CASE NO.: Appeal (civil) 7740 of 1996 PETITIONER: ORISSA STATE FINANCIAL CORPORATION AND ANR. RESPONDENT: HOTEL JOGENDRA DATE OF JUDGMENT: 18/04/1996 BENCH: K. RAMASWAMY & G.B. PATTANAIK JUDGMENT:
JUDGMENT
1996 SUPP. (1) SCR 31
The following Order of the Court was delivered..
Leave granted.
We have heard learned counsel on both sides.
This appeal by special leave arises from the order of the Division Bench of
the High Court of Orissa dated March 5, 1990 made in OJ.C. No. 500/90.
Admittedly, the respondent had taken a loan of a principal sum of Rs. 14,68
lakhs for construction of the hotel which was payable in 18 yearly
installments between July 10, 1984 and January 10. 1993. The respondent
committed default in payment of the loan as contracted Pursuant to the
request, a rephasement was done in November 1989 directing them to pay the
amount in 9 half yearly installments starting from January 1993 to January
1997 with interest on arrear defaulted amounting to Rs. 10.64 lakhs which
was to be paid according to the schedule mentioned below :
March 1989 Rs. 1.30 lakhs March 1990 Rs. 2.00 lakhs March 1991 Rs. 2.84 lakhs March 1992 Rs. 3.00 lakhs March 1993 Rs. 1.50 lakhs
In addition, current interest was also to be paid with half yearly
interests, Since the respondent – Hotel did not comply with the conditions,
notice was given to it under Section 30 of the State Financial Corporations
Act, 1951 on February 1, 1990. Calling that notice in question, the
respondent filed the above writ petition in the High Court. The High Court
has directed the respondent to calculate the entire loan amount with
interest including the additional loan sanctioned to treat he said amount
as principal for the purpose of rephasement of the same for repayment with
interest
It would appear that subsequently action was taken by the appellant, but
the respondent seems to have not complied with the directions. Accordingly,
notice was issued under Section 29. The respondent instead of complying
with the same, approached the High Court by Misc. Case No. 1677/90 which
was disposed of by the High Court on April 9,1991 directing the respondent
to be personally present with the appellants on April 13, 1991 for
consideration of the rephasement of the proposal as ordered in the impugned
judgment, It would appear that the respondent again did not appear before
the authorities on April 13, 1991. The first appellant was, therefore, free
to exercise its statutory powers under section 29 in terms of the order
passed by High Court as order in the Misc. Case on April 13, 1991
requesting seven days’ time for submitting the proposal he sent a letter on
the last date. Even thereafter, the respondent did not submit any proposal
to rephase the amount payable as per the provisions contained in Section 29
of the Act.
Therefore, the Corporation again issued -a letter oil May, 8, 1991 stating
that since that respondent had not furnished the rephasement proposal as
per the orders of the High Court, the appellant was free to take action as
per law. Calling that order in question again, the respondent had filed OJC
No. 2747 of 1991 seeking further directions to rephase the loan. The High
Court by interim order dated June 5, 1991 directed the appellant not to
take any coersive action against the respondent, but ultimately the writ
petition came to be dismissed on January 25, 1994 with the following
holding :
“the present dues of the Corporation is around Rs. 32, 24, 753.00. From the
facts, it appears that the petitioner has become a per-sistent defaulter
and the Corporation is only taking steps available to it under the act to
recover the loan. On facts, we do not consider it to be a fit case for our
interference. The writ petiton hence is dismissed.”
Thereafter, the appellants has issued notice on February 17, 1994 calling
upon the respondent to pay the entire amount due as on January 31, 1994
amount to Rs. 35, 32, 058,43 by February 28, 1994. Instead of making
payment, the respondent again went to the Civil Court and filed Title Suit
No. 88/94 in the Court of Civil Judge, Senior division, Cuttack and
obtained status quo order in Misc. Case No. 115/94 on 28.2.1994.
It would, thus, be seen that the respondent is only interested to delay the
repayment of the dues and has abused the process of the court taking
indulgence of the court’s direction. Under these circumstances., we find
that no indulgence would be shown to such recalcitrant defaulter in
repayment of the loan. Public money is meant to be recycled to all the
needy entrepreneurs. The dilatory tactics defeat the public policy and the
court process becomes an instrument of abuse. Court would protect only
honest and sincere litigants.
The appeal is accordingly allowed with exemplary costs of Rs. 10,000, The
Corporation is at liberty to take action against the respondent as required
under Section 29 of the Act, irrespective of the orders passed by any
Court.