Judgment :- The petitioner is a partnership firm. With an object of establishing the Cotton Ginning Unit, it approached the Warangal Branch of A.P. State Financial Corporation (for short ‘the respondent’), the respondent herein, for loan. The respondent sanctioned on amount of Rs.5,06,427/- and disbursed the same to the petitioner, some time in the year 1985. By 15-12-1992, petitioner repaid about Rs.8,75,000/-. According to it, only a sum of Rs.2,824/- was due, and despite the same, the respondent collected Rs.1,05,550/- up to 1994. The Corporation seized the Industrial Unit of the Petitioner, in the year 1992, in exercise of power under Section 29 of the State Financial Corporations Act (for shot ‘the Act’). Aggrieved thereby, the petitioner filed O.S.No.874 of 1992, in the Court of II Additional Junior Civil Judge, at Warangal, for a declaration that the notices issued by the respondent for seizure of the Unit are unenforceable in law, and for injunction against the Corporation, restraining it from taking any coercive steps. A decree was passed in the suit, on 31-12-1998, directing that the respondent shall not be entitled to levy penal interest against the petitioner, that the Unit shall not be seized for a period of six months, from the date of decree. It was also directed that, within two months from the date of decree, the respondent shall furnish a statement of account, and the petitioner in turn, shall pay the amount, within four months thereafter. It is stated that the respondent did not comply with the terms of the decree, and, on the other hand, is insisting for payment of further amounts. Reference is made to a notice dated 12-09-2002, through which the petitioner was directed to attend a meeting for One Time Settlement (OTS), on 21-09-2002, falling which, he would be masked, handcuffed and arrested. A photograph depicting the same was also enclosed. He was required to pay a sum of Rs.3,20,000/- In this factual background, the petitioner prays for a Writ of Mandamus, directing the respondent to raise the attachment of the Unit, and to release the documents. According to the petitioner, the entire loan, while accrued interest was paid by 1992 itself. The respondent filed a counter-affidavit, denying the allegations of the petitioner. It is stated that the petitioner did not comply with the terms of OTS, and, as on 31-12-2002, its liability has risen to Rs.22,94,852/-. According to the petitioner, the entire loan, while accrued interest was paid by 1992 itself. The respondent filed a counter-affidavit, denying the allegations of the petitioner. It is stated that the petitioner did not comply with the terms of OTS, and, as on 31-12-2002, its liability has risen to Rs.22,94,852/-. They contend that, in compliance with the decree in O.S.No.874 of 1992, necessary information was furnished to the petitioner, and still, it did not comply with the decree. When the writ petition came up for hearing, this Court has perused the notice dated 12-09-2002. In that, the petitioner was required to come for a settlement, and thereby, “avoid arrest and imprisonment and be a respectable citizen”. On the rear side of the notice, advertisement issued by the Corporation, together with a photograph, depicting the picture of a defaulter in Suit, but being masked, and taken away by Police; was reproduced. Though on order dated 19-11-2008, this Court directed the learned Standing Counsel for the Corporation, to get the particulars of the officials, who are responsible for issuance of such an advertisement. An additional counter-affidavit is filed by the Chief-General Manager, OPD-I, narrating the circumstances under which the said advertisement came to be issued. It is stated that the steps mentioned in the advertisement are nothing, but those, contemplated under Section 48 of the A.P. Revenue Recovery Act, 1864 (for short ‘the RR Act’). The liability of the petitioner, in one statement attached to it; as on 31-10-2008, is shown as Rs.57,74,742/-, and in another statement for the same account, the liability is shows as Rs.60,35,825/- Sri Akella Srinivasa Rao, learned counsel for the petitioner submits that the respondent has violated the specific direction issued by the Civil Court in O.S.No.874 of 1992. He states that a small amount remained unpaid by August, 1992, and thereafter a further sum of Rs.1,05,550/- was paid, and despite the same, no statement of account was furnished. He contends that in a subsequent suit, being O.S.No.715 of 2001, in the Court of Principal Senior Civil Judge, Warangal, the respondent has taken a factually incorrect plea, that the directions contained in the decree. In O.S.No.874 of 1992 were complied with. He contends that in a subsequent suit, being O.S.No.715 of 2001, in the Court of Principal Senior Civil Judge, Warangal, the respondent has taken a factually incorrect plea, that the directions contained in the decree. In O.S.No.874 of 1992 were complied with. He submits that the respondent, which is a statutory corporation, totally owned by the State; has resorted to measures, which are not permissible, even for a private lender, be it, as regards the method of calculation of interest, or the mode of recovery. He contends that, with the seizure of the Unit, in violation of the decree passed by the trial Court, the petitioner was subjected to untold hardship, and financial loss. Learned counsel submits that the demand made against the petitioner is barred by limitation. Sri. T. Durga Reddy, learned counsel for the respondent on the other hand, submits that