A.Purushothaman, v. Pondicherry Industrial

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED :16.07.2018

CORAM

THE HON'BLE MR.JUSTICE S.M.SUBRAMANIAM W.P.No.10824 of 2018 and W.M.P.Nos.16321 & 12766 of 2018 A.Purushothaman ..Petitioner vs Pondicherry Industrial Promotion Development and Investment Corporation Ltd., 60, Romain Rolland Street, Pondicherry - 605 001.

.. Respondent Prayer:

Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, calling for the records pertaining to the order passed by the Respondent in his Order No.PIPDIC/FP/SSI/12/201011/T.III/6667 dated 22.03.2018 and quash the same, and direct the respondent to restructure the loan amount, so as to enable the petitioner to avail all the concession and subsidy amount granted by the Government of India.

For Petitioner : Mr.C.Selvaraj, Senior Counsel for M/s.C.S.Associates For Respondent : Mr.D.Ravichandar

O R D E R

The order dated 22.03.2018 issued by the Managing Director/Special Secretary to Government, Pondicherry Industrial Promotion Development and Investment Corporation Limited is under challenge in this writ petition.

2.The learned Senior Counsel appearing on behalf of the writ petitioner made a submission that the Government of India Scheme to develop the Tourism, so as to bring the foreigners and gain foreign exchange to India. The respondent formulated a scheme for the benefit of young entrepreneurs and to encourage them. The writ petitioner had intended to start a Three Star Hotel at Puducherry at a total estimate of Rs.10 Crores. When the writ petitioner entered into the venture, he was in possession of

required funds in his hands and immovable properties to the extent of Rs.2.5 crores. Under these circumstances, the petitioner was in need of a portion of the amount and approached the respondent and the respondent agreed to sanction the loan by stage wise. The petitioner submitted the project details and at the first stage, the respondent sanctioned Rs.85,00,000/-(Rupees eighty five lakhs only) on 03.03.2004 and thereafter, sanctioned Rs.33,00,000/-(Rupees thirty three lakhs only). The petitioner claims that he remitted Rs.8,43,665/-(Rupees eight lakhs forty three thousand six hundred and sixty five only) by way of an interest. On payment of the interest amount, the second phase was sanctioned.

Without even waiting, the respondents were going on charging the interest and the petitioner was unable to meet out the huge interest imposed by the respondents. The particulars stated in the affidavit filed in support of the writ petition states that the petitioner made sincere attempt to clear the dues and in spite of that he was unable to settle the entire loan amount on account of a enormous charge of interest. The respondent issued notice on 23.02.2012 for taking possession of the property. The petitioner filed W.P.No.6811 of 2012. Accordingly, this Court passed an order on 12.12.

"Para 14:

(i)The petitioner shall pay Rs.50 lakhs within a period of 21 days from today and the balance amount of Rs.45,68,345/- (95,68,345-50,00,000) shall be paid by the petitioner in three equal month instalments thereafter.

(ii)If the petitioner has paid the interest amount of Rs.95,68,345/- as stated above, the respondent is directed to reschedule the entire principal outstanding amount upto maximum of two years as per their letter dated 10.01.2012 within a period of four weeks on completion of the payment of instalments as stated above.

(iii)If the petitioner fails to comply with the condition, it is open for the respondent to proceed in accordance with law."

3.Since the writ petitioner could not able to get sufficient time for payment of the entire interest amount, he preferred Writ Appeal in W.A.No.2878 of 2012, the Hon'ble Division Bench granted an interim stay on condition to make payment on various stages and ultimately, the entire amount had been paid by the writ petitioner. However, the Hon'ble Division Bench upheld the possession notice issued by the respondent on 04.12.2017. Challenging the same, the petitioner filed S.L.P.No.8255 of 2018 and the said S.L.P., was dismissed on 16.04.2018. Meanwhile, the respondent Corporation issued notice on 23.10.2017 with an offer

to extend the concessional rate of interest of Rs.1,11,41,384/- (Rupees one crore eleven lakhs forty one thousand three hundred and eighty four only) for the settlement of the loan amount under the "one time settlement scheme". However, the petitioner was unable to raise the required amount within a short span of time. Thus, he approached the respondent Corporation for restructure of the entire loan dues on payment of interest. However, the said request made by the petitioner had not been accepted by the respondent. Under these circumstances, the respondent passed the present impugned order dated 22.03.2018, stating that the petitioner should clear the dues together with interest within a period of one week from the date of receipt of the notice, failing which the movable and immovable assets of M/s.Hotel Happy Green Private Ltd.

, mortgaged/hypothecated with the respondent corporation shall be taken over possession for realizing the dues payable to the Corporation as on the date of taking over of the possession, without prejudice to initiation of action for any other mode of recovery for the balance amount due. Challenging the said notice, once again, the writ petitioner has chosen to file the present writ petition. 4.The learned Senior Counsel appearing on behalf of the writ petitioner made a submission that if the petitioner is permitted to sell the mortgaged property, then he would be in a position to settle the entire loan dues along with interest. However, the respondents are not permitting him to sell the property.

