C. Jagadish S/O Late Chandrappa and ors. Vs. Karnataka State Finance Corporation and ors. - Court Judgment

Excerpt:
- order 26 & rule 9: [ashok b. hinchigeri, j] appointment of court commissioner -appointment of taluk surveyor as court commissioner for ascertaining as to in which survey number the suit schedule property is situated challenged on the ground that the appointment of the court commissioner for collecting the evidence on behalf of a party is absolutely impermissible held, the object of local inspection is not so much to obtain evidence, which from its very peculiar nature can only be had at the spot. if there is a serious dispute with regard to the area and boundaries of the land in question, the non-appointing of the court commissioner results in the serious miscarriage of justice. when the trial court, on perusing the oral and documentary evidence placed on its record, has formed the view that the matter calls for the appointment of the court commissioner, it cannot be found fault with.orderd.v. shylendra kumar, j.1. this is a story of the suffering of small time borrowers from the ksfc who particularly suffer if they are belonging to the lower strata of the society, and reveals as to what kind of harassment, humiliation and disastrous financial consequences are heaped on them, are all very well demonstrated in the present writ petition.2. a person who had a driving licence with the fond hope of owning a transport vehicle, had borrowed a sum of rs. 5.66 lakhs from the respondent-corporation on 20.12.1996 under the self-employment scheme mooted by the corporation.3. the petitioner-borrower had made an initial investment of rs. 2,34,000/- for the purchase of chassis of ashok leyland lorry and the balance was funded by the corporation by funding under the self-employment scheme and it is the version of the petitioner that the petitioner incurred a further expenditure of rs. 1,53,000/- for building truck body on the chassis and started using vehicle for transport operations, himself being driver of the vehicle.4. it appears, the petitioner was unable to maintain the schedule for repayment of the loan as per the instalments and had defaulted in making payment of a few instalments, which gave cause for the corporation to re-possess the vehicle and ultimately, the vehicle itself was sold on 09.04.2001 for a price of rs. 2.80 lakh after going through a farce of a procedure for notifying the public at large to buy the vehicle in an open competition/auction. this is the allegation of the petitioner against the respondent financial corporation as an advertisement on 15.02.2001 about the sale of such seized vehicles was carried out in a non-descript vernacular newspaper by the name 'ranarudra' published at chitradurga, the place of the borrower and the mainstay of which newspaper appears to be only such advertisements issued by the corporation.5. the corporation found that even after adjusting the sale proceeds of the vehicle, which according to the petitioner had been undersold, as the version of the petitioner is that the vehicle was worth not less than rs. 6 lakh on that day, even as per the valuation by the insurance agency, the outstanding loan having not been cleared, the corporation took steps to realize the balance, which according to the corporation was a sum of rs. 2,36,543/- as on 09.04.2001.6. with the only source of livelihood which was with the petitioner and being a self-employed person, having been lost, there was no way for the petitioner generating any income and paying the balance instalments and that is how, while the amount remained outstanding or not paid according to the corporation, the corporation merrily went ahead with mulcting the already bruised borrower with interest, compound interest, penal interest and what not interest and swelled the amount to a sum of rs. 5,83,835/- as on 30.04.2002 and recovery proceedings were resorted to by the corporation for realization of this amount by enforcing the surety taking recourse to enforcement of the amount on the surety and it is at this stage, the petitioner has approached this court by filing the above w.p. no. 29182/2002 contending inter alia that the respondent-corporation has taken the petitioner for a ride; that though the petitioner had till then paid total sum of rs. 6,91,719/- (including value of the vehicle as sold by the corporation for rs. 2,80,000/-), the corporation nevertheless is making an unreasonable demand for repayment of rs. 5,83,835/- and therefore, sought for the following prayers:1. issue a writ of certiorari by quashing the legal notice dated 22/27.02.2002 issued by the first respondent to the second petitioner/surety;2. issue a writ in the nature of mandamus directing the second respondent to consider the petitioner's representation dated 22.04.2002 by the waving simple and penal overdue interest at the rate of 22.5% and 30% respectively p.m.;3. issue writ in the nature of declaration, declaring the sale of the vehicle ashok leyland truck bearing no. ka-16-5325 by the 1st respondent in favour of the third respondent is illegal and void;4. and pass such other orders or directions.7. this writ petition has been contested by the corporation on several grounds, principal amongst which is that a writ petition of this nature is not tenable before this court in a petition under articles 226 and 227 of the constitution of india, even in terms of the law laid down by the hon'ble supreme court as per the judgment in the case of gujarat financial corporation v. lotus industries etc. : air 1983 sc 848.8. this writ petition is taken up for scrutiny and has received consideration at the hands of this court for quite sometime, mainly for the reason that when once the corporation has taken over the asset of the borrower which was an income producing asset and by working it the borrower could