IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) PRESENT: THE HON’BLE MR. JUSTICE C.V.NAGARJUNA REDDY TUESDAY, THE EIGHTEENTH DAY OF MARCH, TWO THOUSAND EIGHT ONLY WRIT PETITION No.19520 of 2007 Between: M/s.Dhananiwala Textiles Pvt. Ltd., Represented by its Managing Director Sri Kamalnayan Dhananiwala, Business, Bahinsa, Adilabad district. … Petitioner. AND The A.P. State Financial Corporation Ltd., 5-9-194, Chirag Ali Lane, Abids, Hyderabad, reptd., by Vice-Chairman and Managing Director. … Respondent Counsel for the petitioner: Sri Vilas V. Afzul Purkar, Senior Counsel for Sri M.Papa Reddy. Counsel for the respondent: Sri T.Durga Reddy. This Court made the following: ORDER: This Writ Petition is filed for a Writ of Mandamus to declare Notice dated 23-8-2007 issued by the A.P. State Financial Corporation (respondent herein) as illegal and ultra vires the Sick Industrial Companies (Special Provisions) Act, 1985. The proceedings of the case shows that on 14-9- 2007 this Court recorded the contention of the learned Standing Counsel for the respondent-Corporation that the Corporation is not willing to proceed against the petitioner under Section 29 of the Andhra Pradesh State Financial Corporation Act, 1951 (for short “the Act”). Having recorded the said statement, this Court, however, directed the petitioner to deposit the entire principal amount within six months to establish its bonafides. Sri Vilas V. Afzul Purkar, learned Senior Counsel appearing for the petitioner, stated that in compliance of the said order, the petitioner deposited the entire principal amount. Inasmuch as the respondent is not interested in proceeding against the petitioner under Section 29 of the Act, the cause in the Writ Petition, as it was originally conceived, does not survive for consideration. However, during the pendency of this Writ Petition, the petitioner filed WPMP No.6263 of 2008 seeking amendment of the Writ Petition, whereby the petitioner questioned the rejection of O.T.S. proposal by the respondent. Sri T.Durga Reddy, learned Standing Counsel for the respondent opposed the request of the petitioner for settling the petitioner’s liability under O.T.S. Scheme on the ground that the petitioner is not eligible for claiming the benefit under the O.T.S. Scheme. Sri Vilas V. Afzul Purkar invited my attention to proceedings of the BIFR, wherein it recorded the consortium decisions, which include the respondent in principle agreeing to consider the O.T.S. Scheme as per the norms. In view of this agreement of the respondent, I deem it appropriate that it shall reconsider the decision taken by it with regard to the request of the petitioner to settle the claims under the O.T.S. Scheme. Being the instrumentality of the State, the respondent is expected to take into consideration various aspects, including the feasibility and reasonableness of the amounts to be recovered from the petitioner. Having regard to the facts and circumstances of the case, the Writ Petition is disposed of. The petitioner is permitted to file a fresh application before the respondent under O.T.S. Scheme within a period of one week from today. The respondent shall, on receipt of the same, consider, after giving an opportunity of personal hearing to the representative of the petitioner, and take a decision thereon within a period of three weeks thereafter. Till the final decision is taken, the respondent shall not proceed with recovery of the outstanding amounts from the petitioner. In the event the respondent passes an adverse order, the petitioner is left free to avail its remedies. -------------------------------------- C.V.NAGARJUNA REDDY,J Dt.18-3-2008 MNR