Himachal Pradesh High Court
The Himachal Pradesh State Industrial ... vs M/S Himachal Air Products (P) Ltd And ... on 13 August, 2019
Author: Sureshwar Thakur
Bench: Sureshwar Thakur
IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA .
Civil Suit No. 26 of 2005 Reserved On : 24.7.2019 Decided on : 13.8.2019 The Himachal Pradesh State Industrial Development Corporation Limited .. ... Plaintiff.
Versus M/s Himachal Air Products (P) Ltd and others.
....Respondents.
Coram:
The Hon'ble Mr. Justice Sureshwar Thakur, Judge. Whether approved for reporting?1 For the Plaintiff: Mr. Balwant Kukreja, Advocate.
For the Defendants: Mr. Suneet Goel, Advocate, for defendants No. 1 to 3 and 5.
Mr. Dinesh Kumar Sharma, and, Mr. Y.Paul, Advocate, for defendant No.6.
Defendants No. 4,7 and 8 exparte.
Sureshwar Thakur, Judge Through the instant Civil Suit, the plaintiff seeks rendition, of, a decree, hence, for recovery from the defendants, of, Rs.1,41,82,110.55 alongwith future interest.1
Whether reporters of the local papers may be allowed to see the judgment?::: Downloaded on - 29/09/2019 02:03:24 :::HCHP
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2. The plaintiff casts averments in the plaint qua it .
being a company incorporated, under, the Companies Act, 1956, and, its holding its registered office at New Himrus Building, Cart Road, Shimla 171001 (H.P), and, Mr. P.K Bali, Manager Project (legal) of the corporation, being duly authorized by the Managing Director of the plaintiff, through, resolution No. 12 of 18.6.1997, to, sign, verify and institute suits on behalf of the plaintiff company, and, to appoint advocate etc. for prosecuting suits etc.
3. Further thereonwards, it is averred in the plaint, that, defendant No.1 applied for term loan of Rs.60.00 lacs on 11.7.1981, for, the construction of factory building, purchase of land and plant and machinery and other assets for setting up an industrial unit for the manufacture of oxygen/nitrogen gas at Nalagarh, District Solan in the State of Himachal Pradesh.
On 14.1.1982, defendant No.1 was sanctioned a term loan of Rs. 60.00 lacs. The interest agreed to be paid by defendant No.1 on loan amount was @ 4.5% per annum over the IDBI ::: Downloaded on - 29/09/2019 02:03:24 :::HCHP ...3...
refinance rate of 9% with a rebate of 1% per annum for prompt .
payment of principal and interest on due date subject to minimum of 12.5% per annum with half yearly rests. For securing the repayment of the said loan and interest thereon, defendant No.1 through its Directors i.e defendants No. 2 to 4, executed a promissory note, loan agreement on 30.8.1985 with respect to term loan of Rs.60.00 lacs, and, Hypothecation Agreement regarding Land, Building, Plant and Machinery and other asset was also executed on 30.8.1982. Apart from this, equitable mortgage was created by deposit of title deeds of the properties of the industrial concern of defendant No.1 in favour of the plaintiff on 30.8.1982 with proforma defendant No. 7, who was cofinancer with the plaintiff. The defendants were also provided term loan by defendant No. 8 and had pari passu charge with the plaintiff and proforma defendant No.7.
Agreement for paripassu charge was entered on 12.2.1987.
4. It is also averred in the plaint that defendants No. 2 to 5 stood guarantee to defendant No.1, and, consequently ::: Downloaded on - 29/09/2019 02:03:24 :::HCHP ...4...
Deed of Guarantee was executed on 30.8.1982. The loan was .
also guaranteed by late Shri Y.D Sharma, who is survived by his son, Shri Deepeshwar Sharma, defendant No. 6 herein, and, right to sue survives against him, being a legal heir of late Sh. Y.D Sharma. Defendants No. 2 to 6 being guarantors are liable to pay the outstanding loan amount alongwith interest to the plaintiff. The loan was also guaranteed by late Shri M.L Sethi, who is survived by his son, wife and two daughters i.e defendant No.3 (a) to (d), and right to sue survive against them being the legal heirs. The liabilites of defendant No.2, 3 (a) to (d), 4,5 and 6 is joint and several with defendant No.1. Date of the agreement and hypothecation deed is 30.8.1982. Defendant No. 3 (a) to (d), and, defendant No.6 are also liable to pay the suit amount. Name of mortgagee/hypothecatee is HP State Industrial Development Corporation Limited, Shimla (plaintiff). Name of the mortgagor/hypothecator is M/s Himachal Air Products (P) Ltd., Nalagarh, District Solan, H.P, and the sum assured is ::: Downloaded on - 29/09/2019 02:03:24 :::HCHP ...5...