have repaid the amount and in fact, because the action of selling it in a so-called public auction, which according to the petitioner is again a farce and an under-sale only resulting in losses to the borrower, whether the corporation can even after that continue to mulct the borrower with interest, compound interest, penal interest etc, on the premise the entire amount is not realized even after sale of the re-possessed asset and it is such an amount of rs. 2,36,543/- said to be due as on that date, which has now swollen to a sum of rs. 60,25,739.82 said to be the amount outstanding as on 30.09.2009 as per a memo placed before this court today by the corporation.9. this is as per the intimation issued by the corporation in the context of a suggestion made by the court, when the corporation had indicated there are certain governmental schemes presently available, for extending concession/relief to such borrowers and as per that, a further communication placed along with a memo dated 13.11.2009 which is placed before the court today, to which is attached a working sheet as communicated by the corporation on 30.10.2009/07.11.2009 to the borrower, apprising the borrower that he should pay a sum of rs. 5.55 lakh along with a vat liability of rs. 69,375/-.10. the corporation, while is inclined to close the loan account of the petitioner as fully paid, if the petitioner should pay the amount now, would at the same time seek further instructions from the borrower as to the manner in which a sum of rs. 1.29 lakh which is due to the borrower and which is in deposit in an account known as arpa account in the very bank, can be closed and proceeds paid or otherwise and failing which, the corporation will take action in accordance with law etc. this communication, it appears is now followed by a further communication indicating that action in accordance with law will be persuaded for recovery of the amount of rs. 60,25,739.82/-, if the borrower does not comply with the possibility/payment as indicated in this communication.11. to the copies of the memo and communications is attached a government proceedings of the government of karnataka in no. ae:56:gfc 2009, bangalore, dated 26.09.2009, extending concession in the matter of rate of interest to borrowers falling in different categories such as those who have borrowed below rs. 2 lakh in category, in between rs. 2 lakh and rs. 5 lakh category and between rs. 5 lakh and rs. 10 lakh category etc.12. the concession that is available to a borrower in terms of the scheme is worked out by the corporation on the premise that the petitioner- borrower comes under category, being a borrower of a loan which is between rs. 5 lakh and rs. 10 lakh.13. mr.ramachandra, learned amicus curiae, appearing for the petitioner-borrower, points out that the classification of the petitioner as category is also wrong; that even as admittedly if the borrowed amount which was the outstanding amount based on which further calculation was made was rs. 2,36,543/- as on 9.4.2001 after selling away the re-possessed vehicle of the borrower and this is shown as the outstanding amount on the date of sale of the vehicle, that for the purpose of this notification of the government, this amount of rs. 2,36,543/- alone should be taken to be the initial borrowing and the borrower fitted into category and the concession in the rate of interest to be extended on the borrowing should be extended in terms of this computation/premise.14. while mr.joshi, learned counsel appearing on behalf of the corporation along with ms.anitha, would submit that the categorization is not based on the subsequent outstanding , but on the original loan etc., i am of the opinion that for the present purpose, it can definitely be taken to be the amount outstanding, starting with the year 2001, as the corporation had already worked out its remedies by then, and it is on the outstanding amount of rs. 2,36,543/-, the present outstanding of rs. 60,25,739.82 has been worked up.15. smt. anitha, counsel places before the court a memo dated 13.11.2009, contents of which are as:memo1. a letter was issued to the petitioner on 21.10.2009.2. in pursuance of the order passed by this hon'ble court, details are furnished to the petitioner, and also informed to avail the benefit of government order. the liability is rs. 60,25,740/- as on 07.11.2009. awaiting the benefit of the government order, petitioner required to pay rs. 5.55 lakhs and vat rs. 69,375/-. the amount of rs. 1.29 lakhs paid by petitioner is kept in a r p a and that amount would be deducted from rs. 5.5 lakhs. petitioner also served along with copy of letters and order.copy of government order.16. while this is an option open to the corporation to work out on such premise and to indicate to the petitioner as to what can be the amount that has to be paid by the petitioner for taking advantage of the scheme and for a final settlement of the loan even as submitted by ms. anitha, learned counsel appearing for the corporation, there is no rhyme or reason as to why the corporation is insisting on adding vat liability of a sum of rs. 69,375/- even on a scaled down amount of rs. 5.55 lakh on the borrowing in terms of the scheme, as levy of tax under the vat is attracted only on sale of goods and by no stretch of imagination or wisdom one can understand the logic or justification for treating a borrowing from a financial institution or any loan facility extended by the bank to a borrower, to be in the nature of sale of any goods.17. be that as it may, even it is submitted by the counsel that their client (ksfc) is not heeding to their counselling and advise and therefore, a responsible officer of the bank will have to be present come before this court and explain the rationale of the corporation being in the habit of heaping a vat liability on the hapless