HARI SHANKAR PRASAD, J. - (1.) SINCE both the appeals arise out of the same judgment dated 30.11.1992 (decree signed on 19.12.1992) passed in Money Suit No. 9/6 of 1984/1989 both the appeals are heard together and are being disposed of by this common judgment.
(2.) THE case of the plaintiff in brief is that it applied for grant of loan to the tune of Rs. 3.87 lacs before the Bihar State Financial Corporation, Patna (defendant No. 1) for the purpose of establishing factory at Industrial Area Kokar, Ranchi on 5.11.1976. The defendant sanctioned a sum of Rs. 3.36 lacs as loan vide letter No. 7026 dated 7.7.1977 and the plaintiff, through its partners executed mortgage deed of the property mentioned in Schedules A.B. and C to the said deed that is the lease hold right over the land measuring 0.56 acres at village Kokar being Plot No. 913P under Khata No. 124 and Plot No. 914P under Khata No. 42 on portion of industrial plot No. 9 as specified in Schedule B and all the plants and machineries purchased or installed or to be purchased and to be installed on the plot of land and building are mentioned in schedule C. The plaintiff was required to pay instalment of Rs. 25,000/ - each with interest a 14.25% per annum half early and defendant No. 1 paid a sum of Rs. 1,72,000/ - on 6.4.1978 to the plaintiff for the purpose of machineries and establishment of factory and for other purpose. The plaintiff spent over Rs. 40,000/ -towards construction of building and towards other incidental expenses and placed orders for supply of machins, for which the loan had been sanctioned, but as the machineries were not readily available at the relevant time the plaintiff returned a sum of Rs. 1,32,000/ - to the defendant No. 1 on stipulation that the same amount shall be paid to the plaintiff as soon as the machineries are made available. In fact the plaintiff records a total amount of Rs. 3,43,300 from the defendant No. 1. The plaintiff installed machineries after construction of building over the plot and started operation in the month of November, 1978 and on 30.11.1978 the plaintiff applied for additional loan of Rs. 50,000/ - but the plaintiff due to dilly dally tactics of defendants No. 1 abandoned the idea of availing any additional loan from defendant No. 1 and in stead approached Industrial Development Bank of India which financed the loan with effect from 26.9.1978. The plaintiff made a total payment of Rs. 47,861.69 to defendant No, 1 by way of interest. The plaintiff then filed an application to the defendant No. 1 on 10.9.1979 for rescheduling the repayment programme on the ground that production in the factory was started very late and also on the ground of low productivity due to frequent power failure but the plaintiff received a letter from the defendant No. 1 on 8.4.1980 that if the amount of interest is paid to the defendant No. 1 then only application for rescheduling of the principal instalment shall be considered. Due to power failure the factory remained closed for several days the plaintiff suffered a heavy loss and due to the scarcity of power, production could not be sufficiently made and therefore plaintiff vide its letter dated 10.12.1980 informed the defendant No. 1 expressing difficulties in smooth running of the factory and its financial stringency in payment of interest and the principal amount and requested the defendant No. 1 to afford opportunity to the plaintiff to liquidate the suitable instalment but the defendant No. 1 directed the plaintiff to make payment of Rs. 23,000 by 31.12.1980 and to make further payment of outstanding dues by February, 1981. The plaintiff replied by letter dated 14.3.1981 stating difficulty in making payment fixed by the Advisory Board and due to non -cooperative attitude of defendant No. 1 and also due to power failure plaintiff had no option but to close the factory in the month of March, 1982 and due information regarding this fact, was given to the Branch Manager of loan office of the defendant No. 1. The plaintiff had apprised the position to defendant No. 1 but defendant No. 1 did not make any effort to solve the problems and the plaintiff was surprised to learn from the publication in the newspaper that an advertisement for sale of the plaintiff's factory along with