- (1.) Apex Engineering Pvt. Ltd. and Fairgrowth Financial Services Limited had entered into a hire-purchase agreement whereby a sum of Rs. 36.50 lakhs was advanced by Fairgrowth to Apex Engineering for purchasing two wheel loaders from M/s. Tata Engineering and Locomotive Company Ltd. (TELCO). Agreeing to the terms of the agreement, Apex Engineering had to pay 36 equal quarterly instalments totalling Rs. 56.21 lakhs. The agreement further stipulated that in the event of default of payment by Apex Engineering it would be required to pay interest at 2 per cent per month compounded on daily basis.
(2.) Some instalments were paid, but on 7th May, 1992, Apex Engineering wrote to Fairgrowth that there were some inherent manufacturing and design defects in the wheel loaders rendering them unusable and requested Fairgrowth to repossess the wheel loaders and take up the matter with TELCO.
(3.) On 6th June, 1992, the Special Courts Ordinance was issued, which was subsequently replaced by the Act and on 2nd July, 1992, Fairgrowth was declared as a "notified person". As a result thereof, amounts due to the Fairgrowth were to be recovered by the Custodian.;