Rs.60.00 lacs and interest thereon. Rate of interest was 4.5% .
above IDBI refinance rate of 9% with a rebate of 1% for timely payment subject to minimum of 12.5% p.a with half yearly rests. Land, Building, plant and Machinery and other assets are property mortgaged/hypothecated, and, deed of guarantee was of 30.8.1982.
5. to The plaintiff casts further averments in the plaint that as per loan documents, the loan alongwith agreed interest was to be paid in half yearly installments, commencing from 10.6.1984, for, loan of Rs. 60.00 lacs, and, the last installment was payable on or before 10.6.1989. The repayment of loan was averred to be rescheduled on 9.2.1985 and 20.4.1986, and, as per that, the loan was allowed to be repaid in half yearly installments commencing from 10.12.1987 and last installment was repayable on 10.6.1991. The defendants also failed to pay the installments of the principal amount and interest thereon in accordance with the repayment schedule.
Defendant No.1 defaulted in the repayment of dues with the ::: Downloaded on - 29/09/2019 02:03:24 :::HCHP ...6...
plaintiff and also with proforma defendant No.7, as such, the .
hypothecated/mortgaged assets of industrial concern of defendant No.1 were taken over on 9.3.1988 by proforma defendant No.7 under the provision of Section 29 of the State Financial Corporation Act, 1951. The defendants preferred a Civil Writ Petition bearing number 309 of 1988 before this Court, the afore petition was dismissed, and, a Special Leave Petition arising therefrom, preferred before the Hon'ble Apex Court, also stood dismissed. During the intervening period, the defendants also filed reference before the Board for Industrial and Financial Reconstruction Under Sick Industrial Companies (Special Provisions) Act, 1985, and, also filed appeal before Appellate Authority for Industrial and Financial reconstruction, which was dismissed on 3.12.1990. In compliance to the directions rendered by the Hon'ble Apex Court, the sale of the industrial Unit of the defendant was re advertised, by the Himachal Pradesh Financial Corporation.
The defendants thereafter submitted proposal to restart the ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...7...
factory and also paid Rs. 7.00 lacs. On receipt of payment, .
and, in view of proposal to revive the unit, the possession of assets was restored in December, 1993 to the defendants. The defendants continued to operate the plant, but, neither remitted payments nor submitted any plan for revival of the unit inspite of various opportunities being provided to them.
The plaintiff finally on 31.1.1998 decided to take over the unit under Section 29 of the State Financial Corporations Act, 1951, and, possession of assets was taken over on 17.2.1998.
The possession of assets was also averred to be delivered to the plaintiff by defendant No.2, Managing Director of defendant No.1. The taken over assets were evaluated, and, thereafter put to auction number of times and in January, 1999 offer of Rs. 50.00 lacs was received. The said offer was averred to be accepted by the plaintiff. The purchaser did not deposit the amount and earnest money of Rs. 3.00 lacs was forfeited which has been credited to the account of defendant No.1.
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6. It is further averred in the plaint that the assets i.e .
land, building, plant, Machinery and other misc assets of Industrial concern of defendant No.1 were again put to auction, and, were sold on 7.7.2004, for, a sum of Rs. 79.00 lacs. These sale proceeds of Rs. 79.00 lacs were shared between plaintiff, proforma defendant No. 7 and Excise and Taxation Department, H.P Government, as under:
(a) H.P Financial Corporation Rs.24,14,830.00
(b) Excise & Taxation Deptt. Rs, 2,20,000.00 H.P Govt.
(c) HPSIDC Ltd. Rs. 52,65,170.00
Rs. 79,00,000.00
It is also averred in the plaint that proforma defendant No. 7 was cofinancer with the plaintiff and had pariassu charge on the assets of defendant No.1. The Excise and Taxation Department had also to recover sales tax dues from defendant No.1 and sales tax being first charge, were entitled to its dues from the sale proceeds. Defendant No. 8 was not given its share as its loan account stands settled by ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...9...
defendants when their case before Debt Recovery Tribunal. It .
is further averred that the total outstanding amount was Rs.10,95,12,287/ and after adjustment of sale proceeds between the plaintiff, proforma defendant No.7 and Excise and Taxation Department, the liability of defendants was calculated on simple interest basis and Rs.9,07,39,454/ on account of penal/compound interest was r a sum of waived off. It is further averred that there was shortfall to the tune of Rs.1,45,28,263, and, for the payment of which defendant No.2 to 6, being guarantors are liable to pay, to, the plaintiff. Defendants No. 2 to 6 were asked to payment the balance amount alongwith the future interest from 10.12.2004 till its final payment vide notice dated 19.1.2005 within one month from the receipt of notice, however, the said period has expired, and, the afore defendants failed to pay the afore sum.
