JUDGMENT: 1. Heard Mr. A.K. Sahani, counsel for the petitioner and Mr. Rajeev Ranjan, Senior counsel appearing for the respondents assisted by Mr. A.K. Yadav, Advocate. 2. This writ petition has been filed for the following reliefs: (a) Quashing the letter No. 257 dated 7.7.2008 contained at Annexure-13 whereby the respondent no. 3 has said to have demanded an arbitrary amount by way of interest in the garb of recasting the accounts which due from the petitioner. (b) Further prayer of the petitioner to accept the application dated 10/11/2007 contained at Annexure-11 filed by the petitioner for liquidation of dues under the Incentive Scheme of 2002 at Annexure-10 within a specified period. 3. The facts as submitted by the writ petitioner is that (i) M/s Neel Kamal Engineering and Body Builder (P) Ltd., Ranchi was granted a term loan by the respondent no. 1. When the said Unit failed to pay dues, the respondent no. 1 took possession and advertised for sale by inviting tender on 14.12.1995. (ii) On 22.7.1998, the respondent no. 1 decided to sell the mortgaged assets to the petitioner for Rs. 35 lakhs and was communicated to the petitioner vide letter dated 17.08.1998. Some of the relevant portion of the said minutes of meeting is as under: The consideration money for sale will be Rs. 35.00 lakhs. The purchaser will pay Rs. 8,75,000/- Including the earnest money of Rs. 20,000/- paid by the purchaser by Bank D.D. within one month. The balance amount of Rs. 26.25 lakhs is converted into loan repayable is a period of 7 years in 28 installments. The payment of installment will begin from 31.12.1998 and will end on 30.09.2005. Installments will be payable on 31st Dec., 31st March, 30th June & 30th Sept. every year. Interest will be calculated and realized on quarterly rest basis. Interest will be realized from the date of execution of sale agreement. (iii) It was specifically mentioned in the sale order that after 21 days from the date of the order, if the unit is not retained by the original promoter and the purchaser makes aforesaid payment, the branch manager will immediately execute the sale order in favour of the purchaser and thereafter handover the assets to the purchaser in presence of two independents witnesses. At the time of handing over the assets, an inventory will be prepared which will be signed by all the concerned i.e. Branch Manager or his authorized officer, the purchaser and the witnesses as per the terms and conditions of the agreement. The process of executing of sale agreement and handing over possession of the unit must be completed within a period of one month from the date of credit of payment made by the purchaser in the account of the respondent no-1. (iv) The petitioner made a representation dated 4.1.1999 before the respondent no. 2, the Managing Director, BSFC pointing out that certain litigation in connection with the property is pending and therefore, a request was made to pass a clear order to take immediate steps in the case before Debt Recovery Tribunal to release the property, in question, of the bank’s liabilities. (v) In pursuant to letter dated 4.1.1999 the respondent slept over the matter for long time and on 11.2.2000 vide letter no. 837 the Deputy Manager Zone-IV of the respondent no. 1 intimated the petitioner that the Corporation has absolute right to sell the mortgaged assets and he advised the petitioner to pay the initial cash down amount of sale in terms of sale order dated 17.8.98 within 21 days from the date of issuance of the letter failing which the sale finalized in favour of the purchase shall be treated as cancelled. (vi) Thereafter, pursuant to the letter dated 11.2.2000 issued to the petitioner, the petitioner duly paid the amount of $ 22,000 which was equivalent to Rs. 9,65,665/- within the stipulated time as mentioned in letter dated 11.2.2000. (vii) Thereafter, the agreement dated 26.07.2000 was entered into between the parties. As per the terms and conditions as contained in page 3 of the agreement, the consideration amount was of Rs. 35 lakhs for the entire assets the payments made by the petitioner was recorded. The balance amount of Rs. 26.25 lakhs was converted into loan repayable in a period of 7 years in 28 quarterly installment of Rs. 93,750/- each the payment of installment was to begin from 31.12.2000 and end on 30.09.2007. Installment was to be payable on 31st Dec., 31st March, 30th June and 30th September of each year. (viii) The petitioner was given the possession of the property on 26.07.2000. 