the writ petition is not maintainable against the steps initiated under Section 29 of the Act. He places reliance upon the judgments of the Supreme Court in Haryana Financial Corporation v. M/s Jagdamba Oil Mills 2002 (3) SCC 496 , and Kumar Chemicals and Fertilizers (P) Ltd., v. Andhra Pradesh Industrial Development Corporation Ltd., 2008 (2) ALT 484 . He contends that the directions issued by the Civil Court in O.S.No.874 to 1992 have been complied with, and despite the repeated demands, the petitioner did not pay amount, due. He submits that the advertisement was issued only to inform the defaulters, about the consequences that are provided for under the relevant provisions of law. Learned counsel further submits that the limitation does not apply to cases, where the seizures are effected under Section 29 of the Act. The petitioner borrowed Rs.5,06,427/- from the respondent in the year 1985. It is not in dispute that, by the end of 1992, about Rs.8,75,000/-was paid by the petitioner. At that stage, the Unit was seized on the ground that the petitioner committed default. According to the petitioner the amount due was only Rs.2,824/-. The respondent collected a sum of Rs.1,05,550/- up to 07-01-1994, and made further demands. At that stage, the petitioner filed O.S.No.874 of 1992. Though the petitioner pleaded that it is entitled for the benefit under One Time Settlement, the trial Court did not agree with it. A finding was recorded to the effect that the respondent cannot levy penal interest against the petitioner. At that stage, the petitioner filed O.S.No.874 of 1992. Though the petitioner pleaded that it is entitled for the benefit under One Time Settlement, the trial Court did not agree with it. A finding was recorded to the effect that the respondent cannot levy penal interest against the petitioner. The operative portion of the judgment in the suit reads as follows: “…In the result, the suit is partly decreed without costs. The defendant-corporation is restrained from seizing the unit fill 6 months. Meanwhile, the defendant corporation is directed to furnish accounts of payment made by the plaintiff deducting the penal interest charged and the amount claimed thereof, within 2 months and plaintiff is directed to pay the said amount within 6 months from the date of this judgment…” From this, it is clear that, a) the respondent was restrained from seizing the unit, for a period of two months. b) the respondent was also placed under obligation to furnish the accounts to the petitioner, after deleting the component of penal interest; within two months from the date of decree, and c) the petitioner was required to clear the amount, within four months from the date of decree. The decree passed by the trail Court became final. About three years later, the petitioner approached the Court of Principal Senior Civil Judge, Warangal, by filing O.S.No.715 of 2001, alleging that the respondent has seized the Unit and is insisting on further payments, without complying with the decree in O.S.No.874 of 1992. In that suit, it has also filed applications-I.A.No.412 of 2001 for removal of lacks put to the Unit, and I.A.No.413 to 2001 for temporary injunction, restraining the respondent from taking any coercive steps. The learned counsel for the respondent has placed before this Court, a copy of common order dated 28-04-2001, passes by the Court, of Senior Civil Judge, Warangal. In Para 5 of that order, the trial court observed as under: “…Respondent No.1 filed a counter through its counsel in IA 412/2001 and adopted the same counter in IA No.413/2001, In this counter, RI Stated that he complied the registered letter through its counsel on 4.4.2001 through registered post and the same was not claimed by the petitioner, so the said cover was returned to him as unclaimed. He is stating that petitioner managed and got returned the said cover. He is stating that petitioner managed and got returned the said cover. He stated that after waiting for 7 months respondent seized the mill on 8.11.2001 as it was hypothecated. It also found that some machinery was missing. Then the respondents issued a notice dt.16.11.2001 to the petitioner to replace those machineries. But petitioner did not comply the same. They also stated that the mill is not in running condition since 8.11.2001 and they are stating that if the mill is handed over to the petitioner, they cannot recover the due amount of Rs.11,00,000/- as on 1.2.1999. They are stating that allowing these applications amount to decreeing the suit itself. They further stated that the petitioner did not pray for any relief for redelivering the unit. So granting of relief does not arise…” In the common order dated 28-04-2001, the learned Principal Senior Civil Judge, has simply noted the contents of the counter-affidavit filed by the respondent herein, and the arguments advanced on its behalf. He did not take the trouble of verifying whether the decree in O.S.No.874 of 1992 was complied with. He was mostly impressed by the fact that an allegation was made, that some machinery was removed, and the applications were dismissed. In view of the lack of clarity in the order passed by the learned Principal Senior Civil Judge, this Court verified from the learned counsel for the respondent. As to whether the decree in O.S.No.874 of 1992 was complied with. He placed the copies of Exs.B-1 to B-3 marked in I.A.Nos.412 and 413 of 2001, and stated that they constitute compliance. A perusal of the said documents discloses that Ex.B-1 is a notice dated 04-04-2000, addressed