It is also averred that after issuance of notice on 19.1.2005, the accounts of defendant No.1 were reconciled and a sum of Rs. 3 lacs on account of forfeiture of earnest money and ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...10...
Rs.46,152.00 lying credited in Misc receipts were credited to .
the account of defendant No.1, and, balance amount now recovered is Rs. 1,41,82,110.55 (Rs. 37,54,263/ on account of principal and Rs. 1,04,27,847 on account of interest). It is also averred that liability of the defendants is joint and several to pay the suit amount.
Besides this, the defendants are also liable to pay interest at the agreed rate of interest @ 12.5% per annum on Rs. 1,41,82,110.55 with half yearly rests and other misc. expenses from 10.12.2004 till realization of entire amount. It is also averred that since the transaction between the plaintiff and the defendants is of commercial nature, hence the plaintiff is entitled to pendente lite and future interest at the contractual rate of interest as per the loan agreement. It is also averred that the cause of action arose first on 17.2.1998 when the mortgaged/hypothecated assets were taken over by the plaintiff and then on 7.7.2004 when the assets were sold and sale proceeds of assets were received by the plaintiff, and, then on 19.1.2005, when the final notice was issued. It is also ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...11...
averred in the plaint that the suit of the plaintiff is within .
time because the demand was made on defendants on 19.1.2005 in terms of their contract of guarantee and when they committed breach of the contract after 19.1.2005 in not paying the demanded amount. It is also averred that this Court has jurisdiction to try and determine the suit. It is also averred that the plaintiff has not filed any other suit before any other Court. Hence, the present suit.
7. Defendants No. 2 and 5 contested the suit, and, filed a joint writtenstatement, wherein, they have taken preliminary objections, regarding, (a) suit is bad for non joinder of necessary parties (b) the suit stands abated in as much as it was filed against a dead person (c) suit has not been filed by a properly authorized person as envisaged under law (d) the suit is not properly valued for the purpose of court fee and jurisdiction (e) the plaintiff is estopped from filing the present suit by his acts and conduct, (f) suit is not maintainable (g) the suit is time barred. On merits, it is ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...12...
averred that the the suit has not been filed by a duly .
authorized person nor verified in accordance with law. It is further submitted that unit in question was established, financial assistance was raised by defendant No.1, from, the plaintiff as well as proforma defendants No. 7 and 8. Besides this, the promoters of defendant No.1 having contributed towards the project substantial amounts. It is also averred that unfortunately, the unit got jinxed from day one. Despite best efforts on the part of the defendants, unit did not become commercially viable. It is also averred in the written statement that defendants No. 2 and 5 pumped in substantial money into it after it was taken over and after the unit was returned to them for running it. Some amount was paid to the plaintiff, but so far interest claimed is concerned it is highly excessive and unreasonable and unconscionable. The plaintiff and defendant No. 7 are not entitled to enforce the alleged personal guarantees because there was novation of contract when the assets of defendant No.1 were taken over and ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...13...
handed back and repayment schedule by both of them was .
revised. No personal guarantee was obtained from answering defendants at any such point of time, hence the present suit is not maintainable. It is also denied that liability of answering defendants being joint or several on the basis of continuing guarantee. It is also pleaded that as per the own showing of the plaintiff, defendant No.1 committed default in repayment of installments to it and to defendant No.7, thereafter the repayment schedule was revised and again defendant No.1 committed default(s), as such the so called original continuing guarantee executed by answering defendants stood novated and the alleged continuing guarantees came to an end. It is also submitted that action of plaintiff and proforma defendant No.7 not to sell the taken over assets promptly on one hand and allowing the interest to amount, makes action of both of them malafide being based on extraneous reasons. It is also submitted that the sale of assets on 7.7.04 as alleged is neither bonafide nor depicts the true market value of the assets of ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...14...
defendant No.1. It is further submitted that the total value of .
assets come to Rs. 99.90 lacs, therefore even if the plaintiff and defendant No.7 succeed in their claim, if any, after setting off their alleged claim, a decree of Rs. 10,05,000/ may be passed against the plaintiff and proforma defendant No.7. It is also pleaded that there is noting on record to suggest that land buildings, fittings, plant and machinery, fixtures etc of defendant No.1 was effected as a single lot or in different lots.