93,750/- each the payment of installment was to begin from 31.12.2000 and end on 30.09.2007. Installment was to be payable on 31st Dec., 31st March, 30th June and 30th September of each year. (viii) The petitioner was given the possession of the property on 26.07.2000. (ix) Counsel for the petitioner submits that from the perusal of the entire agreement, it appears that there is no clause in the agreement for charging interest for the period from 17.09.1998 (i.e one month after the date of letter by which the petitioner was intimated regarding the decision to sell the property to the petitioner) to 26.07.2000 (i.e the date of execution of the agreement). (x) No notices was issued against the petitioner under the statutory provisions of section 29 & 30 of the BSFC Act. The petitioner came to know from a news item published in “Prabhat Khabar” on 21.09.2007 that amongst others the Unit of the petitioner has also been put on auction sale for which offers have been invited. The notice showed the outstanding dues of Rs. 15,45,174/- only. (xi) Vide order no. 70 dated 09.03.2002 the Board of Directors of the Bihar State Financial Corporation in its meeting held on 12.02.2002 vide item no. 12671 came up with incentive scheme for settlement of cases where the borrowers supposed to deposit at least 5% of the balance outstanding with his application. (xii) Pursuant to such scheme one time settlement, the petitioner on 11.10.2007 deposited 5% of the total outstanding amounting to Rs. 1,70,000/- only before the respondents. The counsel for the petitioner further submits that the petitioner further deposited Rs. 10,00,000/- against the grant of receipt No. 2806 dated 10.04.2008. (xiii) The aforesaid application for one time settlement dated 11.10.2007 was processed by the respondent corporation. The respondent no. 3 by impugned letter dated 7.7.2008 refused to admit the balance dues in the account of the petitioner and by this letter a dues outstanding against the petitioner was shown as Rs. 74,76,383/- only. The reason which has been assigned in the impugned letter dated 07.07.2008 is as follows: “In course of verification it was found that interest on the consideration amount has not been charged for the period 17.09.1998 to 25.07.2000. In this regard you are advised to recall the sale order issued vide our H.O. Memo No. 275/98-99 dated 17.09.98. 74,76,383/- only. The reason which has been assigned in the impugned letter dated 07.07.2008 is as follows: “In course of verification it was found that interest on the consideration amount has not been charged for the period 17.09.1998 to 25.07.2000. In this regard you are advised to recall the sale order issued vide our H.O. Memo No. 275/98-99 dated 17.09.98. You were required to complete the sale process within one month from the date of issue of sale order and interest has to be charged one month from the date of issue of sale order i.e. interest has to be charged w.e.f. 17.9.98. The subsequent extension for payment of initial cash down component was necessitated due to your subsequent request but the other terms of sale order remained unchanged. Thus interest from 17.9.98 to 25.7.2000 (from the date of opening of purchaser Account for payment of balance consideration amount) has to be charged and posted in the account.” (xiv) Counsel for the petitioner submits that the impugned order dated 07.07.2008 is totally against the terms and conditions of the sale order as well as the agreement entered into between the parties. Counsel for the petitioner submits that there is stipulation in the sale order that the interest would be charged from the date of entering into sale agreement and there is no condition prescribed in the sale agreement for charging interest for the said period from 17.9.98 to 25.7.2000. He further submits that the reason for non execution of sale agreement within a period of one month from the date of the communication of decision order was attributable to the respondents. (xv) Counsel for the petitioner further submits that vide letter, which was received by the petitioner in connection with execution of the agreement, dated 11.02.2000 issued by the respondent no. 1, the petitioner has been intimated that the corporation has absolute right to sell the mortgaged assets and the petitioner was advised to pay the initial cash down amount of sale in terms of sale order dated 17.8.1998 within 21 days time from the date of issuance of the letter. 