In Bihar State Financial Corporation & Anr. vs. Bhushan Singh & Ors. (2025), Supreme Court's division bench of Justices Sanjay Karol and Prashant Kumar Mishra has passed a 2-page long order dated July 18, 2025 saying, "In the meanwhile, there shall be stay of operation of the impugned judgment and order dated 18.03.2025 in First Appeal Nos.268/1999 (Bihar State Financial Corporation & Anr. vs. Bhushan Singh & Ors.) & 272/1999 (Bambam Kumar & Ors. vs. Bhusan Singh & Ors.) passed by the High Court of Judicature at Patna."
In Bihar State Financial Corporation & Anr. vs. Bhushan Singh & Ors. (2025), Justice Khatim Reza of Patna High Court, upon hearing the two appeals which arose out of judgment and decree dated May 19, 1999 passed in a Title Suit of 1996 by Sub-Judge-5th, Begusarai, passed an 73-page long judgement dated March 18, 2025 vacating the stay granted vide order dated September 15, 1999 with regard to further proceeding of the Execution Case of 1999 pending in the Court of Subordinate Judge V, Begusarai.
The plaintiffs had filed the Title Suit for declaration that the intervenor/defendant did not derive any right, title, interest or have possession by virtue of auction sale dated March 18, 1996 and also that the delivery of possession was void. It was also prayed to set aside auction sale and delivery of possession with a declaration that the plaintiffs had got title and interest in the suit property, and further for declaration that defendant had no right to auction sale the property under Section 29 and 30 of the Bihar State Financial Corporation Act and also sought mandatory injunction directing the defendant Corporation to put the plaintiffs back in possession of the suit premises.
As per the case of the plaintiffs, the defendant Corporation was established under the State Financial Corporation Act, 1951 to promote industrialisation in the State of Bihar by establishing and developing industries and by getting the project of each industry completed and also by maintaining working capital of each industry through some financial banks. The case of the plaintiffs was that on January 5, 1982, the plaintiffs applied for sanction of Rs. 15,00,000/- loan for its Motel Industry at Begusarai. The Corporation wrongly and illegally estimated the total project of the industry at Rs. 12.50 lakhs and sanctioned a loan of Rs. 8.50 lakhs only on 29.05.1982 to the plaintiffs and according to the terms of the loan, promoter’s contribution i.e., of the plaintiffs was to be Rs. 2 lakhs. It was also contended that the plaintiffs deposited original title deeds of land and buildings on September 24, 1982 for creating equitable mortgage of the same in favour of defendant Corporation. On December 2, 1982, the partner of the plaintiffs executed document in favour of defendant Corporation. The defendant Corporation realised its mistake concerning sanction of the said loan and on July 12, 1984, sanctioned another loan amounting to Rs. 3.15 lakhs and both the loans were repayable in installments, last installment was being payable on January 1, 1993. It was also pleaded that even out of total sanctioned loan of Rs. 11.65 lakhs, Rs. 8.29 lakhs only was disbursed to the plaintiffs and about three lakhs rupees was adjusted towards alleged due of the defendants, on account of interest from the very beginning of the loan, as a result of which the total project of the plaintiffs could not be completed.
The case of the plaintiffs was that after service of notice under Section 29 and 30 of the Act, the matter was finally settled on November 6, 1990 in terms of order passed in C.W.J.C. No. 6104 of 1990 by the High Court.
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