U.P. Financial Corp. & Ors vs M/S. Sri Bharat Paper Udyog P.Ltd. ...

dues certificate to the writ petitioner-respondent, release to it the title deeds of the disputed plot and to hand over to it the possession of the property (mortgaged in the favour of the appellant Corporation). The High Court order is based on the premise that it was a term of the one time settlement between the two sides that on payment of the first installment under the settlement by the respondent, the Corporation would release in its favour a piece of land, 4000 sq. yds. in area, which the respondent might sell or give on lease in order to facilitate payment of the remaining installments under the OTS. The High Court found that contrary to its obligation under the OTS, the appellant Corporation did not release the land in question in favour of the respondent. The respondent, therefore, could not be held responsible for the delay in payment of the installments under the OTS and the liability of interest on delayed payments could not be fastened on it. The High Court held that the Corporation's insistence on realizing from the respondent the amount of interest on delayed payments of the installments (a substantial sum!) even after it had paid the full amount under the OTS was unjust, unreasonable, bad and illegal. Hence, the directions to the appellant Corporation as noted above.

2. The respondent company took a loan from the appellant Corporation.

3. Be that as it may, the respondent made an application to the appellants for a one time settlement of its outstanding dues. The application was accepted by the appellants and intimation was given to the respondent vide letter dated August 5, 2002 containing the terms of the settlement. The relevant terms of the settlement as stipulated in the aforesaid letter are as under -

5. According to the respondent, however, the terms contained in the letter dated August 5, 2002 are not conclusive on the issue. The one time settlement was arrived at after a protracted negotiation involving, besides the respondent company and the appellant Corporation, the Divisional Udyog Bandhu, Meerut. Further, in course of the negotiations certain terms had been arrived at which were finally formalized in the OTS. The counsel appearing for the respondent invited our attention to a letter dated July 3, 2002 addressed on behalf of the respondent to the Additional Director of Industries (WZ), Meerut. In this letter, after referring to the decisions of the Divisional Udyog Bandhu, Meerut, dated November 1, 1999 and March 14, 2001 and further referring to the discussions held between the parties, it was 5 stated that the OTS with the Corporation would be finalised and settled under certain terms mutually agreed between the parties as enumerated from paragraph 1 to 4 of the letter. Paragraph 4 on which the counsel laid great stress reads as under -

The terms of the OTS would continue to bind the respondent until those are duly changed and amended by the Corporation.

14. For the reasons, discussed above, we are satisfied that the respondent was not entitled to the relief claimed on its behalf and the writ petition filed in the High Court was liable to be dismissed. The order of the High Court is, accordingly, set aside and the writ petition filed on behalf of the respondent is dismissed. The appeal is allowed with costs amounting to Rs. 20,000/-.

September 8, 2011.