A.P. STATE FINANCIAL CORPORATION ETC. versus V AJRA CHEMICALS AND ORS. ETC.

Citation: [1997] SUPP. 2 S.C.R. 702 · Decided: 15-07-1997 · Supreme Court of India · Bench: S.C. AGRAWAL · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
A.P. STATE FINANCIAL CORPORATION ETC. 
v. 
V AJRA CHEMICALS AND ORS. ETC. 
JULY 15, 1997 
B 
(S.C. AGRAWAL AND M. JAGANNADHA RAO, JJ.) 
• 
State Financial Corporations Act-S-29-Default of payments-Recall-
cum-sale notice-Requirement of second notice before sale fulfilled -Unit 
c 
sold to the highest bidder-respondent being aware of the sale and having 
accepted it cannot question it. 
Constitution of India, 195(}-Ait 136-Special leave Jwisdiction-Inter-
ference with the findings of fact by the lower Court-Nonnally not interfered 
with-However-Supreme Cowt can and will interfere in cases where without 
D even a pleading, factual issue is raised at the appeal stage for the first time, 
and where the findings of the Court are contrary to the contell(s of the 
affidavits filed ill the case and are without reference to the cmcial document 
relevant to the case. 
E 
Appellant brought to sale the respondent's company and sold it to 
the highest bidder after the Respondent defaulted on payments of the loan 
amount owed to the Appellant despite being given several opportunities. 
Writ petitions were filed challenging the sale which were dismissed by 
Single Judge of the High Court inter alia, holding that the respondent was 
F 
well aware of the sale, that his offer of payment during the pendency of the 
Writ could not be accepted and that he was adopting delaying tactics. The 
Division Bench, reversed the decision, inter alia for the following reasons 
viz., though the Corporation gave notice in the begining, 'no independent' 
notice of sale was given, the fact of an offer of concession made to the buyer 
was not communicated to the respondent, that the conditions on the file 
G were not adhered to, that the decision to grant six months time to the 
respondent was not conveyed to them and therefore, the Corporation acted 
'\ 
unreasonably. The High Court directed refund of the sale proceeds with 
interest to the bidder, restoring possession to the respondent who was 
directed to pay the Corporation the entire dues with interest within six 
H months. Hence, these appeals. 
702 
AP. STATE F1NANCIAL CORPORATION v. V AJRA CHEMICALS 
703 
"" 
Allowing the Appeals, this Court 
A 
·--.,. 
' 
HELD : 1. The Division Bench of the High Court while allowing the 
.. 
Writ Appeal overlooked the fact that there was no pleading in the writ 
petition regarding the representation dated 27.12.1993 or the non com· 
munication of any decision thereon. No rejoind~r was filed by the 1st B 
respondent to contradict the specific averments made in the Corporation's 
affidavit as to what happened on 27.12.1993 in the Chambers of the 
Executive Director of the ·Corporation. There is internal evidence in the 
-\ 
endorsement of the Executive Director of the Corporation which shows 
that the matter was discussed and an arrangement was arrived at in the c 
. 
. 
presence of V, and was reduced to writing and communicated to him and 
consequential directions were issued to the office of the Corporation to 
receive Rs.30,000 as out right payment and release the unit and to receive 
Rs. 50,000 by March 1994, receive post dated cheques and it was also 
agreed that the first respondent was to make an one time settlement 
• 
(OTS). The Division Bench therefore, erred in entertaining and accepting D 
a plea put forward by the 1st respondent-company for the first time in the 
appeal for which there was no foundation in the pleading or affidavits of 
the 1st respondent Company. [712-G-H; 713-A-C] 
2. It is true that this Court does not normally interfere with findings E 
of fact arrived at by the High Court. But where there is no pleading and 
where a factual issue is permitted to be raised for the first time in a Writ 
Appeal and findings are given contrary to the affidavits filed by the 
• 
opposite party and where no reference is made to the contents of the only 
crucial document in the case, (the endorsement dated 27.12.93 
representation), this Court can and will interfere. [713-C·D] 
on the F 
3. The conduct of the 1st respondent which, in fact, estops it from 
approaching the Court. The certificate issued by the Bank, after the sale 
was made, shows that the 1st respondent Company accepted the factum of 
' 
the sale of the unit. In the additional affidavit dated 10.9.1995 filed before G 
the Division Bench it was stated that the certificate dated 3.7.1995 issued 
• 
by the Bank showed that the first respondent was aware of the sale finally 
made by the C

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