SSK/ 1 WP/1182.10 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1182 OF 2010 WITH NOTICE OF MOTION NO 253 OF 2011 IN WRIT PETITION NO. 1182 OF 2010 The Board of Trustees Maharshtra State Road Corporation Contributory Provident Fund & Anr. ....Petitioners Versus The State of Uttar Pradesh through its Principle Secretary ...Respondents Mr. Zal Andhyarujina i/b. M/s. Rustomji & Ginwala, Advocates for the petitioners. Mr. Dinesh S. Sehgal, Advocate for the respondents. CORAM : SMT. RANJANA DESAI & RANJIT MORE, JJ. DATED : 21st JUNE, 2011. P.C.: Rule. By consent of the respective parties, Rule is made returnable forthwith. Respondent through its counsel waives service. 2. The petitioners, as the trustees of the Maharashtra State Road Transport Corporation (MSRTC) Employees’ Provident Funds and Gratuity Fund have during the period between December, 1998 to February, 1999 invested a sum of Rs.4,26,50,000.00 in 16% Government Guaranteed SSK/ 2 WP/1182.10 Bonds floated by the Uttar Pradesh Spinning Mills Federation Ltd. (U.P.S.M.F.L.) for 5 years. Said bonds were guaranteed by the respondent under a Letter of Guarantee dated 18th August, 1998, thereby unconditionally and irrevocably guarantying the payment of the principle amount and interest. 3. Initially, for one year, the Uttar Pradesh Spinning Mills Federation Ltd. paid interest at 16% p.a. amounting to Rs.68,24,000/- to the petitioners upto 30.4.2000 but thereafter, they defaulted in paying the principle amount under the bonds on its maturity as also further interest. The petitioners, therefore, filed Summary Suit Nos.1357 of 2007, 1609 of 2007 and 1356 of 2007 against the respondent for recovery of the principle amount and interest. 4. However, relying on the judgment and order dated 15th October, 2008 passed by the Hon’ble Supreme Court in Civil Appeal No.6126 of 2008 (State of U.P. Vs. Hindustan Unilivers Ltd. & Ors.), the petitioners have preferred the above petition seeking writ of mandamus against the respondent directing the respondent to perform the guarantee dated 18th August, 1998 given to pay the principle amount and interest under the 16% Government guaranteed bonds as aforesaid. SSK/ 3 WP/1182.10 5. By an order dated 1st March, 2011 passed in the above petition, a Division Bench has already directed the respondent to deposit a sum of Rs.4,26,50,000.00 in Court. 6. Before us the respondent has not disputed its liability to pay to the petitioners, the aggregate principle amount of Rs.4,26,50,000.00 in respect of the 16% Government guaranteed bonds along with interest thereon. 7. The parties are not at dispute that one Hindustan Unilever Ltd. (formerly Modern Food Industries (India) Ltd. & Anr.) in similar circumstances approached the Delhi High Court by filing Writ Petition (C) No.16462/63 of 2004 against the respondent. By Order dated 21st November, 2005, Delhi High Court disposed of this writ petition by directing the respondent to pay to Hindustan Unilever Ltd. the amount due to them under the guaranteed bonds. The responden thereafter challenged the above order of the Delhi High Court by filing Civil Appeal No.6126 of 2008. The Supreme Court by its order dated 15th October, 2008 upheld the Delhi High Order with modification in respect of rate of interest for further period after the expiry of 1st five years from the date of deposit. We note that the formula set out in the Supreme Court order is that interest was calculated at the rate of 14.9% for five years from the date of deposit and further interest was calculated at the rate of 9.5% p.a. till payment. SSK/ 4 WP/1182.10 8. Accordingly, the petitioners through their counsel have submitted a statement showing the calculation of the aggregate principle amount due on the bonds amounting to Rs.4,26,50,000.00 with simple interest thereon at the rate of 14.9% p.a. for five years upto 30.04.2004 amounting to Rs.2,54,19,400.00 (after giving credit to the respondent for interest amounting to Rs.68,24,000/- for the first year ending 30.04.2000) and thereafter, at the rate of 9.5% p.a. till 31.05.2011 amounting to Rs.2,86,99,896.00. As per the calculation the aggregate amount now payable to the petitioners by the respondent is Rs.9,67,69,296.00. This calculation is not disputed by the respondent. 