Kranti Hotels (Pvt.) Ltd. vs State of J. and K. and Others

G.D. Sharma, J.—The petitioner herein is a company duly incorporated under the provisions of Companies Act, 1956. Shri Kranti Ghosh is

the Managing Director of the said Company. Through the medium of this writ petition the petitioner has claimed the following reliefs:--

a) The decision of the Government if any relating to non-disbursement of the loan in favour of the petitioner may be quashed;

b) Communication No. IDC/ROJ/91/ 87/247 dated 5-11-92 may be quashed;

c) By way of writ of mandamus or directions respondents may be directed to immediately disburse the loan to the petitioner (Rs. 70 lakhs by State

Industrial Development Corporation and Rs. 30 lakhs by J & K Bank).

d) That all records be summoned from the respondents.

e) Respondents may be directed to put up the case of the petitioner before the Board of Directors of SIDCO and the Board of Directors may be

directed to accord sanction to the grant/release of loan amounting to Rs. 70 lakhs in favour of the petitioner.

Similar directions may be passed against J& K Bank and the Board of Directors may be directed to release the balance amount of Rs. 30 lakhs in

favour of the petitioner

Shorn of its un-essentials, the case of petitioner is that the petitioner-company is A holding plot in question on the basis qf ""subsisting lease

whereupon it has built Hotel known as ""Kranti Hotel"". The construction of the said Hotel has been raised in accordance with the sanctioned

permission. For raising the Hotel construction its funding was intended in the manner :--

Promotion Share Capital Rs. 81 lakhs

Subsidy Rs. 15.20 lakhs

SIDCO Rs. 70 lakhs

SFC Rs. 60 lakhs

J & K Bank Rs. 60 lakhs

The petitioner invested its share capital in full as well as invested Rs. 15.20 lakhs sanctioned to it by the Directorate of Industries and Commerce

by way of 'subsidy grant.' The loan sanctioned in the sum of Rs. 60 lakhs by the State Financial Corporation (respondent-4) also stands invested

besides the loan sanctioned in the amount of Rs. 30 lakhs by the J & K Bank (respondent-5). Respondent-2 (SIDCO) resiled to fulfill the promise

of advancing loan (in the sum of Rupees seventy lakhs). Respondent-5 also took a clue and fell in line as it also did not release the balance loan of

Rupees thirty lakhs. The construction of the said Hotel was started in the year 1987 to the full knowledge of the respondents but till date it could

not be completed on account oi non-release of the sanctioned loans. The super-structure stood substantially erected by the year 1990 but the

completion could not be achieved due to drying up the said loans. The bureaucrates of the Government are the Directors of the concerned financial

institutions (respondents Nos. 2, 4 and 5). The petitioner made various representations but the concerned officials took different stands at different

occasions. As there was no unanimous opinion amongst the concerned Govt. officials so the petitioner was compel- led to file writ petition No.

2349/92 titled Kranti Hotels Pvt. Ltd. v. J&K Industrial Development Corporation Limited and Ors. in which ex parte direction was issued to

respondent-1 therein to process and consider the payment of loan committed in favour of the petitioner under rules if otherwise permissible and to

pass appropriate orders in the matter within eight weeks. (Annexure-I). On this direction, respondent-2 (SIDCO) considered the case of the

petitioner and vide its communication dated 5-11-92 made it known to the petitioner that the Board of Directors had not considered the proposal

for sanction of the term loan assistance.

