R.S.A. No. 965 of 2008 (O&M)
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IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
R.S.A. No. 965 of 2008 (O&M)
Date of decision: 17.04.2009
Punjab Khadi and Village Industries Board, Chandigarh, and another
....Appellants
Versus
Jagdev Singh and others
....Respondents
CORAM: HON'BLE MR. JUSTICE VINOD K. SHARMA
Present: Mr. Shailender Sharma, Advocate,
for the appellants.
Mr. T.K. Joshi, Advocate,
for respondent No. 1.
Ms. Jyoti Choudhary, Advocate,
for respondent No. 3.
*****
VINOD K. SHARMA, J (ORAL)
This order shall dispose of R.S.A. No. 965 of 2008 titled
Punjab Khadi and Village Industries Board, Chandigarh, and another Vs.
Jagdev Singh and others, R.S.A. No. 966 of 2008 titled Punjab Khadi
and Village Industries Board, Chandigarh, and another Vs. Sardool
Singh and others, R.S.A. No. 967 of 2008 titled Punjab Khadi and
Village Industries Board, Chandigarh, and another Vs. Avtar Singh and
others, R.S.A. No. 968 of 2008 titled Punjab Khadi and Village
Industries Board, Chandigarh, and another Vs. Barjinder Singh and
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others, R.S.A. No. 969 of 2008 titled Punjab Khadi and Village
Industries Board, Chandigarh, and another Vs. Harpal Singh and others,
R.S.A. No. 1257 of 2008 titled The Khadi and Village Industries
Commission, VILE PAREL (West), Mumbai, and another Vs. Avtar
Singh and others, R.S.A. No. 1258 of 2008 titled The Khadi and Village
Industries Commission, VILE PAREL (West), Mumbai, and another Vs.
Sardool Singh and others, R.S.A. No. 1259 of 2008 titled The Khadi and
Village Industries Commission, VILE PAREL (West), Mumbai, and
another Vs. Barjinder Singh and others, R.S.A. No. 1260 of 2008 titled
The Khadi and Village Industries Commission, VILE PAREL (West),
Mumbai, and another Vs. Harpal Singh and others, R.S.A. No. 1261 of
2008 titled The Khadi and Village Industries Commission, VILE PAREL
(West), Mumbai, and another Vs. Jagdev Singh and others, as common
questions of law and fact are involved.
For brevity sake facts are being taken from R.S.A. No. 965 of
2008 titled Punjab Khadi and Village Industries Board, Chandigarh, and
another Vs. Jagdev Singh and others.
This regular second appeal is directed against the judgment
and decree dated 6.12.2007 passed by the learned Courts below vide
which the suit filed by the plaintiff/respondent for permanent injunction
restraining the defendants from recalling the margin money deposited
with the bank under the Margin Money Scheme for purchase of
harvester combine, stands decreed.
The plaintiff/respondent No. 1 brought a suit on the plea that
the defendants started Margin Money Scheme for giving loan for the
purpose of purchase of harvester combine. The plaintiff/respondent
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under the said Scheme applied for sanction of loan for purchase of
harvester combine, as per the scheme, and the defendants after satisfying
about the eligibility of the plaintiff, recommended his case to the bank
for grant of loan.
The State Bank of Patiala, Branch Banbhaura, accepted the
proposal and agreed to disburse a loan of Rs.9,90,000/- for purchase of
harvester combine. As per the Scheme, the defendant/appellant sent a
cheque for a sum of Rs.2,47,500/- to the State Bank of Patiala, Branch
Banbhaura, as margin money, thereafter the plaintiff deposited the loan
instalments regularly.
The case set up by the plaintiff is that after the loan amount
was paid, a letter was sent to the Bank by the defendants, for recalling
the margin money, on the plea, that purchase of harvester combine, was
not covered under the Scheme, approved by the Khadi and Village
Industries Commission. The plaintiff alleged that the letter was illegal,
null and void, and sought injunction against its implemention.