its assets and machineries has been published at' the instance of defendant No. 1 and plaintiff vide its letter dated 18.12.1982 requested the defendant No. 1 to withdraw the said advertisement, which was duly received in the office defendant No. 1 and defendant No. 1, vide letter dated 12.1.1983 informed the plaintiff regarding re -advertisement for sale of plaintiff's factory with assets. Besides the properties and assets mortgaged and hypothecated to the defendant No. 1, there were several other valuable materials which are given in schedule -A, attached to the plaint which were lying scattered in the factory premises and the stores and those articles were wholly outside the mortgaged securities of the defendant No. 1 and latter had no claim of any kind thereon. The part of the schedule -A materials were hypothecated in favour of the defendant No. 3 State Bank of India, main Branch, Court Compound, Ranchi and plaintiff used to submit detailed stock statement to the Manager State Bank of India from time to time. Further, the plaintiff was bewildered to learn that the defendant No. 1 has taken possession of the factory premises of the plaintiff along with all its assets and machineries and the stocks and materials by breaking open the lock in an utterly manner including the unhypothecated materials. The details of which are set out in schedule -A of the plaint and further delivered possession thereof to defendant No. 2 who claims to have purchased the same and both the defendants in collusion with each other converted the schedule 'A' properties to their use and thus misappropriated the same. The aforesaid action of the defendant Nos. 1 and 2 is wholly high handed and wrongful and the same amounts to torturous act of wrongful conversion of plaintiff's properties by the defendant Nos. 1 and 2 for which they are bounded in law to reimburse and recompensate the plaintiff for the value of said loss occasioned by their wrongful act as aforesaid. The defendant Nos. 1 and 2 neither called the plaintiff nor the defendant 3, the State Bank of India, main Branch Court Compound, Ranchi or their representative for the preparation of any inventory in their presence. Any inventory said to have been prepared by the defendant No. 1 is incorrect and incomplete and not in accordance with elementary rules of fair play as the witnesses thereto are all their henchmen. The plaintiff on the request made by the defendant No. 3 on a belated stage tried in vain to remove the articles and products as mentioned in schedule A but no materials whatever could be found in the factory premises due to obstructions and protestation made by the defendant No. 2. The plaintiff could not remove anything from the factory premises and the plaintiff wrote a letter to defendant No. 3 regarding their inability to remove the said goods from the factory premises. That due to intransigent attitude of the defendant No. 2 the goods described in Schedule 'A' below remained in the factory premises which are under the possession of defendant No. 2, even since 16.2.1983. Besides the above the defendant without making any genius efforts and a manner which lacked bonafidely and good faith on its part sold the entire factory of the plaintiff to defendant No. 2 by private negotiations on an amount which was far below the reasonable market or fair market price in a buried and surreptitious manner. The factory with its building and equipment installed there were sold at Rs. 4,97,065.54 being the outstanding due of the defendant against plaintiff as on 16.2.1983 according to calculations of defendant No. 1 though in fact the fair market price of the same could not have been less than Rs. 6,84,000/ - as specified in schedule 'b' read with schedule 'C' of the plaint. The plaintiff is entitled to a decree for a sum of Rs. 1,86,934. 46 as contained in schedule 'D' of the plaint being the difference between the fair market price of the properties, sold as specified B and C of the plaint and the price of which the defendant No. 1 sold the properties to defendant No. 2. The cause of action for the suit arose within the jurisdiction of this Court on 16.2.1983 when the plaintiff came to know illegal occupation of the properties belonging to plaintiff by the defendant Nos. 1 and 2.
