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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ANUJA PRABHUDESSAI, J.
GAIOMURD PEDDER SON OF NADIR PEDDER - Appellant
Vs.
SICOM LIMITED - Respondent
Appeal From Order No. 622 of 2009, Civil Application No. 720 of 2009
Decided On : 26-02-2019
Constitution of India, 1950 - Articles 136 and 137 - Code of Civil Procedure, 1908 – Sections 2 and 11 - State Financial Corporation Act, 1951 - Sections 31, 32, 29 and 46 - Indian Contract Act - Sections 133, 135, 139 and 141 - Transfer of Property Act - Sections 69, 29 and 32 - Sick Industrial Companies Act, 1985 - Sections 15 and 22 - SARFAESI Act - Section 13 - Loan Agreement And Deed Of Hypothecation - Appellants herein have challenged judgment in miscellaneous civil petition - By impugned judgment learned ad-hoc district judge has granted application filed by respondent and thus directed appellants/guarantors to pay jointly and severally a sum along with interest specified in loan agreement till date of payment - Brief facts necessary to decide this appeal are as under - Respondent is a deemed state financial corporation within meaning - Respondent is a limited company registered having its registered office at park south main road - Appellants are directors and shareholders of respondent - Respondent corporation had sanctioned and disbursed a term loan to respondent company on terms and conditions mentioned in sanction letter - Respondent company executed loan agreement and deed of hypothecation both - Respondent company mortgaged and hypothecated its immovable and movable properties/assets furniture fixture etc - Respondent company agreed to repay loan in quarterly installments commencing at end of months from date of disbursement of loan - Held, Therefore reasons which persuaded this court to give same meaning to two different words in a statute cannot be applied here - In none of decisions cited before us has word suit been defined in a context similar to that of sica - Decisions cited by appellants do not relate to same or similar statutes nor do they seek to define word suit in contradistinction to word proceeding - Decision was given in context of partition act where a distinction between filing a suit for partition and suing for partition has been drawn - It was held that suing for partition was a wider phrase than phrase suit for partition without defining what a suit meant - Decision in assistant collector of central excise v tobacco company related to construction of bar of suit - Section as it stood at relevant time provided that no suit prosecution or other legal proceedings shall be instituted for anything done or ordered to be done - There can be no doubt that suit or prosecution are those judicial or legal proceedings which are lodged in a court of law and not before any executive authority even if a statutory one - In its comprehensive sense word suit is understood to apply to any proceeding in a court of justice by which an individual pursues that remedy which law affords - Modes of proceedings may be various but that if a right is litigated between parties in a court of justice proceeding by which decision of court is sought may be a suit - Appeal Is Dismissed.
Anuja Prabhudessai, J.
1. The Appellants herein have challenged the judgment dated 19th September, 2007 in Miscellaneous Civil Petition No.859 of 2006. By the impugned judgment the learned Ad-hoc District Judge, Pune has granted the Application filed by the Respondent No.1 under Section 31(1) (aa) of the State Financial Corporation Act, 1951 (for short 'the SFC Act) and thus directed the Appellants/Guarantors to pay jointly and severally a sum of Rs.10,92,63,025/-alongwith interest specified in the loan agreement w.e.f. 1st October, 2006 till the date of payment.
2. The brief facts necessary to decide this appeal are as under:-
The Respondent No.1 is a deemed State Financial Corporation within the meaning of Section 46 of the State Financial Corporation Act, 1951. The Respondent No.2 is a limited Company registered under the provisions of the Companies Act, having its registered office at Koregaon Park, South Main Road, Pune. The Appellants are the directors and shareholders of the Respondent No. 2- Company.
3. The Respondent No.1-Corporation had sanctioned and disbursed a term loan of Rs.650,000,000/-to the Respondent No.2-Company on the terms and conditions mentioned in the sanction letter dated 7th December, 1999. The Respondent No.2-Company executed the loan agreement and deed of hypothecation both dated 20-04-2000. The Respondent No.2-Company mortgaged and hypothecated its immovable and movable properties/assets, furniture, fixture etc. at plot No.297/1 and plot No.297/2, Nandur Industrial area village Nandur, Taluka-Daund, District-Pune. The Respondent No.2-Company agreed to repay the loan in 21 quarterly installments commencing at the end of 24 months from the date of disbursement of the loan.
4. The Appellants executed a separate Deed of Personal Guarantee dated 20th April, 2000 in favour of the Respondent No.1- Corporation whereunder they secured the financial assistance extended to the Respondent No.2-Company. They guaranteed that in the event of default being committed by the Respondent No.2-Company in payment of the loan, they would jointly and severally repay the amount demanded by the Respondent No.1-Corporation.
5. The Respondent No.2-Company did not repay the installments of loan as per the schedule of repayment agreed to in the loan agreement dated 20-04-2000. At the request of the Respondent No.2-Company, the Respondent No.1-Corporation re-scheduled the repayment of the outstanding loan on the terms and stipulation in the letters dated 02-8-2001 and 10-09-2001. The Respondent No.2 -Company also executed modification to loan agreement dated 10th September, 2001. The Respondent No.2-Company failed to repay the loan installments as per re-scheduled installments. The Respondent No.1-Corporation therefore issued a demand notice to the Respondent No.2-Company demanding the payment of defaulted amount.
6. The Respondent No.2-Company, despite opportunities given, failed and neglected to clear the outstanding dues. The Respondent No.1-Corporation therefore, vide notice dated 10th October, 2002 recalled the entire dues under the term loan and called upon the Respondent No.2-Company to repay the entire outstanding amount together with interest. The copy of the said notice was also sent to the Appellants for information and necessary action. In response to the recall notice, the Respondent No.2-Company vide its letter dated 24-11-2002 once again requested for some more time stating that they would come forward with a concrete proposal for adjustment of the dues. The Respondent No.2-Company continued to make default in repayment of loan. Hence, by notice dated 27th October, 2004 the Respondent No.1-Corporation informed the Appellants about the default committed by the Respondent No.2- Company in repayment of the loan and invoked the personal guarantee executed by the Appellants. The Appellants were informed that as on 25th October, 2004 an amount of Rs.11,88,36,529/- was due and payable and they were called upon to mak
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