V.K. Jhanji, J.
1. In this petition, the challenge is to the action taken by the Haryana Financial Corporation invoking the provisions of Section 29 of the State Financial Corporations Act, 1951 (hereinafter referred to as 'the Act'), and taking possession of the industrial unit. Quashing is also sought of the advertisement dated May 26, 1997, published in the Economic Times,New Delhi, whereby the unit under the name Rukmani Enterprises Private Ltd., Kaprivas, Tehsil and District Rewari (Haryana) has been advertised to be sold through tender by the Haryana Financial Corporation.
2. In brief, the facts are that one Parkash Tapase son of the late Shri G.D. Tapase, former Governor of the State of Haryana, was the owner of land measuring 47 k 9 m in village Kaprivas Tehsil and District Rewari. In the said land, he set up LPG cylinders unit under the name and style of Rukmani Enterprises Private Limited. For setting up the unit, Shri Parkash Tapase obtained loans from the Haryana Financial Corporation and the Haryana State Industrial Development Corporation (hereinafter referred to as 'HFC and HSIDC') (respondents Nos. 1 and 2 respectively) to the extent of Rs. 55 lakhs. However, the said unit did not start operations of manufacturing LPG cylinders and became a defaulter in repayment of the loans to the HFC and the HSIDC. In July, 1994, the respondent-Corporations agreed to settle the dues of Rukmani Enterprises Private Limited payable to both the financial institutions, i.e., HFC and HSIDC at Rs. 70 lakhs. As per settlement dated July 27/28, 1994, it was envisaged that this amount would be shared by the two institutions on pro rata basis. The total amount was to be paid in five instalments and the last instalment being payable in December, 1995. The amount was to bear interest at the rate of 17.5 per cent. per annum with effect from July 1, 1994, till the settled amount was paid in full. Interest was payable quarterly and was to be compounded if not paid on due dates. It was also stipulated that in case of default or non-performance of terms of settlement, the entire outstanding dues of the financial corporations in terms of mortgage deed/hypothecation/supplementary deed or agreement deed would become payable. Shri Parkash Tapase, on behalf of Rukmani Enterprises Private Ltd. conveyed his acceptance to the terms of the settlement letter dated July 27/28, 1994. Instead of making the payment in terms of settlement dated July 27/28, 1994, Mr. Parkash Tapase entered into a memorandum of undertaking (in short MOU) with one Shri Suresh Verma, the then director of Sahil Electronics Private Limited, New Delhi (now chairman of the petitioner-company). In terms of the MOU dated November 23, 1994, Shri Suresh Verma agreed to take over the total liability of HFC and HSIDC to the tune of Rs. 70 lakhs on an 'as is where is basis'. Since payment of Rs. 7 lakhs had already been made to HFC and HSIDC, Shri Suresh Verma agreed to make payment of Rs. 63 lakhs to both the financial institutions in accordance with the terms of settlement dated July 27/28, 1994. At the time, when the MOU dated November 23,1994, was entered into between Shri Parkash Tapase and Shri Suresh Verma, liquidation proceedings were pending against Rukmani Enterprises Private Limited. In fact the said company was ordered to be wound up by this court on March 10, 1989, and the official liquidator had already taken possession of the industrial unit.Company Petition No. 125 of 1995, was filed on February 1, 1995, for the recalling the order of winding up of the company and for acceptance of the MOU dated November 23, 1994. The company judge, on February 29, 1996, in C. P. No. 125 of 1995 opined that it would be just and fair if the scheme of rehabilitation of the company in liquidation is approved and sanctioned. Resultantly, the winding up order dated March 10, 1989, passed in C. P. No. 27 of 1989 was recalled. The official liquidator was directed to hand over possession of assets, liabilities and books of account of the company in liquidation to the management of the company as per the MOU dated November 23, 1994, which earlier had been approved by the shareholders and secured creditors of the company in liquidation.
