TILES INDIA Vs. ASSAM FINANCIAL CORPORATION

JUDGEMENT

(1.) THIS appeal under Section 32 (9) of the State Financial Corporation Act, 1951 (for brevity the "act") has been filed by the borrower against the judgment and order dated 04. 05. 2000 passed by the then learned District Judge, Nagaon in Misc. (R) No. 141/1998. By the impugned judgment the learned Trial Judge has accepted the prayer of the Assam Financial Corporation (the 'corporation' in short) made U/s 31 (1) (a) and (c) of the said Act. In other words, the learned Trial Judge has made the interim order of attachment of the mortgage and hypothecated properties dated 17. 08. 1998 absolute. Being aggrieved with this order, the borrower has filed this appeal.

(2.) WE have heard Sri C. K. Sarma Barua, learned counsel for the appellants. Sri B. K. Goswami, learned senior counsel appearing on behalf of the corporation. We have also gone through the impugned judgment and the pleadings of both the parties made in the lower Court.

(3.) THE corporation filed an application u/s 31 of the Act in the Trial Court praying for sale of mortgaged and hypothecated properties for realization of the debt amount. , which included the principal amount with interest. It was the case of the petitioner/respondent that the term loan of Rs. 4,05,000/- was sanctioned to the appellants vide letter dated 08. 07. 1987 to set-up an industrial unit under the name and style of M/s Tiles India at Puranigudam in the district of Nagaon, Assam. The loan amount was disbursed on hypothecation of plant and machinery and mortgaging of landed property on 30. 07. 1987. It may be mentioned here that the appellant No. 1 is a firm and appellant No. 2 is the proprietor of the said industrial unit. As per the terms and conditions, the loan amount was to be redeemed in 28 quarterly installments from January, 1989 onwards with interest. It was also the case of the respondents that the loan was sanctioned @ 12. 5% interest per annum. However, there was a rider that the interest @ 13. 5% p. a. would be charged if the loan amount is not re-financed by IDBI. There was another stipulation in the loan agreement that panel interest @ 4% p. a. would also be levied additionally if the borrower defaults in repaying the loan. As per the corporation, the borrower did not pay a single installment against the principle amount of loan. Only a sum of Rs. 2,10,245. 10 was deposited which was adjusted against the interest. Consequently a sum of Rs. 14,97,776/- became due as on 15. 07. 1998 with interest and interest tax. According to the corporation, despite notice to refund the money, the borrower failed to keep the promise, and as such, they had to take recourse to S. 31 of the Act for sale of mortgaged properties.