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Judgment
Augustine George Masih, J.—The petitioner-a partnership firm has challenged the notice dated 23.01.2007 (Annexure P8) issued u/s 29 of the State Financial Corporations Act, 1951 (for short "1951 Act") served on it by the Respondent-Punjab State Financial Corporation (hereinafter referred to as "respondent-Corporation") in the light of the statement of accounts of the petitioner-firm as per letter dated 16.10.1989 (Annexure P2), according to which petitioner-firm has paid the full amount rather has paid an amount of Rs. 55,509.42 over the agreed amount. Petitioner-firm was sanctioned a loan of Rs. 13.00 lacs by the respondent-Corporation for the purpose of establishing a cold storage unit on 27.01.1976. Mortgage deed in favour of respondent-Corporation was executed by the petitioner-firm on 01.06.1976. Out of the sanctioned loan amount, Rs. 10.29 lacs were availed by the petitioner-firm. During the days of militancy in Punjab in nineteen eighties, all cold storage units in Punjab went through a lean period and became sick. Even the recoveries of the loan amounts due from the borrowers became difficult and, therefore, the State Government recommended a Scheme for settlement of the loan accounts of such units. In pursuance thereto, the Board of Directors of the respondent-Corporation floated a proposal for concessions on case to case basis authorising the Managing Director through a resolution dated 30.05.1986 to sanction the same in the case of deserving units.
Petitioner-firm being covered by the Package of Concession to sick cold storage units was held entitled to the benefit of the same and was granted concession to enable it to rehabilitate its unit and reschedule its account as is apparent from the letter dated 16.10.1989 (Annexure P2). As per the said letter, a concession of Rs. 9,06,225.21 in the principal and interest w.e.f. 15.06.1986 was sanctioned to the petitioner-firm and the schedule of payment was also provided, according to which the petitioner was required to pay back its loan amount by 15.12.1995. To this offer, the petitioner-firm gave its consent and also fulfilled all the terms and conditions of the letter (Annexure P2). Petitioner-firm started repaying the amount to the respondent-Corporation. Entire amount totalling Rs. 16.90 lacs against the rescheduled amount was paid on 29.11.1995, which was well before the last date, i.e., 15.12.1995. It is asserted that besides paying back the amount due with respect to interest amount, principal amount as well as interest on principal amount, an amount of Rs. 55,509.42 in excess was paid to the respondent-Corporation above the agreed amount.
Petitioner-firm after payment of the last instalment requested the respondent-Corporation through representation dated 07.12.1995 (Annexure P3) to settle its account as per the terms of the letter dated 16.10.1989 (Annexure P2) calling upon the respondent-Corporation to issue No Dues Certificate and return all original documents of land and other loan documents to the petitioner. All through, the petitioner had been approaching the respondent-Corporation and visiting its office, meeting officials for the issue of No Dues Certificate and for the return of the original documents, but without any result.
No communication was received from the respondent-Corporation, when after almost a gap of ten years to the surprise and shock of the petitioner, a letter dated 15.01.2004 was received from the respondent-Corporation calling upon the petitioner-firm to deposit an amount of Rs. 13.41 lacs, i.e., principal amount Rs. 9.07 lacs plus Rs. 4.34 lacs as interest thereon being balance w.e.f. 15.05.1988. This amount was to be paid within a period of fifteen days. Petitioner-firm approached the respondent-Corporation and pleaded with them that the said amount was a concession amount given and allowed to the petitioner as per policy decision vide letter dated 16.10.1989 (Annexure P2) and, therefore, the action of the respondent-Corporation was totally unjustified.