This order (annexure-J) of the Directors of respondent-2 has been challenged in OWP No. 3108/92 in which notices have been issued to the

respondents therein and the same is pending for disposal. On the loan of Rupees sixty lakhs (advanced by respondent-4) interest in the sum of

Rupees 36,48,174.00 was claimed on 15-9-93. Besides that, res-pondent-4 served notice on the petitioner under Set. 29 of the State Financial

Corporation Act, 1951, Against a loan of Rupees thirty lakhs interest in the sum of Rupees twenty lakhs is being claimed by respondent-5. The

petitioner has incurred debts and his original share of capital investment has exceeded from Rupees 81.24 lakhs to Rs. 1.25 crore. The incomplete

super-structure of the Hotei in question does not yield any income and it is pleaded that in order to make it functional, a sum of Rupees one crore

is needed more. The Hotel project was sponsored by the concerned Financial Institutions i.e. respondents Nos. 2, 4. and 5 after fully satisfying

themselves about its.viability, but because of recalcitrant, arbitrary and whimsical attitude being adopted by respondent-2 from the very beginning,

it could not be completed and for the last three years, it is at a standstill stage. According to the petitioner, respondents have taken irrational

decisions without realising that huge investments have been made and it would be impossible to generate any income and repay the loans. The

Hotel Project which was economically viable has not been allowed to function and the petitioner who was a genuine entrepreneur has been

prevented to earn his livelihood. The petitioner as such is entitled to claim the release of the sanctioned loans and entitled to damages. The

petitioner is being discriminated because the loans sanctioned in favour of similar other hotel projects stand released.

Respondents have filed the objections. Respondent-3 in its objections has pleaded that the petition is not maintainable because the petitioner has

failed to show compliance to the decision taken in the meeting on 21-4-93. Not only that, the petitioned has committed defaults in making the

payments of the instalments of the auction amount of the plot and as such is liable to pay interest in the sum of Rs. 44.80 lakhs. The verification oi

the title of the Hotel in question could only by made by the answering respondent in case the petitioner had withdrawn writ petition No. 582/92

titled Karanti Ghosh v. JDA and Ors. and the arbitration proceedings pending before the arbitrator. The petitioner has unauthorisedly encroached

upon 7 kanals of land which the answering respondent had kept reserved as site for the building of State Bank of India. Further, it is asserted that

the doctrine of promissory estoppel is not attracted to the present case as the petitioner has not approached the court with clean hands. Disputed

questions of facts are involved in this case and they cannot be decided in the writ jurisdiction.

Respondent-5 in its objections has taken the preliminary plea that writ petition is not maintainable because the Jammu and Kashmir Bank does

not fall within the definition of State as contemplated under Article 12 of the Constitution. It is also pleaded that the Bank has not infringed any right

of the petitioner and as such there is no cause of action against it. On facts, it is stated that the release of the remaining loan of Rupees thirty lakhs

was withheld _because respondent-2 (SIDCO) did not sanction or advance any loan in favour of the petitioner. The answering respondent already

has fulfilled its obligation of the contract and any future escalation in the cost of the Hotel project cannot be attributed to it. The loan advanced by

the answering respondent stands blocked in the assets of the Hotel Project in question which is not functioning. In order to secure its money, the

answering respondent is within its rights to file the suit. On 30-6-94, the petitioner had a liability (of the loan advanced plus interest accrued

thereon) in the sum of Rupees fifty lakhs towards the answering respondent.

Respondents Nos. 1, 6 and 7 in their objections have raised the preliminary objections regarding the maintainability of the writ petition by

pleading that no right of the petitioner has been infringed. According to them, in the year 1950 plot of land measuring 38,600 sq. ft. was leased out

in favour of the petitioner lor a premium of Rs. 22,57000/-. The possession of the plot was handed over to the petitioner in accordance with the

terms and conditions of the lease deed daied 11-3-82. It was stipulated in the lease deed that petitioner had to pay the balance amount of the

premium amounting to Rs. 16,92,750/- in four equal instalments which he failed to pay. Subsequently, he paid the whole amount of the premium

but did not pay any interest. The accumulated interest was in the sum of Rupees forty four lakhs. The proceedings for the recovery of the interest

were initiated but the petitioner got the same stayed from the Court. On this dispute a meeting was held on 21-4-93 in the chambers of the Chief

Secretary and it was decided that instead of Rupees forty four lakhs a sum of five lakhs be recovered from the petitioner. The petitioner agreed to

this decision and an agreement was drawn between the parties. The Auquaf Committee had objected for the construction of the Cinema Hall on

the leased plot and this objection prevailed over the parties. After this agreement, the petitioner applied to the concerned authorities for the grant of

permission which was granted. Afterwards the petitioner started the construction of the Hotel and applied for the grant of loan which was

sanctioned. The loan was initially sanctioned by the SIDCO and on Us behest it was distributed amount the Financial Institutions (respondents

Nos. 4 & 5). Subsequently, in one of the Board Meetings of respondent-2 (SIDCO), it transpired that the petitioner had violated some provisions

of the Agreement.

