IFCI VENTURE CAPITAL FUNDS LIMITED Vs. SANTOSH KHOSLA

JUDGEMENT

(1.) The challenge by means of this Regular First Appeal filed under Section 96 of Code of Civil Procedure, 1908 (CPC) is to the impugned judgment of the trial Court dated 18.10.2003 dismissing the suit filed by the appellant/plaintiff for recovery of Rs. 3,04,597.60/-.

(2.) The facts of the case are that the appellant/plaintiff granted a loan to the defendant Nos. 1 and 2 on 12.5.1978. This loan was granted because the defendant Nos. 1 and 2 needed moneys to subscribe to their portions of the share capital in the defendant No. 3-company. It was pleaded by the appellant/plaintiff that no interest was payable but service charges @ 1% per annum was payable on the loan which was granted. The loan was secured by the pledge of the borrowers' entire equity share holding in defendant No. 3. The defendants executed various security documents in favour of the appellant/plaintiff on 12.5.1978. An amendatory agreement was also signed on 29.4.1982 by the defendant Nos. 1 and 2. It was further pleaded in the plaint that on the loan being recalled the same would cease to be interest free and interest would be payable at the current bank rate. It was pleaded that the defendants committed default in repayment of the dues and also acknowledged their liabilities on 29.4.1982, 19.12.1983 and 6.2.1986. It was pleaded that as the defendant Nos. 1 and 2 committed default in repayment of the dues, the subject suit came to be filed.

(3.) The suit was withdrawn against the defendant No. 3-company on 27.8.2001. The defendant Nos. 1 and 2 contested the suit on identical pleas. The defendants contented that the plaintiff had already appropriated the proceeds of the equity shares pledged which were more than the suit amount and therefore the suit was not maintainable. It was also pleaded that RIICO and IFCI which are the parent bodies of the original lender were necessary parties as the entire assets of the defendant No. 3-company were sold by the said parent bodies.