Surjit Singh, Judge.: The Himachal Pradesh State Industrial Development Corporation Limited, a Company incorporated under the Companies Act 1956, has filed the present suit through its Senior Manager (Project) Shri Vinajyaka Kahol against defendants No. 1 to 4 for recovery of a sum of Rs. 1,43,49,345/-.

2. Cause of action, as disclosed in the plaint, may be summed up thus. One of the functions of the plaintiff- Corporation is to provide financial assistance to industrial units. Defendant No.1, which is a private limited company, applied to the plaintiff for grant of term loan of Rs.49.5 lacs for construction of a building, purchase of land, plant and machinery for setting up a factory of manufacturing of basic drugs at Baddi, District Solan. Term loan of Rs.45.5 lacs was sanctioned on 30.5.1992 and the remaining amount of Rs.4 lacs on 8.4.1993. Loan documents were executed by defendant No.1 through its Directors, impleaded as defendants No. 2 to 4. The documents included loan agreements and hypothecation agreements in respect of both the loans, i.e. one amounting to Rs.45.5 lacs and other amounting to Rs. 4 lacs. One set of the documents in respect of the loan of Rs.45.5 l