borrowers.18. apart from the irrational approach and actions on the part of the financial corporation, what shocks one's conscience and sensitivity is, and this court is taken aback, that a small time borrower who is self-employed and who has sought for some financial assistance from the corporation and who has already been heaped with misery and harassment by re-possessing and selling away of the vehicle for the purchase of which the corporation had financed, the corporation is coming up with the version that a sum of rs. 2,36,543/- outstanding as on 9.4.2001 has not swollen to rs. 60,25,739.82/- and the borrower/petitioner is now called upon to pay a total sum of rs. 60,25,739.82/-, as the amount due in terms of the conditions of borrowing and that an amount of rs. 60,25,739-82 is outstanding as on 26.09.2009, notwithstanding several interim orders passed in this writ petition, and matter pending before this court since 2002 and corporation now coming up with a version, which is, to say the least, that the corporation has shown such temerity and audacity to place before this court that an amount of rs. 2,36,543/- outstanding as on 9.4.2001 can swell to a staggering amount of rs. 60,25,739.82/-within eight years or so.19. if such is the rate of interest the corporation is charging on its borrowers, i do not think any borrower carrying on any business activity on any legitimate lines can service a loan with interest rates of this magnitude. no wonder most of the borrowers of the corporation keep defaulting and many of them perish when the corporation resorts to coercive recovery proceedings using its statutory powers under the act.20. for the purpose of computing the amount payable by the petitioner, for the corporation to close the loan account as fully paid/satisfied by the borrower, the corporation is further directed to deduct the sum of rs. 4,00,000/- deposited by the petitioner with the corporation as per the interim order passed by this court on 30.8.2002, and by deducting this amount from the outstanding balance of rs. 2,36,543/- as on 5.4.2001 and treating the outstanding capital amount from the date of deposit of this one lakh to be rs. 1,36,543/-and compute interest on this amount, thereafter even in terms of the scheme referred to above.21. this apart, it is worthwhile to find out from the corporation the information as to what amounts were outstanding to the corporation in the overall, as on this day i.e., 09.04.2001 and as to the manner in which the corporation has realised such outstanding amounts upto this date which amount was due to the corporation till now and if any such amount which was an amount due on this day has not been repaid till today, as to how such outstanding amount has worked out in the present case and the corporation is directed to furnish such factual information before this court for appreciating the manner in which the corporation is functioning and as to whether the corporation is adopting a uniform and fair method of business transactions, as to whether a fair and reasonable treatment is meted out to all its borrowers, particularly the corporation being state within the meaning of article 12 and owing a duty to explain its conduct and management to this court when the query is precisely on such questions. the corporation is also directed to place before this court the total loan amounts/outstanding amounts which, it has written off as bad debts and as irrecoverable debts during the past eight years, i.e. ever since 09.04.2001.22. corporation to place all these materials before this court within a reasonable time and though ms. anitha, learned counsel would seek for two to four weeks, they are given six weeks time from today to place all that material and also to apprise the petitioner, in the meanwhile, as to what precise amount has to be paid by the petitioner if the loan amount for ots is reworked on the premise that the borrower falls in category and not category, and by extending the facility of interest waiver/concession as per the scheme of the government and as further indicated in this order. it is open to the petitioner to avail this facility and to clear the loan amount, without prejudice to his contentions in the writ petition and without waiting for any permission or orders by this court on this aspect of the matter.23. furnish a copy of this order to the learned counsel for the corporation and the registry is directed to forward copies of this order to the managing director, karnataka state financial corporation and to the principal secretary to the government of karnataka, finance department, as also the chief secretary.24. this court may have to examine the desirability of recommending to the state government the winding up of the corporation itself, if the corporation is only taking its borrowers for a ride mulcting such small time borrowers with such hefty rate of interest on the borrowings, resulting in misery and harassment to small time borrowers, and writing off loans availed by big borrowers by treating their loans as irrecoverable, as such actions and management rather mismanagement of the affairs of the corporation is definitely detrimental to the larger public interest and particularly as the corporation is funded and started with an initial investment by public funds drawn from the state exchequer.registry to furnish copies of this order free of cost to the amicus curiae appearing for the petitioner, to the learned counsel appearing for the corporation and also to forward a copy each to the principal secretary, department of finance, government of karnataka, and the chief secretary to government of karnataka, forthwith for their showing awareness to such developments in the management of state owned financial corporations and also for taking commensurate remedial measures pending further orders by this court.

