RAMESH CHANDER Vs. PUNJAB FINANCIAL CORPORATION

JUDGEMENT

(1.) PLOT No. B -39 measuring 2512.12 Sq. Yds. Focal Point, Moga, was given as security for due repayment of the loan advanced to a partnership firm M/s. Prakash Chemicals through a registered mortgage deed. The mortgage was alongwith building and machinery installed therein. The borrower committed default in repayment of the loan and thus, respondent No. 1 M/s. Punjab Financial Corporation (PFC), which had advanced the loan, exercised powers under Section 29 of the State Financial Corporations Act, 1951 (in short 'the Act') and took over the possession of the mortgaged properties. Petitioner was the highest bidder for purchase of this property and as per the Minutes of the Sale Committee placed on record dated 4.1.1995, the petitioner was called upon to make 25% down payment after deducting the dues payable to Punjab Small Industries and Export Corporation (PSIEC)/respondent No. 2 and the balance amount was payable in 12 quarterly installments on usual terms and conditions. It is stated that these terms and conditions provided that the payment would be made with 26% interest with a concession of 6% interest in installment if installments were paid by due dates.

(2.) THE petitioner did make payment, but there was some default. It is the say of the learned counsel for the petitioner that this default was in payment of interest though principal was paid. Suffice to say that as a result thereof, the PFC exercised its right once again under Section 29 of the said Act, but this time qua the petitioner and sought to re -auction the property after taking over possession from the petitioner.

(3.) LEARNED counsel for the petitioner submits that the defaults in payment of interest on the part of the petitioner was occasioned by the fact that the petitioner was not able to utilize the plot despite possession being handed over on account of failure of respondent No. 1 to comply with its obligations to make payment of dues to respondent No. 2, on which payment, rights of the petitioner would have matured. The result was that there was no transaction completed in favour of the petitioner.