It is also submitted that it is not understood on what basis a sum of Rs. 2,20,000/ has been paid by defendant No.7. It is admitted that defendant No.7 had paripassu charge on assets of defendant No.1. However, defendants No. 2 and 5 are not admitted the averments regarding recovery of sales tax dues.
It is also submitted that the plaintiff and defendant No. 7 be put to strict proof of all averments qua their respective claims as alleged. It is further prayed that a decree in respect of the counter claim be passed after setting off the claim of the plaintiff. In the alternative and without conceding, it is also ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...15...
submitted in the writtenstatement that the claim is highly .
excessive because on principal amount of Rs. 37,54,263/ and on it almost three times interest is being claimed by the plaintiff. It is also pleaded that the defendants are not liable to pay either the amount claimed or the interest as claimed much less with half yearly rests. It is also averred that the plaintiff is not entitled to claim interest at contractual rates as alleged, and, it be put to strict proof of averments made therein. It is also submitted that an amount of Rs.
1,51,65,000/ is due and payable to the answering defendants, on account of recovery of cylinders Rs.1,30,65,000/, and, Rs.
20,90,000/ being the amount for which the property was Short sold, as such, these amounts deserve to be set off against the plaintiff.
8. The defendants No.2 and 5 have also filed a counter claim, and, they pray that the same may kindly be decreed in their favour. In the counterclaim, they reasserted and reaffirmed the grounds taken in their writtenstatement.
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Further they have pleaded in their counter claim that there is .
nothing on record to suggest that the land buildings, fittings, plant and machinery, fixtures etc. of defendant No.1 were sold in a single lot or in different lots. It is also averred that if any attempt in this direction been made, it would have certainly fetched a much higher price because the rate of land increased manifold in mid 2004 after declaration of the industrial package in the Nalagarh Tehsil and the industry flourished by leaps and bounds where defendant No.1company was situated. It is further pleaded that it is not understood that on what basis, a sum of Rs. 2,20,000/ has been paid by defendant No.7. It is also pleaded that the taken over assets of defendant No.1 were valued at Rs. 99.90 lacs by the agency of the plaintiff in the year 1998, however, the same were sold in the year 2004, for, an amount of Rs. 79.00 lacs, therefore a sum of Rs.20.90 lacs is due and liable tobe adjusted in the amounts claimed by the plaintiff. It is also pleaded that the plaintiff while taking over the assets of defendant No.1 did not ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...17...
account for cylinders which also formed a part of the assets of .
defendant No.1. The said cylinders were in the custody of the customers of defendant No.1 and are valued at Rs.
1,30,65,000/. A total sum of Rs.1,51,65,000/ is due and payble to the defendants No. 2 and 5. It is also submitted that after setting off the amount of Rs.1,51,65,000/ against the amount of Rs.1,41,82,110.55 being claimed by the plaintiff, a sum of Rs.9,72,889.45 is due and payable to the answering defendants which may kindly be decreed in their favour. It is also pleaded that the interest on the said amount @ 12% per annum from the date of its sale is also payable by the plaintiff. It is also pleaded that the cause of action is accrued in favour of the answering defendants initially when the assets of defendant No.1 were taken over the plaintiff on 17.2.1998 and thereafter it again arose when assets of defendant No1 company were put to sale in January 1999 and thereafter on 7.7.2004 when the plaintiff conducted a distress sale of the assets of defendant No.1 company for an amount of Rs. 79 lacs without ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...18...
intimating the answering defendants. It is also submitted that .
the counter claim of the answering defendants is valued at Rs.
9,72,889.45 with 12% interest from the date of its sale i.e 7.7.2004 which comes to Rs. 1,94,577.88 till the date of the filing of counter claim, however, the claimants/defendants
9. to concerned restrict the counter claim to Rs. 10,05,000/.