9. Since, the facts in the above writ petition are identical to the facts in the Hindustan Unilever case (supra) (except that the interest on the bonds in the above writ petition is 16% p.a. while in the case of Hindustan Unilever case was 14.90% p.a.) we direct the respondent to pay to the petitioners, the said sum of Rs.9,67,69,296.00 as per the statement/calculation submitted by the petitioners. 10. The respondent has filed the above Notice of Motion No.253 of 2011 for transfer of an amount of Rs.3 Crore plus interest in control of the Prothonotary & Senior Master, High Court as per the Order of this Court SSK/ 5 WP/1182.10 passed in the above writ petition on 1st March, 2011. The petitioners have already filed Suit No.2792 of 2000 for recovery of an amount in respect of non-guaranteed bonds issued and allotted by U.P.Co-operative Spinning Mills Federation in this Hon’ble Court in which the Court Receiver is appointed. The Court Receiver has sold the plant and machinery of Itawa Mill for about Rs.1.85 Crore and plant and machinery of Sitapur Mill for about Rs.1.68 Crore and total amount of Rs.3.53 Crore is lying with the Court Receiver, High Court of Bombay. The Registrar, Handloom & Textile Co-operative Spinning Mills Federation has challenged the sale of the aforesaid two mills by the Court Receiver in Supreme Court by filing Special Leave Petition (Civil) No. 11184 of 2007 on the ground that the said mills were sold at very meagre price. By Orders dated 4th June, 2007 and 20th July, 2007, the Supreme Court directed the above said Registrar to deposit amount of Rs.3 Crore with the Prothonotary and Senior Master, High Court of Bombay and the said amount was deposited by the Registrar with the Prothonotary & Senior Master on 11th February, 2008. The respondent claim that this amount was made available by it to the Registrar for depositing the same in the High Court of Bombay. The Supreme Court by Order dated 1st April, 2010 dismissed the above Special Leave Petition. However, the amount deposited by the Registrar, Handloom and Textile Co- operative Spinning Mills Federation in terms of order dated 20th July, 2007 was directed to be returned along with the interest. In these facts and SSK/ 6 WP/1182.10 circumstances, the respondents have filed the above notice of motion for permission to adjust this amount of Rs. 3 Crore deposited with this Court in Suit No.2792 of 2000 along with accrued interest thereon amounting to Rs. 50,47,864 (in all aggregating to Rs.3,50,47,864/-). The petitioners have no objection if this amount is adjusted towards their claim against the respondent. The Prothonotary & Senior Master, High Court, Bombay, is therefore, directed to forthwith pay to the petitioners the said amount of Rs.3,50,47,864/-. After adjusting the said amount of Rs.3,50,47,864/-, the respondent is liable to pay an amount of Rs.6,17,21,432/-. The respondent deserves to be granted sometime to pay the said amount to the petitioner. The respondent is accordingly granted time till 31st October, 2011. 11. The petitioners undertake to unconditionally withdraw the Summary Suits being Summary Suit Nos.1357 of 2007, 1609 of 2007 and 1356 of 2007 filed against the respondent. 12. It is clarified that the present order is only in respect of the Guaranteed Bonds issued by the UPSMFL; the same will not have any bearing whatsoever on the liability of UPSMFL in respect of the petitioners claim in Suit No.2792 of 2000 for the non-guaranteed bonds and/or any interlocutory proceedings therein and/or in any manner affect any orders passed therein. SSK/ 7 WP/1182.10 13. The Writ Petition and Notice of Motion No.253 of 2011 are disposed of accordingly with no orders as to costs. (RANJIT MORE, J.) (SMT. RANJANA DESAI, J.)