1, the petitioner has been intimated that the corporation has absolute right to sell the mortgaged assets and the petitioner was advised to pay the initial cash down amount of sale in terms of sale order dated 17.8.1998 within 21 days time from the date of issuance of the letter. (xvi) Counsel for the petitioner further submits that the impugned order dated 07.07.2008 is beyond the terms and conditions of the sale order as well as the agreement entered into between the parties and accordingly, the same is fit to be set aside and accordingly the respondents be directed to accept the one time settlement of the petitioner pursuant to office order dated 09.03.2002 particularly in view of the fact that the petitioner had duly applied for one time settlement as per the scheme but the same could not materialize on account of the fact that after projecting the dues amounting to Rs. 15,45,174/- only the respondent unilaterally, arbitrarily and illegally raised outstanding amount of Rs. 74,76,383/- and it appears that this was only due to charging of interest for the period from 17.09.1998 (i.e one month after the date of letter by which the petitioner was intimated regarding the decision to sell the property to the petitioner) to 26.07.2000 (i.e the date of execution of the agreement). 4. Counsel for the respondents, on the other hand submits that : (a) The writ petitioner ought to have made the payment within a period of one month as stipulated in the sale order as per decision of the respondent no. 1 on 22.7.1998 and communicated to the petitioner vide letter dated 17.08.1998 but instead of making payment the petitioner filed a letter dated 16.9.1998 seeking extension for time for making payment to the respondents though the letter dated 16.9.1998 has not been brought on the record. But the respondents by referring a letter dated 27.11.1998 addressed to the petitioner submits that in view of the letter of the purchaser, the Managing Director of the Corporation extended time for making payment of the aforesaid initial cash down payment in terms of sale order with a condition that interest @ 18% shall be chargeable on the consideration amount after one month from the date of issuance of sale order and accordingly the interest for the period from 17.09.1998 to 25.07.2000 was payable by the petitioner. Although there is no letter issued by the petitioner accepting the terms extended vide letter dated 27.11.1998 but the conduct of the petitioner shows that the petitioner had accepted the terms of extension for time for payment and accordingly the agreement entered on 26.07.2000 should be read with the letter dated 27.11.1998. (b) Counsel for the respondents submits that although in the agreement as well as in the sale order there is no stipulation regarding the payment of interest from one month after the date of sale till the date of agreement entered into between the parties but the petitioner was certainly under a legal obligation for making payments of interest from the period from one month after the communication regarding sale in his favour till the date of entering into agreement between the parties. (c) Counsel for the respondents submits that the petitioner continued to make default in making payment of installments in terms of the agreement as a consequence whereof a notice under section 29 and 30 of State Financial Corporation Act, 1951 vide reference no. 889/02 dated 9.11.2002. 5. Heard counsel for the parties and after perusal of the documents as placed by the parties, I hereby allowed the writ petition and set aside the impugned order letter dated 07.07.2008 as contained at Annexure-13 to the writ petition on account of the following facts and circumstances: (i) Admittedly, as per the sale order consideration amount was Rs. 35 lakhs. The purchaser was to pay Rs. 8,75,000/- including the earnest money of Rs. 20,000/- within a period of one month. (ii) The balance amount of Rs. 26.25 lakhs was converted into loan repayable for a period of 7 years in 28 quarterly equal installments of Rs. 93,750/- each and this also included the interest chargeable as per the agreement. The payment of installment was to begin from 31.12.1998 till 30.09.2005. There is specific clause in the sale order that the interest was to be calculated and realised on the quarterly/rest basis from the date of execution of the agreement. (iii) From the perusal of the sale agreement and sale order, it appears that there is specific clause for realization of interest from the date of execution of sale agreement. There is specific clause in the sale order that the interest was to be calculated and realised on the quarterly/rest basis from the date of execution of the agreement. (iii) From the perusal of the sale agreement and sale order, it appears that there is specific clause for realization of interest from the date of execution of sale agreement. (iv) Admittedly, the sale agreement was not executed within the stipulated time as per the case of the petitioner the fault lies on the side of the respondents and as per the respondents the fault was of the petitioner. (v) However, the petitioner had filed an application vide its letter dated 16.9.1998 for extension of