WOODYS HOTELS P LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) Admittedly there is a loan agreement between the petitioner and the second respondent a Company registered under the Companies Act. Of course it is a Government owned Company. The business of the second respondent includes granting of loans to hoteliers including the petitioner. It is in that regard Ext. P1 agreement was entered into between the parties providing for repayment and the relationship interse until the repayment is fully effected. Therefore, the rights and obligations of the parties arise, concerning the loan transaction from out of Ext. P1 agreement which provides for various situations. The loan has to be repaid completely by 2007 as per the revised schedule. But the petitioner sought for early settlement of the transaction. That was finally answered in Ext. P34 the impugned order herein that in terms of the agreement settlement of accounts in respect of the loan prior to the scheduled period shall result in prepayment premium and interest which the respondent has qualified as Rs. 37,45,892,57. This letter is dated 8.2.2000.

(2.) Clause.4.8. of Ext. P1 provides that

(3.) With regard to the maintainability of the Writ Petition it is submitted relying on the decisions in Hindustan Construction Co. Ltd. v. K.S.E.B. ( 1999 (2) KLT 30 ) and by the Supreme Court in Life Insurance Corporation of India v. Asha Goel ( 2001 (2) SCC 160 ) that the jurisdiction vested under Art.226 is wide enough to cover a situation like this. When there is totally arbitrary order and unconscionable stipulation by an authority under Art.12, necessarily this court can entertain a petition under Art.226 of the Constitution. The former case was in respect of a contract with Electricity Board and the latter case was an insurance contract with Life Insurance Corporation.