MADHUKAR D NIRGUDKAR Vs. ECONOMIC DEVELOPMENT

JUDGEMENT

(1.) THIS appeal is filed by defendant no. 2 in SCS No. 68/1985 and is directed against judgment/decree dated 21/12/2001 by which the defendants have been directed to pay to the plaintiff a sum of Rs. 19,68,433. 77 with interest at the rate of 14. 5% from 1/04/1985 till payment.

(2.) THE parties hereto are referred in the names as they appear in the cause title of the said civil suit.

(3.) THERE is hardly any dispute as regards the basic facts. The defendant no. 2 was a promoter, share holder and a director of a company known as M/s. Goa Metal Casters Pvt. Ltd. who was advanced two loans by the plaintiff in the sum of Rs. 5. 6 lacs on 19/05/1977 and Rs. 7. 5 lacs on 4/07/1979. The first loan was repayable in 17 half yearly instalments of Rs. 32,900/-each with interest at the rate of 14. 5%, starting from 20/03/1980. The second loan was also repayable in 17 half yearly instalments of Rs. 44,000/-each, starting from 20/03/1980 with interest at the rate of 14. 5%. The defendants had guaranteed the repayment of the first loan by a deed of continuing guarantee dated 31/03/1978 and the second loan by a deed of guarantee dated 4/07/1979. On 31/03/1978 the defendants had also given an undertaking not to transfer, dispose of, pledge or charge, etc. their share holdings in the share capital in the said company without the written permission of the plaintiff. The said company had also executed a deed of mortgage on 21/04/1978 in consideration of a sum of Rs. 5. 6 lacs, part of which was already advanced and part of which was to be advanced. The said mortgage was in respect of a plot of land admesuring 20,000 sq. mts. and also included the plant, machinery, spare parts, etc. belonging to the said company. By another indenture dated 21/04/1978 a tripartite agreement was entered into between msfc (Maharashtra State Financial Corporation), the plaintiff and the said company. The said company had also obtained a loan of Rs. 30 lacs from the said MSFC on or about 16/09/1976. The agreement provided that the rights of the plaintiff and the said MSFC in respect of the securities created by the msfc mortgage and EDC mortgage would rank pari passu without any preference or priority of any one over the other.