OM PRAKASH - (1.) A usual petition is filed by the petitioner a partnership firm styled as M/s Kuber Dal and Oil Mills-constituted by two partners, namely, Ayodhya Prasad and Kanhiya Lal (though wrongly asserted a proprietary concern in para 2 of the writ petition), engaged in the business of manufacture of pulses for quashing the impugned order dated 7-1-1991 (Annexure '1' to the writ petition), issued by the U.P. Financial Corporation (U.P.F.C.) calling upon the petitioner to pay the outstanding dues, aggregating to Rs. 6,01,700.88 p. break up of which is as follows : 1. Principal outstanding Rs. 4,49,918.60 2. Interest due up to 20-12-90 Rs. 1,51,782.88 3. Other expenses Rs. Nil Total : Rs. 6,01,700.00 The facts as succinctly stated are that a term loan to the tune of Rs. 4,53,000.00 was sanctioned by the UPFC to the petitioner on 5-6-1986; that of the sanctioned amount only a sum of Rs. 4,49,918.00 was paid to the petitioner; that loan disbursed to the extent of Rs. 12,070.00 was adjusted towards the interest and thus the difference of Rs. 4,49,918.00 minus Rs. 12,070.00 was actually disbursed to the petitioner; that the petitioner has paid a sum of Rs. 1,06,678.25 p. towards interest thereof during the period from 1987 to 1990, details of which are set out in para 3 of the writ petition; that gestation period which was due to commence after two years as per the recovery schedule set out in Annexure '2' to the writ petition, would start from the date of commencement of production and in any case that could not commence before the date of last disbursement; that as per the disbursement schedule set out in para 2 of the writ petition, last amount was disbursed on 30-9-1988 and, therefore, the gestation period would start upon the expiry of two years after 30-9-1988; that the petitioner was entitled to pay the first instalment after two years w.e.f. 30/09/1988; that the petitioner expected to start production by the end of April, 1991 and the entire term loan would be repaid within seven years adhering to the recovery schedule and, therefore, the action threatened to be taken under S. 29 of the State Financial Corporation Act (briefly, the Act) by the UPFC against the petitioner is illegal.
(2.) In the counter-affidavit filed for and on behalf of the UPFC it is stated that S. 29 notice was given on 23-2-1991; that working capital was to be arranged by the petitioner; that the petitioner made meagre payments aggregating to Rs. 1,52,279.00 so far, which have been adjusted towards the interest as per the terms and conditions of the term loan agreement (Annexure '1' to the counter-affidavit); that though first disbursement was made on 2-5-1987, no instalment of principal amount has been paid so far by the petitioner; that the agreement (Annexure '1' to the counter-affidavit) clearly postulates that the first instalment would fall due for repayment after twenty four months from the date of the first advance of loan by the U.P.F.C. and every subsequent instalment would be paid half yearly together with interest on principal amount; that the gestation period would, therefore, come to an end after two years from the date of the first advance of loan and that as no principal amount was paid by the petitioner, the respondents had no option but to resort to action as envisaged by S. 29 of the Act.
(3.) In para 15 of the counter-affidavit which was filed in November, 1996, it is averred that though a period of nine years has gone by, the entire principal amount coupled with huge interest aggregating to Rs. 13,36,448.47p. is outstanding against the petitioner. In para 9 of the counteraffidavit, it is averred that the petitioner over a long period of nine years paid only a sum of Rs. 1,52,279.00. In para 3 of the writ petition, the petitioner has set out details of payment of interest aggregating to Rs. 1,06,678.25p. paid during the period from 1987 to 1990. In para 8 of the rejoinder-affidavit which replies para 9 of the counteraffidavit, it is averred that correct details of repayment are given in para 3 of the writ petition. Disbursement of loan having commenced from 25-1987 as gleaned from the details of disbursement set out in annexure '2' to the counteraffidavit, it is plain that considerable liability towards interest would have arisen against the petitioner and if that is added to the principal amount, admittedly, advanced to the petitioner, then it will be seen that as against the principal amount and the interest having accrued thereon, the petitioner has made slender repayment so far.;