Punjab-Haryana High Court
Hayre Regency Hotel Limited vs Tourism Financial Corporation Of India ... on 4 November, 2011
Bench: Hemant Gupta, G.S.Sandhawalia
CWP No.12119 of 2010 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
CWP No.12119 of 2010
Date of decision: 04.11.2011
Hayre Regency Hotel Limited. ....Petitioner
Vs.
Tourism Financial Corporation of India Limited and others
....
Respondents
CORAM: HON'BLE MR.JUSTICE HEMANT GUPTA
HON'BLE MR.JUSTICE G.S.SANDHAWALIA
Present: Mr.Aman Arora, Advocate for the petitioner,
Mr.Manish Jain, Advocate for respondent No.1,
Ms.Harpreet Kaur, Advocate, for respondents No.2,
Mr.I.P.Singh, Advocate for respondent No.3.
*****
HEMANT GUPTA J. (ORAL)
The petitioner has invoked the jurisdiction of this Court claiming a writ of mandamus seeking a direction to issue No Dues Certificate qua the term loan of Rs.4,50,00,000/- advanced to the petitioner vide loan agreement dated 06.10.2003 (Annexure P1).
The petitioner availed a term loan of Rs.4,50,00,000/- from respondent No.1 at the rate of 14% per annum vide loan agreement dated 06.10.2003. The said agreement contemplates that the terms and conditions of the loan shall also include the terms and conditions of the General Conditions. As per the General Conditions, the relevant clause of the agreement is as under:
CWP No.12119 of 2010 2
"Section 4.8 PREMATURE REPAYMENT The borrower shall not prepay the outstanding principal amounts of the loans in full or in part before the due dates except after the conversion right is exercised in full or has elapsed and after obtaining the prior written approval of the Lead Institution (which may be granted conditionally including inter alia on payment of premium for early redemption of the account as may be decided by Lender/Lead Institution.)"
After the said agreement, the petitioner, respondent Nos.1 and 2 entered into a pari-passu Consortium Agreement dated 09.10.2003 (Annexure P2). The respondent No.2 has advanced an amount of Rs.3,00,00,000/- at the rate of 13.50%. The said agreement has a following clause in respect of repayment of charges:
" VIII. In case borrower repays the entire loan before time by obtaining loan from other agency or financial institution then the borrower shall be liable to pay 3% of the total outstanding at relevant time as penalty and if borrower repays the loan from its own pocket the matter would be otherwise."
The petitioner entered into an agreement with respondent No.3 for re-financing its loan amount after settling the loan amounts of respondent Nos.1 & 2. The respondent No.2 issued No Dues Certificate (Annexure P4) on 23.02.2009. But, respondent No.1 claimed a sum of Rs.46,62,955/- as pre-payment charges vide letter dated 19.02.2008 (Annexure P12). The said letter reads as under:
" Please refer to your letter dated February 6, 2008 on the above subject. In this regard please note that as per Section 4.8 of Articles IV of the General Conditions applicable to assistance provided by Financial Institutions and signed by you alongwith Loan Agreement and other security documents, the borrower shall not prepay the outstanding principal amounts of the loans in full or in part before the due dates except after the conversion right is CWP No.12119 of 2010 3 exercised in full or has elapsed and after obtaining the prior written approval of the Institution.
In the light of the above, premium on pre-payment of loan has been calculated as per the Institutional norms which comes to Rs.46,62,955/-. The detailed calculations are enclosed for your reference. Accordingly, you are requested to remit the pre- payment premium of Rs. 46,62,955/- and upto-date interest to TFCI. We have communicated to your representative about the premium clause well before your depositing the amount in our account. The NOC would be provided to you subject to clearance of full dues of TFCI i.e. principal, interest and pre-payment premium."
The argument of the learned counsel for the petitioner is that in terms of the pari-passu Consortium Agreement dated 09.10.2003 (Annexure P2), the petitioner is liable to pay 3% of the total outstanding at the relevant time as penalty, whereas respondent No.1 is claiming pre-payment charges in terms of general conditions contained in Section 4.8 of the General Conditions even though the respondent is not a lead institution, the same being Punjab National Bank, respondent No.2.
Mr.Jain, learned counsel for respondent No.1 rightly conceded that since the pari-passu Consortium Agreement dated 09.10.2003 is subsequent to the loan agreement dated 06.10.2003, therefore, in terms of the Consortium agreement (Annexure P2), the respondent No.1 is entitled to 3% of the total outstanding as penalty but it is argued that such amount was payable by the petitioner in the year 2007, therefore, respondent No.1 is entitled to the said penalty amount along with interest at the documented rate.
We do not find any merit in the stand of respondent No.1. The persistent stand of respondent No.1 was that the said respondent is entitled to pre-payment charges in terms of Section 4.8 of General Conditions. Since the said respondent has never communicated its willingness to accept CWP No.12119 of 2010 4 the said penalty at the rate mentioned in Clause VIII of the pari-passu Consortium Agreement dated 09.10.2003, it cannot claim the interest on the said amount for its default in not accepting its entitlement under Clause VIII of the pari-passu Consortium Agreement dated 09.10.2003. Since it is for the first time today in the Court, Mr.Jain has communicated that respondent No.1 agrees to accept payment of 3% of the total amount outstanding at the relevant time in terms of Clause VIII of the pari-passu Consortium Agreement dated 09.10.2003, therefore, the question of interest will arise only from today.
In view of the said fact, we dispose of the present petition with direction to the petitioner to pay 3% of the total outstanding on the date of settlement as pre-payment charges, i.e., 28.09.2007 within one month. If the amount is not paid within one month, the petitioner will be liable to pay interest at the documented rate of interest. On payment of the requisite amount of penalty within the stipulated time, respondent No.1 shall issue No Dues Certificate including that of no claim against the bank guarantee submitted by petitioner.
(HEMANT GUPTA) JUDGE (G.S.SANDHAWALIA) 04.11.2011 JUDGE sailesh