Indian Kanoon - Search engine for Indian Law

3. The brief facts leading to this appeal are as under:

3.1 The plaintiff - M/s. SRS Alloys Private Limited established an industrial unit at Hirehalli Industrial Area, an industrially backward area situate in Tumakuru. It is stated that the said industry was commenced by the plaintiff with the financial assistance from the defendant - M/s. Karnataka State Industrial Investment and Development Corporation Limited (for short, 'KSIIDC'). The Government of Karnataka had also sanctioned an investment subsidy to the plaintiff in a sum of Rs.11,00,000/- for the purpose of setting up industry involved in manufacture of alloys and steel castings etc. 3.2 Since the plaintiff - Company had suffered huge financial loss, it had fallen in arrears with regard to payment of money due to the defendant - KSIIDC and hence, it requested for settlement of dues under the One Time Settlement (for short 'OTS') Scheme. The defendant vide its letter No.AGM(Z-II)/734/2006-07 dated 08.06.2006, approved the plaintiff's request for settling the dues under the OTS scheme, which was formulated as per the OTS policy for the year 2004-05, subject to certain conditions stated therein.

3.5 In the said suit, the defendant - KSIIDC after service of summons, entered appearance. The defence taken by the defendant was that at the time of OTS approval, it had collected only the principal amount of Rs.84,00,000/- from the plaintiff and considering the financial loss suffered by the plaintiff, it had waived off accrued interest to the tune of Rs.92.19 lakhs payable by the plaintiff. In that background, the defendant had appropriated the third installment of subsidy of Rs.2,75,000/- towards the sacrifice made by it at the time of approval of OTS scheme as per the terms of OTS policy for the year 2004-05. The defendant pointed out that though the plaintiff did not stick to the payment schedule under the OTS scheme, delay in payment of the principal amount was condoned with an intention to help the plaintiff to get over the financial crisis. The defendant contended that it was not liable to pay any interest much less 18% per annum as sought by the plaintiff and that the suit suffered from non- joinder of necessary party and mis-joinder of parties. Accordingly, it sought for dismissal of the suit with exemplary costs.

4. Whether defendant further proves that suit of the plaintiff is bad for non-joinder and mis-joinder of parties?

5. What order or decree ?"

3.7 In support of the case of the plaintiff, one of its Directors was examined as PW.1 and he got marked documents as per Exs.P1 to P11. On behalf of the defendant

- KSIIDC, its Assistant General Manager was examined as DW.1 and documents as per Exs.D1 to D5 were got marked.

3.8 The Court below after considering the contentions of the learned counsel for the parties and the evidence available on record, in its judgment dated 02.12.2013, has observed that the plaintiff - Company had accepted the terms and conditions of the OTS policy for the year 2004-05 vide Ex.D1, which provided for adjustment of the subsidy amount after closure of the account under the OTS scheme by the defendant towards the amount sacrificed by it at the time of OTS approval. The Court below has referred to the admission of PW.1 - Sri Renukananda to the effect that: the plaintiff was liable to pay more than Rs.2,06,00,000/- to the defendant; the defendant had waived off accrued interest to the tune of Rs.92,19,000/- payable by the plaintiff; the plaintiff had paid only Rs.78,50,000/- to the defendant and the balance amount of Rs.5,50,000/- was adjusted against the first installment of subsidy released by the Government to the defendant. PW.1 further admitted that the third installment of subsidy in a sum of Rs.2,75,000/- sanctioned by the Government to the defendant after closure of OTS was public money. In that view of the matter, the Court below while answering issue Nos.1 and 2 in the negative, held that the defendant - KSIIDC had rightly appropriated the subsidy amount of Rs.2,75,000/- released by the Government towards the loss suffered by it on account of waiver of interest to the tune of Rs.92,19,000/- at the time of approval of OTS.

9. The contention of the learned counsel for the appellant is that the said condition was not mentioned in the letter dated 08.06.2006 addressed by the Assistant General Manager of the respondent - KSIIDC to the appellant and concurrence of the appellant in that regard was not taken. There is nothing on record to substantiate the said contention. The OTS scheme has been framed by the respondent under the OTS policy for the year 2004-05. The appellant having

- 14 -