In Brief
The Odisha State Financial Corporation appealed against a High Court order upholding execution proceedings to recover Rs. 8.89 crores against a decree for Rs. 90,400 passed in 2001. The Supreme Court allowed the appeal, holding the decree was a nullity on three grounds: (1) no notice under Section 80 CPC was issued before suing the State instrumentality, violating mandatory jurisdiction requirements; (2) the trial court wrongly applied the Interest on Delayed Payments Act, 1993 to a 1985 transaction that predated the Act's enforcement; and (3) the corporation, holding assets in trust under the SFC Act, could not be liable for the original borrower's debts beyond amounts in its hands. The Court directed refund of Rs. 2.92 crores already received by the respondent, and criticized the corporation's poor litigation conduct while emphasizing courts' duty to protect public resources from unjust depletion.
The lawyer headnote and full judgment text are available to registered users.