ORDER : Heard Mr. M. Dutta, the learned counsel appearing for the writ petitioners. Also heard Mr. B.D. Das, the learned Sr. counsel representing the Assam Industrial Development Corporation (AIDC) and their Managing Director (respondents). 2. The 1st petitioner i.e. M/s Sonar Cachar Publication Pvt. Ltd. had availed loan from the AIDC and the agreement dated 18.01.1994 was executed by the AIDC and the borrower to incorporate the terms of the loan. Admittedly Rs.73 lakh was the principal loan amount disbursed to the petitioner during 06.04.1994 – 15.11.1996. The loan is required to be repaid with 17.5% interest. 3. The borrower faced various setbacks including the death of their M.D. Ranabir Roy and failed to adhere to the repayment schedule. Therefore, the AIDC initiated recovery proceedings, under the State Financial Corporations Act, 1951 by attaching the hypothecated property of the borrower. The mortgaged assets were taken over by the AIDC without exercising the management option, under Section 29 of the 1951 Act and thereafter, the sale notice was advertised on 16.10.2014 to sell the assets of the debtor. 4. At that stage, the outstanding dues from the borrowers as on 18.10.2014 were indicated under 5 heads as follows: “…………….. 1. Principal : Rs.73,00,000.00 2. Interest on Term Loan : Rs.1,08,68,186.00 3. Penal Interest : Rs. 20,18,385.00 4. Addl. Interest : Rs.21,03,981.00 5. Equity : Rs.6,50,000.00 Total : Rs.2,29,40,552.00 ……………..” 5. However, since the reserve price was not stipulated for the advertised sale and valuation of the assets were not done, the borrowers filed the WP(C) No.5599/2014, where direction was issued on 05.11.2014 to arrange for valuation of the property and stipulate the reserve price, before the sale exercise is undertaken. 6. Subsequently the impugned sale notice was advertised on 01.07.2015 (Annexure-14), where the reserve price for the assets was stipulated at Rs.2.80 crores but this sale notice is challenged by the borrower with a prayer to allow the borrower to redeem the mortgage and a direction on the AIDC, to furnish the statement of the loan accounts of M/s Sonar Cachar Publication Pvt. Ltd. 7. While issuing returnable notice in the WP(C) No.5025/2015, this Court passed an interim order on 27.08.2015, whereby the impugned sale notice was stayed until such time, the valuation of the assets is completed and statement of accounts is furnished to the petitioners. While issuing returnable notice in the WP(C) No.5025/2015, this Court passed an interim order on 27.08.2015, whereby the impugned sale notice was stayed until such time, the valuation of the assets is completed and statement of accounts is furnished to the petitioners. As the sale could not fructify on account of the stay order, the AIDC has filed the I.A. No.79/2016 to vacate the interim order to enable the AIDC to sale the mortgaged assets, to recover the loan dues. 8. The applicants contend that valuation of the assets was done by a govt. registered valuer with participation of the representatives of the borrower and the valuer has assessed the mortgaged assets to be worth Rs.3.18 crores. But Mr. M. Dutta, the learned counsel refers to the prejudicial valuation of the plants and machineries and contends that mortgaged assets were left unattended after they were taken over by the AIDC and therefore the machineries and equipments have gathered dusts and rusts for several years and that is how their worth is assessed on salvage value basis and this is to the serious prejudice of the debtors. 9. While a detailed statement of accounts calculated up to 31.07.2015 was furnished to the borrower on 02.09.2015, Mr. M. Dutta, the learned counsel submits that AIDC has not explained how the total outstanding figure is reached and accordingly it is argued that proper statement of accounts as was ordered by the Court on 27.08.2015, have not been furnished to the borrower. 10. As the writ petitioners pleaded that incomplete statement of accounts was furnished, direction was issued to the AIDC to furnish full details and consequently the detail statement of accounts in respect of the repayable loan amount of M/s Sonar Cachar Publication Pvt. Ltd. is brought on record by the respondents. The first page summary of the outstanding as on 31.03.2016, reflect that Rs.2,46,94,153.31 is recoverable from the borrower and this figure is reflected under the following heads: Summary for outstanding as at 31.03.2016 Sl. No. Particulars Amount 1) Term Loan outstanding : 7,300,000.00 2) Interest on Term Loan outstanding : 12,720,186.00 3) Penal Interest Outstanding : 2,358,386.10 4) Additional Interest Outstanding : 2,315,581.21 Total : 24,694,153.31 11. In addition to above, the AIDC has also taken into account Rs.6.5 lakh, which was the money invested by the AIDC, to purchase equity shares of the borrower company. 12. In addition to above, the AIDC has also taken into account Rs.6.5 lakh, which was the money invested by the AIDC, to purchase equity shares of the borrower company. 12. Under Clause 3.2(a) of the loan agreement dated 18.01.1994, interest is payable at the stipulated rate. But the proviso to the clause stipulates that when accrued interest is not paid on the due dates, further interest @2% per annum, is chargeable over and above the regular interest. In the statement of accounts, the total interest (for the period 06.04.1994 – 31.03.2016) is computed at Rs.2,73,84,543/- out of which, the borrower has repaid Rs.1,46,64,357/-. Thus under the interest head, outstanding amount Rs.1,27,20,186/- shown against the borrower. To this figure, further interest @2% is added under the proviso to Clause 3.2(a) and hence the debtor is made liable to further interest (penal charge), to the tune of Rs.23,58,386/-. 13. That apart, since Rs.73 lakh was the principal amount disbursed to the borrower and they were expected to adhere to the stipulated repayment schedule starting from 07.04.1996, further interest @2% per annum on defaulted installments, is also added under Clause 3.3 of the loan agreement. Under this head, additional interest to the tune of Rs.23,15,581.21 is added as repayable, towards the debtors account. 