Defendant No.6 contested the suit, and, filed writtenstatement, wherein he has taken preliminary objections qua suit being barred by limitation, plaintiff is estopped by its acts, conduct deed and acquiescence etc. from filing the present suit. On merits, it is averred that the he has no knowledge that a loan of Rs.60,00,000/ with interest at the rate mentioned in the plaint was sanctioned in favour of defendant No.1. It is also averred that he has no knowledge about the fact that promissory note was executed by defendants No.2,3 and 4 with regard to the loan agreement, and, so the hypothecation agreement, and, also he has no knowledge about creation of equitable mortgage. It is also ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...19...
denied that late Sh. Y.D Sharma was the guarantor of the .
afore loan. According to the knowledge of defendant No.6, it is pleaded that, there were disputes with regard to management, assets, liabilities and other matter of M/s Himachal Air Product. As per defendant No.6, Mr. Y.D Sharma was not a party to the revival pan nor at any point of time he entered into any agreement in pursuance whereof any liability can be fastened upon Mr. Y.D Sharma. It is also pleaded by him that neither late Sh. Y.D Sharma nor he is a party to any contract in pursuance whereof the suit for recovery may be maintained by the plaintiff. It is also denied that defendant No.6 is a guarantor as alleged. On account of revival plan and execution of subsequent documents, the documents on the basis of which suit can be filed are subsequent documents, as earlier documents stands superseded at the time of revival plan. It is further pleaded that in case some of the defendants have substituted earlier agreements by subsequent agreements, in that eventuality those defendants may be ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...20...
responsible to discharge the liability, but neither late Sh. Y.D .
Sharma nor he is liable to make payment of any amount to the plaintiff. It is also averred that no letter or notice of demand has ever been received by him. It is also pleaded that he has not received the notice of 19.1.2005. It is also denied that defendants, as alleged.
r to liability of defendant No.6 is joint and several with other Defendant No.6 and his predecessor in interest are not party to the revival plan. It is also denied that there is any cause of action in favour of the plaintiff and against the replying defendant or the same initially arose on 17.2.1998 and subsequently on 19.1.2005. It is also prayed that the defendant No. 6 is not liable to make payment of any amount to the plaintiff, hence, the suit may kindly be dismissed.
10. The plaintiff herein filed replication to the written statement of the defendants No.2 and 5, wherein he denied the contents of the writtenstatement and reaffirmed and reasserted the averments made in the plaint. It is also ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...21...
averred that the plaintiff came to know about the death of late .
Shri M.L Sethi on 13.7.2005. Thereafter the plaintiff engaged services of investigating agency to find out the date of death and LRs of deceased defendant No.3. The plaintiff thereafter moved an application under order 22 Rule 4 and 9 CPC and such application was allowed by this Court and LRs of Shri M.L Sethi have been arrayed as defendant No.3 (a) to (d). In the writtenstatement of the plaintiff to the counter claim of the defendants, it is pleaded that the counter claim is false frivolous and vexatious and the defendants have no locus standi to file the counter claim on account of its own act, deed, conduct commission omission and acquiescence. It is also pleaded that the counter claim has not been properly valued for the purpose of court fee and jurisdiction. It is also pleaded that the mortgaged assets of defendant No.1 company were evaluated after its take over in March, 1998 and the assessed value was Rs.99.90 lacs and realizable value in parts was assessed at Rs.60.00 lacs by HIMCON. The assessed value ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...22...
was mentioned in the auction notice published in the various .
newspapers by the plaintiff. It is also averred that the defendants are not entitled for any sum of Rs. 20.90 lacs as alleged. It is further averred that defendants are not entitled for any amount on account of cylinders from the plaintiff. The plaintiff took over the mortgaged and hypothecated assets under Section 29 of the State Financial Corporations Act, 1951 in order to realise the outstanding loan amount advanced by the plaintiff and proforma defendants No. 7 and 8 to the defendant No.1. The alleged cylinders which were financed by the plaintiff and defendant No.7 were not handed over by defendant No.2 to the plaintiff. It is also averred that after taking over the assets, it was observed that some items of plant and machinery and other misc fixed assets were not available at the factory premises. A notice was served upon the defendants to produce all the missing items. In response to that notice, defendant No.2 informed that some of the items are for repairs, and, regarding cylinder, it was informed that ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...23...
empty gas cylinders are in rotation with their customers and .
dealers and it will take time to collect empty cylinders from customers. Thereafter it was requested to give them three time months time to restore. Defendant No.2 did not restore the cylinders and as such another notice was issued on 4.8.1998. On failure of the defendants to restore the missing assets an FIR was also lodged with the police Station, Nalagarh on 9.9.1998. It is also averred that the investigation also reveals that defendant No.2 had also filed an FIR against the dealers, and, it was found that defendant No.1 has given the cylinders to the dealers/customers, and, in lieu thereof, the defendants have taken security amounts from them. It is also also averred that when the factory was closed, and, taken over by the plaintiff, the Managing Director of defendant No.1 did not return the securities to the dealers. It is also revealed during investigation that 23 dealers had filed civil suits against defendant No.2. It is also pleaded that the defendants are neither entitled for set off of the amount nor any interest ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...24...
