Mill are dismissed. Writ Application C.W.J.C. No. 11071 of 1998 filed by Chandrama Singh is disposed of as infructuous and L.P.A. No. 1315 of 2001 and 1446 of 2001 are disposed of accordingly. There shall be no orders as to costs. Nagendra Rai, J. 23 I agree.