Shri Deepak Bhandari vs H.P. State Industrial Development Corporation Ltd. and Others

Dev Darshan Sud, J.—This appeal has been filed by the Defendant Deepak Bhandari against the judgment and decree passed by Hon''ble Single Judge decreeing the suit of the Plaintiff for a sum of Rs. 30,60,762/- alongwith interest at the rate of 12% per annum from the date of suit till its realization.

The first question, raised for consideration, is that the suit instituted by the Plaintiff was barred by time. Issue No. 1 was settled on this point by the Court and decided in favour of the Plaintiff-Respondent. The Hon''ble Judge, relying upon the judgment of the Supreme Court in Civil Appeal No. 1971 of 1998, titled: Himachal Pradesh Financial Corporation v. Smt. Pawna and Ors., decided on 18th December, 2003, held that the suit was within time. Learned Counsel appearing for the Appellant-Defendant urges that this judgment is distinguishable on the facts because in Pawna''s case the Supreme Court was dealing with Clause-7 of the mortgage deed which itself provides that limitation would start from the date after the assets of the loanee had been sold. Learned Counsel submits that there is no mortgage deed in the present appeal.

We cannot accept this contention urged on behalf of the Appellant-Defendant. In H.P. State Industrial Development Corporation v. Form Techniks (India) Pvt. Ltd. and Ors. 2001 (3) Shim. L.C. 204 , on the question of limitation, Clause (5) of Part VIII of the agreement was considered by this Court and it was held that limitation would start only after the loan was recalled at the option of the Plaintiff which right was reserved to the Plaintiff. It is undisputed before us that same clause which was the subject matter of adjudication in Form Techniks''s case is also verbatim a part of the agreement Ext. PW1/A, Ext. PW1/B and Ext. PW1/C executed between the parties. In The H.P. State Industrial Development Corporation Ltd. Vs. Gobind Pharm Chem Pvt. Ltd. and Others, , this question was again considered by this Court holding:

Clause 5 of Part-VIII of the agreements Exts. PW3/A and PW3/B has been the subject of consideration by two different Single Benches of this Court in two separate cases, instituted by the Plaintiff. The first such case is H.P. State Industrial Development Corporation v. Form Techniks (India) Pvt. Ltd. and Ors. 2001(3) Shim. L.C. 204. I this case the Court observed that the clause gives a discretion to the Plaintiff either to enforce the payment of the amount in respect of which default has been committed or by a notice in writing re-call the entire amount of loan and enforce its immediate payment and that if a notice of re-call is given, suit can be filed within three years of the date of the re-call notice.

The second case is The H.P. State Industrial Development Corpn. Ltd. Vs. Kesri Roller Flour Mills and Others, In this case it has been held that under this clause the Plaintiff has the option to declare the principal, due at the time of default, to be payable immediately by serving a notice in writing and on such declaration, the principal amount then payable, the interest and all other moneys payable under the agreement, would become due and payable immediately and that the cause of action accrues to the Plaintiff to institute the suit on the date of the notice.

These two precedents negate the submissions made by the learned Counsel for the Defendants. Consequently the issue is found against the Defendants.

One of us (Justice D.D. Sud) has followed the ratio of the decision in Form Techniks and Gobind Pharm''s case in Civil Suit No. 30 of 2002 decided on 1.12.2009.

We are in agreement with the ratio of the law laid down in the cases noticed by us above. We, therefore, hold that the suit of the Plaintiff-Respondent is within limitation. Submission made on behalf of the Appellant that Ext.PW1/L which is the notice recalling the loan amount is not valid cannot be accepted as the notice, though does not use the word ''recall'' but a reading of this document in its entirety leaving no doubt in our mind that the entire loan amount has been recalled.

The second contention raised by the Appellant is that issue No. 7-A has not been decided by the Hon''ble Single Judge as the suit was not properly constituted or instituted for or on behalf of the Plaintiff. There was no evidence to show that the Secretary was duly authorized to file the suit. We cannot accept this submission. The Hon''ble Single Judge, relying upon the statement of PW-2 Shri M.K. Chaudhary, holds that the suit has been properly constituted. We are unable to find anything on the record to indicate that he was not authorized to institute the present suit. In Form Techniks, case (supra), the authority of this very Officer to act on behalf of the Corporation was challenged. The issue was decided against the Defendant holding that Shri Chaudhary was infact duly authorized to institute the suit. We, therefore, do not find any justification in the submissions made by the Respondent-Defendant that the Officer was not duly authorized to institute the suit.

The last contention raised by the learned Counsel appearing for the Appellant is that interest has been awarded on a higher rate and that the Appellant-Company being a sick Unit, interest could not have been awarded at 12% as determined by the Hon''ble single Judge. This contention is rejected. The loan is a commercial transaction and interest would be payable at the rate agreed to between the parties. No other point is urged. We, therefore, find no merit in this appeal which is dismissed. There shall be no order as to costs.