Judgment:
ORDER

D.V. Shylendra Kumar, J.

1. This is a story of the suffering of small time borrowers from the KSFC who particularly suffer if they are belonging to the lower strata of the society, and reveals as to what kind of harassment, humiliation and disastrous financial consequences are heaped on them, are all very well demonstrated in the present writ petition.

2. A person who had a driving licence with the fond hope of owning a transport vehicle, had borrowed a sum of Rs. 5.66 lakhs from the respondent-Corporation on 20.12.1996 under the self-employment scheme mooted by the Corporation.

3. The petitioner-borrower had made an initial investment of Rs. 2,34,000/- for the purchase of chassis of Ashok Leyland Lorry and the balance was funded by the Corporation by funding under the self-employment scheme and it is the version of the petitioner that the petitioner incurred a further expenditure of Rs. 1,53,000/- for building truck body on the chassis and started using vehicle for transport operations, himself being driver of the vehicle.

4. It appears, the petitioner was unable to maintain the schedule for repayment of the loan as per the instalments and had defaulted in making payment of a few instalments, which gave cause for the Corporation to re-possess the vehicle and ultimately, the vehicle itself was sold on 09.04.2001 for a price of Rs. 2.80 lakh after going through a farce of a procedure for notifying the public at large to buy the vehicle in an open competition/auction. This is the allegation of the petitioner against the respondent Financial Corporation as an advertisement on 15.02.2001 about the sale of such seized vehicles was carried out in a non-descript vernacular newspaper by the name 'Ranarudra' published at Chitradurga, the place of the borrower and the mainstay of which newspaper appears to be only such advertisements issued by the Corporation.

5. The Corporation found that even after adjusting the sale proceeds of the vehicle, which according to the petitioner had been undersold, as the version of the petitioner is that the vehicle was worth not less than Rs. 6 lakh on that day, even as per the valuation by the Insurance agency, the outstanding loan having not been cleared, the Corporation took steps to realize the balance, which according to the Corporation was a sum of Rs. 2,36,543/- as on 09.04.2001.

