LOTUS HOSPITAL AND RESEARCH CENTRE LTD. Vs. HOUSING AND URBAN DEVELOPMENT CORPORATION LTD. , THROUGH ITS AUTHORISED SIGNATORY AND JOINT GENERAL MANAGER (LAW), R. MURUGESAN

JUDGEMENT

(1.) The present writ petition is filed challenging the impugned order in R.A.No.102 of 2019 dtd. 19/12/2019 of the Debt Recovery Appellate Tribunal (DRAT), on the premise that it suffers from manifest arbitrariness inasmuch as it affirms the action of the 1 st respondent financial institution in resiling/reneging its offer/promise.

(2.) The 1 st petitioner proposed to establish an Hospital at Erode with a view to provide better medical care in Rural area. The project cost was estimated at Rs.20.00 Crores. The first respondent came forward to fund the petitioner hospital under the "Rural Infrastructure Development Scheme" envisaged by the first respondent. In terms of the said Scheme the 1 st respondent was to fund projects including hospitals for development of rural infrastructure, with a condition that the project/establishment would provide for certain concessions, one of them being that such hospital would provide 20% of the beds free of cost to rural public. The first respondent granted a loan of Rs.827.95 lakhs for construction of 100 bedded multi- speciality hospital at Kasipalayam, Erode. The petitioner executed necessary documents including mortgage deed as security for the loan advanced by the 1 st respondent. While, petitioners 2 to 4 (1 st petitioner is the Managing Director; 2nd petitioner is a Doctor and wife of the 1 st petitioner, petitioners

(3.) and 4 are the Directors of the 1 st petitioner), executed personal guarantee in favour of the 1 st respondent. 3. The petitioner due to a variety of reasons inter alia including financial bottlenecks, non availability of adequate finance at the right time, policy measures introduced by the government which according to the petitioner had a negative impact, rendered the project itself unviable. As a consequence, there were defaults made by the petitioner in servicing/ repayment of the loans obtained, which is not in dispute.