IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
Letters Patent Appeal No.380 of 2009 (O&M)
Date of decision: 16th September, 2009
M/s Shiva Cold Store & Ice Factory
... Appellant
Versus
Punjab Financial Corporation
... Respondent
CORAM: HON'BLE MR. JUSTICE T.S. THAKUR
HON'BLE MR. JUSTICE KANWALJIT SINGH AHLUWALIA
Present: Mr. Nitin Thatai, Advocate for the appellant.
Notes: 1. Whether Reporters of local newspapers may be allowed to
see the judgment?
2. To be referred to the Reporters or not?
3. Whether the judgment should be reported in the Digest?
KANWALJIT SINGH AHLUWALIA, J.
Civil Misc. No. 1048-LPA of 2009
For the reasons stated in the application, the same is allowed
and delay of ten days in filing the appeal condoned.
Civil Misc. No. 1049-LPA of 2009
Application is allowed and Annexure A-1 taken on record.
Civil Misc. No. 1050-LPA of 2009
Application is allowed, subject to just exceptions. Documents
(Annexures P-1 to P-12 and A-1) are taken on record.
Letters Patent Appeal No. 380 of 2009 2
Letters Patent Appeal No.380 of 2009
M/s Shiva Cold Store & Ice Factory (hereinafter referred to
as, ‘the appellant Firm’) preferred a writ petition in this court. A Single
Judge of this Court opined that disputed questions of fact are involved,
which cannot be decided while exercising the writ jurisdiction. The
petitioner was granted option to institute a Civil Suit, if so advised. As a
consequence of the above opinion, the writ petition was dismissed.
Aggrieved against the same, the petitioner has filed present
appeal. Narration of brief facts of the case is necessary to appreciate the
findings returned by the Single Judge of this Court.
M/s Shiva Cold Store & Ice Factory, a partnership Firm,
consisting of seven partners, applied for grant of loan to respondent,
Punjab Financial Corporation (hereinafter referred to as, ‘the respondent
Corporation). An advance loan of Rs.50.00 lakh was sanctioned and on
15th May, 1998, the appellant Firm executed a mortgage deed in favour of
the respondent Corporation. The loan was disbursed to the appellant Firm
between 5th May, 1998 to 27th April, 1999. It is alleged that due to delay in
disbursal of the loan, the appellant Firm suffered losses due to cost
overruns and delay in the implementation of the project. As per the terms
and conditions, the loan was to be returned in 78 monthly installments.
The first installment was to be paid on 15th November, 1999 and other
installments thereafter at monthly rests. The rate of interest determined
was 17 per cent per annum, payable on quarterly basis. The appellant
Firm averred that up to 31st March, 2003, the loan amounting to Rs.52.77
lakh was paid back to the respondent Corporation. The respondent
Corporation floated a scheme in consonance with the Reserve Bank of
India guidelines. The scheme was called ‘Punjab Financial Corporation
One Time Settlement (General) Scheme 2003’. The appellant Firm
Letters Patent Appeal No. 380 of 2009 3
approached the respondent Corporation for settlement of the loan account
vide letter dated 19th June, 2003 (Annexure P-4). The Settlement
Committee of the respondent Corporation held its meeting on 18th July,
2003 and in pursuance of one time settlement policy, the appellant Firm
was called upon to pay Rs.46.75 lakh, along with further interest on the
settlement amount from 15th May, 2003 onwards at the rate of 14 per cent
per annum. The amount was to be paid within 21 months. The respondent
Corporation had acknowledged receipt of Rs.4.70 lakh deposited by way
of cash as 10 per cent paid towards OTS. The balance amount of
Rs.42.05 lakh was to be paid in 21 monthly installments. The amount of
each installment fixed was Rs.2,00,238.10. Besides this, the interest at
quarterly rests was to be paid separately. The payment of installments
was to commence from 30th August, 2003. The appellant Firm has
pleaded that due to hard times faced by the appellant Firm, schedule of
repayment drawn as per one time settlement scheme could not be
adhered to. It is stated that orally, the Managing Director and other senior
officers agreed to condone the delay. Lastly, it is stated that on 16th
September, 2006, the appellant Firm paid Rs.3.20 lakh towards the final
settlement. Further version of the appellant Firm is that on 11th January,
2007, a partner of the appellant Firm visited the Head Office of the
respondent Corporation and learnt that an amount of Rs.17,250/- is due
and immediately Rs.20,000/- were deposited.