(3.) THE plaintiff has valued the suit at Rs. 3,74,569.70 P for the purpose of jurisdiction and Court fee and plaintiff has paid advaloram Court fee and has sought the aforementioned relief at para 1. The defendant No. 1 has appeared and filed his written statement and has contested the suit. The defendant No. 2 has appeared and has filed his written statement. The defendant No. 3 has appeared but not filed his written statement. The suit has been heard ex parte against defendant No. 3. The written statement of contesting defendant No. 1 in brief is that the plaintiff has no cause of action for the suit. The suit as framed is not maintainable and is liable to be dismissed. The suit is barred under Section 46B of the State Financial Corporation Act. The statements made in paragraphs 1 to 24 of the plaint are matters of record. The full facts will however appear from the relevant document concerning the facts involved in the suit. The defendant No. 1, has not controverted the statement of plaint paras 1 to 24 except paras 20 and 25 and has admitted that it is a fact that the plaintiff applied for advance of loan of Rs. 3,87,000.00 for setting up an industrial unit in the industrial area. Kokar, Ranchi to the defendant and that loan of Rs. 3,36,000/ -was sanctioned in the letter of sanction dated 7.7.1977 vide Annexure -1 of plaint and letter of acceptance dated 12.7.1977. According to terms and condition of sanction of loan the plaintiff executed and registered a deed of mortgage on 5th January, 1978 in favour of this defendant whereby the plaintiff mortgaged all the land and building standing on the land existing which were to be constructed after the grant of loan and all machineries which were existing and other machineries which were to be brought, on site by purchase after grant of loan as will appear from the deed of mortgage Annexure 2 of the plaint. That out of the loan sanctioned i.e. Rs. 3,36,000.00, plaintiff was advanced Rs. 3,34,300.00 by instalments the receipt of which sum has been accepted by the plain tiff in paragraph 3 of the plaint. The plaintiff however defaulted in making repayment of the loan according to the terms and conditions contained in letter Annexure 1 of the plaint and mortgage deed Annexure 2 of the plaint and hence the plaintiff was asked to repay the loan but the plaintiff failed to do so and hence the case of the plaintiff was placed before the Advisory Committee (Legal Default Case) on 11.12.1980 in which Vinod Kumar Modi was present Vinod Kumar Modi agreed to clear the dues in the manner stated in paragraph 18 of the plaint i.e. Rs. 23,000 by 31.12.1980 and to make further payment of the outstanding dues by February, 1981. But the plaintiff firms failed to pay the dues as agreed upon and hence matter was therefore again placed before the Advisory Committee (Legal and Default) on 10.3.1981. The Committee decided that if the concern failed to clear off entire over dues by 31.3.1981 legal action may be taken immediately for recovery of the dues of the defendant No. 1. That when the plaintiff firm did not pay the dues, notice under Sections 30 and 29 of the State Financial Corporation Act, 1951 was given on 7.12.1981 and three months time was given for payment of the loan amount of Rs. 4,05,862.09 but dues were not paid. The mortgaged assets were advertised for sale. On the said advertisement no tender was received, then the notice for sale was again issued. The defendant No. 2 then offered to purchase the mortgaged assets for Rs. 4,96,106.24. The total outstanding dues as on 1.10.1982, he paid Rs. 1,50,000/ - at the firs instance and agreed to pay the balance of the dues by instalments. The proposal of the defendant No. 2 was accepted by the defendant No. 1 and the defendant No. 2 was put in possession of the mortgaged assets. An inventory of the properties found in the mortgaged premises was prepared at the time of taking out possession of the mortgaged assets in presence of witnesses and it was signed by the witnesses and branch manager and others vide Annexure -IV of the written statement. The statement made in paragraphs 20 and 25 of the plaint are not correct and are denied. The Defendant denies that properties mentioned in schedule A of the plaint were in the mortgaged premises. Noting beyond the properties mentioned in the inventory list Annexure -IV were in the factory premises. The plaintiff is put to strict proof of the statement made in paragraph 25 of the plaint. The statement made in paragraph 26 of the plaint are not admitted and plaintiff is put to strict proof of it. With regard to statements made in paragraphs 27 to 29 of the plaint, it is stated that the plaintiff was fully aware of the fact that the possession was taken of the mortgaged assets. The possession was taken after due notice to the plaintiff. The statements to the contrary made in the aforesaid paragraph are not correct and are denied. With regard to statement made in paragraphs 30, 31 and 32 of the plaint, it is stated that any other properties found in the factory premises was duly prepared in presence of witnesses and signed by the witnesses coalitar etc. mentioned in Schedule A of the plaint were not found in the factors premises. The question of the same did does not arise. The plaintiff is put to strict proof of the statement that the properties as mentioned in schedule A of the plaint were within the factory premises when possession was taken of the said mortgaged premises.;