JAYASAKTHI LEATHERS PVT LTD Vs. PONDICHERRY INDUSTRIAL PROMOTION DEVELOPMENT AND INVESTMENT CORPORATION LTD

JUDGEMENT

(1.) This writ petition has been filed by M/s Jayasakthi Leathers Private Limited under Article 226 of the Constitution of India, seeking to quash the impugned letter dated 3.4.2013 issued by the Chief General Manager of Pondicherry Industrial Promotion Development and Investment Corporation Limited and direct the respondent to extend the OTS for another one year to enable the petitioner to settle the dues to the respondent under the OTS scheme.

(2.) Learned counsel for the petitioner submitted that the petitioner Company submitted an application dated 28.9.95 requesting the respondent-Corporation to provide financial assistance for setting up of a SSI unit at R.S.No.2, Kurumbapet, Villianur Commune, Puducherry for manufacturing leather shoe uppers. Accepting the said request, the respondent-Corporation also sanctioned a term loan of Rs.26,25,000/- on 20.12.95 and intimated the same on 11.1.96 and also subsequently issued a corrigendum on 3.5.96 relating to the same. As per the terms, the petitioner should repay the term loan amount along with interest at the rate of 18.5% per annum and if it commits any default, it was made clear that the petitioner should pay additional interest at the rate of 4% per annum for the period of default. . That apart, the petitioner also made an application on 11.3.99 with a request to provide working capital loan of Rs.3,50,000/-. Accordingly, by passing a sanction order dated 18.3.99, the Corporation also sanctioned the working capital loan of Rs.3,50,000/- on 18.3.99 subject to the terms and conditions prescribed thereof. As per the terms and conditions, the petitioner should repay the working capital loan amount along with interest at the rate of 15% per annum and if it commits any default, it was made clear that the petitioner should pay additional interest at the rate of 4% per annum for the period of default. Moreover, as per condition No.42 of the sanction order, the petitioner also executed a hypothecation deed on 10.5.99 and its Directors viz., Mrs.G.Vasantha Leela, W/o Mr.P.Gopalan and Mr.P.Gopalan had executed equitable mortgage by way of deposit of title deeds, mortgaging their plots bearing Nos.15, 16, 17 & 18 at R.S.No.2, Kurumbapet, Puducherry as collateral security for the loan on the same day.

(3.) Adding further, it was also stated that as per the terms and conditions of the sanction order and corrigendum, the petitioner had also executed a deed of mortgage on 6.5.96 mortgaging its plots bearing Nos.19, 20, 21, 22, 23 & 24 comprised in R.S.No.2 corresponding to Cad.No.3 at Kurumbapet Revenue village, Puducherry measuring 6000 sq.ft., as security for due repayment of the term loan amount. As per the first sanction order, having executed the hypothecation deed and the equitable mortgage deed on 6.5.96 as security, after the expiry of the moratorium period of 1 = years from the date of first disbursement, the petitioner had to repay the above term loan amount in 32 quarterly instalments, namely, the first 4 instalments at Rs.18,750/- each, the next 4 instalments at Rs.50,000/- each, the next 4 instalments at Rs.87,500/- each and the last 20 instalments at Rs.1,00,000/- each. Therefore, on this basis, it was further submitted that the petitioner had availed the entire term loan amount of Rs.26,25,000/- on various dates from 18.6.96 to 22.8.97 and again the respondent-Corporation had provided the working capital loan of Rs.3,50,000/- on 18.3.99. After the expiry of the moratorium period of 3 months from the date of first disbursement, the petitioner had to repay the working capital loan in 16 quarterly instalments, namely, the first 14 instalments at Rs.22,500/- each and the last two instalments at Rs.17,500/- each and the petitioner availed the entire working capital loan amount of Rs.3,50,000/- on various dates from 17.5.99 to 22.6.99.