On facts, they have pleaded that respondent-2 (SIDCO) had to consider the case of the petitioner and they have nothing to do with it. The Hotel

in question has not been built on the land specified for the same and there have been certain other deviations as well. The petitioner has illegally

occupied some other land which was not leased out to him. The loan was not stopped because of the arbitrary, unconstitutional and illegal decision

of the respondents, but due to acts of omissions and commissions committed by the petitioner. The petitioner by violating the terms and conditions

of the lease deed and the sanctioned plan has raised the Hotel at his own risk and is not entitled to any other relief, No benefit of doctrine of

promissory estoppel can be given to the petitioner. The petitioner has filed other writ petitions and in that view of the matter this writ petition

deserves dismissal.

Respondent-2 (SIDCO) in its objections has pleaded that the writ petition is not maintainable, as none of the fundamental rights of the petitioner

has been infringed. The writ petition is based on facts which are to be ascertained. The petitioner has misled the Court as he has concealed the

pendency of the Civil suit filed against him. The petitioner has violated the law by encroaching upon the land of the Jammu Development Authority

measuring seven kanals on which he has raised the construction and for its completion he seeks loan, which respondent-2 cannot give to legalize

his illegal act. The Jammu Development Authority had initiated action for the demolition of the Hotel in question but the same could not be

completed as the petitioner had obtained the stay order from the court which matter is still subjudice. The petitioner has filed series of writ petitions

and arbitration petitions which are still pending disposal. By pressure tactics petitioner wants to get the loan from the answering-respondent and by

completing the constructions he wants to show it as legalized construction which otherwise is illegal one.

The Board of Directors of the answering respondent had never sanctioned Term Loan assistance in favour of the petitioner and as such there

arose no question of making any commitment. A decision was taken in the Meeting held under the Chairmanship of the Chief Secretary on August

18, 1992, whereby the answering respondent and other Financial institutions were directed not to process any proposals for sanctioning loans to

the project of the petitioner untill the liabilities of the government agencies are discharged by the petitioner and illegalities committed are removed.

The Board of Directors of the answering respondent had not considered it feasible to sanction term loan assistance in favour of the Hotel Project in

question. The Board of Directors had considered the case of the petitioner herein on the direction of the Court, but they had not found it fit for

sanctioning any loan. The answering respondent has no liability in case other financial institutions have sanctioned the loans. The Hotel Project of

the petitioner in the approved scheme had a capacity of 55 rooms but during the execution of the construction, the petitioner constructed 110

rooms, which resulted in escalation of the Project Cost. The revised Project cost had increased up to Rupees 289 lakhs from earlier approved

cost of Rs. 97 lakhs.

Respondent-4 (State Financial Corporation) in its objections has pleaded that at the request of the petitioner, it sanctioned and disbursed the

loan of Rupees sixty lakhs to the petitioner on the terms and conditions stipulated in the documents executed between the petitioner and the

answering respondent. In terms of the agreement, the answering-respondent had asked the petitioner to repay the loan along with interest accrued

thereon which he has not done. It is also pleaded that in the exercise of writ jurisdiction the court cannot interfere with the contractual liabilities of

the petitioner.

Heard the arguments.

