w w w . L a w y e r S e r v i c e s . i n



M/s. SRS Alloys Pvt. Ltd. Rep. by its Director, Renukananda v/s M/s. Karnataka State Industrial Investment & Development Corporation Ltd., Rep. by its Managing Director.


Company & Directors' Information:- SRS LIMITED [Active] CIN = L74999HR2000PLC040183

Company & Directors' Information:- T S ALLOYS LIMITED [Active] CIN = U27109OR2004PLC009683

Company & Directors' Information:- P V T INVESTMENT LIMITED [Amalgamated] CIN = U74899DL1988PLC121600

Company & Directors' Information:- P V T INVESTMENT LTD [Not available for efiling] CIN = U67120PB1988PLC008068

Company & Directors' Information:- B P ALLOYS LIMITED [Active] CIN = L27107PB1987PLC007827

Company & Directors' Information:- G. K. ALLOYS PRIVATE LIMITED [Active] CIN = U74999PN2020PTC193107

Company & Directors' Information:- A TO Z ALLOYS PRIVATE LIMITED [Active] CIN = U27100MH2006PTC160869

Company & Directors' Information:- V S L ALLOYS (INDIA) PRIVATE LIMITED [Active] CIN = U74899DL1991PTC046396

Company & Directors' Information:- G. M. ALLOYS PRIVATE LIMITED [Active] CIN = U74120DL2007PTC169855

Company & Directors' Information:- S T INVESTMENT PRIVATE LIMITED [Amalgamated] CIN = U65993WB1990PTC050032

Company & Directors' Information:- C M ALLOYS PRIVATE LIMITED [Active] CIN = U27110MH1999PTC122729

Company & Directors' Information:- R D ALLOYS PVT LTD [Active] CIN = U27320WB1971PTC027983

Company & Directors' Information:- H. L. INVESTMENT COMPANY LIMITED [Amalgamated] CIN = U65990WB1975PLC128186

Company & Directors' Information:- A K ALLOYS PVT LTD [Active] CIN = U27101PB1989PTC009860

Company & Directors' Information:- M M INVESTMENT PRIVATE LIMITED [Converted to LLP] CIN = U65921CT2008PTC020533

Company & Directors' Information:- G. N. G. INVESTMENT LIMITED [Active] CIN = U65910GJ1981PLC004128

Company & Directors' Information:- A S G S INVESTMENT PRIVATE LIMITED [Active] CIN = U74120DL2008PTC173938

Company & Directors' Information:- H B S ALLOYS PRIVATE LIMITED [Active] CIN = U27100GJ2012PTC071516

Company & Directors' Information:- G L INVESTMENT PVT LTD [Active] CIN = U65993WB1991PTC051072

Company & Directors' Information:- K L ALLOYS PRIVATE LIMITED [Active] CIN = U99999PB1989PTC008964

Company & Directors' Information:- B R ALLOYS PVT LTD [Active] CIN = U27101WB1995PTC075793

Company & Directors' Information:- C & C INVESTMENT LTD [Active] CIN = U67120AS1976PLC001654

Company & Directors' Information:- S M S INVESTMENT CORPORATION PRIVATE LIMITED [Active] CIN = U74899DL1963PTC003988

Company & Directors' Information:- V R V INVESTMENT PRIVATE LIMITED [Active] CIN = U67120WB1985PTC039793

Company & Directors' Information:- P D ALLOYS PRIVATE LIMITED [Active] CIN = U27100PB2004PTC027669

Company & Directors' Information:- S P INVESTMENT PVT LTD [Active] CIN = U70109WB1961PTC025099

Company & Directors' Information:- K M U ALLOYS PRIVATE LIMITED [Active] CIN = U74899DL1994PTC059238

Company & Directors' Information:- INDUSTRIAL ALLOYS (I) PVT. LTD. [Active] CIN = U27106WB1988PTC045060

Company & Directors' Information:- R H INVESTMENT PRIVATE LIMITED [Active] CIN = U99999MH1978PTC020633

Company & Directors' Information:- M. R. ALLOYS PRIVATE LIMITED [Active] CIN = U27106PB1990PTC010461

Company & Directors' Information:- T N B INVESTMENT PRIVATE LIMITED [Active] CIN = U74899DL1986PTC025590

Company & Directors' Information:- S N ALLOYS PVT LTD [Active] CIN = U27101WB1993PTC059587

