Shri Dinesh Kumar vs Delhi Financial Corporation

Manmohan Sarin, J.—Rule.

With the consent of the parties, writ petition is taken up for disposal.

The petitioner has filed this writ petition seeking a writ of prohibition to restrain the respondents from auctioning the petitioner''s residential house bearing No. 8115, Kharia Mohalla, Roshnara Road, Sabji Mandi, Delhi and restrain them from taking possession of the said property. The petitioner inter alias also sought quashing of the proceedings initiated u/s 29 as well as a writ restraining the respondents from recovering the amounts from the petitioner in respect of the loan advanced and from taking any other coercive steps pursuant to the notice dated 13.12.1997 and 17.4.1998 issued by the respondents.

Counsel for the parties have been heard.

The relevant facts as also the respective submissions are noted:-

Petitioner claims to have applied for a loan of Rs. 8.60 lacs. in October, 1996. Respondents sanctioned the same and Rs. 7.60 lacs was disbursed to the petitioner. The respondents contend that the petitioner without taking their permission unauthorizedly sold the machinery for the purchase of which loan was taken. Machinery was hypothecated with the respondents, yet the petitioner sold the same without their knowledge at an absurdly low price of Rs. 1.85 lacs. Petitioner claims to have deposited the said amount. Counsel for the petitioner submits that it was on account of non-disbursement of full amount of loan that petitioner faced these difficulties, which led to a cash bottle-neck.

Learned counsel submits that petitioner was unable to carry on the business at Naraina on account of high rent and was thus compelled to sell the equipment as a distress sale. Whatever proceeds petitioner got, he deposited with the respondent. Not only this counsel for the petitioner submits that residential house of the petitioner was sold for a sum of Rs. 4,25,000/-, which proceeds have also deposited with the respondent.

Respondent has produced on record the statement of account Learned counsel for the petitioner submits that the petitioner has already remitted Rs. 7.90 lacs against the loan of Rs. 7.60 lacs and petitioner is a sick Company and should be allowed the benefit under the policy of 7.6.1996. This is of course disputed by the respondent who submits that the policy is applicable on merit and the petitioner by its conduct is disentitled to claim the benefit under the policy.

On a consideration of the entire matter it prima facie appears to the undersigned that even though the petitioner had violated the terms in selling the equipment without the permission and consent of the respondents, petitioner thereafter had been making efforts to pay the proceeds which he had received from the sale of the equipment. Petitioner thereafter had been making efforts to pay the proceeds which he had received from the sale of the equipment. Petitioner claims that sum of Rs. 1,85,000/- was duly paid, though in Installments. Petitioner also after selling the house for a sum of Rs. 4,25,000/- under the supervision of respondents, deposited the same with the respondents.

Learned counsel for the petitioner submits that in these circumstances petitioner is entitled to be given the benefit under the recovery policy dated 7.6.1996. Let the petitioner make a representation to the respondents within two weeks, who would sympathetically consider the same taking into account the factors enumerated earlier and take a decision on the same giving the benefit to which the petitioner may be legitimate entitled. Till the disposal of the petitioner''s representation no further coercive steps be taken.