as claimed. The defendants are not entitled for any decree .
whatsoever against the plaintiff. The alleged claim on account of cylinders is not maintainable. It is also specifically denied that the plaintiff conducted any distress sale as alleged. It is also pleaded that the counter claim has not been properly valued for the purpose of court fee and jurisdiction. It is also prayed that counter claim of the defendants being false and frivolous be dismissed with costs.
11. The defendants No. 1,2 and 5 herein filed replication to the writtenstatement of the counter claim, wherein they denied the contents of the writtenstatement of the counter claim and reaffirmed and reasserted the averments made in the counter claim.
12. On the contentious pleadings of the parties, this Court framed the following issues:
1. Whether the plaintiff is entitled to the suit amount? OPP
2. Whether the suit is filed by an authorized person?
OPP
3. Whether the plaintiff has claimed interest at an exorbitant rate? If so, what should be the reasonable rate of interest in the facts and circumstances of the case? OPD ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...25...
4. Whether the plaintiff is estopped to file the suit by the acts and conduct of the functionaries of .
the plaintiff and defendant No.7? OPD
5. Whether the suit is bad for nonjoinder of necessary parties, as alleged? OPD
6. Whether the assets of defendant No.1 were sold at a price lower than the prevailing price, as alleged? If so, its effect? OPD
7. Whether the suit is barred by time? OPD
8. Whether the defendants are entitled to the amount claimed in the counterclaim, together with interest at the rate of 12%? OPD
9. Whether the counterclaim is liable to be dismissed on account of suppression of true facts, as alleged? OPP
10. Whether the defendants do not have the locus r standi to file the counter claim? OPP
11. Whether the counterclaim has not been properly valued for the purpose of court fee and jurisdiction? OPP
12. Relief.
13. For the reasons to be recorded hereinafter, my findings on the aforesaid issues are as under: Issue No.1 Yes.
Issue No.2 Yes.
Issue No.3 No, contractual rate of interest.
Issue No.4 No.
Issue No.5 No.
Issue No.6 No.
Issue No.7 No.
Issue No.8 No.
Issue No.9 Yes.
Issue No.10 Yes.
Issue No.11 No.
Relief: The suit of the plaintiff is decreed as
per the operative portion of the
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judgment, whereas, the counter claim filed by the defendants No. 2 and 5 is dismissed.
.
Reasons for findings:
Issues No. 1 to 614. Since issues No. 1 to 6, are interconnected, and, hence are being amenable for common findings being recorded thereon.
15.
r to In proof, of, the relevant issues, the, plaintiff relied, upon, the deposition of PW1 (Shri Pawan Kumar Bali), who, during the course of his examinationinchief, tendered into evidence, the, apposite resolution, of, the board of directors, of, the plaintiff, as, comprised in Ex. PW1/A, (i) wherethrough, he stood authorized, to, institute the present suit, and, also to engage, hence, counsel(s). He also tendered into evidence Ex.
PW1/B, exhibit whereof, comprises the requisite authorization bestowed, upon, him, and, loan application comprised in Ex. PW1/C is also tendered, into evidence, and, the sanction meted thereon, is, comprised in Ex. PW1/D, and, terms of loan conditions, as accepted, by the defendants, is, ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...27...
embodied in Ex. PW1/E, and, also, all afore stood tendered .
into evidence, by the afore PW. The promissory note, executed by the defendants, is, borne in Ex. PW1/F, loan agreement in Ex. PW1/G, and, hypothecation agreement, is, borne in Ex.
Pw1/H, Ex. PW1/J is the guarantee executed by defendants No. 2 to 5, and, the father of defendant No.6.
testified by PW1, in his examinationinchief qua the r It is also defendants also making borrowings from Punjab National Bank, Nalagarh, and, from the Himachal Pradesh Financial Corporation. He also further testified qua the plaintiff, entering on 12.2.1987 into a paripassu agreement with the Punjab National bank, as, also with the Himachal Pradesh Financial Corporation. The apposite copy of the agreement, is, comprised in Ex. PW1/K. Further he testifies qua in pursuance thereto, the defendants availing the loan facility, and, withdrawing a sum of Rs.56.31 lacs. Even though, despite defaults being made by the defendants, yet, repayment of loan being ordered, through, Ex. PW1/L, and, yet also the ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...28...
defendants making defaults, and, thereupon, the industrial .