Company & Directors' Information:- M J ALLOYS PVT LTD [Active] CIN = U27106WB1985PTC038633

Company & Directors' Information:- S.R.S. ALLOYS PRIVATE LIMITED [Active] CIN = U27101KA1998PTC023400

Company & Directors' Information:- A R S INVESTMENT PVT LTD [Active] CIN = U65993WB1990PTC048513

Company & Directors' Information:- S A ALLOYS PRIVATE LIMITED [Active] CIN = U27310DL1996PTC081185

Company & Directors' Information:- V P INVESTMENT PRIVATE LIMITED [Active] CIN = U74899DL1983PTC015714

Company & Directors' Information:- P. B. ALLOYS PRIVATE LIMITED [Active] CIN = U28910UP2010PTC039384

Company & Directors' Information:- INDUSTRIAL DEVELOPMENT AND INVESTMENT CO PVT LTD [Active] CIN = U65990MH1941PTC003300

Company & Directors' Information:- H. P. ALLOYS PRIVATE LIMITED [Active] CIN = U74999MH2012PTC230070

Company & Directors' Information:- S M D INVESTMENT LIMITED [Strike Off] CIN = U65993TN1995PLC033139

Company & Directors' Information:- G R D INVESTMENT PVT LTD [Amalgamated] CIN = U67120WB1980PTC032727

Company & Directors' Information:- M K ALLOYS PVT LTD [Active] CIN = U27109PB1992PTC012515

Company & Directors' Information:- K V DEVELOPMENT AND INVESTMENT CO PVT LTD [Active] CIN = U65922MH1979PTC021155

Company & Directors' Information:- R AND J ALLOYS PRIVATE LIMITED [Strike Off] CIN = U27106MH1997PTC110781

Company & Directors' Information:- C AND N INVESTMENT PRIVATE LIMITED [Active] CIN = U74899DL1983PTC015710

Company & Directors' Information:- R INVESTMENT PRIVATE LIMITED [Strike Off] CIN = U65993TZ1988PTC002181

Company & Directors' Information:- H N G L INVESTMENT PRIVATE LIMITED [Active] CIN = U74899DL1995PTC066774

Company & Directors' Information:- K M S INVESTMENT PRIVATE LIMITED [Active] CIN = U67120UP1993PTC015287

Company & Directors' Information:- U M INVESTMENT PVT LTD [Active] CIN = U70101WB1979PTC032160

Company & Directors' Information:- G S M ALLOYS PRIVATE LIMITED [Active] CIN = U27205HR2009PTC039242

Company & Directors' Information:- A S T INVESTMENT PRIVATE LIMITED [Strike Off] CIN = U67120DL1996PTC082812

Company & Directors' Information:- K K ALLOYS PRIVATE LIMITED [Active] CIN = U27106PB1996PTC018111

Company & Directors' Information:- B N E INVESTMENT LTD [Not available for efiling] CIN = U67120WB1974PLC029360

Company & Directors' Information:- P C ALLOYS PRIVATE LIMITED [Active] CIN = U27106CH1990PTC010828

Company & Directors' Information:- K S J INVESTMENT COMPANY PRIVATE LIMITED [Strike Off] CIN = U74899DL1994PTC061335

Company & Directors' Information:- M G INVESTMENT AND INDUSTRIAL CO LTD [Not available for efiling] CIN = U99999MH1947PTC007551

Company & Directors' Information:- S. B. ALLOYS PVT LTD [Strike Off] CIN = U27101PB1990PTC010324

Company & Directors' Information:- P T INVESTMENT PVT LTD [Strike Off] CIN = U65999WB1995PTC067065

Company & Directors' Information:- K. S. R. INVESTMENT LIMITED [Strike Off] CIN = U65992UP1988PLC010253

Company & Directors' Information:- G A ALLOYS PRIVATE LIMITED [Active] CIN = U45400DL2008PTC175934

Company & Directors' Information:- L C ALLOYS PVT LTD [Strike Off] CIN = U27107WB1978PTC031690

Company & Directors' Information:- J S S R ALLOYS PRIVATE LIMITED [Strike Off] CIN = U27100CT2011PTC022720

Company & Directors' Information:- S G ALLOYS PRIVATE LTD. [Active] CIN = U74899DL1985PTC021870

Company & Directors' Information:- S P ALLOYS PVT LTD [Active] CIN = U27106PB1990PTC010856

