JAMMIGUMPULA SIVAIAH v. A. P. STATE FINANCIAL CORPORATIONS
2003-08-05
H.K.SEMA, S.N.VARIAVA
body2003
DigiLaw.ai
ORDER 1. HEARD PARTIES. 2. THESE APPEALS CAN BE DISPOSED OF BY A COMMON ORDER AS BOTH APPEALS ARE DIRECTED AGAINST THE JUDGMENT OF THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH DATED 20-12-1995. 3. BRIEFLY STATED THE FACTS ARE: THE ANDHRA PRADESH STATE FINANCIAL CORPORATION HAD LENT SOME AMOUNT TO THE FATHER OF RESPONDENT 3 IN CIVIL APPEALS NOS. 12830 AND 12831 OF 1996 AND RESPONDENT 1 IN CIVIL APPEALS NOS. 12834-35 OF 1996. AS THE AMOUNTS WERE NOT REPAID, THE FINANCIAL CORPORATION PURPORTED TO SELL THE PROPERTY TO THE APPELLANT IN CIVIL APPEALS NOS. 12830-31 OF 1996. THIS SALE WAS CHALLENGED. BY THE IMPUGNED JUDGMENT THE SALE HAS BEEN SET ASIDE ON THE GROUND THAT THE GUIDELINES LAID DOWN BY THIS COURT IN THE CASE OF MAHESH CHANDRA V. REGIONAL MANAGER, U.P. FINANCIAL CORPN.1 HAVE NOT BEEN FOLLOWED. 4. IT IS POINTED OUT TO US THAT THIS DECISION HAS BEEN OVERRULED BY THIS COURT IN THE CASE OF HARYANA FINANCIAL CORPN. V. JAGDAMBA OIL MILLS2. IT IS SUBMITTED THAT AS THOSE GUIDELINES NO LONGER APPLY, THE ACTION OF THE CORPORATION UNDER SECTION 29 OF THE STATE FINANCIAL CORPORATIONS ACT, 1951 COULD NOT AND SHOULD NOT HAVE BEEN INTERFERED WITH. 5. IT IS, HOWEVER, TO BE NOTED THAT EVEN IN HARYANA FINANCIAL CORPN. CASE2, THIS COURT HAS HELD THAT THE CORPORATION MUST ALWAYS TRY AND REALISE THE MAXIMUM PRICE. IT HAS BEEN HELD THAT THE ASSETS MUST BE SOLD BY FOLLOWING PROCEDURE WHICH IS TRANSPARENT AND ACCEPTABLE, AFTER DUE PUBLICITY. 6. IN THE IMPUGNED JUDGMENT, THE LEARNED JUDGE HAS EXTRACTED, VERY SUCCINCTLY, HOW THE CORPORATION HAS SOLD THIS PROPERTY TO THE APPELLANT IN CIVIL APPEALS NOS. 12830 AND 12831 OF 1996. THESE FACTS MAKE IT CLEAR THAT THE PROCEDURE FOLLOWED WAS NEITHER TRANSPARENT NOR FAIR. IN OUR VIEW, PRINCIPLES OF NATURAL JUSTICE HAVE ALSO NOT BEEN FOLLOWED. IN OUR VIEW, THE DIVISION BENCH HAS CORRECTLY SET ASIDE THE AUCTION-SALE. WE SEE NO REASON TO INTERFERE. BOTH THE APPEALS ACCORDINGLY STAND DISMISSED WITH NO ORDER AS TO COSTS. 7. IT MUST, HOWEVER, BE MENTIONED THAT THE DIVISION BENCH ALSO GAVE A DIRECTION THAT THE ENTIRE AMOUNT DUE AND PAYABLE SHOULD BE PAID. AFTER THE JUDGMENT OF THE DIVISION BENCH, THE FINANCIAL CORPORATION WROTE A LETTER DATED 16-2-1996 SETTING OUT THAT THE AMOUNT DUE AS ON 25-8-1990 WAS RS 1,31,650.80.
7. IT MUST, HOWEVER, BE MENTIONED THAT THE DIVISION BENCH ALSO GAVE A DIRECTION THAT THE ENTIRE AMOUNT DUE AND PAYABLE SHOULD BE PAID. AFTER THE JUDGMENT OF THE DIVISION BENCH, THE FINANCIAL CORPORATION WROTE A LETTER DATED 16-2-1996 SETTING OUT THAT THE AMOUNT DUE AS ON 25-8-1990 WAS RS 1,31,650.80. EVEN THOUGH RESPONDENT 3 DISPUTED THE FIGURE, A DEMAND DRAFT FOR RS 1,31,650.80 WAS SENT IMMEDIATELY. THE CORPORATION CHOSE TO RETURN THAT DEMAND DRAFT. THEREAFTER BY ANOTHER LETTER DATED 17-8-1996 RESPONDENT 3 AGAIN FORWARDED DEMAND DRAFTS TOTALLING RS 1,31,650.80. THESE HAVE BEEN ACCEPTED BY THE CORPORATION. HOWEVER, THE CORPORATION NOW CLAIMS THAT THE AMOUNT DUE IS RS 5,01,646.25. IT IS CLAIMED THAT AFTER GIVING CREDIT FOR RS 1,31,650.80, THE AMOUNT PAYABLE COMES TO RS 3,69,995.45. IN OUR VIEW, SUCH A CLAIM IS ENTIRELY UNTENABLE. THE CORPORATION HAD TAKEN POSSESSION AS FAR BACK IN 25-8-1990. THEREAFTER, THEY PURPORTED TO SELL THE PROPERTY AND RECEIVED MONIES FROM THE APPELLANT. THEREFORE, ALL THAT WAS DUE AND PAYABLE WAS RS 1,31,650.80 WHICH HAS ALREADY BEEN PAID. IT IS, THUS, CLARIFIED THAT NOTHING FURTHER REMAINS DUE AND PAYABLE BY THE BORROWER TO THE CORPORATION. THE CORPORATION SHALL RETURN THE MONEY TAKEN FROM THE APPELLANT IN CIVIL APPEALS NOS. 12830-31 OF 1996 AFTER TAKING BACK POSSESSION FROM HIM. THE CORPORATION SHALL HAND BACK POSSESSION TO THE 3RD RESPONDENT IN CIVIL APPEALS NOS. 12830 AND 12831 OF 1996 WITHIN A PERIOD OF ONE MONTH FROM TODAY. IT IS CLARIFIED THAT IF THE CORPORATION DOES NOT RECOVER AND HAND OVER POSSESSION TO THE ORIGINAL DEBTOR WITHIN THIS PERIOD G THEY WILL BE LIABLE TO PAY MESNE PROFITS AND DAMAGES. IT IS FURTHER CLARIFIED THAT THE LESSEE WHO WAS PUT IN POSSESSION, PENDING LITIGATION, WILL HAVE NO RIGHT AND WILL HAVE TO VACATE FORTHWITH.