time for payment of initial amount, which has not been brought on record by either of the parties. The Managing Director of the Corporation vide memo no. 403/98-99 dated 27.11.98 had extended time for making cash down payment with a condition that interest @ 18 % shall be chargeable on the consideration amount after one month from the date of issuance of sale order, the memo has been annexed as Annexure-A to the counter-affidavit filed by the respondents. (vi) From the entire record, this court did not find any letter of acceptance so far as this letter dated 27.11.1998 is concerned. There is nothing on record to come to the conclusion that the condition put in letter dated 27.11.1998 was accepted by the petitioner by his conduct which has been dealt with later in this judgment. (vi) From the entire record, this court did not find any letter of acceptance so far as this letter dated 27.11.1998 is concerned. There is nothing on record to come to the conclusion that the condition put in letter dated 27.11.1998 was accepted by the petitioner by his conduct which has been dealt with later in this judgment. Even in the impugned order there is no reference to letter dated 27.11.1998 and from the impugned order it appears that demand for interest for the period from 17.09.1998 (i.e one month after the date of letter by which the petitioner was intimated regarding the decision to sell the property to the petitioner) to 26.07.2000 (i.e the date of execution of the agreement) has been made not on the basis of said letter dated 27.11.1998 but the demand of interest for the aforesaid period has been made by referring to the sale order contained in memo number 275/98-99 dated 17.08.1998 ( the date of sale order in the impugned letter dated 7.7.2008 has been wrongly mentioned as 17.09.1998) and stating that as per the sale order the petitioner was to complete the sale process within one month from the date of issuance of sale order and interest was to be paid from the date of issuance of sale order. This court does not find any such clause in the sale order which entitles the respondents to raise demand of interest from the date of sale order. Thus the basis of demand of interest in the impugned order for the said period on the basis of sale order is not sustainable in law. Moreover, the agreement which was subsequently entered into also did not provide for charging of any interest for the period from 17.09.1998 (i.e one month after the date of letter by which the petitioner was intimated regarding the decision to sell the property to the petitioner) to 26.07.2000 (i.e the date of execution of the agreement). As the agreement is a subsequent conduct of the parties this court is not inclined to accept the contention of the respondents that the petitioner had agreed to pay the interest from 17.09.1998 till the date of agreement by his conduct. As the agreement is a subsequent conduct of the parties this court is not inclined to accept the contention of the respondents that the petitioner had agreed to pay the interest from 17.09.1998 till the date of agreement by his conduct. It is important to note here that the respondents in their counter affidavit has taken a specific stand in para 28 that the demand has been raised in the impugned letter in terms of the sale order issued in favour of the petitioner and only because of clerical mistake in the sale agreement the petitioner cannot derive any benefit from the same. However the petitioner during the course of argument could not point out any such clause of the sale order which enables the respondent to raise any demand of interest for the period from 17.09.1998 (i.e one month after the date of letter by which the petitioner was intimated regarding the decision to sell the property to the petitioner) to 26.07.2000 (i.e the date of execution of the agreement). It appears that the argument of the petitioner that the petitioner had agreed to pay the interest from 17.09.1998 till the date of agreement by his conduct is an after thought. This charging of interest for the period from 17.09.1998 to 26.07.2000 and recasting the entire accounts of the petitioner has projected the total dues as Rs.74,76,383/- instead of Rs.15,45,174/- and this amount of Rs.15,45,174/- was also shown in the notice issued under section 29 and 30 of State Financial Corporation Act,1951. (vii) This Court further finds that a letter dated 04.01.99 was issued by the petitioner to respondent no. 2 to get the property released from the Tribunal, which was responded by the respondents only on 11.02.2000 wherein the respondents had communicated to the petitioner that the respondents have absolute right to sell the mortgaged assets. Vide this letter the respondents