Company & Directors' Information:- N. P. ALLOYS PRIVATE LIMITED [Active] CIN = U27101PB1995PTC016862

Company & Directors' Information:- R N B J INVESTMENT AND DEVELOPMENT PVT LTD [Strike Off] CIN = U65990MH1982PTC028451

Company & Directors' Information:- J T INVESTMENT PVT LTD [Strike Off] CIN = U65923WB1979PTC032344

Company & Directors' Information:- C K ALLOYS PRIVATE LIMITED [Active] CIN = U27101DL1998PTC095554

Company & Directors' Information:- S P INVESTMENT AND DEVELOPMENT COMPANY PVT LTD [Strike Off] CIN = U67121ML1988PTC003133

Company & Directors' Information:- M M ALLOYS PVT LTD [Strike Off] CIN = U27101RJ1983PTC002780

Company & Directors' Information:- R K INVESTMENT LTD [Strike Off] CIN = U65993WB1969PLC027398

Company & Directors' Information:- N I ALLOYS PVT LTD [Strike Off] CIN = U27109PB1987PTC007643

Company & Directors' Information:- D R ALLOYS PRIVATE LIMITED [Strike Off] CIN = U27101MH1999PTC118474

Company & Directors' Information:- A N ALLOYS PVT LTD [Strike Off] CIN = U27106PB1994PTC015052

Company & Directors' Information:- R A ALLOYS PVT LTD [Strike Off] CIN = U27106PB1995PTC016101

Company & Directors' Information:- N M G C INVESTMENT PRIVATE LIMITED [Strike Off] CIN = U74899DL1982PTC014603

Company & Directors' Information:- S B ALLOYS PVT LTD [Strike Off] CIN = U27106CH1990PTC010538

Company & Directors' Information:- T M INVESTMENT CO PVT LTD [Active] CIN = U67120WB1971PTC028172

Company & Directors' Information:- S. A. F. INVESTMENT LIMITED [Active] CIN = U67120DL1997PLC088611

Company & Directors' Information:- H K (INVESTMENT) COMPANY PRIVATE LIMITED [Active] CIN = U65990GJ1950PTC000511

Company & Directors' Information:- S J ALLOYS PRIVATE LIMITED [Strike Off] CIN = U27101PB1995PTC015964

Company & Directors' Information:- P N INVESTMENT PRIVATE LIMITED [Under Liquidation] CIN = U65910GJ1988PTC010715

Company & Directors' Information:- INVESTMENT CORPORATION LIMITED [Under Liquidation] CIN = U65993KL1942PLC000449

Company & Directors' Information:- S U ALLOYS PVT LTD [Strike Off] CIN = U27104WB1988PTC044767

Company & Directors' Information:- S R M INVESTMENT PVT LTD [Strike Off] CIN = U67120WB1979PTC031888

Company & Directors' Information:- A TO Z INVESTMENT PVT LTD [Dissolved] CIN = U67120WB1988PTC044464

Company & Directors' Information:- S S R ALLOYS PVT LTD [Strike Off] CIN = U27101WB1974PTC029161

Company & Directors' Information:- R J INVESTMENT PRIVATE LIMITED [Active] CIN = U67120MH1976PTC018954

Company & Directors' Information:- B N K INVESTMENT CO PVT LTD [Active] CIN = U65993WB1971PTC028169

Company & Directors' Information:- A D INVESTMENT CO PVT LTD [Active] CIN = U67120WB1971PTC028170

Company & Directors' Information:- S K R S ALLOYS PRIVATE LIMITED [Strike Off] CIN = U28113HR2011PTC042687

Company & Directors' Information:- T R ALLOYS PVT LTD [Strike Off] CIN = U27106PB1990PTC010906

Company & Directors' Information:- T D INVESTMENT CO PVT LTD [Strike Off] CIN = U65921CH1987PTC007637

Company & Directors' Information:- KARNATAKA INDUSTRIAL PRIVATE LIMITED [Strike Off] CIN = U29222KA1974PTC002711

Company & Directors' Information:- G C ALLOYS PVT LTD [Strike Off] CIN = U27101PB1995PTC015760

Company & Directors' Information:- R K ALLOYS PVT LTD [Strike Off] CIN = U27104HP1986PTC006641

Company & Directors' Information:- C G K INVESTMENT P LTD [Strike Off] CIN = U65910AP1986PTC006088

Company & Directors' Information:- K R ALLOYS PVT LTD [Strike Off] CIN = U27101HR1981PTC011733

