State Financial Corporation Act, 1951

The appellants, ICICI Ltd., filed a suit for recovery of a large sum and sought under Order 40 Rule 1 of the CPC the appointment of a receiver with authority to sell the respondents' immovable properties before any decree. The Bombay High Court dismissed the application, relying on a Full Bench decision in State Bank o…

Karnataka State Industrial Investment and Development Corporation Ltd. (KSIIDC) invoked its power under Section 29 of the State Financial Corporation Act, 1951 to take over a defaulting borrower, Cavalet India Ltd., and sold the unit to Vinpack Ltd. The borrower challenged the sale as void and illegal, and a Single Jud…

The Haryana Financial Corporation (HFC) granted a loan of Rs 7.48 lakh to Jagdamba Oil Mills under the State Financial Corporation Act, 1951, to be repaid in instalments. The borrower repeatedly defaulted despite two reschedulings, prompting HFC to recall the loan under Section 30 and take possession of the unit under …

Denin Leathers Ltd obtained a term loan from the Pradeshiya Industrial and Investment Corporation (PICUP) and mortgaged its immovable property. After the company converted to a public limited company, recovery certificates were issued against several guarantors, including the appellant Ashok Mahajan, under the Uttar Pr…

The Karnataka State Financial Corporation (KSFC) recovered a debt from Hoysala Thermo Farmers Pvt. Ltd. and, after default, auctioned agricultural land (Sy. No.67) belonging to the managing director, G.M. Krishna. The appellant, R. Raghu, purchased the land at the auction and later obtained a sale certificate as truste…

The appellant, a former director of Depro Foods Pvt. Ltd., challenged a recovery certificate issued under Section 3 of the Haryana Public Moneys (Recovery of Dues) Act, 1979, which sought to recover a shortfall of Rs. 18,22,178.05 from him without any prior notice or hearing. The High Court had held that no further not…

The Uttar Pradesh Financial Corporation (UPFC) had taken a mortgage over a parcel of land to secure a loan. After the borrower defaulted, UPFC advertised the property for sale under s.29 of the State Financial Corporation Act, 1951 and accepted the highest bid from Pradeep Kumar Sharma, who paid the full consideration,…

The Uttar Pradesh Financial Corporation (UPFC) seized the assets of a defaulting borrower under Section 29 of the State Financial Corporation Act, 1951 and sold them at a public auction. M/s. Rana Girders Ltd., the highest bidder, purchased the land, building and plant‑machinery free from encumbrances, with a clause in…

The State Financial Corporation (SFC) initiated recovery proceedings against a debtor company under Section 29 of the State Financial Corporation Act, 1951. The company was later wound up and an official liquidator was appointed. SFC then filed a recovery citation against the guarantor, Ram Kripal Singh, under the Utta…

The Pradeshiya Industrial & Investment Corp. of U.P. (PICUP) advanced a loan to Shefali Papers Ltd., secured by mortgage and guarantee bonds executed by Kailash Nath Agrawal and others. After the company was declared sick under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), PICUP issued demand not…

The State Industrial & Investment Corporation of U.P. Ltd. issued a recovery notice under the Uttar Pradesh Public Moneys (Recovery of Dues) Act, 1972 against Pawan Kumar Jain, who was a guarantor of a loan advanced to a fourth respondent company. Jain challenged the notice, arguing that after a Central Government noti…

The appellant, A.P. State Financial Corporation, had granted loans to two companies that later went into liquidation. To recover its dues, it filed applications under Section 446(1) of the Companies Act read with Sections 29 and 46 of the State Financial Corporation Act, 1951, seeking to stay outside the winding‑up pro…

The Commissioner of Income Tax, Kerala appealed against the High Court’s order allowing Tara Agencies to claim a weighted deduction under Section 35B(IA) of the Income Tax Act for export‑related expenses. Tara Agencies purchased various grades of tea, blended them, and exported the blended product. The issue was whethe…

The appellants, guarantors of a term loan granted by the Haryana State Industrial and Infrastructure Development Corporation (HSIDC) to Khemka Ispat Ltd, faced recovery notices under the Haryana Public Moneys (Recovery of Dues) Act, 1979 and the State Financial Corporation Act, 1951 after the loan defaulted. They conte…

The appellant, Gajraj Jain, a director of Mis Katihar Flour Mills, challenged the sale of the company's flour mill assets by Bihar State Credit and Investment Corporation Ltd (BICICO) to Stichworth Exports Pvt Ltd. BICICO, as the first charge holder under the State Financial Corporation Act, 1951, had taken possession …

The State Financial Corporation (OSFC) and IPICOL financed a hotel project of MIS. MICRO HOTEL P. Ltd. (the borrower) which defaulted on loan repayments. The corporations offered One‑Time Settlement (OTS) schemes in 2006 and 2007, which the borrower failed to meet, leading to withdrawal of the offers and a demand for f…

The Industrial Promotion and Investment Corporation of Orissa (the appellant) took over a foundry unit under Section 29 of the State Financial Corporation Act, 1951 and advertised it for sale on an "as is where is" basis. The respondents offered Rs.40 lakh, paid a down‑payment of Rs.8 lakh, and took possession of the u…

The Union of India and other appellants sought to recover central excise dues from SICOM Ltd., which had defaulted on a loan secured by a mortgage under the State Financial Corporation Act, 1951. The State Financial Corporation had taken possession of the mortgaged assets and claimed a first charge over them. The appel…

The Odisha State Financial Corporation (OSFC) financed a bleaching powder unit that defaulted, leading to its possession of the unit and subsequent litigation. Respondent Vigyan Chemical Industries sued the defaulting borrower and later impleaded OSFC, claiming repayment with interest calculated under the repealed Inte…

The Supreme Court examined whether State Financial Corporations (SFCs) could exercise their statutory power under Section 29 of the State Financial Corporation Act, 1951 to sell mortgaged assets of a company that had been ordered to be wound up, without involving the Company Court. The Court held that once a winding‑up…

The State of Karnataka appealed against Shreyas Papers Pvt. Ltd., which had purchased the land, building, plant and machinery of a defaulting company after the Karnataka State Industrial Investment and Development Corporation took over those assets under the State Financial Corporation Act. The Commercial Tax Officer i…