Haryana Financial Corporation & Anr. v. M/s Goyal Electro Metal and General Industries

Present: Mr. Kamal Sehgal, Advocate for the appellants. Mr. A. C. Jain, Advocate with Mr. Aparana Jain, Advocate for the respondent. L. N. MITTAL, J (ORAL) Defendants i.e Haryana Financial Corporation through its two different officers have filed the instant second appeal. Respondent-M/s Goyal Electro Metal and General Industries filed civil suit against the appellants herein. The suit was initially for relief of permanent injunction, but by amendment, relief of possession was also claimed. Haryana Financial Corporation (HFC for brevity) invited bids for sale of sick unit M/s Jai Suiting & Sarees Mill, Rewari of which possession had been taken over by HFC. Plaintiff submitted bid of Rs.10,00,000/- along with bank draft of Rs.1,00,000/- being 10% of the sale consideration. Plaintiff being higher bidder, the defendants accepted the plaintiff's bid RSA No.4086 of 2009 -2- on 29.11.1999 and accepted the plaintiff's proposal vide letter dated 04.01.2000. Accordingly, the plaintiff deposited demand draft of Rs.9,00,000/- with the defendants on 31.01.2000. The plaintiff thus paid the entire sale consideration, but the defendants did not handover possession of the sick unit to the plaintiff nor executed necessary sale deed. Stand of the defendants was that the sick unit had filed civil suit against the defendants wherein on an application moved under Order 39 Rule 2A of the Code of Civil Procedure (in short C.P.C), Court passed order dated 01.02.2000 restraining the defendants from delivering possession of the suit property i.e sick unit and, therefore, the defendants could not deliver possession thereof to the plaintiff. Learned Civil Judge (Senior Division), Rewari vide judgment and decree dated 21.07.2008 dismissed the suit of the plaintiff. However, first appeal preferred by the plaintiff has been allowed by learned District Judge, Rewari vide impugned judgment and decree dated 09.09.2009 thereby directing the defendants to pay interest at the rate of 10% per annum on the amount of Rs.10,00,000/- with effect from 01.02.2000 till date of delivery of peaceful possession of the sick unit to the plaintiff, within two months from the date of decree, failing which the defendants shall pay penal interest at the rate of 18% on the interest amount commencing from 09.11.2009 till realisation. The suit filed by plaintiff-respondent thus stands decreed by the RSA No.4086 of 2009 lower Appellate Court. -3- I have heard learned counsel for the parties and perused the case file. Learned counsel for the appellants vehemently contended that the defendants were prevented from delivering possession of the sick unit to the plaintiff on account of order dated 01.02.2000 passed by Civil Court in the civil suit instituted by the sick unit against the defendants and, therefore, there was no fault of the defendants. The contention appears to be very forceful on first blush, but in fact the contention is completely devoid of substance. Facts in the case are not in dispute. The plaintiff paid Rs.1,00,000/- to the defendants along with tender on 18.11.1999 and paid the balance amount of Rs.9,00,000/- on

31.01.2000. However, possession of the sick unit was not delivered to the plaintiff. Thus the plaintiff was deprived of the possession and enjoyment of the unit as well as of the amount of Rs.10,00,000/- without any fault on his part, because the defendants failed to deliver possession of the sick unit to the plaintiff, whatever may be the reason therefor. The plaintiff has thus been rightly compensated by the lower Appellate Court by directing the defendants to pay interest at the rate of 10% per annum on the amount deposited by the plaintiff with the defendants. Learned counsel for the appellants contended that the lower appellate Court has allowed interest at excessive rate. RSA No.4086 of 2009 -4- The contention cannot be accepted. The appellants themselves charge interest at much higher rates than that allowed by the lower Appellate Court. Even otherwise, prevalent bank rate on commercial loan is more than 10 % per annum. Consequently, interest awarded by lower appellate Court at the rate of 10% per annum cannot be said to be excessive. Learned counsel for the appellants also contended that sick unit i.e M/s Jai Suiting & Sarees Mills was a necessary party to the suit, but was not impleaded. This contention is also completely devoid of merit because the plaintiff had no privity of the contract with the sick unit. The transaction in question was between the plaintiff and the defendants. Consequently, the plaintiff had cause of action against the defendants only. The plaintiff had no cause of action against the sick unit. For the reasons recorded hereinabove, I find that there is absolutely no merit in the instant appeal which is completely frivolous. HFC is a statutory Corporation. It cannot function in a dictatorial manner. It is supposed to function in fair and just manner. However, HFC deprived the plaintiff- respondent of the possession of the sick unit as well as of the sale consideration of Rs.10,00,000/-. If for any reasons, the defendants/appellants were unable to deliver possession of the sick unit to the plaintiff, the minimum the defendants could do was that they should have returned the amount of Rs.10,00,000/- to the plaintiff with the condition that the amount RSA No.4086 of 2009 -5- would be taken back when the defendants would be in a position to deliver the possession of the sick unit to the plaintiff. The plaintiff cannot be made to suffer for no fault on his part. As noticed hereinabove, the plaintiff has been deprived of his money as well as of the possession and enjoyment of the sick unit for which the money was paid by the plaintiff to the defendants. In view of the aforesaid, I find no merit in the instant second appeal. No question of law, much less substantial question of law arises, for determination in the instant second appeal. Accordingly, the instant second appeal is dismissed with costs quantified at Rs.10,000/-. The period of two months granted by the lower appellate Court for commencement of penal interest would, however, commence after two months from today because operation of judgment and decree of the lower appellate Court had been stayed by interim order dated 12.11.2009 passed by this Court.

14.01.2010 A. Kaundal ( L. N. MITTAL ) JUDGE