M/S Gaurav Saurav Plast (India) vs Delhi Financial Corporation
2010 Latest Caselaw 3692 Del

             *IN THE HIGH COURT OF DELHI AT NEW DELHI

                                            Date of decision: 9th August, 2010.

W.P.(C) No.10026/2009, CM No.8361/2009 & CM No.5668/2010 (both
for interim relief).

%
         M/S GAURAV SAURAV PLAST (INDIA)              ..... Petitioner
                      Through: Mr. R.K. Vats, Advocate.

                                      versus

         DELHI FINANCIAL CORPORATION                .... Respondent
                      Through: Mr. Sanjay Poddar, Advocate.

CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.       Whether reporters of Local papers may
         be allowed to see the judgment?                    No

2.       To be referred to the reporter or not?             No

3.       Whether the judgment should be reported            No
         in the Digest?

RAJIV SAHAI ENDLAW, J.

1. The petitioner, a borrower from the respondent Delhi Financial

Corporation, a State Financial Corporation within the meaning of the State

Financial Corporations Act, 1951 preferred this petition upon being faced

with a notice dated 11/15th June, 2009 issued by the respondent in exercise

of powers under Section 29 of the SFCs Act calling upon the petitioner to

pay the outstanding loan amount of Rs.1,28,78,605.60p and threatening the

petitioner, upon failure to make such payment with action for taking over

the possession of the property of the petitioner at D-1654, DSIDC, Narela

Industrial Area, Delhi - 110 040 and plant & equipments installed therein

mortgaged with the respondent. The petitioner in the writ petition, besides

seeking quashing of the aforesaid notice under Section 29 has also sought a

mandamus directing the respondent to settle with it as per Guidelines and

Directives of the RBI and as had been done in other cases. It is inter alia the

case of the petitioner that the petitioner is being discriminated against and

the respondent has not settled with the petitioner on the same terms as the

respondent had settled with M/s Khera Nursing Home and M/s Waris Metal

Pvt. Ltd.

2. The petition came up before this Court first on 13 th July, 2009 when

the notice of the petition was issued on the offer of the petitioner to pay the

amount of Rs.17 lac with interest to the respondent. This Court vide order of

the same date, on the application of the petitioner for interim relief also

ordered that any action pursuant to the proceedings initiated under Section

29 shall be subject to the outcome of this petition.

3. Though the petitioner had made the offer as aforesaid and on the basis

whereof notice was issued, the petitioner filed CM No.13795/2009

contending that since the offer earlier was for payment of Rs.16 lac without

interest, the order should be modified. The said application was dismissed

on 6th November, 2009 holding that the offer of the petitioner as given in the

Court was recorded in the earlier order and the contention of the petitioner

did not call for modification of the order.

4. The respondent in the meanwhile took possession of the property

aforesaid. The petitioner filed CM No.5668/2010 to restrain the respondent

from proceeding under Section 29 of the State Financial Corporation Act.

Since by that time advertisements had already been issued by the respondent

for sale of the property of the petitioner. This Court vide order dated 7 th

May, 2010 while permitting the respondent to open the tender, restrained it

from taking a final decision thereon. The said order continues to be in force.

The counsels for the parties have been heard.

5. The counsel for the petitioner has contended that the petitioner is

being discriminated and the respondent is refusing to settle with it as it has

settled with others. It is further contended that the proprietor of the

petitioner being a member of the Scheduled Caste is also entitled to interest

benefit.