On notice, the defendants contested the suit, wherein besides
taking preliminary objections, it was contended, that the margin money,
has been recalled, as per advice of the Agriculture Department, as the
harvesting combine is an agricultural machine, which did not fall within
the zone of consideration for the purpose of loan of Punjab Khadi and
Village Industries Board.
It is also the case set up by the defendants that one of the terms
of the loan was that in case, the subsidy was not approved by the
Commission, then the same was liable to be recalled.
On the pleadings of the parties, the learned trial Court was
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pleased to frame the following issues: –
“1. Whether the plaintiff is entitled for the relief of
permanent injunction as prayed for? OPP.
2. Whether the suit is not maintainable in the present
form? OPD
3. Whether suit is bad for non-joinder of the
necessary parties? OPD
4. Whether the plaintiff has not casue of action to file
the present suit? OPD.
5. Whether this Court has no jurisdiction to file the
present suit? OPD.
6. Relief.”
On appreciation of evidence, the learned Courts below decided
issue No. 1, in favour of the respondent/plaintiff, by invoking principle
of promissory estoppel, as it was not disputed that the Scheme floated by
the defendants was margin money scheme for purchase of harvester
combine.
Once it was not disputed that the Scheme floated was for
purchase of harvester combine, and it was also proved on record that in
pursuance of the Scheme, the respondent/plaintiff applied for loan,
which was considered and forwarded by defendant No. 1 to the Bank.
The Bank accepted the proposal of defendant in pursuance thereto the
plaintiff spent money, and also repaid the loan, the learned Courts below
righly invoked the principle of promissory estoppel to restrain the
defendant/appellant from recalling the margin money deposited with the
bank by way of impugned decree.
The learned counsel appearing on behalf of the appellant
contends that the appeal raises the following substantial questions of
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law: –
“1. Whether the suit for injunction in the facts and
circumstances was competent?
2. Whether in view of the stipulation in the terms of the
loan, could injunction be granted in favour of the
plaintiff/respondent?
In support of first substantial question of law, the learned
counsel for the appellant vehemently contends that the
plaintiff/respondent should have filed suit for declaration to challenge
the order of recall, and mere suit for injunction for restraining the Bank
from implementing the order was not competent, as in absence of
declaration that order was null and void, no injunction could be granted.
The plea of the learned counsel for the appellant cannot be
accepted. It is not in dispute that in pursuance to the Scheme,
defendant/appellant had, in fact, deposited margin money, in the account
of the plaintiff/respondent, therefore, the suit for injunction was
competent, as the letter of recall was prima facie null and void, being in
violation of settled principle of promissory estoppel.
The substantial question of law is answered against the
defendant/appellant.
The learned counsel for the appellant thereafter contends that
undertaking was given by the plaintiff/respondent that in event of non-
acceptance of the Scheme by the defendant No. 2, he would refund the
amount. The learned Courts below, therefore, were not justified in
decreeing the suit The plaintiff had no legal right to the amount in view
of the undertaking given while advancing loan, as admittedly the
Scheme was not accepted by the Commission.
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This contention of the learned counsel for the appellant also
cannot be accepted. Once under the Scheme, parties have acted in good
faith and had changed position to their detriment, the defendants were
estopped from recalling the margin money.
Under the contract, the defendants could have sought the
refund of money by taking legal recourse against the
plaintiff/respondent, but they had no such authority to unilaterally back
out, from the Scheme floated on the ground that the Scheme was not
acceptable to the Commission, without any valid reason.
The learned Courts below in the facts and circumstances,
therefore, rightly applied the principle of promissory estoppel to grant
decree of permanent injunction.
The condition in loan agreement could not come in the way of
the plaintiff, once they had changed their position to their detriment on
the assurance given by the defendant/appellant.
Consequently, the second substantial question of law is also
answered against the appellant.
No merit.
Dismissed in limine.
(Vinod K. Sharma)
Judge
April 17, 2009
R.S.