6. With the only source of livelihood which was with the petitioner and being a self-employed person, having been lost, there was no way for the petitioner generating any income and paying the balance instalments and that is how, while the amount remained outstanding or not paid according to the Corporation, the Corporation merrily went ahead with mulcting the already bruised borrower with interest, compound interest, penal interest and what not interest and swelled the amount to a sum of Rs. 5,83,835/- as on 30.04.2002 and recovery proceedings were resorted to by the Corporation for realization of this amount by enforcing the surety taking recourse to enforcement of the amount on the surety and it is at this stage, the petitioner has approached this Court by filing the above W.P. No. 29182/2002 contending inter alia that the respondent-Corporation has taken the petitioner for a ride; that though the petitioner had till then paid total sum of Rs. 6,91,719/- (including value of the vehicle as sold by the Corporation for Rs. 2,80,000/-), the Corporation nevertheless is making an unreasonable demand for repayment of Rs. 5,83,835/- and therefore, sought for the following prayers:

1. Issue a writ of certiorari by quashing the legal notice dated 22/27.02.2002 issued by the first respondent to the second petitioner/surety;

2. Issue a writ in the nature of mandamus directing the second respondent to consider the petitioner's representation dated 22.04.2002 by the waving simple and penal overdue interest at the rate of 22.5% and 30% respectively p.m.;

3. Issue writ in the nature of declaration, declaring the sale of the vehicle Ashok Leyland Truck bearing No. KA-16-5325 by the 1st respondent in favour of the third respondent is illegal and void;

4. And pass such other orders or directions.

7. This writ petition has been contested by the Corporation on several grounds, principal amongst which is that a writ petition of this nature is not tenable before this Court in a petition under Articles 226 and 227 of the Constitution of India, even in terms of the law laid down by the Hon'ble Supreme Court as per the judgment in the case of Gujarat Financial Corporation v. Lotus Industries etc. : AIR 1983 SC 848.

8. This writ petition is taken up for scrutiny and has received consideration at the hands of this Court for quite sometime, mainly for the reason that when once the Corporation has taken over the asset of the borrower which was an income producing asset and by working it the borrower could have repaid the amount and in fact, because the action of selling it in a so-called public auction, which according to the petitioner is again a farce and an under-sale only resulting in losses to the borrower, whether the Corporation can even after that continue to mulct the borrower with interest, compound interest, penal interest etc, on the premise the entire amount is not realized even after sale of the re-possessed asset and it is such an amount of Rs. 2,36,543/- said to be due as on that date, which has now swollen to a sum of Rs. 60,25,739.82 said to be the amount outstanding as on 30.09.2009 as per a memo placed before this court today by the Corporation.

9. This is as per the intimation issued by the Corporation in the context of a suggestion made by the Court, when the Corporation had indicated there are certain governmental schemes presently available, for extending concession/relief to such borrowers and as per that, a further communication placed along with a memo dated 13.11.2009 which is placed before the Court today, to which is attached a working sheet as communicated by the Corporation on 30.10.2009/07.11.2009 to the borrower, apprising the borrower that he should pay a sum of Rs. 5.55 lakh along with a VAT liability of Rs. 69,375/-.

10. The Corporation, while is inclined to close the loan account of the petitioner as fully paid, if the petitioner should pay the amount now, would at the same time seek further instructions from the borrower as to the manner in which a sum of Rs. 1.29 lakh which is due to the borrower and which is in deposit in an account known as ARPA account in the very Bank, can be closed and proceeds paid or otherwise and failing which, the Corporation will take action in accordance with law etc. This communication, it appears is now followed by a further communication indicating that action in accordance with law will be persuaded for recovery of the amount of Rs. 60,25,739.82/-, if the borrower does not comply with the possibility/payment as indicated in this communication.

