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Supreme Court Of India

(From : Punjab and Haryana)*

Hon'ble Judge(s): B. N. Kirpal, K. G. Balakrishnan, Arijit Pasayat , JJJ

(A) State Financial Corporations Act (63 of 1951) , S.29— Debt - Recovery of - Corporation seeking to sell industrial unit of debtor by auction - Permanent injunction against - Granted solely on basis a decision of Supreme Court, and without discussing factual aspect relating to failure of debtor to repay loan - Improper. Mahesh Chandra v. Regional Manager.RSA No. 3801 of 2000,@page-SC8351992 AIR SCW 3629 : AIR 1993 SC 935 : 1992 All LJ 1202, Overruled.D/- 6-10-2000 (P H), Reversed. Where the schedule of repayment of loan was twice rescheduled by the State Financial Corporation on the request of the debtor a industrial unit, but not even a minimal portion of the principal amount was repaid and the debtor being chronic defaulter the Corporation seized the unit and sought to sell it by auction, and the debtor filed a suit for permanent injunction restraining the Corporation from auctioning the unit, the Court should not have decreed the suit solely relying on the decision of the Supreme Court in case of Mahesh Chandra v. Regional Manager, U.P. Financial Corpn. (1993 (2) SCC 279) and without dealing with the factual aspects of he case. The factor that the debtor did not repay any amount should not have been lost sight of by the Court. The fact that debtor was prevented by unsurmounted difficulties from repaying the loan needed to be established b....