3. It is the case of the petitioner that after the passing of order dated February 29, 1996, no immediate and effective steps were taken by the official liquidator to hand over possession of the unit to Shri Suresh Verma. Further, according to the petitioner, possession was delivered to Shri Parkash Tapase on June 26, 1996, in the presence of the representatives of HFC and HSIDC as also Shri Suresh Verma (now chairman of Dharm Petrochemicals Limited). It is further the case of the petitioner that on June 24, 1996, Shri Parkash Tapase represented to the managing directors of HFC and HSIDC to revise the repayment schedule in the matter of Rukmani Enterprises Private Limited. It was requested to grant a revised repayment schedule on one-time settlement on the grounds settled in the said letter.
4. The petitioner has averred that Shri Parkash Tapase handed over possession of the unit to the petitioner-company on June 28, 1996, in pursuance of the MOU dated November 23, 1994, and court order dated February 29, 1996. The petitioner has averred that after taking over possession, the petitioner took effective steps to make the unit functional as the unit was in a very dilapidated condition when possession was taken as compared to the time when the MOU dated November 23, 1994, was executed. The petitioner has averred that after taking necessary permission, the petitioner moved an application to the Chief Controller of the Department of Explosives for manufacture of LPG cylinders. It also approached Bharti Registration Service (Patent and Trade Mark Attorneys) for search of trade marks and logo for the purposes of registration of the company's trade mark. It is alleged that the petitioner has spent a sum of Rs. 50 lakhs for obtaining licence, completing buildings, renovation of plant and machinery, electric connection/installation, etc., employment of engineers, employment of security staff and also making advance payment to Industrial Constructions for putting up the bottling plant. The petitioner has alleged that despite effective steps taken by the petitioner to manufacture LPG cylinders, there was complete non-co-operation and inaction on the part of the HFC and HSIDC for revising and rescheduling the repaymentof loan. It is averred that the MFC, vide letter dated September 20, 1996, advised Shri Parkash Tapase to deposit the entire amount along with interest and interest-tax till date in terms of letter dated July 27/28, 1994, In reply to letter dated September 20, 1996, the petitioner wrote to the financial institutions for review of repayment schedule. The petitioner has further averred that despite a bona fide request made by the petitioner-company, the HFC in a most arbitrary, perfunctory and discriminatory manner wrote a letter dated November 15, 1996, declining the request of the petitioner for waiver of interest from July 1, 1994, to June 26, 1996. It is averred that the petitioner was called upon to deposit the entire amount within fifteen days positively from the date of issuance of letter failing which a threat was given that the possession of the unit would be taken over on December 2, 1996, under Section 29 of the Act without making any further reference to the petitioner. The petitioner has alleged that the HFC, without issuing any show-cause notice, took possession of the unit on January 13, 1997, and issued an advertisement dated May 26, 1997, in the Economic Times for sale of the sick unit. It is contended that the action of the respondents in taking over the unit of the petitioner-company and subsequent action in issuing advertisement dated May 26, 1997, is arbitrary, discriminatory and in gross violation of the principles of natural justice and order dated February 29, 1996, of this court passed in Company Petition No. 125 of 1995. Hence, this writ petition.
5. Upon notice of the writ petition, two sets of written statements have been filed ; one by the HFC and the other by the HSIDC. In the written statements, the respondents have stated that the settlement entered into with Rukmani Enterprises Private Limited in July, 1994, for a sum of Rs. 70 lakhs involved waiver of a considerable amount of interest and the only consideration with the corporation was prompt repayment of loan amount. It was not a rehabilitation package. The total amount was to be paid in five instalments and the last instalment was payable in December, 1995. The respondents have stated that the MOU dated November 23, 1994, between Shri Parkash Tapase and Shri Suresh Verma was arrived at without knowledge and approval of the HFC and HSIDC. The respondents have further stated that in February, 1996, before the company judge, the respondents agreed to accept the settled amount provided the third party, i.e., Shri Suresh Verma or Dharm Petrochemicals Limited was willing to clear the outstanding immediately. According to the respondents, there was no instalment or extension envisaged or assurance in this regard extended at any stage. Further, according to the respondents, handing over of the possession of the unit to Shri Suresh Verma in June, 1996, had no bearing on the repayment schedule. The respondents have denied that the petitioner was not given sufficient time or opportunity to pay back the dues. It has 'rather been stated that despite repeated reminders, thepetitioner failed to honour the settlement. Further, according to the respondents, even after final letter of cancellation was communicated, the petitioner was still given an option to give an application for revival/extension of settlement on down payment of Rs. 25 lakhs but the petitioner did not give any reply. The respondents have averred that there is no privity of contract between the petitioner and the financial corporations as the term loan was obtained by Rukmani Enterprises Private Limited. The respondents have stated that the action of the HFC in taking over the possession of the unit of the petitioner-company under Section 29 of the Act is totally legal and justified.
