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2. Brief facts of the case are that PSIDC-respondent No. 1 is a public sector undertaking owned and controlled by the State of Punjab within the meaning of Section 617 of the Companies Act, 1956 (for brevity, 'Companies Act'). It has been established on 31.1.1966 when it was registered as such with the Registrar of Companies. The whole amount invested in the PSIDC is received in the form of equity contribution from the State Government. A detailed chart disclosing the receipt of amount yearwise since 1966- 67 to 1990-91 has been furnished in the form of Annexure R-1 appended with its written statement. Therefore, it is evident that the PSIDC is fully government owned company within the meaning of Section 617 of the Companies Act. A perusal of Clause III-A of Memorandum and Articles of Association of PSIDC reveals the main objects for its establishment. Two of the objects which are closely associated with the controversy are reproduced hereunder:-

3. The main object of PSIDC is to promote industry in a planned manner and to speed up industrialisation in the State of Punjab through various schemes. Other than providing terms loans to various companies, one of the object of the PSIDC is to promote industrial and infrastructure projects in Assisted and Joint Sector by entering into Financial Collaboration Agreements for setting up projects in the joint venture. In this manner, PSIDC invests in the equity share capital of the company which is incorporated in joint sector.

22. Per contra, Mr. N.S. Boparai appearing for PSIDC has reiterated that it is fully owned Government corporation within the meaning of Section 617 of the Companies Act and is also notified under the State Financial Corporations Act, 1951 (for brevity, 'the Financial Corporations Act') for the limited purpose of recovery of its dues. He has further submitted that PSIDC has also been notified under the 1983 Act, vide notification dated 18.9.1986 (Mark 'A'). He has drawn our attention to Object III-A of the Memorandum and Articles of Association of PSIDC amongst others. An examination of Memorandum and Articles of Association show that it is fully owned Government company to promote industries in the State of Punjab through various schemes. The entire money to the corporation has been infused by the State Government as is evident from the data furnished since its inception in 1966, appended with the written statement as Annexure R-1. According to the learned counsel, the main object for which PSIDC has been established is to promote, improve, establish, execute moneys which are likely to promote and advance industrial development in Punjab.

44. In the present case, the PSIDC has invested huge sum of money with the object of promoting and improving industrial development in the State of Punjab, which is one of the object enumerated in the Memorandum and Articles of Association. Apart from the above, Clause 22(a) of the Financial Collaboration Agreement (P-1) has incorporated promises by the petitioner to repay the amount to the PSIDC. The arrangement of repayment is that the first instalment would be repaid when period of three years would expire after the date of production. The second instalment would become payable within one year of the expiry of three years. Petitioner No. 1 Rama Petrochemical Company had also undertaken to purchase the equity share holdings to the extent of the share of the PSIDC in two equal instalments on the date of expiry of third and fourth year. The Financial Collaboration Agreement has been further supplemented by Supplementary Agreement executed on 12.10.2000 (P-2). According to clause 8 of the Supplementary Agreement it has been categorically provided that in the event of failure of Rama Petrochemical Company to buy back the equity share holdings of the PSIDC then BLIP and THIP are to be jointly and severally responsible to buy back the equity shareholding of the PSIDC along with the Collaborator i.e. Rama Company at the same price and terms & conditions as mentioned in the Financial Collaboration Agreement dated 18.3.1999 (P-1). Therefore, there is no question of lacking of 'consideration' as sought to be urged by the learned counsel for the petitioners. It is, thus, clear that by virtue of clause 22 of the Financial Collaboration Agreement, Rama Company and by virtue of Supplementary Agreement BLIP and THIP along with Rama Company are liable to buy back the equity of PSIDC invested in the new venture Rama Industry. The aforesaid amount became payable as per terms of clause 22(a) of the Financial Collaboration Agreement supplemented by the Supplementary Agreement when the period of three years expired from the date of commercial production by the company. The undisputed date of commercial production is 1.7.2001 and accordingly the period of three years expired on 31.6.2004 and the amount of first instalment became payable. The second instalment also became payable on 30.6.2005 and the same is recoverable from the petitioner. In para 10 of the written statement filed by the PSIDC it has been pointed out that the petitioner has admitted the existence of outstanding dues vide letters dated 5.11.2004 and 7.1.2005. There is no mention of any proceedings under SICA Act. Accordingly, no fault can be found in the order dated 15.2.2006 (P-11) and 31.5.2006 (P-9) and consequential recovery certificate dated 14.6.2006 for recovery of Rs. 441.96 lacs (as on 31.3.2005).