When the proposal is submitted by the writ petitioner, the learned counsel appearing on behalf of the respondent, on instructions from the respondent, informed this Court that there is no possibility of granting any such leniency at this point of time and further, the property mortgaged in the loan account is insufficient to meet out the entire dues along with the interest. Thus, no purpose would be served even if the petitioner is allowed to sell his mortgaged property. This apart, the petitioner had not paid the dues and he is a chronic defaulter. The petitioner, being a continuous defaulter of repayment of loan amount, the respondent is not in a position to grant any further concession or otherwise as per the terms and conditions of the loan amount.

5.The learned counsel appearing on behalf of the respondent states that the writ petitioner had availed Rs.5,00,000/-(Rupees five lakhs only) from the respondent and the details of the same are as under:

S.No Date of Sanction Amount Sanctione d in Lakhs Condition Loan - I 30.01.20 Loan amount has to be repaid with interest on quarterly basis in 24 quarterly instalments upto 2013 Loan - II 13.02.20 Loan amount has to be repaid with interest on quarterly basis in 28 quarterly instalments upto 2015 Loan - III 29.11.20 Loan amount has to be repaid with interest on quarterly basis in 28 quarterly instalments upto 2015 Loan - IV 24.03.20 Loan amount has to be repaid with interest on quarterly basis in 32 quarterly instalments upto 2019 Loan - V 30.06.20 Loan amount has to be repaid with interest on quarterly basis in 24 quarterly instalments upto 2017 6.It is contended that the petitioner has committed serious defaults in repayment of the loan amount as well as the interest dues.

Thus, the respondent was constrained to issue Possession Notice on 17.11.2011, under Section 29 of the State Financial Corporation Act, 1951 to take over the assets of the writ petitioner. The respondent had chosen to defer the recovery proceedings, only based on the assurance given by the writ petitioner in his letter dated 18.11.2011 that the interest over-due amount will be cleared by December 2011. Despite his specific assurance to clear the interest over-due amount, the writ petitioner failed to honour his own commitment. In addition to the same, the respondent in their vide communication dated 10.01.

2012, chose to benefit the writ petitioner by providing an opportunity to avail Scheme of Extension of Repayment period, wherein extension would be provided for repayment of loan upto a maximum of two years over and above the original repayment period, on condition of repayment of entire interest over-due amount of Rs.68,82,000/-(Rupees Sixty Eight Lakhs Eighty Two Thousand only) on or before 31.01.2012. Despite repeated opportunities for the writ petitioner, the writ petitioner has chosen not to opt for the above mentioned scheme by committing default in repayment.

terms and conditions in notice dated 23.02.2012 and that notice was challenged by way of a writ petition as stated in the earlier paragraphs. After this notice, the petitioner has chosen to approach the Hon'ble High Court at the first instance, by filing a writ petition and thereafter, he preferred a Writ Appeal and finally, the matter went up to the Hon'ble Supreme Court of India. The relief as such sought for by the writ petitioner had not been granted and thereafter, the present notice has been issued.

7.The learned counsel appearing on behalf of the respondent made a submission that the writ petitioner has gone up to the Hon'ble Supreme Court of India and adjudicated the issues involved in this writ petition. Thus, the present writ petition is to be rejected on the ground of the principles of estoppal. On account of the same loan amount dues, the writ petitioner earlier adjudicated the matter up to the Hon'ble Supreme Court of India and therefore, the present notice is only consequential, issued pursuant to the orders passed by the Hon'ble Division Bench and the Hon'ble Supreme Court of India. Thus, no writ can be entertained against the notice issued and the writ petitioner has an action to settle the entire loan dues along with the interest or face the consequences as per the terms and conditions of the loan scheme.

8.Considering the facts and circumstances of the case, this Court is of an opinion that the writ petitioner is a chronic defaulter and earlier approached this Court by way of a writ petition, writ appeal and by way of a S.L.P before the Hon'ble Supreme Court of India. The present notice issued by the respondent is only consequential and the earlier conditions imposed by the respondent has not been complied with. The writ petitioner was unable to settle the loan dues along with the interest for the past about eight years and there is no scope in this matter even if the same concession is extended by way of rescheduling the loan or by extending the time. 9.Under these circumstances, this Court is of an opinion that there is no infirmity in respect of the notice issued by the respondent and the writ petition is devoid of merits and stands dismissed. However, there shall be no order as to costs. Consequently, connected miscellaneous petitions are closed. Sd/- Assistant Registrar(CS V) //True Copy// Sub Assistant Registrar

To Pondicherry Industrial Promotion Development and Investment Corporation Ltd., 60, Romain Rolland Street, Pondicherry - 605 001.

+1cc to M/s.C.S.Associates, Advocate sr.no.46418 +1cc to Mr.D.Ravichandar, Advocate sr.no.46409 W.P.No.10824 of 2018 nr 27/07/2018