SOLIDAIRE INDIA LIMITED Vs. FAIRGROWTH FINANCE SERVICES LIMITED

JUDGEMENT

(1.) The appellant herein on 3rd March, 1992, 20th March, 1992 and 25th March, 1992 took a loan of Rs. 50 lakhs, Rs. 25 lakhs and Rs. 25 lakhs respectively from respondent No. 1. According to the appellant, the agreement was to repay the loan amount within three years together with interest at 18 per cent per annum.

(2.) Repayment not having been made and respondent No. 1 having been notified under Section 3 of the Special Court (Trial of Offences Relating to Transactions and Securities) Act, 1992 (hereinafter referred to as "Special Court Act"), proceedings were initiated by the Custodian before the Special Court for the recovery of the said money.

(3.) There was no dispute before the Special Court with regard to the fact that Rs. 1 crore had been taken on loan by the appellant. The claim against the appellant before the Special Court was for a sum of Rs. 1,57,20,216.24/- consisting of principal plus interest. The main contention raised before the Special Court related to the rate of interest. The respondent had claimed interest at the rate of 21.5 per cent on the amount of Rs. 50 lakhs and 23 per cent on the two loans of Rs. 25 lakhs each. The Special Court came to the conclusion that the appellant herein had been put to notice by the Custodian as far back as 3rd June, 1993 that if it did not deposit the amount it will become liable to pay interest at a higher rate and the payment had not been made. The Special Court came to the conclusion that the claim of interest made by the respondent was justified. The suit of the respondent was, accordingly, decreed as prayed for along with costs.