R.S.A.No.1852 of 2009 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision : 16.09.2009 R.S.A.No.1852 of 2009 Haryana Financial Corporation ...Appellant Versus Halcyon Pharmaceutical Limited and another ...Respondents R.S.A.No.1855 of 2009 Haryana Financial Corporation ...Appellant Versus Halcyon Pharmaceutical Limited and another ...Respondents CORAM:HON'BLE MR. JUSTICE HEMANT GUPTA Present: Mr. Kamal Sehgal, Advocate, for the appellant. Mr. G.R.Nagar, Advocate, for the respondents. HEMANT GUPTA, J. (ORAL) This order shall dispose of RSA No.1852 of 2009 and RSA No.1855 of 2009 filed by the defendant aggrieved against the judgment and decree passed by the learned first Appellate Court, whereby the appeal filed by the plaintiff was accepted and that of defendant dismissed and the suit decreed in its entirety. The plaintiff availed financial assistance from the defendant in the year 1996 of Rs.58,53,000/-. As per the plaintiff, the entire loan amount including pre-payment charges was paid in the year 2002. In the year 2003, the defendant claim a sum of Rs.9376/- as due from the plaintiff. It was also paid. Thereafter, the defendant has issued No R.S.A.No.1852 of 2009 2 Objection Certificate. But still now a notice has been issued to recover a sum of Rs.15 lac under Section 29 of the State Financial Corporation Act, 1951 (for short 'the Act'), which is said to be illegal in the present suit. In reply, it was pointed out that vide agreement dated 9.5.1996 loan amounting to Rs.1,12,25,000/- was sanctioned, but only Rs.58,53,000/- was disbursed as loan to the plaintiff. It is also admitted that since the plaintiff committed default in payment of dues, notice under Section 29 of the Act was served upon the plaintiff. It is pointed out that a sum of Rs.1,16,786/- was wrongly credited without recovery of the amount. Thus, a sum of Rs.15,02,000/- is still due and payable by the plaintiff. The parties have led evidence in respect of their respective stand. The learned trial Court found that the amount of Rs.2,89,471/- is due to the defendant on account of interest for the quarter 1.11.1998 to 12.1.1999. Therefore, the suit was partly decreed, but the defendant was permitted to recover the aforesaid amount. Separate appeals were filed by the plaintiff and defendant before the first Appellate Court. The learned first Appellate Court dismissed the appeal filed by the defendant, but allowed the appeal of the plaintiff and decreed the suit in its entirety. It was held that the demand of Rs.2,89,471/- after issuing No Objection Certificate in the year 2002 is beyond the period of limitation. Learned first Appellate Court found that the accounts of defendant were regularly audited and that vide letter dated 23.6.2003 Ex.P-5, outstanding balance communicated to the plaintiff was Rs.9097/-. The said amount was received vide letter dated 2.7.2003 Ex.P-6. The defendant raised the demand of Rs.2,89,471/- as an interest for the period from 1.11.1998 to R.S.A.No.1852 of 2009 3 1.2.1999 for the first time by issuance of letter dated 20.6.2007 Ex.P-10. Thus, the Court found that the demand is beyond the period of limitation. Learned counsel for the appellant has vehemently argued that the Court has erred in law in assuming that the period of limitation to recover the aforesaid amount is 3 years. In fact the property was mortgaged and, therefore, the demand of the defendant to recover the balance amount against the property mortgaged cannot be said to be barred by limitation. I do not find any merit in the argument raised by the learned counsel for the appellant. The defendant demanded a sum of Rs.9097/- vide letter dated 23.6.2003. The defendant acknowledged the receipt of said amount vide letter dated 2.7.2003 Ex.P-6. By raising the demand of the specific amount, it necessarily implies that the account between the parties stood settled. Therefore, the demand raised in June 2007 cannot be said to be against the property mortgaged. The suit to challenge the said demand has been rightly decreed as the claim of the defendant cannot be said to be within the period of limitation nor the said amount is in terms of mortgage. Learned counsel for the appellant has stated that the title deeds of the property mortgaged are still with the appellant, therefore, the appellant is within its right to recovery the amount as the property continues to be under mortgage. The said argument is untenable. Once the Corporation has received the amount as per the demand raised by it, the mortgage comes to an end. Withholding the title deeds thereafter by the appellant is unauthorized and unjustified. Therefore, the learned first Appellate Court R.S.A.No.1852 of 2009 4 has rightly decreed the suit holding that the demand raised by the appellant is beyond the period of limitation. In view of the above, I do not find that any substantial question of law arises for consideration by this Court in second appeal. Dismissed. 16.08.2009 (HEMANT GUPTA) Vimal JUDGE