6. Mr. S.S. Saron, Advocate, learned counsel appearing on behalf of the petitioner has contended that the action of the HFC in taking over the unit in exercise of the powers under Section 29 of the Act is arbitrary, unreasonable and colourable exercise of the power. It is contended that the respondents by their conduct and representation made the petitioner to spend nearly Rs. 64.50 lakhs and, therefore, are estopped by their act, conduct and acquiescence as also by principles of promissory estoppel from acting in unjust and arbitrary manner contrary to the norms and equity. Counsel further contended that the respondents cannot back out of their promise by adopting dubious means by asking for repayment of the entire loan just when the unit was ready for production. Learned counsel also referred to letter dated February 18, 1997, annexure P-23 and contended that the petitioner had accepted the condition of making payment of Rs. 25 lakhs within a week but the respondents took no action in that regard. Against this, it is contended by learned counsel, Mr. Kamal Sehgal and Mr. B. R. Gupta, advocates, appearing on behalf of the respondents that more than Rs. 2.46 crores with future interest at the rate of 18 per cent. per annum with effect from December 1, 1996, has become due to the HFC and more than Rs. 2.33 crores with future interest has become due to the HSIDC. It is contended that in February, 1996, before the company judge, the respondents agreed to accept the settled amount from the petitioner provided the petitioner was ready to clear the outstanding immediately. Learned counsel contended that the petitioner was given sufficient time to pay back the dues but when he failed to honour the offer, the respondents had no option but to proceed under Section 29 of the Act. It is contended that even after taking over the possession of the unit, the petitioner was still given an option to give an application for revival/extension of settlement by depositing down payment of Rs. 25 lakhs but the petitioner failed to respond to the said offer. Learned counsel has also produced record to show that letter dated February 18, 1997, annexure P-23, referred to by learned counsel for the petitioner, was never received by the respondents.
7. The record of the case has been perused and learned counsel for the parties have been heard at length.
8. Section 29 of the State Financial Corporations Act, 1951, defines the rights of a financial corporation to take over the management of the industrial concern or realise the mortgaged property by way of lease or sale in case the industrial undertaking makes a default in repayment of any loan or advance or any instalment or in meeting its obligations in relation to any guarantee given by the corporation. How judiciously a financial corporation is to exercise rights under Section 29 of the Act, has been dealt with by the Supreme Court in the following two judgments.
9. In Mahesh Chandra v. Regional Manager, U. P. Financial Corporation [1993] 78 Comp Cas 1 (SC) while dealing with the powers of taking possession of a defaulting unit under Section 29 of the Act the court has held that the default in payment of loan may attract Section 29 but that alone is insufficient either to assume possession or to sell the property. Neither should be resorted to unless it is imperative. The exercise of power to take possession of a defaulting unit should be objective. The public function should be duty conscious rather than power charged. The Supreme Court held that power under Section 29 of the Act to take possession of a defaulting unit and transfer it by sale, requires the authority to act cautiously, honestly, fairly and reasonably. At the same time, their Lordships of the Supreme Court opined that the approach has to be public oriented, helpful to the loanee but without loss to the corporation.
10. In U. P. Financial Corporation v. Gem Cap (India) P. Ltd. [1993] 78 Comp Cas 408, the Supreme Court held that the jurisdiction of the High Court under Article 226 of the Constitution to review the decision of the corporation is very limited. Their Lordships held that in a matter between the corporation and its debtor, a writ court has no say except in two situations : (1) there is a statutory violation on the part of the corporation ; or (2) where the corporation acts unfairly, i.e. unreasonably. Acting unfairly or unreasonably does not mean that the High Court exercising its jurisdiction under Article 226 of the Constitution can sit as an appellate authority over the acts and deeds of the corporation and seek to correct them. That is not the function of the High Court under Article 226. The doctrine of fairness, evolved in administrative law was not supposed to convert the writ courts into appellate authorities over administrative authorities. The constraints--self imposed undoubtedly--of writ jurisdiction still remain. Ignoring them would lead to confusion and uncertainty. The High Court is not to deal with the matter as if sitting as an appellate authority over the corporation.