by the learned counsel for the respondent, at Warangal, to the petitioner. The notice, inter alia states; “…My client had informed me that it had already furnished the account showing the amount due after deducting the penal interest on or about 01-08-1999. However, you have not taken pains to pay any amount either towards the principal or towards interest will this day for reasons final and irrevocable. Now my client having seen your attitude is not responding to the account furnished by my client has sought my services for issuing a legal notice requiring you to comply it”. The basis on which notice in Ex.B-1 was issued, is a letter dated 22-07-1999, addressed by the respondent, to the counsel. Now my client having seen your attitude is not responding to the account furnished by my client has sought my services for issuing a legal notice requiring you to comply it”. The basis on which notice in Ex.B-1 was issued, is a letter dated 22-07-1999, addressed by the respondent, to the counsel. It reads as under: “With reference to the above, we bring to your kind notice, that Suit was decreed in favour of the Corporation on 31-12-1998, we have already furnished Account Statement copies to the party. Party has not so far responded for clearing arrears. In this connection, we request you to issue Legal Notice to party intimation to us and renew Caveat Petition, since the party is litigant.” This letter virtually falsifies the statement contained in Ex.B-1, which is extracted above. Ex-B-2 is a cover, through which a statement is said to have been forwarded, and Ex.B- 3 is the statement, which contain the figures of the amount collected from the petitioner. It does not make any mention of the penal interest, or the amount due from the petitioner. The respondent is not able to establish that the statement, as directed by the trial Court in O.S.No.874 of 1992, was furnished to the petitioner, within the stipulated time. The representation made by the respondent, before the Court of Principal Senior Civil Judge, Warangal, is factually incorrect. In the counter-affidavit filed before this Court also, a statement is made, as under:- “…I state and submit that in terms of the judgment rendered by the Civil Court, this respondent Corporation duly informed the amount due and payable to this respondent Corporation…” Even this is factually incorrect and such on attitude is not expected from a Corporation, created under a statute. The respondent committed a serious illegality and exposed itself for prosecution, for misleading the Courts, with factually incorrect statement, knowing them to be false. The seizure of the Unit was effected in Utter violation of the terms of the decree, and the respondent went on adding interest, at its whims and fancies. Such action cannot be countenanced in law. The cause of action for the petitioner to approach this Court is, a notice dated 12-09-2002. The subject and reference thereof read as under: “Sub: One Time Settlement – Avoid arrest and attachment of movables. Such action cannot be countenanced in law. The cause of action for the petitioner to approach this Court is, a notice dated 12-09-2002. The subject and reference thereof read as under: “Sub: One Time Settlement – Avoid arrest and attachment of movables. Ref: Our advertisement, released in Eenadu on 09-09-2002.” On the reverse of this notice, an advertisement is reproduced. At the end of the notice, the following warning is given: “Settle under One Time Settlement – Avoid Arrest and imprisonment. Be respectable citizen.” The advertisement is in Telugu. Not only several warnings were issued, but also a photograph, depicting a person, being masked, and taken away by the Police: was published. A caption, viz., the only way to avoid this, is to clear the arrears; was indicated to the photograph. In the additional counter-affidavit, it is stated that the advertisement was issued, at a time, when the General Manager was, one Mr.C. Jagan Mohan Reddy, and the Managing Director was Mr. J.C. Mohanthy, I.A.S. It is stated that, while J.C. Mohanthy was transferred from the Corporation, Mr. Jagan Mohan Reddy has retired from service. The dependent of the additional counter-affidavit, by name. Sri. K. Dharma Rao, stated, in paragraph-6 as under: “para-6: I submit that U/s.48 of A.P. Revenue Recovery Act, 1864, the Collector is empowered to arrest the willful defaulter who is willfully withholding the payment of arrears to evade payments. Under the said section a person may be imprisoned on account of arrears of revenue up to a period of 2 years and such imprisonment shall not extinguish the debt due to the Government/Corporation by the defaulter or his surety. The said advertisement was used only to bring to the notice of the defaulters of possible recourses available to the Corporation. However, till this date there is no case where defaulter was arrested by the Corporation. In fact, advertisement also clearly states that steps for arrest would be under A.P. Revenue Recovery Act, 1864”. This Court takes serious exception to the attitude exhibited by the deponent. The advertisement, much less the captions in the notice, do not befit the dignity and decorum of a statutory corporation. Had such steps been taken by any private moneylender, not only they would have been prosecuted, but also their licences would have been cancelled. This Court takes serious exception to the attitude exhibited by the deponent. The advertisement, much less the captions in the notice, do not befit the dignity and decorum of a