14. In so far as the principal loan and the outstanding interest on term loan is concerned, there is no controversy at all. But the borrower is concerned with charging of not only penal interest @2% but also additional 2% interest, as is indicated in the statement of accounts, produced by the AIDC. 15. Charging of further interest (penal interest) is envisaged under the proviso to Clause 3.2(a) of the loan agreement and quantification of Rs.23,58,386.10 under this head, is found to be consistent with the Clause 3.2(a) of the loan agreement. Moreover the repayment schedule of the principal amount was clearly made known to the borrower through the AIDC’s communication dated 21.06.1995 where specific dates and amount are mentioned for repayment of the loan. But as can be seen from the Annexure-C of the statement of accounts that, the borrower failed to pay NIL amount towards liquidation of the principal dues. Therefore charging of additional interest for the defaulted installments as envisaged by Clause 3.3 of the loan agreement, is held to be justified. But as can be seen from the Annexure-C of the statement of accounts that, the borrower failed to pay NIL amount towards liquidation of the principal dues. Therefore charging of additional interest for the defaulted installments as envisaged by Clause 3.3 of the loan agreement, is held to be justified. Of course, the possibility of minor variation of the quantified amount under this head can’t be ruled out since interest plus additional interest is already being demanded, for the unpaid principal loan. 16. But the extra repayment burden upon the borrower with the additional Rs.6.5 lakh towards equity share participation of the AIDC, cannot however be justified since the AIDC must be prepared to face loss or profit through purchase of share. Therefore, the proposed addition of Rs.6.50 lakh as recoverable from the borrower, is not permissible. 17. In Kerala Financial Corporation Vs. Vincent Paul reported in (2011)4 SCC 171 , the Supreme Court formulated certain guidelines for sale of mortgaged assets and since rules have not been framed under the 1951 Act, it will be appropriate in this case also to adhere to the stipulated guidelines for sale of the mortgaged assets, by the Corporation. The first requirement according to the Court guideline is to advertise the sale in two leading newspapers including one in vernacular language, having sufficient circulation in the locality. But the sale must be preceded by valuation of the assets from an approved valuer, in order fix the reserve price for the assets as per the valuation report. While 4 modes of sale are contemplated, inviting tenders or holding public auction is prescribed as the best method for disposal of the assets. The Corporation is also expected to serve a 30 day notice on the borrower for sale of the secured assets. But the basic idea is to ensure that the assets fetch the best price so that prejudice is not caused to any of the stakeholders. 18. The statement of accounts furnished by the AIDC are examined with assistance of both learned counsel and I find that the same is prepared with due regard to the relevant clauses of the loan agreement. 18. The statement of accounts furnished by the AIDC are examined with assistance of both learned counsel and I find that the same is prepared with due regard to the relevant clauses of the loan agreement. The valuation of the mortgaged assets was done by the approved valuer with participation of the borrower’s representative and although salvage value is taken into account for the machineries, the same will not totally undermine the valuation exercise, undertaken by the approved valuer. 19. Before proceeding any further, it must be noted that according to the figures disclosed in the statement of accounts, Rs.2,46,94,153/- as on 31.03.2016, is the recoverable amount claimed by the AIDC. The debtors in their recent communication made on 16.02.2016 had offered to repay as one time settlement, a sum of Rs.73 lakh (towards principal loan) + Rs.16.20 lakh (towards interest). But this offered amount cannot be considered as reasonable when the outstanding figure in the statement of accounts is nearly 2½ times of the settlement offer, made by the debtors. 20. The AIDC in their various communications to the borrower have indicated the total outstanding under different heads as far back as on 09.11.1999 and also on 18.10.2014. The dues under five separate heads were clearly indicated to the borrower but they didn’t protest then. The same heads are shown in the latest statement of accounts produced before the Court where the outstandings (as on 31.03.2016) are similarly indicated, as were mentioned in the AIDC’s earlier communications. That apart, the entire computation of the AIDC under different heads is also supported by Clause 3.2(a) and Clause 3.3 of the loan agreement, dated 18.01.1994. 21. What follows therefore is that AIDC has arranged for valuation of the assets and have furnished the statement of accounts. Hence there is adequate compliance of this Court’s direction given on 27.08.2015. 22. In the above circumstances, I see no justification to stop the sale of the mortgaged assets of the borrower and accordingly the following directions are issued: (i) The AIDC will issue advertisement in the Assam Tribune and the Dainik Jugasankha to invite offers for sale of the mortgaged assets. The reserve price must be stipulated in the sale notice. (ii) Serious effort must be made to fetch the best price and the borrowers may also cooperate with the AIDC so that widest participation of purchasers can be ensured. The reserve price must be stipulated in the sale notice. (ii) Serious effort must be made to fetch the best price and the borrowers may also cooperate with the AIDC so that widest participation of purchasers can be ensured. (iii) But the money invested by the AIDC to purchase equity share of the borrower M/s Sonar Cachar Publication Pvt. Ltd. should not be treated as recoverable outstanding, from the borrower. (iv) The confirmation of sale should be made after being satisfied that the assets have fetched the appropriate price. 23. With the above direction, the writ petition stands disposed of without any order on cost. The interim order merges with this final order.