11. A Full Bench of this court in Haryana Financial Corporation v. Bags and Cartons [1998] 94 Comp Cas 704 (P & H) in reference to Section 29 of the Act, held that (page 708) :
'There is a clear rationale for this provision. Today, materialism has come to have its sway. Business and industry talk in 'money-syllables'. Tosome, even matrimony is a 'matter, money'. The industrialist has the tendency to live within his financier's means. The familiar pattern is take a loan and go sick. Many find it against their 'principle to pay interest and against their interest to pay the principal'. It is in order to meet such a situation that Parliament has armed the corporation with a power to not only invoke the jurisdiction of the court under Section 31 but even to take over the management and possession of the industrial concern under Section 29 and to transfer it by way of lease or sale so as to recover its dues'.
12. At the outset, I may state that the grievance made by the petitioner in this case is not that there is any statutory violation on the part of the corporation but the grievance made is that the action of the corporation in resorting to the provisions of Section 29 of the Act and issuing advertisement for sale of the unit, is arbitrary, discriminatory and violative of the principles of natural justice. The petitioner is also saying that the respondents are estopped by their act, conduct and acquiescence in taking possession of the unit under Section 29 of the Act. The grievances made by the petitioner are to be considered in the light of the principle laid down by the Supreme Court and the Full Bench of this court in the judgments referred to hereinabove.
13. In the instant case, Rukmani Enterprises Private Limited whose managing director happened to be Shri Parkash Tapase son of Shri G.D. Tapase, former Governor of Haryana, obtained a loan from the HFC and the HSIDC in the year 1982 to the tune of Rs. 55 lakhs. Rukmani Enterprises Private Limited failed to manufacture LPG cylinders and committed default in repayment of loan. The record has revealed that Rukmani Enterprises Private Limited was ordered to be wound up on March 18, 1989, and the official liquidator was appointed as liquidator of the company. The record has also revealed that the respondents had shown much latitude to Shri Parkash Tapase when on July 27/28, 1994, they agreed to settle dues at Rs. 70 lakhs against loan of Rs. 55 lakhs advanced in the year 1982. Shri Parkash Tapase instead of making payment of the dues as per settlement dated July 27/28, 1994, entered into a MOU with Shri Suresh Verma whereby Shri Suresh Verma took upon himself to make payment of the dues under settlement dated July 27/28, 1994, to the respondents. The MOU dated November 23, 1994, between Shri Parkash Tapase and Shri Suresh Verma was without the prior approval of the HFC and the HSIDC. The record has further revealed that in February, 1996, before the company judge, in C. P. No. 125 of 1995, the HFC and the HSIDC agreed to accept the settled amount in terms of settlement dated July 27/28, 1994. As noticed earlier, as per the terms of the settlement, Rukmani Enterprises Private Limited was required to pay the settled amount by a specific date, i.e., on or before December 31, 1995, in five quarterly instalments. It was clearly stipulated in letter dated July27/28, 1994, that in case of default/non-adherence to the terms of settlement, the company shall be liable to pay the entire dues of the corporation in terms of the mortgage deed or agreement deed already executed and in that event the settlement dated July 27/28, 1994, shall stand cancelled. A reading of order dated February 29, 1996, of the company judge in C. P. No. 125 of 1995, shows that before the company judge, it was represented that Shri Suresh Verma is to make payment of Rs. 63 lakhs to the financial institutions and the same is in the process of being paid. It was also brought to the notice of the company judge that, vide the MOU dated November 23, 1994, Shri Suresh Verma has undertaken to discharge the liability of the company to the tune of Rs. 70 lakhs. It was on these representations that the scheme of rehabilitation of the company in liquidation was approved and sanctioned and order dated March 10, 1989, of winding up of the company was recalled. Order dated February 29, 1996, passed in C. P. No. 125 of 1995 did not envisage any further extension or rescheduling of repayment of loan. The record produced by the respondents has revealed that when the company came out of liquidation in February, 1996, a meeting was convened in March, 1996, at the level of managing directors of the HFC and the HSIDC in which a decision was taken for asking the company to pay the amount as settled under settlement dated July 27/28, 1994, together with compound interest. A decision was also taken that in the event of non-payment of the amount, the respondents shall be at liberty to withdraw the settlement offer. The record has further shown that the