The counsel appearing for the petitioner have contended that vide annexure-M (DO No. JKB/CMS/CJ/92-152 dated 10-1-92) the Chairman

of the J & K Bank Ltd. (respondent-5 herein) had requested Lt. General M. A. Zaki (Advisor to his Excellency the Governor, Jammu and

Kashmir State) that the J & K Bank (respondent-5) had advanced 50% of the loan amounting to Rs. 30 lakhs in favour of the petitioner on the

recommendations of the Managing Director of respondent-2. Respondent-4 had also on such advice released the whole amount of the loan in the

sum of Rupees sixty lakhs. The remaining 50% of the loan amounting to Rupees thirty lakhs was to be released by respondent-5 (J & K Bank) at

the time when respondent-2 would have released the agreed loan of its share in the amount of Rupees seventy lakhs. Respondent-2 initially

processed the case, but later on declined to advance any loan. The said Advisor was requested to look into the matter personally and issue

necessary directions to Managing Director SIDCO (respondent-2) for financing the case of the petitioner so that the loans already advanced (as

stated above) do not turn bad. In view of such a stand being taken in the year 1992, now it does not lie in the mouth of respondent-5 to make a

volte face and plead that the project is not viable and no further advance of loan is adviseable as that would amount to wastage of public money.

Equally there is no substance in the plea raised by respondents No. 2 and 3 that the Hotel building has not been constructed on its proper site

and in accordance with the accorded permission, but on the encroached land of respondent-3 as on the admission being made on behalf of the

respondent (therein) namely, Executive Officer, Municipality, Jammu in LPA 87/86 titled Kranti Ghosh v. Executive Officer, Jammu Municipality

and Ors., this matter was finally decided. Respondent-3 herein (JDA) was also one of the respondents therein. The counsel for respondent,

Executive Officer, Jammu Municipality (therein) had admitted that the construction was in accordance with building permission No. 287 dated 19-

12-96 (which encompassed the following:--

Hotel

Restaurant

Bar

Conference Hall

Shops

Cinema).

The Division Bench of this court had decided the appeal on the settlement being made by the parties and now, it is a futile exercise to re-agitate the

settled issued. Any plea taken in the objections of the respondents or arguments advanced in support thereof is of inconsequential value.

The other argument advanced by the learned counsel appearing for the petitioner is that the construction of the Hotel building complex was

taken into hands in the year, 1987 on the assurances given by respondents No. 2, 4 and 5 that they would finance ,the project. Acting on such

promises the petitioner incurred expenditures and suffered liabilities. Besides investing Rupees ninety lakhs which the petitioner had received by

way of loans from respondents No. 4 and 5, he also has invested Rupees 15.20 lakhs which amount was received by way of subsidy gram. In

addition to these investments, the petitioner has invested a sum of Rupees one crore and 25 lakhs, but because of the recalcitrant attitude adopted

by respondent-2, the petitioner could not get loan of Rupees seventy lakhs from it and remaining loan of Rupees thirty lakhs from respondent-5

and thus the project is not becoming functional and the whole investment has been blocked. The petitioner is incurring the liability of paying the

interest on the received amounts of loans. Respondents Nos. 2 and 5 are under legal obligation to fulfill their promises as the Doctrine of

promissory estoppel is applicable to the facts of the case. They have cited the cases of Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar

Pradesh and Others, and Gujarat State Financial Corporation Vs. Lotus Hotels Pvt. Ltd., .

Mr. Quaser Lone, the learned counsel appearing for respondent-5 has contended that the Doctrine of promissory estoppel is not applicable to

the facts of the present case because the loan was sanctioned in terms of a contract and the liability was created by express agreement. The entire

transaction according to him is in the realm of contract or private law and not at all in the realm of public law. In support of his contention, he has

cited the case of Jasjit Films (P) Ltd. and Another Vs. Delhi Development Authority and Others, . His further contention is that the petitioner has,

admitted in his averments of the writ petition that the project is not economically viable. That in the presence of such unequivocal admission the

equity is in favour of respondent-5 because there is no guarantee of the repayment of the loan al- ready advanced. Any further investment of the

public money is not in favour of interest of the respondent-Bank.

