IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.14682 of 2007 ONKAR NATH PATHAK, son of late Chintamani Pathak, resident of village and P.O.-Mahdeoganj, District-Shahibganj, permanent resident of village-Kaithpura, P.S.-Barhat, District-Banka. …….Petitioner. Versus 1. The Managing Director, Bihar State Financial Corporation, Fraser Road, Patna through its Managing Director, Bihar State Financial Corporation, Fraser Road, Patna. 2. The Branch Manager, Bihar State Financial Corporation, Deoghar. 3. The Manager (Co-ordination cell), Bihar State Financial Corporation, Head Office, Patna. 4. Rajendra Prasad yadav, son of Sri. Vikram Yadav, resident of village- Mahadeoganj, District-Sahebganj. 5. Bipin Bihar Pathak, son of Chinta Mani Pathak, resident of village- Kaithpura, P.O.-Barhat, District- Sahibganj. ………Respondents. ----------- For the Petitioner : Mr. Sunil Kumar Gupta, Adv : Mr. Anil Kumar, Adv. For the State : Prabhat Kumar Singh, S.C-21. For the Election Commission : Mr. J.P.Karn, Adv. ----------- 08. 19.05.2009 The petitioner being a chronic defaulter and not deterred by repeated actions of Bihar State Financial Corporation Limited (BSFC), BSFC was left no option but to take steps for sale of the unit in exercise of powers under Section 29 of the S.F.C. Act. Petitioner’s unit is a stone crusher. BSFC floated tenders and in response thereto, the best offer came from Respondent No. 4 who has since appeared and filed counter affidavit also. Corporation, considering the offer as made by Respondent No. 4 decided to sale the unit to the 2 Respondent No. 4 and a sale order was issued in favour of Respondent No. 4 as contained in Annexure-4 dated 14.09.2009. As would be apparent from the sale order, Annexure-4, a copy thereof was also sent to the petitioner with an offer to the petitioner to retain the unit on the same terms and conditions as BSFC offered to Respondent No. 4. Petitioner was required to respond within 21 days. Petitioner did not respond within 21 days because allegedly he received the information late. Nevertheless he responded but his response was not entertained by the Managing Director of the Corporation on the ground that his response was a few days late. The Corporation decided to sale the unit to Respondent No. 4. Respondent No. 4 in the meantime, deposited some money. As per agreement between the Respondent No. 4 and the Corporation, the balance money was treated as a term loan to the Respondent No. 4 and it was to be paid over period of several years. Thus in fact, the sale was intended to be a sale on deferred consideration. Petitioner filed this writ application on 19.11.2007. It is not in dispute that by then even possession was not handed over to Respondent No. 4, in spite of notice of the writ proceedings, the Corporation then handed over possession to Respondent No. 4 on 18.12.2007 and documentation i.e. agreement etc were signed and executed 3 on 12.01.2008. It is also not in dispute that sale deeds have not been executed much less registered in favour of Respondent No. 4. This is the situation which stands today as well. First, I think, it is not necessary to dispose of the objection of Respondent No. 4. Respondent No. 4 submits that he had legitimately made an offer, negotiated the matter with the Corporation and made substantial deposits. He had been handed over possession and thereafter he had made substantial investments in renovating the stone crusher and was running it as such. It would be inequitous now to disentitle him from the right that had accrued to him. In my view, what has happened is only that in pursuant to agreement for sale by the Corporation to Respondent No. 4, possession of property has been given to Respondent No. 4. That is covered by principle of part performance as contemplated under Section 53(A) of the Transfer of Properties Act. It only gives a right to Respondent No. 4 to enforce his right through Court but it creates no right in him in present till Court grants him that right. The title would only pass to Respondent No. 4 on a registered sale deed being executed as provided under Transfer of Properties Act. Registered sale deed has not yet been executed much less registered. Thus no title passes to Respondent No.4. So far as right of petitioner is concerned, 4 petitioner has yet to be divested of his title. This property was mortgaged by him to the Corporation and it is in exercise of that right as read with Section 29 of the S.F.C. Act that the Corporation is acting. As has been held by the Apex Court in the case of S.J.S. Business Enterprises Private Limited versus State of Bihar and others since reported in AIR 2004 SC 2421 in relation to the rights of the Corporation under Section 29 of the S.F.C. Act, the right of redemption can not be easily defeated. The facts of the case before the Apex Court were somewhat similar to this case. There also private purchaser took the plea of making investments. The Court found that no sale deed having been executed in favour of private purchaser, the right of redemption could not be defeated and as such on payment being made by the defaulting unit as directed therein, property was restored to the original promoter without compensating the private purchaser for the substantial improvement he had made in the property. The Apex Court clearly held that the private purchaser had made investments at his own risk that gave him no right to claim any compensation in the matter. That case has also elaborately dealt with the law in that regards. In paragraph 24 of the reports their lordships have held that the parties were fully aware that the appellant was fighting tooth and nail to redeem the property which was subject matter of sale 5 and was subject matter of scrutiny by the Court. If it has chosen to make renovation or investment it had done so despite knowledge of the precarious nature of its possession, investments were calculated risk which can not be foisted on the appellant. Here petitioner had approached the Corporation for accepting the offer of retaining the property on the same terms and conditions as offered to the private purchaser, respondent No. 4. He was late by a few days. Havens would not have fallen if the Managing Director granted him indulgence keeping in view of the Principle of equity of redemption and that any clog created on equity of redemption is void. If the Managing Director had done so, all these complications would have been avoided. Pursuant to interim orders of this Court, petitioner has already deposited Rs. 3 lacs with the Corporation. Respondent No. 4 had deposited till now about Rs. 3, 75,000/- to the Corporation and the rest is to be deposited in various installments over next five years. Considering the offer which the Corporation had given to Respondent No. 4, the consideration being Rs. 7 lacs payable in five years with interest, I direct the petitioner to deposit a further amount of Rs. one lac to the Corporation by 30th of May, 2009. That on petitioner depositing the balance of Rs. one lac by 31st of May, 2009, Corporation would be obliged to 6 refund the entire money paid by Respondent No. 4 by 10th of June and would also be obliged to ensure handing over possession of the unit to the petitioner by 15th of June, 2009. The Corporation would see and ensure that Respondent No. 4 vacate the premises which shall immediately be handed over to the petitioner as above. Respondent No. 4 would be obliged to hand over possession of the unit to the petitioner through Corporation. Respondent No. 4 would be entitled to remove any new plant and machinery installed by it. In case of any dispute whether those are plant and machinery installed by petitioner or newly installed by Respondent No. 4 , the Corporation would decide the same at the site immediately for which Corporation would depute a senior responsible Officer. The balance out of Rs. 7 lacs, petitioner would then pay by 31st of December, 2009 along with interest for the deferment of payment at the rate of 12% per annum. In case the petitioner fails to make payment of the initial Rs. one lac within period as pointed out, the possession shall not be handed over to him and in any case if he fails to clear off the entire dues of Rs. 7 lacs by 31st of December, 2009, the Respondent Corporation would be entitled to sell the property or deal with it in the manner as may be advised to them treating as if no order had been passed by this Court in that regard. With these observations and directions, the writ 7 petition stands disposed of. Shageer (Navaniti Prasad Singh, J)