borrower, namely, Rukmani Enterprises Private Limited was asked to pay the amount as per terms of settlement together with interest and copy of the said notice was endorsed to the petitioner as well. In response to the notice, Shri Parkash Tapase made a request to revise the repayment schedule. He stated that since it took considerably long time for the company to come out of liquidation, it be allowed to pay settled amount from January, 1997, onwards in instalments. Shri Parkash Tapase also requested that the settlement be made effective from the actual date when possession of the unit was received from the official liquidator. He sought two years time from July, 1996, to repay the dues in eight quarterly instalments. This request was considered by the respondents in a meeting held on September 11, 1996, and it was decided to turn down the request and for taking action for the recovery of the amount. The minutes of the meeting held on September 11, 1996, read as under :
Present :
1. Shri B.L. Moza, ED, HSIDC.
2. Shri Sudhir Verma, General Manager (Recovery), HFC.
3. Shri R.K. Gupta, DGM (F), HSIDC.
4. Shri Mahavir Singh, Assistant General Manager (F), HSIDC.
The committee discussed the company's request for not charging interest on the settlement amount for the period the unit was in liquidation and the company's request to allow them 2 years time from July, 1996, to repay the settlement dues to the corporation in eight quarterly instalments. Since a similar request had been turned down earlier by the managing directors of the two corporations in March, 1996, and a notice to the company was given to clear up all dues together with interest within 15 days failing which settlement offer would be withdrawn, it was decided to once again give a final reminder to the company to clear all dues as per settlement approved by the two institutions together with interest duly compounded failing which the two institutions would withdraw the settlement offer and proceed for recovery under the law. It was further decided that since the HFC is the lead institution the said notice may be issued by the HFC and further recovery action after lapse of the said notice may also be taken by the lead institution only, i.e., HFC. Sd. (B.L. Moza) Sd. (Sudhir Verma)Executive Director, HSIDC General Manager (Recovery), HFC.'
14. In pursuance of the aforementioned decision, the HFC, vide letter datedSeptember 19, 1996, conveyed to Shri Parkash Tapase that the entire balance amount be deposited along with interest and interest-tax till datewithin 15 days positively from the issuance of letter failing which it wouldbe presumed that he is no longer interested in settlement and the settlement arrived at with the two institutions will be treated as withdrawn andcancelled and possession would be taken on October 7, 1996, under Section 29 of the Act without making any further reference in that regard.The petitioner, instead of making payment, as asked for, wrote to therespondents, vide letter dated October 8, 1996, that out of the total amountof Rs. 70 lakhs, a sum of Rs. 14.50 lakhs had already been paid beforeDecember 8/9, 1994, and the balance amount of Rs. 55.50 lakhs was to bepaid after June 26, 1996, i.e., when possession of the unit was handed overto Shri Parkash Tapase by the official liquidator. The petitioner also madea counter proposal for paying Rs. 3 lakhs immediately on acceptance ofthe proposal and balance amount in six monthly instalments with simpleinterest at the rate of 17.5 per cent. per annum with effect from June 26,1996. The petitioner called upon the respondents to reimburse the loss suffered by the company on account of missing plant and machinery. Thecounter proposal was considered by the respondents in a meeting held onOctober 8, 1996. The respondents decided to decline the request. In thesaid meeting, the respondents noted that though as per one time settlement, Shri Parkash Tapase had undertaken to pay Rs. 25 lakhs startingfrom December 31, 1994, with interest at the rate of 17.5 per cent. perannum and the interest on the balance unpaid amount was to be compounded if the payment was not made on due dates hut the company hadmade payment only of Rs. 14.50 lakhs in July, 1994, and stopped making further payment. In pursuance of the decision taken by the respondents in a meeting held on October 8, 1996, the petitioner and the borrower were called upon to pay the entire amount with interest within fifteen days failing which the petitioner was told that possession of the unit would be taken over on December 2, 1996. Since payment was not made, possession of the unit was taken over by the HFC in exercise of the powers under Section 29 of the Act. The record has also revealed that after possession of the unit was taken over, the petitioner in order to take back possession of the unit, made another proposal for accepting a down payment of Rs. 3 lakhs immediately and for the remaining amount, it was proposed that Rs. 20 to 30 lakhs would be paid in February, 1997, and the