ORDER

1. The prayer in this writ petition is for a direction to the State of Uttar Pradesh, Respondent No.1, to honour its guarantee in respect of the 14.9% redeemable bonds issued by U.P. Co-operative Spinning Mills Federation Ltd. (Respondent No. 2) and pay the Petitioner a sum of Rs. 20,32,491/- towards the principal amount of the bonds together with interest as well as overdue interest till payment.

2. The background facts are that Respondent No. 2 wished to raise a sum of Rs. 55 crores to meet the working capital requirements of its member mills. It, therefore, came out with a bonds issue through private placement. The face value of each bond was Rs. 5,000 and tenure 5 years. The bonds were to carry interest @ 14.9% per annum payable annually on 26th December of each year. The bonds were to be redeemed in three instalments at par at the end of 4th, 4½ and 5th year @ 33%, 33% and 34% respectively. It is stated that RR Financial Consultants Limited and Dara Shaw Badar Financial Services Pvt. Ltd., having their office at Delhi besides other places, were appointed as the arrangers to the issue.

3. In the brochure giving the details of the issue, the

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