State Industries Promotion v. M/S.Crescent Ceramics (P) Ltd.
O.P.No.985 of 2016 N.SATHISH KUMAR, J.
This Petition has been filed under Section 31(i) (aa) of the State Financial Corporation Act, 1951 for directing the respondents to pay a sum of Rs.30,96,49,913/- to the petitioner Corporation with interest from 30.09.2014 till the date of realisation.
2. The learned counsel for the petitioner fairly submitted that even as per the dictum of the Hon'ble Supreme Court in the judgement reported in (2015) 5 SCC 518 in the case of Deepak Bhandari Vs. Himachal Pradesh State Industrial Development Corporation Limited held that the period of limitation will be well within from the date of realisation of the amount by sale.
3. Admittedly, in this case, sale took place on 14.07.2016 and a sum of Rs.65.21 lakhs has been realised, for any balance amount, the Original Petition ought to have been filed within a period of three years, wherein, the present O.P. has been filed beyond the period of three years. Hence, right of
the Original Petition is extinguished and the Original Petition is not maintainable.
4. It is relevant to note that the Hon'ble Apex Court in the judgement reported in (2015) 5 SCC 518 in the case of Deepak Bhandari Vs. Himachal Pradesh State Industrial Development Corporation Limited has held as follows:
22. It is thus clear that merely because the Corporation acted under Section 29 of the State Financial Corporation Act did not mean that the contract of indemnity came to an end. Section 29 merely enabled the Corporation to take possession and sell the assets for recovery of the dues under the main contract. It may be that only the Corporation taking action under Section 29 and on their taking possession they became deemed owners. The mortgage may have come to an end, but the contract of indemnity, which was an independent contract, did not. The right to claim for the balance arose, under the contract of indemnity, only when the sale proceeds were found to be insufficient. The right to sue on the contract of indemnity arose after the assets were sold. The present case would fall under Article 55 of the Limitation Act, 1963 which corresponds to old
Articles 115 and 116 of the old Limitation Act, 1908. The right to sue on a contract of indemnity/ guarantee would arise when the contract is broken.
23. Therefore, the period of limitation is to be counted from the date when the assets of the Company were sold and not when the recall notice was given.
5. Considering the above settled position, the limitation of three years will commence from the date of sale and not when the legal notice was given. Admittedly, assets of the company was sold on 14.07.2006 from that day onwards, the Original Petition ought to have been filed within a period of three years, whereas, the present petition is filed on 17.12.2014 beyond the period of limitation, which is clearly barred by limitation.
6. Accordingly, this petition is rejected.
08.11.2023 vrc
N.SATHISH KUMAR, J.
vrc O.P.No.985 of 2016 08.11.2023