1 IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA RFA No. 240 of 2005 Date of Decision: 12th November, 2009 Onkar Singh and another Appellants Versus H.P.F.C. and others. Respondents. Coram The Hon’ble Mr. Justice Sanjay Karol,J. Whether approved for reporting1? No. For the appellants: Mr.Ramakant Sharma, Advocate. For the respondent No.1: Mr. Ajay Sharma, Advocate. Sanjay Karol, J. (Oral) By way of present appeal filed under Section 96 of the Code of Civil Procedure, 1908, the judgment and decree dated 20.5.2005 passed by District Judge, Kangra, in Civil Suit No. 9-N/I/2004 (1994), titled as H.P.F.C. vs. M/s Kandwal Woolen & Silk Mills, and others, has been assailed. Before the Court below the appellants herein were defendants No.2 and 3 and respondent No.1 was the plaintiff and the parties herein are referred to as defendants and plaintiff. The plaintiff filed a suit for recovery of a sum of Rs.8,38,324/- with future interest w.e.f. 1.2.1994 against defendant No.1 M/s Kandwal Woolen & Silk Mills, of which defendants No.2 and 3 were partners. The defendant No.1 firm through its partners, on 5.4.1978 Whether the reporters of Local Papers are allowed to see the Judgment? 2 applied for grant of loan amounting to Rs.2,20,000/- for construction of building and purchase of plant and machinery for setting up an industrial unit at Raja-ka-bagh, District Kangra. The loan amount sanctioned by the plaintiff on 14.8.1978 was duly availed by the defendant during the financial year 1979-80. The defendants also executed mortgage deed dated 8.1.1979, which was duly registered before the Sub Registrar, Nurpur. As per the agreed terms, the defendants were to pay interest alongwith principal amount in 18 half yearly installments commencing from 10.6. 1980. Since the defendants failed to comply the terms of the mortgage and stick to the repayment schedule, the entire outstanding amount, in terms of the agreement was recalled vide notice dated 24.6.1982. Proceedings under the H.P. Public Moneys (Recovery of Dues) Act, 1973 were initiated which were subsequently withdrawn by the plaintiff and subsequently proceedings under the State Financial Act, 1951 were initiated. After due notice and compliance of provisions of law, the unit/mortgaged property was taken over and with prior intimation to the defendants, the assets were sold for a sum of Rs.3,68,000/-. The sale of the assets took place on 31.8.1991 and 21.4.1992. After due adjustment of the sale proceeds, notice dated 24.11.1991 was issued to the defendants, pay the balance remaining amount of Rs.6,33,789.61 within a period of one month. Since the defendants failed to pay, the plaintiff filed the suit claiming a sum of Rs.8,38,324/-, due and payable by the defendants alongwith interest upto 31.1.1994. Initially the suit was filed by impleading Shri Sudarshan Kumar Gupta, as defendant No.2 being partner of defendant No.1-firm. 3 However, vide orders dated 28.6.1996 his name was deleted as he had died prior to the filing of the suit. The defendants resisted the suit inter alia on the ground that it was barred by limitation. On the pleadings of the parties, the Court below framed the following issues:- 1. Whether the suit is within limitation? OPP 2. Whether the plaintiff is estopped by his own acts of omission and commission from filing the present suit? OPP 3. Whether the suit is bad for non-joinder of the necessary parties. If so, its effect? OPD. 4. Whether the suit in the present form is not maintainable? OPD. 5. Whether cause of action survives in favour of the plaintiff after taking over the unit? OPP. 6. Whether the sale of the industrial unit by the plaintiff is arbitrary and as a result of inaction and without notice to the defendants and what is its effect? OPD. 7. Whether the plaintiff-Corporation is entitled to suit amount? If so, from whom? OPP. Opportunity to lead evidence was afforded to the parties. Appreciating the material on record, the Court below held that since the issue of limitation already stood adjudicated by the Apex Court in terms of its judgment dated 18.12.2003, therefore, no further orders were required to be passed. Issues No.2,3 and 4 were decided in the negative for want of any evidence/material placed on record by the defendants. 4 While deciding Issue No.6, the Court found that notice (Ext.P-4) in fact stood issued to the defendants before taking over the industrial unit and sale thereof. In the absence of anything to the contrary, in my considered view, the Court below rightly held that the sale of the industrial unit by the plaintiff was not arbitrary. While deciding issues No.5 and 7, the Court held as under:- “18. Since both these issues are inter-connected and inter-linked with each other, as such, the same are taken up together for discussion and disposal. 