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2018 Supreme(P&H) 4081
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH
Ajay Kumar Mittal, Avneesh Jhingan, JJ.
Neelkanth Gramudyog Mandal (regd.), Kurukshetra - Appellant
Versus
State Of Haryana - Respondent
CWP No. 28364 of 2017 (O&M)
Decided On : 11-09-2018
Rujhan Dhawan, Advocate for the petitioner, for the Petitioner; Ayuwan Singh, AAG, Haryana, for the Respondent; Samarth Sagar, Advocate for the respondents, for the Respondent
The Clean Hands Doctrine and the duty of full disclosure in approaching the court for equitable relief were central to the court's decision.
Headnote:
Mortgage - Recovery of Loan - Societies Registration Act, 1860 - Land Revenue Act - C.B.C. Scheme - Specific Performance - Clean Hands Doctrine - Article 226 of the Constitution of India
Fact of the Case:
The petitioner, a Society registered under the Societies Registration Act, 1860, availed a credit facility from Haryana Khadi and Village Industries Board. After defaulting in loan repayment, the Board initiated recovery proceedings and attached the mortgaged property. The petitioner filed a writ petition seeking quashing of the recovery proceedings.
Finding of the Court:
The court found that the petitioner had defaulted in loan repayment and engaged in contemptuous conduct by attempting to dispose of the mortgaged property. The court also noted that the petitioner did not approach the court with clean hands, as the facts regarding the agreement to sell and the judgment and decree in a related suit were not disclosed in the writ petition.
Issues: Default in loan repayment, attempt to dispose of mortgaged property, non-disclosure of material facts in the writ petition, contemptuous conduct, interference in writ jurisdiction under Article 226 of the Constitution of India.
Ratio Decidendi: The court held that the petitioner's conduct was contemptuous and that no case was made out for interference in the exercise of writ jurisdiction under Article 226 of the Constitution of India.
Final Decision: The writ petition was dismissed.
JUDGMENT
Avneesh Jhingan, J. - The present writ petition has been filed seeking quashing of order dated 24.04.2017 (Annexure P-8) passed by Incharge, Haryana Khadi and Village Industry Board, Kurukshetra.
2. The petitioner is a Society registered under the Societies Registration Act, 1860. The petition has been filed through Kulbir Singh, Cashier of the Society. State of Haryana; Chief Executive Haryana Khadi and Village Industry Board, Manimajra; Incharge Haryana Khadi and Village Industry Board, Kurukshetra and the Collector, Kurukshetra have been arrayed as respondents No.1 to 4 respectively in the writ petition.
3. The petitioner availed a credit facility from Haryana Khadi and Village Industries Board. A loan of Rs. 21 lakhs was sanctioned, it included Rs. 17.22 lakhs as loan and Rs. 3.84 lakhs as margin money/subsidy. In order to secure the loan, petitioner mortgaged its agricultural land in Village Khandauli and Bhukhri. The petitioner allegedly suffered financial crisis and defaulted in the repayment of loan. The petitioner approached the respondent-board for taking a lenient view with a request that auction proceedings be not initiated to recover the loan. Thereafter, the petitioner approached this Court by filing CWP No. 13513 of 2003. The writ petition was disposed of with directions to the respondent-board to decide the representation within six weeks. The representation was rejected by the Board and it was noticed that petitioner had mis-utilized a sum of Rs. 4,50,000/-.
4. In the year 2005 it is alleged that the petitioner applied for a no objection certificate from respondent No.3. A similar request was made in the year 2012. The petitioner was offered a settlement proposal vide letter dated 11.08.2014. It was offered that the penal interest will be waived off, if the unit deposits one time principal amount and simple interest within three months of the implementation of Consortium Bank Credit (C.B.C.) Scheme. No payment was made, respondent No.3 issued a notice dated 24.04.2017 asking the petitioner to deposit the outstanding dues as on 31.03.2017 of Rs. 25,22,903/-, failing the same would be recovered as arrears under the Land Revenue Act. On failure of the petitioner to make payment, the respondent initiated recovery proceedings and attached the mortgaged property on 29.11.2017.
5. Being aggrieved of the attachment of the mortgaged property, the present writ petition has been filed.
6. On 13.12.2017 learned counsel for the petitioner submitted that the unit of the petitioner is lying closed since 2001. The petitioner is not liable to pay any penal interest in view of the letter dated 11.08.2014. He argued that the Board has not given credit of the amount deposited by the petitioner. He further stated that the petitioner is ready and willing to pay Rs. 7.5 lakhs within a period of one week and, thereafter, would settle the account with the Board.
7. Notice of motion was issued and it was ordered that the property of the petitioner may not be put to sale, subject to petitioner's depositing Rs. 7.5 lakhs within a period of one week.
8. We have heard learned counsel for the parties and perused the record.
9. The contention that petitioner is not liable to pay penal interest is not well founded. Letter dated 11.08.2014 was a proposal for settlement and the condition was that if principal amount and simple interest is paid within three months, penal interest would be waived. The petitioner did not comply with the term of payment, hence, benefit cannot be availed under the settlement proposal.
10. In the written statement filed by the respondents, the mortgage deed of the property has been placed on record. From the perusal of the mortgage deed it is evident that as per Clause-7 the mortgaged property could not be sold without the previous consent of the Khadi Board.
Clause (7) of the mortgage deed is reproduced as under:
"(7) The mortgagor hereby further covenants with the mortgagee Board that he will not alienate t