statutory corporation. Had such steps been taken by any private moneylender, not only they would have been prosecuted, but also their licences would have been cancelled. It must not be forgotten that the State Financial Corporations are conferred under Section 29 of the Act, extraordinary powers, which are not even available even to the department of a sovereign Government. The primary assets, as well as the property mortgaged by the industrial concern, can straightaway be proceeded against, without the necessity of approaching any Court, or Tribunal. Even the powers of Executing Court are conferred upon the Corporations. As though such powers are not sufficient, the respondent has arrogated to itself, the blackmailing tactics, or muscle power. Recently the Honourable Supreme Court took serious exception to the coercive mechanisms, adopted by the Banks, for recovery of amounts from the customers. In a country governed by Rule of law, there is no room for such objectionable methods. If the Corporation is not able to recover the amounts, despite the powers under Section 29 of the Act, or the facility created under Sections 31 and 32-B of the Act, it is a clear case of incompetence and inefficiency, on the part of the concerned. It is not without reasons that the defaults are occurring in large number of transactions, with the respondent. The method of levying interest, shocks the conscience of even the professional money-lenders. Miniscule amounts, that remain unpaid, representing the left over interest, is nourished by the respondent in such a way, as to grow in geometrical propositions, and become crores over the years. In the instant case itself, the petitioner specifically pleaded in O.S.No.874 of 1992 that it had cleared the entire liability. They respondent maintained a tactful silence, as to the exact amount due. The trial Court issued the directions, which have been extracted above: virtually giving liberty to the respondent, to indicate the amount, without levying penal interest. The respondent appears to have treated compliance with the decree of the trial Court, as a step, below its dignity, particularly, when it is conferred with extraordinary power, under Section 29 of the Act. The trial Court issued the directions, which have been extracted above: virtually giving liberty to the respondent, to indicate the amount, without levying penal interest. The respondent appears to have treated compliance with the decree of the trial Court, as a step, below its dignity, particularly, when it is conferred with extraordinary power, under Section 29 of the Act. Having failed to comply with the direction, which is nothing but the one, to furnish a statement of account, it made deliberate misrepresentations before this Court and the Court of Senior Civil Judge, at Warangal. The Unit was seized, in violation of the decree of the Civil Court. The conduct of the respondent is highly arbitrary and despicable. The height of arbitrariness is demonstrated from the fact, that in the year 2002, the petitioner was required to settle the account, by paying Rs.3,20,000/- and it is now pleaded that the petitioner is due a sum of Rs.60,35,825/-. The Parliament never may have dreamt that a creature under its statute, would turn out to be so unreasonable, despotic and dictatorial, Since the seizure was illegal and contrary to the decree of the Civil Court, the respondent is liable to compensate the petitioner, for the loss sustained by it. It is not doubt true that the Honourable Supreme Court, time and against held that this Court cannot sit as an Appellate Authority, over the steps taken by the Financial Corporations, Under Section 29 of the Act. It is essential to note that in Karnataka State Industrial Investment and development Corporation Limited, v. Cavalet India Ltd., (2005) 4 SCC 456 the Supreme Court held, inter alia as under: “…In a matter between Corporation and debtor, a writ court has no say, except in two situations: a) there is statutory violation on the part of the Corporation, or b) Where the Corporation acts unfairly, i.e., unreasonably” It has been demonstrated in the preceding paragraphs that the acts and omissions on the part of the respondent are unfair. Unreasonable and arbitrary, apart from being violative of a specific decree, passed by a Civil Court. For the foregoing reasons, the writ petition is allowed, in the following terms: a) The respondent shall furnish the statement of account as on 31-12-1998, without levying any penal interest, within two months from today. Unreasonable and arbitrary, apart from being violative of a specific decree, passed by a Civil Court. For the foregoing reasons, the writ petition is allowed, in the following terms: a) The respondent shall furnish the statement of account as on 31-12-1998, without levying any penal interest, within two months from today. b) The petition shall submit a statement, as to the loss incurred by in, on account of the seizure, effected in violation of the decree in O.S.No.874 of 1992, on the file of the II Additional Junior Civil Judge, Warangal. c) A Senior Officer of the respondent-Corporation, of the State level, shall take both of them into account, and pass an order, within two months from the date of submission of the statement by the Branch Manager, and the claim made by the petitioner. d) The levy of interest, subsequent to 31-12-1998, is set aside, and e) the seizure of the Unit, which is in violation of the decree in O.S.No.874 of 1992, is also declared as illegal. There shall be no order as to costs.