PUNJAB FINANCIAL CORPORATIONCHANDIGARH Vs. STYLO INDUSTRIES

JUDGEMENT

(1.) This appeal has been filed by the petitioner appellant against the order of the Additional District Judge, Hoshiarpur, dated 3rd November, 1983.

(2.) Briefly, the facts are that the business of the appellant is to grant loans to the industrial concerns on the security of their movable and immovable properties. Respondent 1 is an industrial concern engaged in the business of manufacturing the bench vices and machine vices. Respondents 2 to 7 are its partners. Respondent 1 made an application to the appellant for loan which was sanctioned in its favour to the tune of Rupees 5,90,000/-. Out of the said sanctioned loan, Rs. 4,28,100/- were advanced by the appellant to respondent 1 and the balance was withheld in view of the default committed by the respondents in its repayment. Mortgage deed dated Ist February, 1977 was executed by the respondents in favour of the appellant. The amount was payable by them to the appellant with interest, in instalments. They, however, committed default in repayment. Consequently the appellant filed an application under Section 31, State Financial Corporations Act, 1951 for the recovery of Rs. 5,73,061.82 with future interest at the rate of l51/2 % per annum from 15th December, 1981 along with incidental charges and miscellaneous expenses to be debited to the account of the respondents in terms of the mortgage deed.

(3.) The application was contested by Ashok Kumar respondent 2 who pleaded that the rate of interest claimed by the appellant was excessive and not in accordance with the terms of the mortgage deed. It was further pleaded that after the Industrial Development Bank of India (I. D. B. I.) had re-financed the loan, the appellant was entitled to 31/2 % per annum above the I. D. B. I. refinance rate of interest. On the pleadings of the parties the trial Court framed the following issues:-