11. To the copies of the memo and communications is attached a Government proceedings of the Government of Karnataka in No. AE:56:GFC 2009, Bangalore, dated 26.09.2009, extending concession in the matter of rate of interest to borrowers falling in different categories such as those who have borrowed below Rs. 2 lakh in category, in between Rs. 2 lakh and Rs. 5 lakh category and between Rs. 5 lakh and Rs. 10 lakh category etc.

12. The concession that is available to a borrower in terms of the scheme is worked out by the Corporation on the premise that the petitioner- borrower comes under category, being a borrower of a loan which is between Rs. 5 lakh and Rs. 10 lakh.

13. Mr.Ramachandra, learned Amicus Curiae, appearing for the petitioner-borrower, points out that the classification of the petitioner as category is also wrong; that even as admittedly if the borrowed amount which was the outstanding amount based on which further calculation was made was Rs. 2,36,543/- as on 9.4.2001 after selling away the re-possessed vehicle of the borrower and this is shown as the outstanding amount on the date of sale of the vehicle, that for the purpose of this notification of the Government, this amount of Rs. 2,36,543/- alone should be taken to be the initial borrowing and the borrower fitted into category and the concession in the rate of interest to be extended on the borrowing should be extended in terms of this computation/premise.

14. While Mr.Joshi, learned Counsel appearing on behalf of the Corporation along with Ms.Anitha, would submit that the categorization is not based on the subsequent outstanding , but on the original loan etc., I am of the opinion that for the present purpose, it can definitely be taken to be the amount outstanding, starting with the year 2001, as the Corporation had already worked out its remedies by then, and it is on the outstanding amount of Rs. 2,36,543/-, the present outstanding of Rs. 60,25,739.82 has been worked up.

15. Smt. Anitha, Counsel places before the court a memo dated 13.11.2009, contents of which are as:

MEMO

1. A letter was issued to the petitioner on 21.10.2009.

2. In pursuance of the order passed by this Hon'ble Court, details are furnished to the petitioner, and also informed to avail the benefit of Government order. The liability is Rs. 60,25,740/- as on 07.11.2009. Awaiting the benefit of the Government order, petitioner required to pay Rs. 5.55 lakhs and VAT Rs. 69,375/-. The amount of Rs. 1.29 lakhs paid by petitioner is kept in A R P A and that amount would be deducted from Rs. 5.5 lakhs. Petitioner also served along with copy of letters and order.

Copy of Government order.

16. While this is an option open to the Corporation to work out on such premise and to indicate to the petitioner as to what can be the amount that has to be paid by the petitioner for taking advantage of the scheme and for a final settlement of the loan even as submitted by Ms. Anitha, learned Counsel appearing for the Corporation, there is no rhyme or reason as to why the Corporation is insisting on adding VAT liability of a sum of Rs. 69,375/- even on a scaled down amount of Rs. 5.55 lakh on the borrowing in terms of the scheme, as levy of tax under the VAT is attracted only on sale of goods and by no stretch of imagination or wisdom one can understand the logic or justification for treating a borrowing from a financial institution or any loan facility extended by the Bank to a borrower, to be in the nature of sale of any goods.

17. Be that as it may, even it is submitted by the Counsel that their client (KSFC) is not heeding to their counselling and advise and therefore, a responsible Officer of the Bank will have to be present come before this Court and explain the rationale of the Corporation being in the habit of heaping a VAT liability on the hapless borrowers.

18. Apart from the irrational approach and actions on the part of the Financial Corporation, what shocks one's conscience and sensitivity is, and this Court is taken aback, that a small time borrower who is self-employed and who has sought for some financial assistance from the Corporation and who has already been heaped with misery and harassment by re-possessing and selling away of the vehicle for the purchase of which the Corporation had financed, the Corporation is coming up with the version that a sum of Rs. 2,36,543/- outstanding as on 9.4.2001 has not swollen to Rs. 60,25,739.82/- and the borrower/petitioner is now called upon to pay a total sum of Rs. 60,25,739.82/-, as the amount due in terms of the conditions of borrowing and that an amount of Rs. 60,25,739-82 is outstanding as on 26.09.2009, notwithstanding several interim orders passed in this writ petition, and matter pending before this Court since 2002 and Corporation now coming up with a version, which is, to say the least, that the Corporation has shown such temerity and audacity to place before this Court that an amount of Rs. 2,36,543/- outstanding as on 9.4.2001 can swell to a staggering amount of Rs. 60,25,739.82/-within eight years or so.

