Madras High CourtWP/1811/2019disposed of

N.Sivaraj v. The Tamil Nadu Industrial Investment Corporation Ltd.,

2023-12-11Honourable Mr Justice P.D.Audikesavalu8 pages

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 11.12.2023

CORAM

THE HON'BLE MR. JUSTICE P.D. AUDIKESAVALU N.Sivaraj ... Petitioner -vs1. The Tamil Nadu Industrial Investment Corporation Ltd., Represented by its Chairman, Having office at No. 692, Anna Salai, Nandanam, Chennai - 600 035.

2. The Branch Manager, Tamil Nadu Industrial Investment Corporation Ltd., Villupuram Branch, No. 23-A, Ranganathan Road, (Hotel Woodlands Complex), I Floor, Chennai - Trichy Trunk Road, Villupuram - 605 602.

... Respondents Prayer:- Writ Petition filed under Article 226 of the Constitution of India, 1950, praying to issue a Writ of Certiorarified Mandamus, calling for the records of the Second Respondent in connection with notice dated 10.12.2018 issued to the Petitioner with Ref. No. TIIC/VPM/LAO/2018-2019 and quash the same and further direct the Respondents to not to proceed against the properties of the Petitioner under Section 29 of the State Financial Corporation Act, 1951.

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For Petitioner :

Mr. J.Baranidharan for Mr. R.Srinivas For Respondents :

Mr. K.Mahesh, Standing Counsel

O R D E R

Heard Mr. J.Baranidharan, Learned Counsel for the Petitioner and Mr. K.Mahesh, Learned Standing Counsel appearing for the Respondents and perused the materials placed on record, apart from the pleadings of the parties. 2.

Since the Petitioner has defaulted in the repayment of the term loan of Rs. 75,00,000/- borrowed from the Respondents, possession of the secured asset had been taken under Section 29 of the State Financial Corporation Act, 1951, and it was informed to the Petitioner by the Respondent in Proceedings No. TIIC/VPM/LAO/2018-2019 dated 10.12.2018 that it was proposed to hold tender cum public auction of those assets at 11.00 a.m. on 30.01.2019, which is assailed in this Writ Petition.

This Court at the time of admission on 24.01.2019 had passed the following self-explanatory order:- "3.

The learned counsel for the Petitioner has raised various 2/8

grounds challenging the auction notice dated 10.12.2018 issued by the 2nd respondent. However, the learned counsel for the Petitioner undertakes to pay 25% of the outstanding due amount as on date, which comes to Rs.97,05,731/-.

The learned Standing counsel appearing for Respondents 1 and 2 -Tamil Nadu Industrial Investment Corporation Ltd., undertakes to file vakalat for respondents. According to him, as on date, the outstanding due amount comes to Rs.98,42,000/-. He further submits that the Petitioner is the defaulter in repayment of the loan amount from 2017 and therefore, this writ petition cannot be entertained. He further submits that unless the Petitioner depositing 50% of the outstanding due amount to show his bonafide, the auction notice cannot be interfered with. 5.

Taking into consideration the submission of both sides, there shall be an order of interim stay of the auction notice dated 10.12.2018 on condition that the Petitioner deposits 25% of outstanding due amount of Rs.98,00,000/- in two installments. Accordingly, the Petitioner is directed to deposit the first 3/8

installment of Rs.15,00,000/- (Rupees Fifteen Lakhs only) to the Respondent\Tamil Industrial Investment Corporation Ltd.,] on or before 30.01.2019. Further, the Petitioner has to pay the 2nd installment of Rs.10,00,000/- (Rupees Ten Lakhs only) on or before 15.02.2019, failing which, the interim stay granted shall stand vacated automatically, without further reference to this court.

Post on 31.01.2019 for compliance of the payment of first installment.

Counsel for the Respondents is permitted to file counter affidavit."

Learned Counsel appearing for the Respondents, on instructions, states that the Petitioner had remitted amounts aggregating to Rs. 9,50,000/-, but has not complied with the aforesaid order passed by this Court in its entirety, and there were no bidders on the subsequent auctions held on 31.07.2019, 17.04.2020 and 30.12.2020. It has also been brought to notice that during the auction sale conducted on 27.01.2022, the collateral security fetched Rs. 4/8

36,00,000/- and the sale-deed was executed and registered on 08.03.2022 in favour of the successful bidder as against which the Petitioner has filed the Writ Petition in W.P. No. 30043 of 2022 before this Court, which is now pending.

At this juncture, reference must be made to the decision of the Hon'ble Supreme Court of India in Prestige Lights Limited -vs- State Bank of India [(2007) 8 SCC 449], where it has been held as follows:- "24.

An order passed by a competent court - interim or final - has to be obeyed without any reservation. If such order is disobeyed or not complied with, the court may refuse the party violating such order to hear him on merits. We are no unmindful of the situation that refusal to hear a party to the proceeding on merits is a "drastic step" and such a serious penalty should not be imposed on him except in grave and extraordinary situations, but sometimes such an action is needed in the larger interest of justice when a party obtaining interim relief intentionally and deliberately flouts such order by not abiding by the terms and conditions on which a relief is granted by the court in his favour." Following the said dictum, in the light of the facts narrated supra as borne out 5/8

from the record, it would not be possible to show any more indulgence to the Petitioner, which unwittingly delays the recovery of the public dues owed by him to the Respondent.

Moreover, the Petitioner has not been able to demonstrate any error in the decision-making process leading to the impugned order warranting interference by this Court in the exercise of its discretionary powers under Article 226 of the Constitution. Though obvious, it is made clear that the Respondent is not precluded from proceeding further for recovering the amounts due from the Petitioner following the prescribed procedure in accordance with law. In the result, the Writ Petition, which is devoid of merits, is dismissed. No costs.

11.12.2023 Index: Yes/No NCC: Yes/No Note: Issue order copy by 24.05.2024.

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1. The Chairman, Tamil Nadu Industrial Investment Corporation Ltd., Having office at No. 692, Anna Salai, Nandanam, Chennai - 600 035.

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P.D. AUDIKESAVALU, J.

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