PSIDC has not only been pulled up for its act, but also directed to pay back the entire amount due towards the company, including the interest which PSIDC has charged Mehra Biotech over a period of 12 years.

Mehra Biotech, a local company had taken a loan of about Rs 1.37 crore from PSIDC in 1995. Due to certain reasons, Mehra Biotech ran into losses and could not pay back the loan amount within the stipulated period of time. PSIDC, being the company’s promoter and creditor, eventually took over the company’s plant and the machinery installed there.

In June 1996, to recover its dues, PSIDC sold Mehra Biotech’s machinery and plant, from which they earned about Rs 1.17 crore. The balance payment was yet to be recovered, for which the PSIDC even sold the company’s land, from where they earned about Rs 70 lakh more. Rather than paying the company the excess amount back, PSIDC started charging interest on default both from the borrower (Mehra Biotech Limited) and the company to which they had sold the land.