6. The counsel for the respondent has contended and there is dispute as

to facts and that the loan was advanced to the petitioner in the year 1996-97

for the purposes of setting up a unit on the plot aforesaid at DSIDC, Narela

Industrial Area, Delhi - 110040 that the petitioner has been in default since

beginning and show cause/default notices were issued to the petitioner way

back in 1997; earlier also notices under Section 29 were issued to the

petitioner on 15th December, 1997, 12th June, 1998, 16th November, 1998,

25th February, 2000, 12th September, 2000 and lastly on 11/15th June, 2009

as aforesaid. It is further contended that in or about the year 2000 the

petitioner had filed a suit for injunction against the respondent before the

District Court; the respondent was injuncted by interim order in the said suit

also; that during the hearing of the application for interim relief on 8 th

February, 2001 before the Addl. District Judge, the petitioner offered to

make part payment of Rs.7.5 lac but was directed to pay 50% of the then

outstanding amount; the petitioner however challenged the same before this

Court in CRP No.194/2001; that before this Court again the petitioner

undertook to pay Rs.7.5 lac on or before 31st March, 2001 and the balance

amount as per the revised schedule to be fixed by this Court; that the

petitioner did not deposit any amount inspite of his undertaking and

ultimately the Revision Petition was dismissed as not maintainable on 4th

March, 2004 owing to the judgment in Shiv Shakti Co-operative Housing

Society Vs. Swaraj Developers (2003) 6 SCC 659. The respondent thereafter

initiated proceedings against the petitioner under Section 31 of the State

Financial Corporations Act. During the pendency of the said proceedings,

the case of the petitioner was again considered by the respondent in the

meeting held on 31st July, 2006. It was noticed in the said meeting that the

petitioner had been insisting on one time settlement on the same pattern as

settlement with M/s R.K. Khera Charitable Trust. It appears that the

petitioner had also made a representation to the National Commission for

Scheduled Castes and where also a similar grievance was made. The

respondent, in accordance with the settlement with M/s R.K. Khera

Charitable Trust found a sum of Rs.17,27,942/- to be due from the petitioner

as on 31st July, 2006. In the said minutes, the claim of the petitioner for 4%

concession in interest was also considered. It was found that the said benefit

in interest had been given to the SC/ST operators of CNG buses and was

being reimbursed by the Government of NCT of Delhi; however there was

no such scheme with respect to the loans granted by the respondent and as

such the same could not be accepted.

7. The counsel for the respondent further points out that the petitioner

did not accept the aforesaid proposal also, drawn up in accordance with the

settlement with M/s R.K. Khera Charitable Trust. The counsel for the

respondent then invites attention to the proceedings dated 10 th March, 2008

before the Mediation Cell of the District Court arising out of proceedings

under Section 31 of the Act initiated by the respondent. The petitioner in the

said proceedings admitted that the proposal in the meeting aforesaid of the

respondent for settlement at Rs.17,27,942/- was in accordance with the

settlement with M/s R.K. Khera Charitable Trust and admitted that he could

not pay the amounts at that time owing to financial constraints and offered

to pay the said amount if the proposal was revived and revalidated. The

respondent for the sake of settlement and inspite of the Scheme under which

the aforesaid offer was made having lapsed, again revived the proposal for

payment of Rs.17,27,942/- together with interest. Attention in this regard is

invited to the letter dated 8th July, 2008 issued to the petitioner calling upon

the petitioner to pay Rs.17,27,942/- along with interest at 13% p.a. from 1st

August, 2006 till the date of payment. The petitioner still did not pay the

amount. The respondent then withdrew the proceedings initiated under

Section 31 and issued the notice aforesaid impugned in this petition under

Section 29 of the Act. It is further pointed out that in pursuance to the said

notice the possession of the property aforesaid of the petitioner has already

been taken. It is further informed that though the petitioner had during the

pendency of this writ petition deposited post dated cheques for Rs.17.28 lac

with the respondent but out of the same also, only the cheques for Rs.6.5 lac

were realized and the balance cheques dis-honoured. The counsel for the

respondent thus contends that the claim of the petitioner that he is

discriminated against is baseless in as much as the petitioner himself had

admitted the offer of Rs.17,27,942/- given to him to be in accordance with

the settlement with M/s R.K. Khera Charitable Trust and has failed to

honour the same. It is further contended that the Scheme under which the

petitioner is claiming settlement has long since lapsed and the petitioner

cannot now be extended the benefit thereof. It is further informed that in the

auction held by the respondent the highest bid of approximately Rs.66 lac

has been received and which bidder has also deposited a sum of Rs.15 lac

with the respondent. It is informed that there are electricity and water dues

of over Rs.8 lac on the property and unearned increase of approximately

Rs.40 lac will have to be paid for transfer of leasehold rights in the land

underneath the property in favour of the highest bidder. The counsel for the

respondent also relies on Andhra Pradesh State Financial Corporation Vs.

