LexORISSA STATE FINANCIAL CORPORATION AND ANR. versus M/S. HOTEL JOGENDRA
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., ORISSA STATE FINANCIAL CORPORATION AND ANR. A v. M/S. HOTEL JOGENDRA APRIL 18, 1996 IK. RAMASWAMY AND G.B. PATTANAIK, .l.T.] B State Financial Corporations Act, 1951 : Sections 29, JIJ-Party taking loan for const111ction of a hotel-Dcfa11// in repayment-Rephasement-Pmty not submitting proposal and approaching C01uts for stay and status quo-Held, public money is meant to be recycled C to all needy entrepreneurs--Dilat01y tactics defeat public policy and cowt process becon1es an instnunent of abuse--Corut tvould protect only honest and sincere litigants--No indulgence would be shown to recalcitrant defaulter in repaynient of loan--Co17Joration is at libe1ty to take action against the defaulter under S.29 i1Tespective of the orde1~ passed by any Cowt. D CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7740 of 1996. From the Judgment and Order dated 5.3.90 of the Orissa High Court in O.J.C. No. 500 of 1990. E Shambhu Prasad Singh, Sunil K. Jain, J.K. Bhatia for Jain Hansaria & Co. for the Appellants. Janaranjan Das for the Respondent. The following Order of the Court was delivered : Leave granted. We have heard learned counsel on both sides. F This appeal by special leave arises from the order of the Division G Eench of the High Court of Orissa dated March 5, 1990 made in OJC No. 500/90. Admittedly, the respondent had taken a loan of a principal sum of Rs. 14.68 lakhs for construction of the hotel which was payable _in 18 yearly instalments between July 10, 1984 and January 10, 1993. The respondent committed default in payment of the loan as contracted. Pursuant to the H 571 572 SUPREME COURT REPORTS [1996] SUPP. 1 S.C.R. A request, a rephasement was done in November 1989 directing them to pay the amount in 9 half yearly instalments starting from January 1993 to January 1997 with interest on arrear defaulted amounting to Rs. 10.64 lakhs which was to be paid according to the schedule mentioned below : B c March 1989 Rs. 1.30 lakhs March 1990 Rs. 2.00 lakhs March 1991 Rs. 2.84 lakhs March 1992 Rs. 3.00 lakhs March 1993 Rs. 1.50 lakhs In addition, current interest was also to be paid with half yearly interests. Since the respondent - Hotel did not comply with the conditions, D notice was given to it under Section 30 of the State Financial Corporations Act, 1951 on February 1, 1990. Calling that notice in question, the respon- dent filed the above writ petition in the High Court. The High Court has directed the respondent to calculate the entire loan amount with interest including the additional loan sanctioned to treat he said amount as prin- E cipal for the purpose of rephasement of the same for repayment with interest. It would appear that subsequently action was taken by the appellant, but the respondent seems to have not complied with the directions. Ac- cordingly, notice was issued under Section 29. The respondent instead of f complying with the same, approached the High Court by Misc. Case No. 1677/90 which was disposed of by the High Court on April 9, 1991 directing the respondent to be personally present with the appellants on April 13, 1991 for consideration of the rephasement of the proposal as ordered in the impugned judgment. It would appear that the respondent again did not G appear before the authorities on April 13, 1991. The first appellant was, therefore, free to exercise its statutory powers under section 29 in terms of the order passed by High Court as order in the Misc. Case on April 13, 1991 requesting seven days' time for submitting the proposal he sent a letter on the last date. Even thereafter, the respondent did not submit any proposal to rephase the amount payable as per the provisions contained H in Section 29 of the Act. .. ORISSASTATE FINANCIAL CORN. v. HOTELJOGENDRA 573 Therefore, the Corporation again issued a letter on May, 8, 1991 A stating that since that respondent had not furnished the rephasement proposal as per the orders of the High Court, the appellant was free to take action as per law. Calling that order in question again, the respondent had filed OJC No. 2747 of 1991 seeking further directions to rephase the loan. The High Court by interim order dated June, 5, 1991 directed the appellant not to take any coersive action against the respondent, but ultimately the writ petition came to be dismissed on January 25, 1994 with the following holding : B "the present dues of the Corporation is aroun
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