19. If such is the rate of interest the Corporation is charging on its borrowers, I do not think any borrower carrying on any business activity on any legitimate lines can service a loan with interest rates of this magnitude. No wonder most of the borrowers of the Corporation keep defaulting and many of them perish when the Corporation resorts to coercive recovery proceedings using its statutory powers under the Act.

20. For the purpose of computing the amount payable by the petitioner, for the Corporation to close the loan account as fully paid/satisfied by the borrower, the Corporation is further directed to deduct the sum of Rs. 4,00,000/- deposited by the petitioner with the Corporation as per the interim order passed by this court on 30.8.2002, and by deducting this amount from the outstanding balance of Rs. 2,36,543/- as on 5.4.2001 and treating the outstanding capital amount from the date of deposit of this one lakh to be Rs. 1,36,543/-and compute interest on this amount, thereafter even in terms of the scheme referred to above.

21. This apart, it is worthwhile to find out from the Corporation the information as to what amounts were outstanding to the Corporation in the overall, as on this day i.e., 09.04.2001 and as to the manner in which the Corporation has realised such outstanding amounts upto this date which amount was due to the Corporation till now and if any such amount which was an amount due on this day has not been repaid till today, as to how such outstanding amount has worked out in the present case and the Corporation is directed to furnish such factual information before this Court for appreciating the manner in which the Corporation is functioning and as to whether the Corporation is adopting a uniform and fair method of business transactions, as to whether a fair and reasonable treatment is meted out to all its borrowers, particularly the Corporation being State within the meaning of Article 12 and owing a duty to explain its conduct and management to this Court when the query is precisely on such questions. The Corporation is also directed to place before this Court the total loan amounts/outstanding amounts which, it has written off as bad debts and as irrecoverable debts during the past eight years, i.e. ever since 09.04.2001.

22. Corporation to place all these materials before this Court within a reasonable time and though Ms. Anitha, learned Counsel would seek for two to four weeks, they are given six weeks time from today to place all that material and also to apprise the petitioner, in the meanwhile, as to what precise amount has to be paid by the petitioner if the loan amount for OTS is reworked on the premise that the borrower falls in category and not category, and by extending the facility of interest waiver/concession as per the scheme of the Government and as further indicated in this order. It is open to the petitioner to avail this facility and to clear the loan amount, without prejudice to his contentions in the writ petition and without waiting for any permission or orders by this court on this aspect of the matter.

23. Furnish a copy of this order to the learned Counsel for the Corporation and the Registry is directed to forward copies of this order to the Managing Director, Karnataka State Financial Corporation and to the Principal Secretary to the Government of Karnataka, Finance Department, as also the Chief Secretary.

24. This Court may have to examine the desirability of recommending to the State Government the winding up of the Corporation itself, if the Corporation is only taking its borrowers for a ride mulcting such small time borrowers with such hefty rate of interest on the borrowings, resulting in misery and harassment to small time borrowers, and writing off loans availed by big borrowers by treating their loans as irrecoverable, as such actions and management rather mismanagement of the affairs of the Corporation is definitely detrimental to the larger public interest and particularly as the Corporation is funded and started with an initial investment by public funds drawn from the State Exchequer.

Registry to furnish copies of this order free of cost to the Amicus Curiae appearing for the petitioner, to the learned Counsel appearing for the Corporation and also to forward a copy each to the Principal Secretary, Department of Finance, Government of Karnataka, and the Chief Secretary to Government of Karnataka, forthwith for their showing awareness to such developments in the management of State owned Financial Corporations and also for taking commensurate remedial measures pending further orders by this court.