Thereafter meetings were arranged and various communications were exchanged, but without any result. In the end, petitioner-firm submitted an application under the Right to Information Act seeking the details of the accounts, which information was supplied to the petitioner-firm vide letter dated 25.09.2007. On 23.01.2007, notice/order issued u/s 29 of the 1951 Act ordering the possession of the land measuring 36 kanals 16 marlas, situated in the revenue estate of village Khokhar, Tehsil Dasuya, District Hoshiarpur together with building constructed thereon along with machinery was sought to be taken over by the respondent-Corporation and the deemed possession was taken on 14.08.2007. However, the physical possession continued with the petitioner-firm. Thereafter also, efforts were made by the petitioner to persuade the respondent-Corporation to finalise the accounts of the petitioner in the light of the letter dated 16.10.1989 (Annexure P2), but in futility. This forced it to approach this Court through the present writ petition impugning the action of the respondent-Corporation.
Learned Senior Counsel for the petitioner has made his submissions on the basis of the pleadings and has asserted that once the amount due has been informed to the petitioner-firm as per the decision of the Managing Director of the respondent-Corporation vide a communication dated 16.10.1989 (Annexure P2) and the amount calculated therein was paid well in time within the rescheduled period, respondent-Corporation cannot now be permitted to resort to the provisions of the 1951 Act vide order dated 23.01.2007 (Annexure P8).
Upon notice, reply has been filed by the respondent-Corporation, wherein it has been stated that the petitioner-firm had not been coming forward to settle its account with the respondent-Corporation and has not fulfilled the original terms and conditions of the mortgage deed dated 01.06.1976, according to which the unit had to be commissioned within a period of three months and there could be no change in the constitution of the company. These two conditions have been violated and, therefore, the letter dated 16.10.1989 would not be binding upon the respondent-Corporation. Even as per the terms of the cold storage concession offered to the petitioner-firm, further interest was recoverable from 15.12.1995 onwards as the payment was not made as per the terms of the concession granted to the cold storage unit and the amount has been debited in the account of the petitioner-firm as per the terms of the mortgage deed. Reference has been made by the learned counsel for the respondent to the letter dated 06.09.1999 which is addressed to the petitioner-firm, wherein it was intimated that a total amount of Rs. 13.41 lacs is still outstanding and was in default on 30.06.1986. The contention, thus, is that it is wrong to assert that the respondent-Corporation had not been informing the petitioner firm about the dues, which were to be recovered from it as per the terms of the mortgage deed. Prayer has, thus, been made for dismissal of the writ petition.
We have considered the submissions made by the learned counsel for the parties and with their assistance have gone through the records of the case.
In our considered view, after coming into existence of reschedulement-concession to the cold storage industries vide letter dated 16.10.1989 (Annexure P2) addressed to the petitioner-firm which gave the details of the amount to be paid by the petitioner-firm and the schedule of the payment and the rescheduled payment, the terms and conditions thereof would be covered and governed by the said letter, which is based upon the policy decision of the Board of Directors dated 30.05.1996, which dealt with the package of concession to sick cold storage units, which was to enable the said industry to rehabilitate its unit and reschedule its account. It is not disputed that as per the reschedule of the payments, petitioner-firm has, prior to the expiry of the period specified, i.e., 15.12.1995 had paid the entire amount to the respondent-Corporation by 29.11.1995. If that be so, it does not lie in the mouth of the respondent-Corporation to now assert that there was some default on the part of the petitioner-firm in violating the terms of the said letter by way of non-commission of the unit within three months and for not changing the constitution of the partnership firm. It may be clarified here that the re-constitution of the firm was necessitated because of the death of one of the partners of the firm and as regards the commissioning of the unit is concerned, it has been stated that the same was indeed commissioned within the time stipulated by the learned counsel for the petitioner and in this regard he has referred to the rejoinder filed by the petitioner-firm, which goes unrebutted. In view of the above, the present writ petition is allowed. Notice/Order dated 23.01.2007 (Annexure P8) is hereby quashed. The account of the petitioner stands settled and a direction is issued to the respondent-Corporation to return the original documents submitted by the petitioner-firm at the time of execution of the mortgage deed, i.e., 01.06.1976 within a period of one month from the date of receipt of copy of this order.