DELHI FINANCIAL CORPORATION Vs. RAM PERSHAD

JUDGEMENT

(1.) The appellant is the Delhi Financial Corporation incorporated under the State Financial Corporations Act, 1951 (hereinafter referred to as the Act). The appellant filed an application in the Court of District Judge, Delhi, under Section 31 of the Act for the recovery of Rs. 1,89,376.92 paise from the respondent herein, Shri Ram Prashad, the sole proprietor of Delhi Steel and Foundry Works, Delhi. According to the averments in this application, the Punjab Financial Corporation had advanced a loan of Rs. 1,50,000.00 to the respondent under a mortgage deed dated 22nd April, 1963 and that the said Corporation had advanced a further loan of Rs. 50,000.00 to the respondent under the mortgage deed dated 7th December, 1964. The respondent had hypothecated certain properties belonging to him by way of security for the said loans. The loans were repayable with interest by instalments which were specified in the mortgage deeds. Under the Punjab Reorganization Act, 1966, the appellant took over all the assets and liabilities of the Punjab Financial Corporation Within the Union Territories of Delhi and Chandigarh. The appellant, therefore, became entitled to recover the loans advanced to the respondent under the two mortgage deeds. The respondent committed default in the payment of the instalments and under the terms of the mortgage deeds, became liable to pay the entire balance of the loans together with interest. The appellant issued a notice to the respondent calling upon the latter to pay the entire balance of the loans amounting to Rs. 1,89,376.92 paise together with interest at 8 per cent per annum. In spite of the notice, the respondent failed to make the payment. The appellant, therefore, filed the petition under Section 31 of the Act praying

(2.) On the pleadings of the parties, the following issues were framed:

(3.) Issues Nos. 1 to 9 were decided in favour of the appellant and against the respondent, because the appellant had adduced evidence in support of issues Nos. 3, 4, 5, 7, 8 and 9 and the respondent had not adduced any evidence in rebuttal on these issues and because the respondent did not adduce any evidence on issues Nos. 1, 2 and 6, the burden of which issues had been cast upon the respondent. On issue No. 11, however, the learned District Judge held that the Act was ultra vires the Constitution. In view of the finding on this issue, the learned District Judge dismissed the petition filed by the appellant. The appellant has preferred the present appeal against the said judgment of the learned District Judge.