Hon'ble Judges/Coram:
Kuldip Singh and B.P. Jeevan Reddy

JUDGMENT

B.P. Jeevan Reddy, J.

1. The appeal is directed against the judgment and order of a Division Bench of the Allahabad High Court allowing Writ Petition 544 of 1986 with certain directions. The first respondent-Gem Cap (India) Pvt. Ltd. is a private limited company. Second respondent is its Managing Director. At the request of the respondents, the appellant, U.P. Financial Corporation, sanctioned a loan of Rs. 29.70 lakhs. The terms and conditions of loan and the manner of repayment of the loan are contained in the agreement and hypothecation deeds executed in 1981. Suffice it to note that loan was repayable in certain specified installments alongwith interest. A sum of Rs. 26,29,578/- was released to the respondents. The first respondent went into production in December 1982. Within a few months i.e., in March 1983 its operations ceased. By an order dated February 21, 1984 the first respondent-unit was declared a sick unit. The respondents did not make any repayment as stipulated in the agreement and hypothecation deeds whereupon the Corporation took steps to take over the unit under Section 29 of the State Financial Corporations Act, '1951 for recovering an amount of Rs. 38.57 lakhs due to it by that date - vide notice dated July 10, 1984. Then started a series of Writ Petitions by the respondents, all designed to stall the appellant from taking over and/or recovering the amount due to it. It is not necessary to trace the course of the several writ petitions except the one from which the present appeal arises.

2. Writ Petition 544 of 1986 was filed questioning the taking over of the first respondent-unit by the appellant-Corporation under Section 29 of the Act and for a direction to the appellant to reschedule the repayment of debt in accordance with the earlier orders of the High Court. The writ petition has been allowed with the following directions:

(1) Having regard to the discussion made above we direct the U.P. Financial Corporation:

(1) to consider expeditiously the resolution dated 29.1.1986 aimed at the rehabilitation of the industrial concern in question in the light of the feasibility report of the U.P. Industrial Consultants Ltd. the Financial aid forthcoming from the Bank of Baroda and other financial institutions and the reports of the managing director of the corporation dated 18.12.85 and 29.1.1986;

(2) to restore back possession of the unit to the petition No. 1 forthwith.

The notice dated 11.6.1986 issued by the