Unit of defendant No.1, being taken over, by the Himachal Pradesh Financial Corporation, under, the provisions of Section 29 of the State Financial Corporation Act, 1951, (i) and, the afore action being challenged before this Court through CWP No. 309 of 1988, and, the afore CWP being dismissed, under, order borne in Ex. PW1/M, (ii) and, a Special Leave Petition arising therefrom, before the Hon'ble Apex Court, also standing dismissed, through orders contained in Ex. PW1/N. He further deposes qua in compliance to the directions rendered by the Hon'ble Apex Court, the sale of the industrial Unit, of, the defendant being readvertised, by the Himachal Pradesh Financial Corporation, yet, the defendant preferring an application before the BIFR, registered as Case No. 261/1988 , and, the afore application being dismissed, on 19.10.1989, and, the appeal reared therefrom also suffering, dismissal, and, the afore orders, being, respectively comprised in Ex. PW1/O, and, in Ex. PW1/P. He further testifies qua on ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...29...
30.6.1993, the defendants approaching the plaintiff, through, .
Ex. PW1/Q , for, restoration of the assets to them, and, for sanction of rehabilitation package, and, the afore request being acceded to by the plaintiff, and, an additional sum of Rs.7 lacs, being sanctioned, however, with a promise that they would clear the entire outstanding loan amount.
promise, is, testified, to remain uncomplied with, by the r The afore defendants, given, the defendants, as testified by PW1, omitting to submit, a, rehabilitation package. Consequently, notice under Section 29 of the State Financial Corporation Act, as, embodied in Ex. PW1/R, stood issued, upon the defendants, and, for lack of response thereto, by the defendants, hence, the assets being taken over by the plaintiff, on, 17.2.1998 and in contemporaneity therewith, an, inventory of assets being also prepared. He also testifies that the defendants vide Ex. PW1/T responding to the notice issued, by, the plaintiff. He furthers testifies, qua, the plaintiff granting requisite extension, to, the defendants vide Ex. PW ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...30...
1/U, However, for want of, the, defendants, not, keeping their .
promise, a complaint embodied in Ex. PW1/V, being lodged against them at police Station, Nalagarh. The police responded, by three communications, borne respectively in Ex.
PW1/W1, Ex. PW1/W2 and in Ex. PW1/W3. He further testifies qua the bids being invited for the sale of the assets of the defendants, and, an offer of Rs. 50 lacs, being made by Quadricon Private Limited, offer whereof was accepted by the plaintiff. He further testifies qua the defendant Company not fulfilling its undertaking and thereupon, the, earnest deposit of Rs.3 lacs being forfeited by the plaintiff, and, the amount was credited to the account, of, the defendants. He also testifies that the assets were again put to sale by invitation of bids, this time, a consideration of offer, of, Rs. 79 lacs, was made by S.K Mineral, offer whereof was finalized, and, accepted on 11.6.2004, copy of letter accepting the bid, is, comprised in Ex. PW1/K. He also testifies that they paid the entire amount, and, therefore, the auctioned assets were ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...31...
handed over to them. He also testifies that the plaintiff .
appropriated a sum of Rs.52,65,170/ to Himachal Pradesh Financial Corporation, Rs.24,40,830 to itself, and, Rs.
2,20,000/ to the Excise and Taxation Department. He also testifies that notice embodied in Ex. PW1/Y was issued for recovering the balance amount. During his crossexamination, he testifies qua the rate of interest being not charged, on, a compounding basis. He also testifies qua the assets of the defendantcompany, standing evaluated, from the HIMCON, on March, 1998, copy whereof, is comprised in Ex. D1. He also testifies in his crossexamination qua no notice being issued to the defendants either individually or jointly, however, a notice being issued in the newspaper, making echoings, qua the maximum bid, of, Rs. 79 lacs, standing received. He denied the suggestion qua it being the plaintiff's responsibility to recover the assets/liabilities etc. of the industrial unit, qua wherewith possession was assumed by the plaintiff. He also denied qua it being the duty of the plaintiff ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...32...
to recover 3250 cylinders valuing Rs. 1,30,65,000/, from, the .
various dealers, after, the assets of defendant No.1 had been taken over by the plaintiff. He also stated it to be correct that the revival plan Ex. PW1/Q is not signed by defendant No.6.
