Wednesday 25 July 2012

Decision invoking article 226 of Indian Constitution

Madras High Court: The Court held that the High Court while exercising its jurisdiction under Article 226 of the Constitution does not sit as an appellate authority over the acts and deeds of the Financial Corporation and seek to correct them. Further, in a matter between the Corporation and its debtor, a writ court has no say except in two situations: (a) there is a statutory violation on the part of the Corporation, or (b) where the Corporation acts unfairly i.e. unreasonably.
The court dismissed the writ petition filed by the petitioner praying to quash the impugned order of Tamil Nadu Industrial Investment Corporation Ltd. and to settle the dues of the petitioner through a one-time settlement. The court relied upon U.P. Financial Corpn. v. Gem Cap (India) (P) Ltd., (1993) 2 SCC 299 and Karnataka State Industrial Investment and Development Corpn. Ltd. v. Cavalet India Ltd., (2005) 4 SCC 456. [Vaanavil Dyeing Unit No.2 v. Tamil Nadu Industrial Investment Corporation Ltd., WP No. 1720 of 2012 decided on July 13, 2012]

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