R.S.A. No. 2059 of 2008 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH R.S.A. No. 2059 of 2008 Date of Decision: 17.10.2008 M/s P.S. Silk Mills (P) Ltd. And another ...Appellants. Versus Punjab Financial Corporation and others ...Respondents. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Sunil Chadha, Advocate for the appellants. **** AJAY KUMAR MITTAL, J. Having failed before the courts below, the plaintiffs have approached this Court by way of the present regular second appeal against the judgment and decree dated 10.1.2008 passed by the lower appellate court affirming that of the trial court dated 25.5.2006 vide which the suit of the plaintiff for mandatory and permanent injunction besides rendition of accounts, was dismissed. The factual back-drop leading to the present round of litigation would reveal that the plaintiffs applied for a term loan to the defendant-Corporation which was sanctioned to the tune of Rs.20,50,000/-, out of which an amount of Rs.12,30,000/- was disbursed on execution and registration of the mortgage deed dated R.S.A. No. 2059 of 2008 -2- 18.10.1994 in its favour. It was pleaded that without any reason, the defendant-Corporation failed to disburse the remaining sanctioned amount of loan instead had adjusted an amount of Rs.52,486/- towards interest for the period upto 15.3.1995 without any intimation. It was further pleaded that vide demand letter dated 5.7.1995, the defendant- Corporation directed the plaintiffs to pay an amount of Rs.1,78,575/- and again adjusted an amount of Rs.52,500/-, whereas the amount of interest upto that date came to be Rs.30,346/- thus, charging an excess amount of Rs.22,154/-. On 16.5.1995, an amount of Rs.56,500/- was adjusted against the interest due. The plaintiffs on 28.8.1995 and 30.8.1995 had deposited amount of Rs.90,000/- and Rs.32,075/-, respectively. The Corporation vide demand notice dated 6.10.1995 again demanded an amount of Rs.95,049/- as interest for the period 15.7.1995 to 14.10.1995 and the plaintiffs had paid an amount of Rs.95,000/- on three different dates. Thereafter, in the month of January, 1996, the defendant-Corporation demanded interest for a period of three months from 16.10.1995 to 15.1.1996 despite the plaintiffs having already paid an excess amount upto January, 1996. According to the plaintiffs, due to excessive and untimely rain and snowfall and the local assembly election in the State they had suffered losses in the venture and the unit had gone sick. They requested the defendant-Corporation to rehabilitate the unit by giving the due and requisite reliefs but the defendant-Corporation vide letter dated 13.1.1998 had demanded an amount of Rs.9,53,000/- as due upto 30.9.1997. Thereafter, the defendant-Corporation issued another notice dated 6.2.1998 directing the plaintiffs to pay an amount of R.S.A. No. 2059 of 2008 -3- Rs.10,77,000/-. On the asking of D.C. Aggarwal, the plaintiffs deposited two cheques of Rs.50,000/- each with Shri V.K. Aggarwal, Branch Manager and the cheque dated 20.3.1998 was tampered with by inserting amount of Rs.51,000/- instead of Rs.50,000/-. It was also pleaded that the defendant-Corporation issued an advertisement for putting on sale the taken over units including the units of the plaintiffs and vide order dated 25.7.1988, the trial Court restrained the defendant- Corporation from forcibly dispossessing the plaintiffs from the units. It was next pleaded that the plaintiffs were to receive the State subsidy of Rs.4,74,000/- in the case of M/s P.S. Silk Mills and the said amount was to be deposited with the Punjab Financial Corporation directly. The powers given by the Legislature to the Financial Corporation under Section 29 of the State Financial Corporation Act, 1951 (hereinafter referred to as “the Act”) were not only arbitrary but the same were irrational as no guidelines were provided as to how and when such powers were to be exercised which are ultra vires the Article 14 of the Constitution of India. The units of the plaintiffs had been taken over with malafide intention by passing an order by defendant No.2 causing wrongful loss to them. The plaintiffs' unit was entitled to the benefits as a sick unit under the instructions of the Reserve Bank of India. The plaintiffs requested the defendants to admit their claim but all in vain and that gave rise to the filing of the suit. To controvert the claim of the plaintiffs, the defendants filed a joint written statement raising various preliminary objections. It was pleaded that the loan amount of Rs.20.50 lacs was sanctioned and availed by the plaintiffs after executing a registered mortgage deed in R.S.A. No. 2059 of 2008 -4- favour of the defendant-Corporation. The plaintiffs company had been in default in making the repayment of the loan amount and there was an outstanding balance of Rs.26.69 lacs. On 6.2.1998, the notice under Section 29 of the Act was issued to the company which failed to evoke any response and the defendant-Corporation took over the unit on 25.3.1998. It was further pleaded that the defendant-Corporation was well within its right under Section 29 of the Act to recover its dues by sale of assets and the plaintiffs had filed the suit just to delay the proceedings and sale of the mortgaged assets by them for recovery of the outstanding amount. Besides denying the other averments made in the plaint, a prayer for dismissal of the suit was made. The plaintiffs failed to lead any evidence in support of the their pleadings despite having availed various opportunities. The trial court vide judgment and decree dated 25.5.2006 dismissed the suit of the plaintiffs under Order 17 Rule 3 of the Code of Civil Procedure. In appeal, the lower appellate court vide judgment and decree dated 10.1.2008 dismissed the appeal . I have heard the learned counsel for the appellants. The lower appellate court had noticed that the plaintiff- appellants despite availing of six opportunities did not lead any evidence and also that the counsel for the plaintiffs was reluctant in furnishing the list of witnesses to be examined and to make a statement that the plaintiffs would produce the witnesses at their own risk and responsibility. The findings are to the effect that the intention of the plaintiffs was to delay the recovery proceedings initiated by the defendants and, therefore, do not call for any interference by this Court R.S.A. No. 2059 of 2008 -5- in the regular second appeal. Further more, this intention of the plaintiffs is further fortified from the fact that they allowed the suit to be dismissed in default on 30.8.1999 and got the same restored on 27.7.2000 by moving an application for restoration. No question of law, much less a substantial question of law arises in this second appeal for determination of this Court. In view of the above, there is no merit in this appeal and the same is hereby dismissed with no order as to costs. October 17, 2008 (AJAY KUMAR MITTAL) gbs JUDGE