16. PW2 Shri Rajinder Prasad, Senior Manager (Projects) HPSIDC Ltd. testifies, in his examinationinchief qua the accounts of the all the loanees being maintained under his supervision. He has also brought ledger account, comprised in Ex. PW2/A. He also testifies qua letters respectively comprised in Ex. PW2/B and in PW2/C, being sent, for, publication of notice in the newspaper(s), regarding the maximum bid, received by the plaintiff. During, the course of his crossexamination, he denied the suggestion qua Ex.PW2/A, and, the books of accounts, standing prepared incorrectly, or, qua theirs not reflecting the true and proper accounts.
17. DW1 (HC Harvinder Kumar) has produced the FIR register in respect of P.S Nalagarh, for, the period ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...33...
19.3.1998 to 26.4.1998. He testifies qua Ex. DW1/A being the .
true and correct copy of FIR No. 65 of 1998.
18. DW2 Deepeshwar Sharma testifies in his examination in chief qua his father expiring in the year 1996.
He also testifies qua his unknowing qua his father signing the documents comprised in Ex. PW1/G , in Ex. PW1/H and in Ex. PW1/J. He further testifies qua his, not, receiving any notice comprised in Ex. PW1/Y. In his crossexamination, he stated that he cannot recognize the signatures of his father Mr. Y.D Sharma. He also can not say that whether defendants No. 1 to 5 had taken loan from the plaintiff corporation, and, that his father was also one of the guarantor.
19. Since the material averments, cast in the application, are, proven by the testification of PW1, and, by the testification of PW2, and ,when the predecessorin interest, of, codefendant No. 6, is, a signatory of Ex. PW 1/J,and, when no evidence has been adduced by codefendant No. 6, that, after revival of the defendant No.1/company, his ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...34...
predecessor in interest, remaining only a share holder therein, .
and, consequently his being absolved, of his, coextensive liability, as a guarantor, visavis, the borrowings made by co defendant No.1, from the plaintiff, and also from all consequential therewith liabilities, (i) thereupon, any argument addressed before this Court, by, the learned counsel for the defendant No. 6, qua, on the afore anvil codefendant No. 6 being absolved, of, his liability, obviously is both blunted, and, maimed, (ii) conspicuously also on the principle of liability, of, the guarantor, being, coterminus, with, the original borrower hence, defendant No. 6, is, jointly and severally liable alongwith the principal borrower, hence to face a conjoint decree, being pronounced, visavis, the plaintiff, in the instant suit, (iii) and, even if the predecessorininterest of defendant No. 6 has died, yet, the assets inherited by defendant No. 6, from his predecessorininterest, are, yet available for enforcing the afore principle of coextensive, and, coterminous liability, of, the apt successorininterest, of, the ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...35...
guarantor, alongwith, the principle borrower, visavis, the .
loan amount. Hence, the afore issues are decided in favour of the plaintiff and against the defendants.
Issue No. 720. Since the accruable causes of action commenced from the date enumerated in the plaint and since therefrom, for the various reasons delineated, in the plaint, the cause(s) of action survived, up to, the date, of, institution of the suit, thereupon the suit is within limitation.
Issues No. 8 to 1021. Since PW1 has denied the suggestion, put to him, by the learned counsel, for, the defendants concerned, that, it was a solemn responsibility, of, the plaintiff to collect, the cylinders, from the entities/persons concerned, and, has also denied the further suggestion, put to him, qua monetary value(s) thereof being amenable for being recompensed, visa vis, the defendants, besides when no cogent evidence comprised in apt therewith recitals or covenants being borne ::: Downloaded on - 29/09/2019 02:03:25 :::HCHP ...36...
in the relevant contract, remains unadduced, thereupon the .
afore issues are decided in favour of the plaintiff, and, against the defendants, and, the amount claimed in the counter claim, is, declined to be decreed qua the defendants.
Issue No. 1122. The counterclaim has been properly valued for the purpose of Court fee and jurisdiction, hence the afore issue is decided in favour of the defendants and against the plaintiff.
Relief:
23. In view of the above, the present suit is decreed for a sum of Rs.1,41,82,110.55 with costs and interest at the rate of 12% per annum with half yearly rests from 10.12.2004 till its realization, and, also jointly and several amongst the defendants, whereas the counter claim filed by defendants No. 2 and 5, stands dismissed. Decree sheet be prepared accordingly.
13th August, 2019 ( Sureshwar Thakur ),
(priti) Judge.
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