balance in March, 1997. This proposal too was considered by the respondents in a meeting held on January 21, 1997. After considering the entire matter, the respondents decided to decline the offer to accept Rs. 3 lakhs as down payment and it was decided that before handing back possession, the petitioner be asked to pay Rs. 25 lakhs as down payment and Rs. 30 lakhs in the months of February, 1997, and the balance along with the entire interest by March 15, 1997. The record has shown that the petitioner did not respond to the offer made by the respondents. Letter dated February 18, 1997, annexure P-23 whereby the petitioner had allegedly indicated that amount of Rs. 25 lakhs would be paid within a week's time is not on the record maintained by the respondents. In fact, letter dated February 18, 1997, annexure P-23 was not even referred to by the petitioner in his original petition and the amended petition but was placed on record by way of civil miscellaneous application while the matter was being argued. In my view, such a letter had never been issued. More so, Vinod Gupta, Assistant General Manager, HSIDC in his affidavit dated March 26, 1998, on oath, has stated that as per record maintained by the corporation, letters dated February 23, 1995, and February 18, 1997, annexures P-22 and P-23, respectively, were not received by the corporation because copies of the same are not available on the office record. In any case, there is nothing on record to show that payment of Rs. 25 lakhs was never made by the petitioner.
15. The record of this case has not revealed that the respondents ever gave an assurance to the petitioner that it would be given an indefinite period to make the payment. As is evident from the facts brought on record of this case, I am of the view that the respondents have acted in a very fair and reasonable manner. As per settlement arrived at on July 27/ 28, 1994, the total amount was payable on or before December 31, 1995. Out of the total amount, only Rs. 7 lakhs were paid and remaining Rs. 63 lakhs were to be paid on or before December 1, 1995, starting from December 31, 1994. The first two instalments were to be of Rs. 12 lakhs each while the remaining three instalments were to be of Rs. 13 lakhseach. The said amount was to bear interest at the rate of 17.5 per cent. per annum from July 1, 1994, till the amount was paid in full. Interest was payable quarterly and was to be compounded if the instalments were not paid on due dates. It is the accepted position that except Rs. 14.50 lakhs, no other payment was made and there had been default in paying the instalments on due dates. In accordance with the settlement, the borrower had become liable to pay the outstanding dues in terms of the mortgage deed/hypothecation deed or agreement deed. The MOU between Shri Parkash Tapase and Shri Suresh Verma was not on the asking of the respondents but unilateral action on the part of the borrower and the petitioner. The respondents never asked the petitioner to enter into any contract with Shri Parkash Tapase and if any understanding had come into being between the two of them, the same cannot be made binding on the respondents. The settlement dated July 27/28, 1997, or the MOU dated November 23, 1994, did not envisage any extension or rescheduling of loan. What has been accepted in February, 1996, before the company judge was the payment under settlement dated July 27/28, 1994, meaning thereby that the entire payment along with interest due under the original agreement entered into between the respondent-corporation and Shri Parkash Tapase at the time of disbursement of loan had become due and was to be paid by the borrower and the petitioner. Handing over of the possession of the unit in June, 1996, by the official liquidator had no bearing on the repayment schedule. As noticed in the earlier part of the judgment, after the borrower company had come out of liquidation, counter-proposals for rescheduling the repayment of loan were made by the borrower and the petitioner but the respondents at no stage accepted those counter-proposals. In case the petitioner has made any investment, the same is entirely at its own risk and responsibility for which the respondents cannot be held responsible. There has been no representation or assurance on the part of the respondents nor could one be pointed out by learned counsel for the petitioner that interest would be waived for the period possession had remained with the official liquidator or extension in repayment would be given from the date of handing over possession of the unit by the official liquidator to the petitioner. There had also been no assurance or representation by the respondents that any reimbursement would be made towards the claim of the petitioner against missing machinery while the possession had remained with the official liquidator. The proposals made by the borrower and the petitioner in this regard were considered from time to time by the respondents and the same were rejected.