The grievance of the appellant Firm is that delay in making
the payment has not been condoned and the loan account has not been
settled as per one time settlement scheme, as the essential requisite to
pay the loan amount within the prescribed schedule was not maintained. It
is stated that the Board of Directors of the respondent Corporation had
Letters Patent Appeal No. 380 of 2009 4
taken a general decision that a delay of more than one year shall not be
condoned.
Case of the appellant Firm is that from 1st April, 2003 to 31st
March, 2007, in cases of 159 promoters, the delay was condoned.
Therefore, the appellant Firm cannot be dealt with differently, as according
to the appellant Firm, the respondent Corporation refused to condone the
delay of 20 months (600 days).
The appellant Firm has weaved a story that on 10th
December, 2008, all of a sudden, 6 – 7 officers of the respondent
Corporation came to the Cold Store of the appellant Firm for exercising
the powers vested in the respondent Corporation under Section 29 of the
State Financial Corporation Act (hereinafter referred to as, ‘the Act’). It is
alleged that the appellant Firm was threatened, therefore, to avoid
complication, due to coercion, the appellant Firm had to pay Rs.14.50
lakh, as the officials of the respondent Corporation had threatened to use
force. It is stated that in these circumstances, the appellant Firm had to
part with Rs.14.50 lakh.
The prayer made in the writ petition is that letter dated 26th
March, 2007 (Annexure P-1), whereby one time settlement scheme was
cancelled and a demand notice of Rs.29,760/- issued, be quashed and
further a writ of mandamus be issued to the respondent Corporation to
refund Rs.14.50 lakh, which according to the appellant Firm, was paid
under duress to the respondent Corporation. The appellant Firm has relied
upon the decision of a Division Bench of this Court rendered in Civil Writ
Petition No. 11385 of 2007 titled as ‘M/s Bharaj Industries v. Punjab
Financial Corporation’ and Civil Writ Petition No. 11413 of 2007 titled as
‘M/s H.B. Industries v. Punjab Financial Corporation’ decided on 10th
April, 2008, wherein it was held that once in accordance with the terms of
Letters Patent Appeal No. 380 of 2009 5
one time settlement scheme, the loan has been repaid, on the delayed
amount, the defaulter is to pay only the interest @ 12 per cent per annum.
We find that no general dicta of the law has been laid. That case was
decided on the facts of that case. In the present case, the appellant Firm
has paid Rs.14.50 lakh, which according to the appellant Firm, was in
excess and the same was paid as the appellant Firm was compelled to
pay under the threat of taking over the premises of the appellant Firm, by
invoking section 29 of the Act. Similarly, the decision of another Division
Bench of this Court rendered in Civil Writ Petition No. 11932 of 2007 titled
as ‘Surya Auto Industries v. Punjab Financial Corporation’ decided on
21st November, 2008 also cannot be applied as in that case, section 29 of
the Act was invoked and the Punjab Financial Corporation had taken over
the Unit of the petitioner. In that case, it was urged that after the Unit was
taken over, if there was delay on the part of the Corporation to dispose of
the property, the defaulter cannot be fastened with penal interest. Counsel
for the appellant has also relied upon ‘Central Bank of India v. Ravindra’
2002 (1) SCC 367 to urge that the appellant Firm is not liable to pay the
penal interest.
