HONOURABLE SRI JUSTICE L. NARASIMHA REDDY WRIT PETITION No.5184 OF 2010 ORDER: The petitioner is a proprietary concern of one C. Vijay Kumar. With a view to establish a ‘Packaged Drinking Water’ unit, the petitioner obtained permission from various agencies, including the Bureau of Indian Standards. It approached the Andhra Pradesh State Financial Corporation (for short ‘Corporation’), the 1st respondent herein, for sanction of loan. The loan was sanctioned and there was some irregularity in repayment thereof. An auction notice was published on 24-10-2009 for sale of the unit, and a notice, dated 14-12-2009, showing the liability of the petitioner at Rs.24,15,000/- as on 30-09- 2006, was issued to the petitioner. Before the auction took place, the petitioner came forward with a request to extend the benefit of one time settlement. It is stated that the respondents agreed to close the account of the petitioner, if he pays a sum of Rs.17,00,000/-. The petitioner agreed for the same and filed a letter, dated 12-02-2010, stating that he made down payment of Rs.3,00,000/- and that the balance of Rs.14,00,000/- would be paid on or before 28-02-2010. This proposal appears to have been accepted and further steps in pursuance of the auction notice were not taken. 2. However, on 27-01-2010, the Corporation issued a notice stating that it received certain offers in response to its advertisement, dated 24-10-2009, and in case any other person is willing to offer over and above the same, it would consider the offers. 3. The 3rd respondent is said to have made his offer and thus, negotiations have taken place on 18-01-2010. It is stated that he paid a sum of Rs.10,00,000/- and that the possession of the unit was delivered to him. The petitioner feels aggrieved by the steps initiated by the Corporation vis-à-vis the unit. He seeks a direction to the effect that the action of the Corporation in not granting reasonable time to discharge the liability of Rs.17,00,000/- under one time settlement as illegal and unreasonable. 4. The respondents 1 and 2 on the one hand, and the 3rd respondent on the other, filed counter affidavits. It is stated that the petitioner was given ample opportunity to clear the loan and on account of his failure, proceedings as contemplated under law were initiated. 5. Heard Sri B. Vijaysen Reddy, learned counsel for the petitioner, Sri M.S. Ramachandra Rao, learned counsel for the respondents 1 and 2, and Sri Palle Nageswara Rao, learned counsel for the respondent No.3. 6. The petitioner committed default in payment of certain installments. That resulted in issuance of notice, dated 24-10-2009, proposing sale of unit. The Corporation, no doubt, received bids, but did not accept any offer. In the meanwhile, the petitioner approached with a request to extend the benefit of one time settlement. The proposal made by him through letter, dated 12-02-2010, viz., making down payment of Rs.3,00,000/- and payment of Rs.14,00,000/- by 28-02-2010 in final settlement of the account was accepted by the competent authority. The Corporation would have justified in taking further steps after 28-02-2010. However, much before that date, the respondents proceeded to negotiate with the 3rd respondent and finalized the matter. 7. In the counter – affidavit filed by them, the respondents 1 and 2 have not denied the factum of acceptance of one time settlement with the petitioner. As a matter of fact, it is stated by them that a telegram was issued to the petitioner requiring him to pay the amount as agreed to, under the one time settlement. The record, however, discloses that the negotiations etc., have taken place much before the time fixed for payment of Rs.14,00,000/-. It is stated that the Corporation issued tender notice on 11-01-2010 and that negotiations were held with the 3rd respondent on 18-01-2010. This approach is totally arbitrary and illegal. 8. The petitioner approached this Court hardly within one week from 28-02-2010, complaining that the respondents have not honoured the one time settlement. This Court passed an interim order on 31-03-2010 staying further proceedings on condition that the petitioner shall deposit Rs.14,00,000/-, which is the balance under the one time settlement. The petitioner has since deposited the amount. 9. This Court is of the view that various steps taken by the respondents 1 and 2 in finalizing the sale of the unit in favour of the 3rd respondent and handing over the possession of the same are not at all legal and proper and are contrary to the terms of one time settlement. The Corporation cannot deny to the petitioner, what it has agreed to extend. 10. Learned counsel for the 3rd respondent submits that his client has undertaken improvements and repairs to the unit and he cannot be made to re-deliver it to the petitioner. It is felt that the 3rd respondent can be compensated for whatever improvements he has made to the unit, even while permitting him to take back the amount paid by him to the Corporation. 11. Hence, the Writ Petition is allowed directing that, a) the loan transaction between the petitioner on the one hand and the Andhra Pradesh State Finance Corporation on the other hand shall stand closed in view of the deposit of Rs.14,00,000/- by the petitioner in compliance with the directions issued by this Court; b) The 3rd respondent shall be under obligation to re- deliver possession of the Unit to the petitioner within three (3) weeks from today; c) On re-delivery of the possession of the Unit by the 3rd respondent to the petitioner, the Corporation shall refund the amount deposited by the 3rd respondent including EMD within two weeks form the date on which the 3rd respondent makes the claim; d) In case, the 3rd respondent has made any improvements or additions to the Unit, he shall furnish the particulars of the same to the petitioner. If the petitioner disputes the correctness of the same, the matter shall be referred to the Executive Engineer of Rural Water Supply Scheme of the area, who in turn, shall take into account the improvements made and the income, if any, received by the 3rd respondent by running the Unit, and determine the amount that may have to be paid by the petitioner. This exercise shall be completed within a period of three (3) months from the date of reference of the claim to the Executive Engineer. The fee to be paid to the Executive Engineer, for this purpose, shall be shared equally by the petitioner and the 3rd respondent. 12. There shall be no order as to costs. _____________________ L. NARASIMHA REDDY, J. February 21, 2011. KTL