Madras High Court
Prabhu Salt Industries vs The Tamil Nadu Industrial ... on 27 March, 2023
2023:MHC:1728
Writ Petition Nos.6750 and 6798 of 2005
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED :27.03.2023
CORAM :
THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM
Writ Petition Nos.6750 and 6798 of 2005
and WMP.No.7463 of 2005
Prabhu Salt Industries, a Registered
Partnership Firm having its Office at
24 B Sandhal Road,
Tuticorin and represented by its
Managing Partner
C.D.Vijaya Rajan ... Petitioner in W.P.No.6750/2005
Raj Salt Industries, a Registered
Partnership Firm having its Office at
Municipal Lorry Nilayam V.E.Road,
Tuticorin and represented by its
Managing Partner
C.Dharmaraj Nadar ... Petitioner in W.P.No.6798/2005
-Vs-
1. The Tamil Nadu Industrial Investment Corporation Ltd.,
No.692, Anna Salai, Nandanam,
Chennai – 600 035.
2. The Branch Manager,
The Tamil Nadu Industrial Investment Corporation Ltd.,
No.4/35, N.P.S. Complex, near New Bus Stand,
Tuticorin.
3. M/s.Panniyar Salt Traders,
Arumuganeri represented by its
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Writ Petition Nos.6750 and 6798 of 2005
Managing Partner
Thiru R.Kosalai Pannaiyar,
S/o.Ramasamy Nadar, residing at No.6,
West Street, Moolakarai Village, Tiruchendur Taluk,
Tuticorin District. … Respondents in both W.Ps.
Common Prayer : Writ Petitions under Article 226 of the Constitution of
India praying for the issuance of a Writ of Certiorari, calling for the
records relating to the notice of the 2nd respondent in TIIC/LAO/2004-05
dated 19.01.2005 and set aide the auction sale effected by the 2nd
respondent on 01.02.2005 in favour of the third respondent.
For Petitioners : Mr.T.Srinivasaraghavan
[in both W.Ps.]
For Respondents : Mr.B.Balaji
[in both W.Ps.] for Mr.A.Panneerchelvam [R1 and
R2]
COMMON ORDER
The intimation regarding the auction to be conducted on
01.02.2005 in proceedings dated 19.01.2005 is sought to be quashed in
these writ petitions.
2. The petitioners are registered partnership firm and engaged in
salt production processing of salt and other connected activities. The
petitioners are companies registered under the Indian Companies Act,
1913.
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Writ Petition Nos.6750 and 6798 of 2005
3. The grievance of the writ petitioners is that the procedure as
contemplated for conducting of auction had not been followed by the
respondents and they have committed violation in respect of the
procedures to be followed. Thus, the impugned order is liable to be set
aside.
4. It is not disputed that the petitioners are defaulters in repayment
of loan amount. The learned counsel appearing for the petitioners
reiterated that, even in respect of the property that belongs to a defaulter,
the respondents are bound to follow the procedures and thus the order
impugned is not in consonance with the established procedure. In support
of his contention, he relied on the judgment of the Hon'ble Supreme
Court in the case of Kerala Financial Corporation Vs. Vincent Paul
and Anr. reported in 2011 3 LW 114, wherein the Apex Court laid down
the procedures to be followed for the purpose of conducting auction.
5. Pertinently, it is contended that notice was not given properly
and 30 days time as stipulated was also not granted to the petitioners.
Prize fixed was also improper and incommensurate with the market value
of the property. Thus, the respondents have committed violation in
respect of the procedure to be followed.
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Writ Petition Nos.6750 and 6798 of 2005
6. Learned counsel appearing for the respondents 1 and 2 states
that the show cause notice was issued in the year 2011 vide proceedings
dated 09.02.2011 under Section 29 of the State Financial Corporations
Act, 1951[hereinafter referred to as 'the Act']. Thus, the 30 days time was
complied with. Pertinently, show cause notice issued under Section 29 of
the Act on 09.02.2011 was challenged by the writ petitioners in
W.P.No.8618 of 2001, since the writ petition was pending, no further
action was taken, the writ petition was dismissed on merits, the
petitioners have not paid the arrears of loan amount and after dismissal of
the writ petition, again a notice was issued to the petitioners for the
purpose of proceeding the auction sale on 01.02.2005, which is again
under challenge in these writ petitions. The impugned order dated
19.01.2005 is an intimation provided to the petitioners regarding the
auction to be conducted on 01.02.2005. This being the factum, the
contention of the writ petitioners that time prescribed had not been given
is incorrect.
7. Learned counsel for respondents has further stated that even
conditional interim order which was granted in these writ petitions has
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Writ Petition Nos.6750 and 6798 of 2005
not been complied with by the petitioners i.e., this Court directed the
petitioners to pay a sum of Rs.25,00,000/- (Rupees twenty five lakhs
only) and the said amount has not been paid in the year 2005/2006. That
apart, during the pendency of the writ petitions, the auction sale
conducted was brought to the notice of this Court and the same was
recorded on 15.06.2006 that the successful bidder in the auction sale paid
the entire amount and the possession was handed over to the third
respondent, who was the auction purchaser. Thus, this Court declined to
grant an interim stay.
8. Section 29 of the Act intimates Rights of Financial Corporation
in case of default. In the present case, the respondents had followed the
procedures as contemplated under Section 29 of the Act. They have
issued show cause notice on 09.02.2011 and the petitioners filed a writ
petition, which was dismissed. The petitioners failed to comply with the
interim order passed by this Court and no payment has been made,
subsequently, after the dismissal of the writ petition, the present
impugned order has been passed in proceedings dated 19.01.2005
informing the petitioners that the auction scheduled to be conducted on
01.02.2005.
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Writ Petition Nos.6750 and 6798 of 2005
9. During the pendency of these writ petitions, auction sale was
conducted and third respondent was the successful bidder and he took the
possession of the said property and the said confirmation order was also
not challenged by the writ petitioners, so far these writ petitions has been
filed only against the intimation letter dated 19.01.2005 and the
subsequent sale confirmation and handing over of possession of the
property to the third respondent are not under challenge in these writ
petitions.
This being the factum, the writ petitioners are not entitled to any
relief in these writ petitions. Accordingly, these writ petitions stand
dismissed. No costs. Connected miscellaneous petition is closed.
27.03.2023
Index : Yes
Speaking order: Yes
Neutral Citation:Yes
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https://www.mhc.tn.gov.in/judis
Writ Petition Nos.6750 and 6798 of 2005
S.M.SUBRAMANIAM, J.
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Writ Petition Nos.6750 and 6798 of 2005
27.03.2023
https://www.mhc.tn.gov.in/judis