Mr. B. M. Sadiq, learned counsel for respondents 1, 6 and 7 has contended that Board of Directors (of respondent-2) had held their meeting

where it was resolved that,

Subject to the Commr/Secy. Govt. Housing Department, stating that the company viz. Kranti Hotels Pvt. has a clear title to the land underneath

and appurtenant to its Hotel project at Railway Road, Jammu and that same is free of any disputes, claims, encumbrances with JDA/Jammu

Municipal Corporation, a term-loan of Rs. 70.00 lacs be and is hereby sanctioned under direct lending in favour of Kranti Hotels Pvt. Limited to

enable it complete the Hotel project.

Resolved further that the term-loan of Rs. 70.00 lacs would be disbursed to the company only when the promoters agree and bring in an additional

amount of Rs. 59.19 lacs as their contribution to the equity of their project to the satisfaction of SIDCO.

The Commissioner/Secretary Housing Department had asked the comments of the Vice Chairman, JDA (respondem-3) who vide his letter

No. JDA/LITG/25/94/410 dated 31-10-95 wrote to the said Commissioner that no objection of Housing and Urban Development Department to

SIDCO may be conveyed on the following four clear and specific conditions:--

M/s. Kranti Ghosh shall withdraw writ petition No. 582/92 titled Kranti Ghosh v. JDA regarding allotment of adjoining 7 kanals of land which

has already been offered to State Bank of India;

M/s. Kranti Ghosh shall withdraw the arbitration case filed by him before the High Court;

An interest of Rs. 11,61,917.46 shall be recovered from him in four equal quarterly instalments.

Rest of the cases pending in the courts regarding violation of building plan, encroachment on the northern side, encroachment on green belt and

etc. shall be decided by the courts during normal course.

On this inquiry, the Deputy Secretary to Government, Industries and Commerce Department had vide his No. Ind/NI-90/91 dated 28-10-96

written to the Managing Director SIDCO, Srinagar that the petitioner had made encroachments and defaulted in making the payments of the

principal amount of the plot and interest accrued thereon, therefore, ""no objection"" certificate for the disbursement of the loan could not be granted.

According to Mr. Sadiq the petitioner is suffering because of his own faulty conduct and he is not entitled to any relief.

Mr. N. A. Baba, learned counsel appearing for respondent-2 has contended that in terms of the objections filed by respondent-2 on 2-12-94,

it is established that petitioner has encroached upon JDA's land (measuring 7 kanals) whereupon he has been raising Hotel construction. The JDA

(res-pondent-3) has initiated proceedings to get this unauthorised structure demolished, but through the medium of this writ petition the petitioner is

seeking advancement of loan and the purpose behind it is to get his illegal construction legalized. It is also pleaded that the Board of Directors of

respondent No. 2 neither sanctioned any term loan assistance in favour of the petitioner nor made any commitment with him for advancing the loan.

The petitioner has created superstructure with a capacity of 110 rooms instead of sanctioned capacity of 55 rooms and himself has escalcated the

costs of the project. The approved cost of project was Rupees 97 lakhs but the revised project cost has gone to the tune of Rupees 289 lakhs.

Lastly, it is stated that as the petitioner has illegally encroached upon 7 kanals of land belonging to JDA, Jammu (respondent-3) so he should not

be granted this equitable relief.

How a public sector corporation (respondent-2 herein) set up to give impetus to industrial development of the State, a promise of planned

economy aimed at job expansion to liquidate the curse of unemployment, and larger production helping price stabilisation acts in a manner contrary

to its raison de'etre and becomes counterproductive is aptly illustrated by the facts of this case. Respondents Nos. 2, 4 and 5 are the financial

institutions and instrumentalities of the State which owe an obligation to the deserving claimants for their economic upliftment and in broader

prospects to the planned economic development of the State. In terms of agreement arrived at between the petitioner and these institutions,

respondent-4 released the whole amount of sanctioned loan (in the sum of Rs. 60 lakhs) and respon-dent-5 released half of the amount of loan (in

the sum of Rs. 30 lakhs) but respondent-2 by adopting unprincipled and unrealistic attitude from the very beginning compelled the Hotel project to

make bad weather of it. The Board of Directors of respondent-2 on 11-9-95 considered the case of the petitioner (item No. 113.08) and had

resolved that a term loan in the sum of Rs. 70 lakhs be released in favour of the petitioner to enable it to complete the Hotel project subject to the

