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2001 Supreme(HP) 111
High Court Of Himachal Pradesh
R.L.KHURANA
H.P.STATE INDUSTRIAL DEVELOPMENT CORPORATION - Appellant
Versus
FORM TECHNIKS (INDIA) PVT.LTD. - Respondent
Civil Suit No. 53 of 1996
Decided On : 06/07/2001
Mr. K.C. Rana, Advocate, for the Plaintiff; Mr. R.L. Sood, Advocate with Mr. S. Kukreja, Advocate, for the Defendants.
The plaintiff-corporation had the right to recover the outstanding amount from the defendants and was not estopped from filing the suit.
Headnote:
Companies Act - Financial Assistance - State Financial Corporations Act, 1951 - Section 29
Fact of the Case:
Defendant No. 1, a private limited company, received financial assistance from the plaintiff-corporation for setting up an industrial unit. After defaulting on loan repayments, the plaintiff-corporation took over the unit and sold it to recover the outstanding amount. The defendants contested the suit, claiming that the plaintiff-corporation was estopped from filing the suit and that the suit was not maintainable.
Finding of the Court:
The court found that the suit was filed by a competent person and was maintainable. The plaintiff-corporation was not estopped from recovering the balance amount after the sale of the unit. The court also held that the suit was within the limitation period and that the plaintiff was entitled to the suit amount from the defendants jointly and severally.
Issues: Competency of the person filing the suit, maintainability of the suit, estoppel by the plaintiff-corporation, suit's limitation, and non-filing of original documents.
Ratio Decidendi: The plaintiff-corporation had the right to file the suit, was not estopped from recovering the balance amount, and the suit was maintainable against the defendants. The suit was within the limitation period, and the plaintiff was entitled to the suit amount from the defendants jointly and severally.
Final Decision: The court passed a decree in favor of the plaintiff-corporation for the suit amount with costs and interest at the rate of 12% per annum.
R.L. Khurana, J.—Defendant No. 1, Messrs Form Techniks (India) Private Limited, is a private limited company duly incorporated under the provisions of the Companies Act, 1956. Defendants No. 2 and 3 are the Directors thereof. For the purpose of setting up its industrial unit at Baddi in Tehsil Nalagarh of District Solan, it was granted financial assistance in the form of loans by the plaintiff-corporation as under:— (i) Term loan of Rs. 37,02,000. (ii) Soft loan (seed capital) of Rs. 4,00,000.
2. The loans were sanctioned respectively on 12.12.1984 and 31.5.1985. The loans carried interest respectively at the rate of 12.5% and 1% per annum. The necessary documents in respect of the loans were executed respectively on 10.10.1985 and 1.5.1986. The loans were repayable alongwith interest in half yearly instalments. The first instalment in respect of the term loan was payable by 10.1.1989 and the last instalment was payable by 10.7.1993. Similarly, insofar as soft loan is concerned, the first instalment was payable by 10.12.1988 and the last instalment was payable by 10.6.1994. Defendants No. 2 and 3 also furnished their personal guarantee for the repayment of the two loans. Since the defendants, after having availed the loans, failed to repay the same as per the agreed terms, the entire loans amount was recalled and the defendants were called upon to repay the same. They failed to do so. The plaintiff-corporation, therefore, acting under Section 29 of the State Financial Corporations Act, 1951, took over the unit of the defendant No. 1 on 15.7.1994 and thereafter sold the same to Messrs Shiva Metal Forming (India) Limited, for a total consideration of Rs. 46,00,000 on 9.10.1995 with the consent of defendant No. 2.
3. The defendant No. 1 had also taken financial assistance from proforma defendant No. 4 Himachal Pradesh Financial Corporation and a pari-passu charge in respect of its assets was created in favour of the plaintiff Corporation and the proforma defendant No. 4. Resultantly, the sale proceeds of Rs. 46,00,000 received from the sale of the assets of defendant No.1 were shared by the plaintiff Corporation and defendant No. 4 as under :— (a) Plaintiff Corporation Rs. 27, 88,923 and (b) Defendant No. 4, H.R Financial Corporation, Rs. 18, 11,077.
4. After adjusting the above said amount of Rs. 27,88,923 against the amount outstanding from the defendants, a sum of Rs. 1,00,25,113 was still due from the defendants. They were called upon to pay the amount due. Defendant No. 2 submitted a proposal to pay the outstanding amount by calculating the element of interest at the rate of 9% per annum. He offered to repay such amount in instalments extending to a period of ten years. The proposal submitted by defendant No. 2 was considered by the plaintiff Corporation in its Board Meeting on 30.9.1995. It was decided that defendants may pay the outstanding amount within five years. Interest was decided to be charged at the simple rate of 12-1/ 2% per annum. In such way, interest to the extent of Rs. 47, 18,907 was written off and the defendants were called to pay the balance amount of Rs. 53,06,206 within five years in half yearly instalments alongwith interest at the simple rate of 12-1/2% per annum. The defendants failed to pay the amount inspite of notice. Hence the present suit for the recovery of Rs. 53, 06,206.
5. The suit is being resisted and contested by defendant Nos. 2 and 3. Though two separate written statements have been filed by the defendants No. 2 and 3, the defence taken by them is one and the same. The defendants admitted the loans. It was pleaded that the entire amount of the loans sanctioned was not disbursed in their favour. It was further pleaded that they were made to sign blank proformae of the documents pertaining to the loans and that such blanks have been filled in behind their back and without their knowledge and consent. The defendants further averred that the plaintiff took over the unit under Section 2