had asked the petitioner to pay the initial cash down amount in terms of sale order dated 17.08.1998 within 21 days from the date of issuance of the letter. Pursuant to letter dated 11.2.2000 the petitioner made down payment and thereafter, the agreement was executed duly incorporating the terms of payment of installments including interest clearly stipulating that the payment of installment will begin from 31.12.2000 and will end on 30.09.2007 in a period of 7 years in 28 quarterly installment of Rs. Pursuant to letter dated 11.2.2000 the petitioner made down payment and thereafter, the agreement was executed duly incorporating the terms of payment of installments including interest clearly stipulating that the payment of installment will begin from 31.12.2000 and will end on 30.09.2007 in a period of 7 years in 28 quarterly installment of Rs. 93,750/- each in connection with balance amount of Rs. 26.25 lakhs. There is no stipulation in the agreement regarding the payment of interest for the period from 17.09.1998 (i.e one month after the date of letter by which the petitioner was intimated regarding the decision to sell the property to the petitioner) to 26.07.2000 (i.e the date of execution of the agreement). The terms and conditions of agreement have been put in writing on 26.07.2000 and the parties have been acting pursuant to the clear terms and conditions of the agreement dated 26.07.2000. Accordingly, it is not open to the respondents to say that the petitioner will be liable to pay interest for the period from 17.09.1998 (i.e one month after the date of letter by which the petitioner was intimated regarding the decision to sell the property to the petitioner) to 26.07.2000 (i.e the date of execution of the agreement). (viii) Accordingly, the impugned order dated 07.07.2008 demanding interest for the period from 17.09.1998 (i.e one month after the date of letter by which the petitioner was intimated regarding the decision to sell the property to the petitioner) to 26.07.2000 (i.e the date of execution of the agreement) is hereby, quashed and set aside. Consequently, the respondents are directed to take a final decision on the application dated 11.10.2007 pursuant to incentive scheme as contained in office order no. 70/09.03.2002 which was invoked by the petitioner at the relevant point of time but was not considered by the respondents on account of the erroneous approach of the respondents that the petitioner is also liable to pay interest for the period from 17.09.1998 (i.e one month after the date of letter by which the petitioner was intimated regarding the decision to sell the property to the petitioner) to 26.07.2000 (i.e the date of execution of the agreement) and accordingly calculated the total dues as Rs.74,76,383/- instead of Rs.15,45,174/- which was the dues shown in the notice under section 29 and 30 of State Financial Corporation Act, 1951. The petitioner has a right to be considered in accordance with law under the said one time settlement scheme and this right of the petitioner stood crystalized on the day when the petitioner filed his application with the requisite amount under the scheme for one time settlement. This right does not get watered down by efflux of time as the respondents have acted arbitrarily and illegally while including the interest for the period from 17.09.1998 (i.e one month after the date of letter by which the petitioner was intimated regarding the decision to sell the property to the petitioner) to 26.07.2000 (i.e the date of execution of the agreement) while calculating the dues against the petitioner. At this stage, Counsel for the petitioner submits that the petitioner is ready and duty bound to pay the amount as per the said incentive scheme within a period of 15 days from the date of receipt of the communication of the amount payable by the petitioner as per the said scheme. 6. Counsel for the respondents is directed to take a final decision in terms of the aforesaid observations and directions within a period of one month from the receipt of a copy of this order and the petitioner as per the said undertaking is directed to pay the amount so calculated within a period of 15 days from the date of receipt of the communication failing which the benefits under the one time settlement will stand withdrawn. 7. Accordingly, this writ petition is disposed of with aforesaid directions and observations. W.P.(C) No. 5498 of 2008 8. Counsel for the petitioner submits that the petitioner has challenged the auction notice. 9. As submitted by both the parties, since the said notice is related to the year 2007 the writ petition has become infructuous. 10. Accordingly, W.P.(C) No. 5498 of 2007 stands dismissed as infructuous.