SCA/591619/1997 1/4 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 5916 of 1997 For Approval and Signature: HONOURABLE MR.JUSTICE AKIL KURESHI ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= AZIZ TEXTURISERS PVT LTD - Petitioner(s) Versus GUJARAT STATE FINANCIAL CORPORATION & 2 - Respondent(s) ========================================================= Appearance : MS HIRAL A PANCHAL FOR MR MANISH R BHATT for Petitioner(s) : 1, MR DAXESH T DAVE for Respondent(s) : 1 - 3. ========================================================= CORAM : HONOURABLE MR.JUSTICE AKIL KURESHI Date : 24/11/2008 ORAL JUDGMENT 1. The petitioner is a closed textile undertaking which is a private limited Company. The petitioner had taken certain loans from SCA/591619/1997 2/4 JUDGMENT respondents Gujarat State Financial Corporation (GSFC for short). Since admittedly the petitioner did not repay the loan with agreed interest periodically, GSFC took action under Section 29 of the State Financial Corporations Act and proceeded to take the possession of the land, plant and machinery belonging to the petitioner. 2. It appears that though there was no stay either against the sale of the seized property of the petitioner or permitted the petitioners not to repay the dues, after filing of the petition, the petitioner does not appear to have made any further payment to the GSFC. 3. Counsel for GSFC stated that during the pendency of the petition, Corporation was also not able to dispose of the property through public auction. 4. In the present case, two main grievances are made. Firstly, it is contended that the GSFC did not release remaining amount of the loan as promised and further that it did not adjust cash subsidy payable to the petitioner amounting to Rs. 11,02,000/-. It was also contended that the valuation of the property sought to be auctioned was not properly done and the value arrived at was inadequate. SCA/591619/1997 3/4 JUDGMENT 5. Considering the facts and circumstances of the case, I find that no case for quashing the steps taken by the GSFC in terms of Section 29 of the State Financial Corporation Act is made out. Admittedly, the petitioner was not able to repay the loan released in its favour by GSFC. Mere non releasing of loan installment of 25% for valid reasons on petitioner not adhering to the repayment schedule cannot be a ground to oppose recovery proceedings initiated by GSFC. 6. The properties attached by GSFC are not yet been sold as stated by the Counsel. Presently obviously, the value of properties would have gone up and there would be upward revision so far as immovable properties are concerned. Question of entitlement of the petitioner to receive at the relevant time cash subsidy needs to be addressed to by GSFC. 7. Under the circumstances, petition is disposed of by giving following directions : 1) Before finalising the present position of the accounts of the petitioner, GSFC shall take into account the representation of the petitioner that the amount of Rs. 11,02,000/- was due and payable by way of cash subsidy. After finalising the present account position, it would be open for the GSFC to take further steps in accordance with law to recover its dues SCA/591619/1997 4/4 JUDGMENT including selling of the property of the petitioner already attached. However, before doing so, GSFC shall obtain fresh valuation report as on date and will also permit the petitioner, if so desired, to produce material to enable GSFC to arrive at the correct market value of the property which is sought to be sold. 8. With these directions, the petition is disposed of. Rule made absolute to the above extent. (Akil Kureshi,J.) (raghu)