Case Note & Summary
The case involved a Special Civil Application filed by a petitioner challenging the action of the Gujarat State Financial Corporation (GSFC) under section 29 of the State Financial Corporations Act, 1951. The petitioner, who operated a small-scale industry named Swastik Engineering Works, had been sanctioned financial assistance of Rs. 8,11,000 in 1982 but had only withdrawn Rs. 87,000. He was in default of payment and received a notice to deposit Rs. 91 lakhs, which he failed to do. The petitioner contended that he had not received a subsidy of Rs. 1,88,000 and cited an accident in his factory in 1985 as a reason for his inability to pay. The court examined the petition and concluded that there was no illegality in the notice issued by the GSFC, emphasizing that the petitioner was indeed a defaulter and that the GSFC was not obligated to pay the subsidy. Consequently, the court ruled that the petitioner was not entitled to relief under Article 226 of the Constitution of India. The Special Civil Application was dismissed, and the rule was discharged without any order as to costs.
Headnote
A) Financial Law - Recovery of Dues - Validity of Notice - State Financial Corporations Act, 1951, Section 29 - The petitioner challenged the notice for recovery of dues issued by the GSFC, claiming non-receipt of subsidy and inability to pay due to an accident. The court found no illegality in the notice as the petitioner was a defaulter and not entitled to any indulgence under Article 226. Held that the notice was valid and the application was dismissed (Paras 1-3).
Issue of Consideration
Whether the notice issued by the Gujarat State Financial Corporation under section 29 of the State Financial Corporations Act was valid.
Final Decision
The Special Civil Application was dismissed, and the rule was discharged with no order as to costs.
Law Points
- Interpretation of State Financial Corporations Act
- 1951
- Default in Loan Repayment
- Article 226 of the Constitution of India