16. It is true that principles of estoppel by conduct not only applies to individuals but also to statutory corporations. A corporation is bound as much as an individual by the wrongful acts of its servants and the result ofmisrepresentation by an agent is the same in the case of corporation as in the case of an individual. The only exception is that the promise or representation held out by the corporation should not be statutorily prohibited or against legislative or quasi-legislative power or authority or opposed to public policy. Before this principle is applied, it has to be proved that the conduct of one party has led another to draw certain inference and to act upon such inference. In case it is proved that a person has conducted himself so as to mislead another, he cannot afterwards be allowed to say that he is not bound if another has acted upon it. In the present case, as has been noticed earlier, the respondents never held out any promise or representation for waiving of interest or rescheduling of loan other than what had been settled between the borrower and the respondents under settlement dated July 27/28, 1994. Since there had not been any promise or representation held out by the respondents, the allegation of the petitioner that he was misled by the respondents and he changed his position to his detriment, is without any foundation. In fairness to learned counsel for the petitioner, the judgment in Pawan Alloys and Casting Pvt. Ltd. v. U. P. State Electricity Board [1997] 7 SCC 251 has no application to the facts of this case.
17. Consequently, I am of the considered view that neither is the action of the respondent in resorting to the provisions of Section 29 of the Act and advertising the sale through tender arbitrary, discriminatory or violation of the principles of natural justice nor are the respondents estopped by their act, conduct and acquiescence in taking over possession of the unit under Section 29 of the Act.
18. Before concluding, it is also necessary to deal with Civil Miscellaneous No. 3501 of 1998 filed by S.G. . [1993] 78 Comp Cas 408, the Supreme Court has observed that (page 415) :
'The relationship between the Corporation and the borrower is that of creditor and debtor. The Corporation is not supposed to give loans once and go out of business. It has also to recover them so that it can give fresh loans to others. The Corporation no doubt has to act within the four corners of the Act and in furtherance of the object underlying the Act. But this factor cannot be carried to the extent of obligating the Corporation to revive and resurrect every sick industry irrespective of the cost involved. Promoting industrialisation at the cost of public funds does not serve the public interest; it merely amounts to transferring public money to private account. The fairness required of the Corporation cannot be carried to the extent of disabling it from recovering what is due to it. While not insisting upon the borrower to honour the commitments undertaken by him, the Corporation alone cannot be shackled hand and foot in the name of fairness. . . . These Corporations are not sitting on King Solomon's mines. They too borrow monies from the Government or other financial Corporations. They too have to pay interest thereon. The fairness required of it must be tempered--nay, determined--in the light of all these circumstances.'
19. Having regard to the above quoted observations of the Supreme Court, it would riot be fair to direct the respondents to accept the proposal of the petitioner to accept the amount under settlement dated July 27/28, 1994, by treating as no default had been committed by the borrower. The action of the respondents not being unfair or unreasonable in resorting to the provisions of Section 29 of the Act, no interference is thus called for and the writ petition deserves to be dismissed. It is accordingly so ordered. No costs.
20. However, having regard to the guidelines laid down by the apex court in Mahesh Chandra's case [1993] 78 Comp Cas 1 (SC), the respondents are directed that in case the petitioner is willing to offer the same price as the tenderer, namely, the applicant S. G. Manufacturing Company Delhi Private Limited, then it shall be offered the same facility and the unit shall betransferred to it and the arrears remaining thereafter shall be rescheduled to be recovered in instalments with interest after, the payment of last instalment fixed under the agreement entered into as a result of tendered amount.
21. In view of the dismissal of this writ petition, prayer made in Civil Miscellaneous No. 3501 of 1998 filed by S. G. Manufacturing Company DelhiPrivate Limited for being impleaded as respondent No. 3 to this writ petition, is declined.