Commissioner-Secretary to Government Housing Development Department stating that the petitioner has clear title to the land underneath and

appurtenant to the said project. This verification could not be got done till today and the strife between the parties has been kept alive on the basis

of the grounds stated in letter No. JDA/LITG/25/ 94/410 dated 31-10-95 addressed by the Vice-Chairman JDA Jammu to the Commissioner-

Secretary to Government Housing and Urban Development Department. According to the contents of the above said letter, the petitioner has

encroached on 7 kanals of land in the adjoining area which stands earmarked for State Bank of India and there is litigation going on in the court

(writ petition No. 582/92). Jammu Development Authority has also claimed interest from the petitioner in the sum of Rupees 11,61,917,46 paisa.

From this communication it becomes clear that JDA had not given a specific reply to the Commissioner-Secretary, Housing regarding the

verification of the title of the land underneath appurtenant to the Hotel Project building but had sought the withdrawal of the cases which are

pending and JDA is a party in them. The courts frown at such an approach and in some cases it amounts causing interference to the fair

administration of justice. No party can be compelled to withdraw from a pending cause because it erodes the authority of law at the cost of

executive exuberance. The Commissioner/Secretary should have brushed aside such types of letters and without loss of time got the title verified

from an independent agency keeping in view the decision of the Division Bench of this court given in LPA 87/86 titled Kranti Ghosh v. Executive

Officer, Municipality Jammu and Ors., in which JDA was also one of the respondents. Be that as it may, Mr. G. Q. Wani, General Manager of

respondent-2 has gone ahead of respondent-3 (JDA) in keeping this dispute not by taking a different stand in his counter-affidavit which he filed on

20-11-95. Respondent No. 2 in its earlier objections filed on 2-12-94 had taken a specific stand for not sanctioning the loan on the following three

grounds :--

1) The petitioner herein had encroached on 7 kanals of land and has raised illegal construction thereon which he now wants to legalise through the

medium of this writ petition and get the loan.

2) The order of demolition has been passed for this unauthorised construction, but the same has been stayed by the court.

3) Planned developments of Jammu province have been affected by this illegal structure. Mr. G. Q. Wani in his counter-supplementary affidavit

filed on 20-11-95 on behalf of respondent No. 2 did not reiterate any of these grounds, but in para-21 (a) at page 4 took a novel stand that

petitioner had illegally encroached upon adjacent plot of land and it was not absolutely clear whether the project was coming up on the actual

leased premises. These objections were purposely filed in the court after 11-9-95 when the Board meeting of the Directors had taken place

because they stood verified by him on 6-9-95.

From the admitted facts, it can be said that the judgment of the Division Bench in LPA 87/86 (stated above) is of final and binding nature so far

as the building permission of the Hotel project in question discussed therein is concerned and no party can wriggle out from the import of the

judgment. Respondent No. 2 cannot unilaterally absolve itself of the liability which arose from the offer made by it to the petitioner by taking

different stands at different times. At this stage, it has to be seen whether the ratio of the case of Motilal Padampat Sugar Mills Co. Ltd. v. The

State of Uttar Pradesh (supra) is applicable or not. In the said case the principle of promissory estoppel has been elucidated by stating that (at

page 631):