19. As per the statement of Accounts Ex.P6, a sum of Rs.8,38,324.11 paise remains due in favour of the plaintiff- corporation from the defendants upto January 31, 1994, even after sale of their industrial unit. I have perused the statement of PW1 Sh.B.D.Kashyap, Deputy General Manager, HP Financial Corporation, who has deposed that the defendants had taken a loan of Rs.2,20,000/- from the plaintiff-corporation on August 14, 1978 for installation of factory of clothes. The loan was to be re-paid in Eighteen half-yearly instalments from June 10, 1980 to December 10, 1988. However, the defendants defaulted in making re- payment and, therefore, notices, copies of which are Ex.P2 to Ex.P4, were served upon them, including the last notice, copy of which is Ex.P5, when they were called upon to pay the balance amount of Rs.6,33,789.61 paise, due on the date of issuance of notice Ex.P5. There is nothing in the cross-examination of this witness that such due amount was paid by the defendants to the plaintiff-corporation nor this defence has been taken by them in their written statement. I have also perused the statement of DW1 Sh.Onkar Singh, who has simply denied that such amount on the said date was due from the defendants in favour of the plaintiff- corporation. Therefore, in my considered opinion, cause of action survives in favour of the plaintiff-corporation, even 5 after sale of their industrial unit, because the balance amount of Rs.6,33,789.61 paise, remained due thereafter also, which amount has now swollen to Rs.8,38,324.11 paise. It is fortified from the statement of accounts Ex.P6 as well. Therefore, I further hold that the aforesaid amount of Rs.8,38,324.11 paise is due from the defendants in favour of the plaintiff-corporation as on February 1, 1994. So both these issues are decided in favour of the plaintiff- corporation and against the defendants.” During the course of hearing Mr. Ramakant Sharma, learned counsel for the appellant could not point out as to in what manner the aforesaid findings are either erroneous, illegal or not borne out from the record. The plaintiff had disbursed the amount to the defendants on agreed terms. Documents including the mortgage deed had been duly executed by the defendants. The statement of accounts Ex.P-6 stands duly proved by the plaintiff’s witness. The suit amount in fact was due and payable by the defendants to the plaintiff. No error in the same could be pointed out during the course of hearing. The plaintiff had a right in law to recover the amount due and payable by the defendants after adjustment of the sale proceedings. There being no infraction of any law in the sale of the unit taken over by the plaintiff, it cannot now be contended that the sale was illegal, arbitrary and carried out in a capricious manner. As noticed hereinabove, even the trial Court could not find any material to hold to the contrary. The Court below has correctly appreciated the material in entirety. It was open for the defendants to have participated in the sale proceedings. Importantly, it is not the defendants’ case that the sale was carried out in collusion or connivance with the officials of the plaintiff. It 6 is also not the defendants’ case that their better offer had been ignored. No material had been ignored by the Court below. It cannot be said that the judgment is based on surmises and conjectures. It has also been argued that original defendant No.2 Shri Sudarshan Kumar Gupta, was partner to the extent of 34% and that the defendants liability is restricted and limited. The contention needs to be rejected as there is no material on record to prove the same. That apart, the partners’ liability being joint and several the plea is not open to the remaining defendants. The original defendant No.2 was deleted in terms of order dated 28.6.1996 passed by this Court, which is reproduced as under:- “Shri Bimal Gupta, vice counsel for the plaintiff states that in view of Order 30 rule 4 C.P.C. the legal representatives of deceased respondent No.2 are not required to be brought on record and his name may be deleted from the array of respondents. Prayer allowed. Order accordingly. Name of respondent No.2 be deleted from the array f respondents.” The said order was never challenged by the remaining defendants. Hence the content that the suit was bad for non-joinder of the parties is misconceived. No such issue was either framed or pressed by the parties before the trial Court. The provisions of Order 30 Rule 4, C.P.C. are evidently clear and the suit cannot be said to be bad for non- joinder of parties. For the aforesaid reasons, the present appeal being devoid of merits is dismissed. However, there shall be no order as to costs. 12th November, 2009 (Sanjay Karol) (C) Judge. 7