- 1 - HC-KAR NC: 2025:KHC:35752 WP No. 54568 of 2017 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE R. NATARAJ WRIT PETITION NO. 54568 OF 2017 (GM-KSFC) BETWEEN: CHEMSOLAR ENERGY SYSTEM PVT LTD A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 HAVING ITS OFFICE NO.47, 8TH MAIN ROAD MALLESWARAM, BANGALORE-560055 REPRESENTED BY ITS DIRECTOR MR.VIMAL KUMAR AGGARWAL …PETITIONER (BY SMT. G.K.BHAVANA, ADVOCATE FOR SRI. PURUSHOTHAM R., ADVOCATE) AND: KARNATAKA STATE FINANCIAL CORPORATION NO.1/1, THIMMAIAH ROAD, BANGALORE-560052 BY ITS MANAGING DIRECTOR …RESPONDENT (BY SRI. BIPIN HEGDE, ADVOCATE) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT THE RESPONDENT CORPORATION TO REFUND RS.50.00 LAKHS TO THE PETITIONER ALONG WITH 21% INTEREST PER ANNUM FROM THE DATE OF DUE TILL ACTUAL PAYMENT TO THE PETITIONER. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE R. NATARAJ Digitally signed by SUMA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:35752 WP No. 54568 of 2017 ORAL ORDER The petitioner has sought for a writ in the nature of mandamus to direct the respondent to refund a sum of Rs.50,00,000/- along with interest at the rate of 21% per annum from the date it fell due till the date of payment. 2. (i) The petitioner claims that it is a company incorporated under the Companies Act, 1956. It had raised a term loan from the respondent on the security of the plant and machinery. Since the petitioner defaulted, the respondent initiated steps under Section 29 of the State Financial Corporations Act, 1951 (henceforth referred to as 'SFC Act, 1951' for short), seized and brought the entire assets of the petitioner for sale. (ii) The petitioner procured a purchaser who was willing to purchase the plant and machinery at a sum of Rs.50,00,000/-. A negotiating committee constituted by the respondent accepted the offer of the said buyer. Though the buyer accepted the terms and conditions, he did not pay the amount but sought extension of time to pay the amount. The request of the buyer was therefore declined and the EMD - 3 - HC-KAR NC: 2025:KHC:35752 WP No. 54568 of 2017 deposited by him was forfeited. At that stage, the petitioner submitted a letter dated 31.03.2005 identifying another buyer who was willing to purchase the plant and machinery. (iii) The Executive Director of the respondent corporation accepted the proposal of the petitioner in terms of which, the purchaser paid a sum of Rs.27,60,000/- and the balance sum of Rs.22,40,000/- was paid on 04.06.2005. The sale proposal was cleared by the respondent, but later the managing director of the respondent cancelled his communication vide letter dated 26.08.2005. (iv) The purchaser then filed WP No.20360/2005 before this Court contending that a sum of Rs.50,00,000/- was paid as on 04.06.2005 and therefore, he sought for a direction to the respondent corporation to execute and convey the property sold. The writ petition was dismissed in terms of an order dated 27.03.2008 and thereafter, a writ appeal was filed in W.A. No.679/2008, which was allowed. The petitioner and the respondent filed Civil Appeal No.9594/2010, which also was dismissed. In the meanwhile, the petitioner claimed that he had paid a sum of Rs.24,24,000/- to the respondent towards the - 4 - HC-KAR NC: 2025:KHC:35752 WP No. 54568 of 2017 dues. The petitioner therefore contends that the respondent had in all possession a sum of Rs.74,24,000/-, while the dues as on 28.05.2005 was only a sum of Rs.26,96,326/-. The petitioner therefore contends that the respondent was in possession of Rs.50,00,000/- in excess and that the respondent was bound to repay the same. Since the respondent failed to repay the said amount, the petitioner is before this Court seeking for a direction. 3. The petition is opposed by the respondent, who has filed a detailed statement of objection inter alia contending that the issue regarding the excess amount lying with the respondent was placed before the Executive Committee, which held a meeting on 10.01.2017 and it was deliberated and agreed to refund a sum of Rs.32,50,909/- in the following manner: Particulars Amount(Rs.) Sale proceeds received on 28.05.2005 27,60,000.00 Dues position as on 28.05.2005 (-) 26,96,326.16 Surplus available 63,673.84 Sale proceeds received on 15.06.2005 22,40,000.00 Repayment received from the company on 24,24,000.00 - 5 - HC-KAR NC: 2025:KHC:35752 WP No. 54568 of 2017 31.3.2008 Total 47,27,673.84 Subsequent other debits (-) 14,76,764.00 Total surplus refundable to company 32,50,909.84 4. It is contended that it was decided in the said meeting that the petitioner shall furnish a no-objection certificate from the State Bank of Mysore, which had a second charge on the assets of the petitioner in view of working capital and bank guarantee facility availed by it, a no-objection certificate from the Commercial Tax Department that there are no arrears of tax. The respondent contends that the petitioner did not produce the NOCs. On the contrary, the petitioner sent a notice through its advocate on 24.04.2017, which was suitably replied to on 06.06.2017. The respondent therefore contends that the petitioner is not entitled to a sum of Rs.50,00,000/- as claimed in the writ petition. The learned counsel for the respondent reiterated the above submission. 5. When this petition was taken up for final disposal, the learned counsel for the respondent submitted that the respondent has taken a policy decision to refund a sum of Rs.32,50,909.84Ps. along with interest at the rate of 7% per - 6 - HC-KAR NC: 2025:KHC:35752 WP No. 54568 of 2017 annum from 28.05.2005. Learned counsel for the respondent, however, submits that a sum of Rs.14,76,764/- is appropriated towards other debits and therefore, what the respondent is liable to refund is a sum of Rs.32,50,909.84Ps. along with Rs.14,76,764/-. Learned counsel for the petitioner submitted that the petitioner would accept the said amount subject to the petitioner being reserved the right to challenge the debit of Rs.14,76,764/-. In view of the above, the writ petition is disposed off on the following terms: The petitioner is directed to accept the Cheque bearing No.732825 dated 06.09.2025 for Rs.72,51,259/- drawn on the Canara Bank, K.S.F.C Complex, Bengaluru, towards the principal of Rs.32,50,909.84Ps. and the interest accrued thereon. It is, however, open for the petitioner to challenge the debit of a sum of Rs.14,76,764/-, which is debited by the respondent from the account of the petitioner under various heads. The petitioner may file - 7 - HC-KAR NC: 2025:KHC:35752 WP No. 54568 of 2017 appropriate representation before the respondent seeking information from the respondent about the debit so made and the respondent shall furnish information about the same within a period of one month from the date of receiving a request from the petitioner. Sd/- (R. NATARAJ) JUDGE BKN-para Nos.1 to 4 SMA-from para No.5 till end List No.: 1 Sl No.: 37