M/s. G.A.R. Re-Rolling Mills (1994) 2 SCC 647 to contend that the

respondent was entitled in law to invoke both Section 29 & Section 31

against the petitioner.

8. The petitioner has in rejoinder contended that since the respondent has

declared the account of the petitioner as a NPA (Non Performing Asset), the

respondent is prohibited from proceeding against the petitioner in exercise

of powers under the State Financial Corporation Act. It is again disputed

that the settlement offered was in accordance with M/s R.K. Khera

Charitable Trust. He also contends that respondent having realized at least

Rs.6.5 lac out of the cheques for Rs.17.28 lac deposited by the petitioner

during the pendency of this writ petition, is now not entitled to proceed with

the notice impugned in this petition. It is contended that the respondent has

been making different offers at different times and which shows that no

reliance whatsoever can be placed on the computations of the respondent.

Attention is particularly invited to the offer of the respondent to settle for

Rs.16 lac even after having made the settlement offer of Rs.17.28 lac. The

counsel further contends that the respondent has never disclosed as to how

the settlement offers communicated are being computed; how much amount

is towards principal amount and how much towards interest. He also

contends that the claim of the respondent for interest from 1st August, 2006

at 13% p.a. is unjustified. The counsel for the respondent informs that the

respondent itself pays interest at 12% p.a. to SIDBI.

9. The aforesaid facts would disclose that the petitioner has successfully

held up the payment of dues of the respondent for the last over 10 years. The

petitioner has dragged the respondent to all possible foras viz the District

Court, this Court and the National Commission for Schedule Castes &

Scheduled Tribes. The documents in support of the contentions aforesaid of

the respondents and which are not controverted disclose that the petitioner

before the Mediation Cell of the District Court admitted the then offer to be

in accordance with the settlement with M/s R.K. Khera Charitable Trust but

still failed to make the payment. Such a borrower cannot expect any

discretion from this Court. After all the respondent Corporation has been

set-up to encourage industrialization and offer assistance by giving financial

assistance in the shape of loans and advances etc. repayable in easy

instalments and if its dues remain held up as the petitioner has succeeded in

doing and if it is embroiled in litigations in different foras, it would be

prevented from doing the laudable task for which it has been set-up. The

petitioner has neither been able to make out a case of discrimination nor of

being entitled to proposal for settlement in accordance with the Scheme of

the Reserve Bank of India. The petitioner was given such offers and failed to

accept or comply with the same and cannot repeatedly ask for such

settlements. In so far as the contention of the petitioner of the respondent

giving different offers and reducing its settlement amount from time to time

is concerned, that would not lead to a conclusion of the actions of the

respondent being unreliable or the offers given by the respondent being not

in accordance with the Guidelines. The respondent as a Financial Institution

is interested in early recovery of its dues without any impediment and in

such endeavour appears to have reduced the amounts on which settlement

could be arrived at from time to time but the petitioner still failed to accept

or comply with any of the said offers. No further indulgence can be shown

to the petitioner. Similarly encashment of cheques for Rs.6.5 lacs out of total

cheques for Rs.17.28 lacs would also not estopp the respondent when the

balance cheques have been dishonoured.

10. The Full Bench of this Court as far as back as in Digambar Prasad

Vs. S.L. Dhani MANU/DE/0243/1969 held that the grant of a writ of

certiorari, as sought by the petitioner herein, is in the discretion of the court

and court will decline to exercise discretion where conduct of the petitioner

is such that it would be inequitable and unjust to grant him the relief. This

Court would be loath to exercise discretion in favour of petitioner who

inspite of opportunity has failed to repay the public dues.

11. The petition is dismissed. I refrain from imposing any costs.

RAJIV SAHAI ENDLAW (JUDGE) 9th August, 2010 pp