PNB CAPITAL SERVICES LIMITED Vs. SUMAC INTERNATIONAL LIMITED

JUDGEMENT

(1.) This order will dispose of the application of the plaintiff for the grant of an interim injunction as also the application of defendant No. 2 under Order 39, Rule 4 Civil Procedure Code for vacating the ex parte order of injunction granted on April 22, 1996. The brief facts which have resulted in the filing of the present suit, are that: Defendant No. 1 had taken lease finance from the plaintiff for acquisition of certain plants and machineries for use/installation at the factory known as Khalilabad Sugar Mills. The total amount granted by way of lease finance by the plaintiff to defendant No. 1 was Rs. 150 lacs. The amount was repayable in the manner mentioned in the agreements entered into between the plaintiff and defendant No. 1. In the event of default in the payment of rentals, the plaintiff was entitled to remove and repossess the equipments installed at Khalilabad Sugar Mills which would have been without prejudice to other rights of the plaintiff. With the amount granted by the plaintiff, defendant No. 1 is stated to have acquired assets of the value of Rs. 128.65 lacs which had been capitalised in their books of accounts. There was a default in the payment of the amount in terms of the agreement by defendant No. 1. Defendant No. 2 had also made an application for loan to the Central Government for modernisation and expansion and was granted loan under the Sugar Development Fund Act of the total amount of Rs. 124 lacs. It was at the stage of disbursement of the said loan that the plaintiff filed present suit contending that this amount of Rs. 124 lacs had been sanctioned in favour of defendant No. 2 only for payment of money to the plaintiff so as to transfer the ownership of the machines to defendant No. 2 and according to the plaintiff, as defendants 1 to 3 intended to utilise the said loan for purpose other than payment to the plaintiff, a decree was claimed in the suit restraining defendant No. 4 from releasing the amount of Rs. 124 lacs or any other amount.

(2.) Alongwith the suit, an application for temporary injunction was also filed and it was on the allegations mentioned above that this Court by an order dated 22nd April, 1996 passed an ex parte order of injunction restraining defendant No. 4 from releasing the amount of Rs. 124 lacs to any of the defendants 1, 2 and 3.

(3.) Defendant No. 2 instead of filing the written statement, filed an application under Order 39, Rule 4 Civil Procedure Code for setting aside/varying the ex-paret order dated April 22, 1996 on the allegations that defendant No. 2 was an independent entity having nothing to do with the agreement which had been entered into between the plaintiff and defendant No. 1 and that the loan granted by the financial institutions was from out of the Sugar Development Fund created under the Sugar Development Fund Act, 1982 and the said loan could not be utilised for any purpose other than what had been mentioned in the terms and conditions under which it was granted by the Central Government. It was stated that pursuant to the request of defendant No. 2, the Central Government had granted an additional loan of Rs. 124 lacs to defendant No. 2 on the following terms and conditions :