Where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create a legal relations or

affect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made

and it is in fact so acted by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if

it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so

irrespective of whether there is any pre-existing relationship between the parties or not. The Doctrine of promissory estoppel need not be inhibited

by the same limitation as estoppel in the strict sense of the term. It is an equitable principle evolved by the courts for doing justice and there is no

reason why it should be given only a limited application by way-of defence. There is no reason in logic or principle why promissory estoppel

should also not be available as a cause of action, if necessary to satisfy the equity. It is not necessary in order to attract the applicability of the

doctrine of promissory estoppel, that the promisee, acting in reliance on the promise, should suffer any detriment. What is necessary is only that the

promisee should have altered his position in reliance on the promise. But if by detriment we mean injustice to the promisee which would result if the

promiser were to recede from his promise, then detriment would certainly come in as a necessary ingredient. The detriment in such a case is not

some prejudice suffered by the promisee by acting on the promise, but the prejudice which would be caused to the promisee, if the promisor were

allowed to go back on the promise. If this is the kind of detriment contemplated, it would necessarily be present in every case of promissory estop-

pel, because it is on account of such detriment which the promisee would suffer if the promisor were to act differently from his promise, that the

Court would consider it inequitable to allow the promisor to go back upon his promise.

In the instant case, the petitioner herein has acted in reliance upon the promise made to him by respondents Nos. 2 and 5 as he raised the

structure of the Hotel complex by investing huge amounts received from the sanctioned loans as well as from his private resources. He is not getting

any income from these investments and thus the altered position is to his disadvantage. In these circumstances, it is inequitable to allow respondents

Nos. 2 and 5 to go back upon their promises.

In the case of Gujarat State Financial Corporation Vs. Lotus Hotels Pvt. Ltd., it was held that loan to an entrepreneur once accepted could not

be refused except on valid grounds. In that case State Financial Corporation had sanctioned loan to a private entrepreneur at a lower rate of

interest in case Industrial Development Bank agreed to refinance the loan and otherwise at higher rate of interest. Later on, an enquiry was held

and the Bank refused to re-finance. Sanctioning of the loan was not conditional upon re-financing. It was also held that Corporation was bound by

its agreement to disburse the loan and could not back out on the ground of bank's refusal to re-finance. The ratio decidendi of this case applies in

all fours to the facts of the case in hand.

The ratio of the case of Jasjit Films (P) Ltd. and Another Vs. Delhi Development Authority and Others, cited by Mr. Qasir Loan, counsel for

respondent-5 does not apply to the facts of the present case because in that case the entire transaction was in the realm of a contract of private law

and not in the realm of public law. Also, the decision of writ petition OWP No. 2349/92 titled Kranti Hotels v. J. &K. State Industrial

Development Corporation does not operate as res judicata as had been pleaded by Mr. Lone because no issue was decided in that case. That

writ petition was not even admitted and there was an ex parte direction to the respondents to consider the case of the petitioner which was

considered and that decision is now one of the grounds of challenge in this writ petition.

In the backdrop of the fact situation stated above the principle of promissory estoppel would come into play by estopping respondent-2 from

backing out of its obligation arising from a solemn promise made by it to the petitioner. In the result, the petition is accepted and a writ of

mandamus is issued directing respondent-2 to disburse the sanctioned loan in the sum of Rs. 70 lakhs (Rupees seventy lakhs) in favour of the

petitioner within a period of two months from the receipt of this order. Also, respondent-5 is directed to release the balance loan of Rs. 30 lakhs in

favour of the petitioner within the same period. Communication dated 5-11-92 bearing No. IDC/ROJ/91/87/247 (annexure-J) is hereby quashed.

By the grant of these reliefs substantial justice will be done and in view of the changed circumstances there is no necessity for going into the

other reliefs claimed by the petitioner. Mr. Z. A. Shah, the counsel of the petitioner had admitted that by the decision of this case, writ petition

bearing No. 3108/92 would become infructuous and he will withdraw the same. These reliefs have been granted to the petitioner because equity is

in his favour. It is equally expected from the petitioner that he will not peruse the litigation in other cases pending with the respondents in which

equity is not in his favour. By adopting such reciprocal and pragmatic approach final curtain can be drawn on the long drawn litigation pending

between the parties in different forums.