We cannot determine whether the amount of Rs.14.50 lakh
paid by the appellant Firm was voluntary or under threat or duress. By
simply pleading that on 10th December, 2008, 6 – 7 officers of the
respondent Corporation came and they intended to take over the Unit and
sell it at a throw-away price, therefore, the amount of Rs.14.50 lakh was
paid, is essentially a disputed question of fact. In ‘Life Insurance
Corporation & Ors. v. Smt. Asha Goel & Anr.’, 2001(2) SCC 160; 2001
(1) RCR(Civil) 347 (SC), the Hon’ble Apex Court has held as under:
“10. Art. 226 of the Constitution confers extraordinary
jurisdiction on the High Court to issue high prerogative writs for
enforcement of the fundamental rights or for any other
Letters Patent Appeal No. 380 of 2009 6purpose. It is wide and expansive. The Constitution does not
place any fetter on exercise of the extraordinary jurisdiction. It
is left to the discretion of the High Court. Therefore, it cannot
be laid down as a general proposition of law that in no case
the High Court can entertain a writ petition under Art. 226 of
the Constitution to enforce a claim under a life insurance
policy. It is neither possible nor proper to enumerate
exhaustively the circumstances in which such a claim can or
cannot be enforced by filing a Writ Petition. The determination
of the question depends on consideration of several factors
like, whether a writ petitioner is merely attempting to enforce
his/her contractual rights or the case raises important
questions of law and constitutional issues, the nature of the
dispute raised; the nature of inquiry necessary for
determination of the dispute etc. The matter is to be
considered in the facts and circumstances of each case. While
the jurisdiction of the High Court to entertain in Writ Petition
Art. 226 of the Constitution cannot be denied altogether, Court
must bear in mind the self-imposed restriction consistently
followed by High Court all these years after the constitutional
power can into existence in not entertaining Writ Petitions filed
for enforcement of purely contractual rights and obligations
which involve disputed questions of facts. The Courts have
consistently taken the view that in a case where for
determination of the dispute raised, it is necessary to inquire
into facts for determination of which it may become necessary
to record oral evidence a proceeding under Art. 226 of the
Constitution, is not the appropriate forum. The position is also
well settled that if the contract entered between the parties
provide an alternate forum for resolution of disputes arising
from the contract, then the parties should approach the forum
agreed by them a and the High Court in writ jurisdiction should
not permit them to by pass the agreed forum of dispute
resolution. At the cost of repetition it may be stated that in the
above discussion we have only indicated some of the
circumstances in which the High Court have declined to
entertain petitions filed under Art. 226 of the Constitution for
Letters Patent Appeal No. 380 of 2009 7enforcement of contractual rights and obligations; the
discussions are not intended to be exhaustive. This Court from
time to time disapproved of a High Court entertaining a
petition under Art. 226 of the Constitution in matters of
enforcement of contractual rights and obligation particularly
where the claim by one party is contested by the other and
adjudication of the dispute requires inquiry into facts.”In the present appeal, the agreement arrived at between the
parties, from which contractual obligation arise, has not been placed on
record. One Time Settlement scheme has also not been annexed. While
dismissing the writ petition of the appellant Firm, the learned Single Bench
has observed as under:
“The petitioner thereafter has paid a sum of Rs.14.50
lacs to the respondent-Corporation on 10.12.2008 though, the
respondent- Corporation has further demanded a sum of
Rs.29,760/- towards full and final settlement of the accounts.After paying Rs.14.50 lacs, that the petitioner has
approached this Court challenging the additional demand of
Rs.29,760/- and seeking the refund of Rs.14.50 lacs on the
solitary ground that the said amount was recovered by the
Corporation forcibly, under threat and by using coercive
means.Having heard Learned Counsel for the Petitioner, I am
satisfied that the allegations of threat or use of coercive
means of force by the authorities is a seriously disputed
question of fact which cannot be effectively settled by this
Court in exercise of its writ jurisdiction.Dismissed.
The Petitioner may, if so advised, file a civil suit.”
On the touchstone of the observations made by Their
Lordships of Hon’ble Supreme Court in Asha Goel’s case (supra), we are
of the view that the impugned order dated 3rd March, 2009 passed by a
Letters Patent Appeal No. 380 of 2009 8Single Bench of this Court suffers from no infirmity and no interference is
warranted.
Hence, the present appeal is dismissed without any order as
to costs.
[T. S. THAKUR] [KANWALJIT SINGH AHLUWALIA]
CHIEF JUSTICE JUDGE
September 16, 2009
rps