BIHAR STATE FINANCIAL CORPN.&ORS vs M/S.CHEMICOT INDIA P.LTD.&ORS

The Supreme Court upheld the Patna High Court's decision directing the State Financial Corporation to disburse a sanctioned loan of Rs. 15 lakhs to the respondent, a small scale industrial unit, despite the absence of a D.G.T.D. Registration Certificate. The Court found that the Corporation had waived its right to insist on this certificate by registering the loan agreement. The Court emphasized that the refusal to disburse the loan was unjustified, as the respondent had fulfilled other obligations under the loan agreement, and the requirement for the certificate was not applicable to small scale industries under the relevant provisions of the Income Tax Act, 1961.