Company & Directors' Information:- B R N ALLOYS PRIVATE LIMITED [Strike Off] CIN = U27101KA1982PTC004759

Company & Directors' Information:- L D INVESTMENT COMPANY PVT LTD [Strike Off] CIN = U65921HP1988PTC008425

Company & Directors' Information:- G K INVESTMENT PRIVATE LIMITED [Active] CIN = U65993TZ1987PTC001919

Company & Directors' Information:- G V INVESTMENT PRIVATE LIMITED [Active] CIN = U65993TZ1987PTC001920

Company & Directors' Information:- D AND L ALLOYS PRIVATE LIMITED [Active] CIN = U27310RJ2006PTC023316

Company & Directors' Information:- B C K H INVESTMENT CO PVT LTD [Active] CIN = U67120MH1982PTC026819

Company & Directors' Information:- H V INVESTMENT PRIVATE LIMITED [Active] CIN = U67120MH1997PTC107686

Company & Directors' Information:- M L INVESTMENT PVT LTD [Strike Off] CIN = U67120WB1979PTC032180

Company & Directors' Information:- S & G INVESTMENT COMPANY PRIVATE LIMITED [Active] CIN = U65100DL2012PTC244271

Company & Directors' Information:- R. M. ALLOYS PRIVATE LIMITED [Active] CIN = U37100DL2016PTC302431

Company & Directors' Information:- A M ALLOYS PRIVATE LIMITED [Strike Off] CIN = U27310GJ2014PTC078387

Company & Directors' Information:- S B INVESTMENT PVT LTD [Liquidated] CIN = U99999RJ1959PTC001090

Company & Directors' Information:- R AND P INVESTMENT PVT LTD [Strike Off] CIN = U67120PB1995PTC016124

Company & Directors' Information:- M M B INVESTMENT PRIVATE LIMITED [Active] CIN = U65993RJ1996PTC012698

Company & Directors' Information:- M G A INVESTMENT COMPANY PRIVATE LIMITED [Strike Off] CIN = U99999MH1980PTC022406

Company & Directors' Information:- D S N INVESTMENT PVT LTD [Strike Off] CIN = U65993TG1988PTC008554

Company & Directors' Information:- V. I INVESTMENT PVT LTD [Strike Off] CIN = U67120HR1988PTC030206

Company & Directors' Information:- KARNATAKA INDUSTRIAL COMPANY LIMITED [Strike Off] CIN = U33130KA1916PLC000063

Company & Directors' Information:- R J P INVESTMENT PRIVATE LIMITED [Strike Off] CIN = U65993GJ1981PTC004678

Company & Directors' Information:- D D P INVESTMENT PRIVATE LIMITED [Strike Off] CIN = U65910GJ1981PTC004695

Company & Directors' Information:- C J P INVESTMENT PVT LTD [Strike Off] CIN = U99999GJ1981PTC004662

Company & Directors' Information:- INDUSTRIAL DEVELOPMENT COMPANY LIMITED [Strike Off] CIN = U99999KA1938PLC000231

Company & Directors' Information:- M P INVESTMENT CO PRIVATE LIMITED [Under Process of Striking Off] CIN = U65993KA1974PTC002646

Company & Directors' Information:- INDUSTRIAL DEVELOPMENT CORPORATION PRIVATE LIMITED [Dissolved] CIN = U74900KL1946PTC000457

Company & Directors' Information:- INVESTMENT COMPANY PRIVATE LIMITED [Dissolved] CIN = U65990KL1946PTC000461

Company & Directors' Information:- INVESTMENT CORPORATION LIMITED [Not available for efiling] CIN = U99999MH1943PLC007730

Company & Directors' Information:- S B INDUSTRIAL DEVELOPMENT CO. PVT LTD [Strike Off] CIN = U45208WB1945PTC012688

Company & Directors' Information:- S.R.S. INVESTMENT P. LTD. [Strike Off] CIN = U99999DL2000PTC903634

    Regular First Appeal No. 448 of 2014 (MON)

    Decided On, 02 July 2018

    At, High Court of Karnataka

    By, THE HONOURABLE MR. JUSTICE S.N. SATYANARAYANA

    For the Appellant: S. Chandrashekar for C.G. Gopalaswamy, Advocates. For the Respondent: T.P. Vivekananda for P.S. Manjunath, Advocates.



Judgment Text

(Prayer: This RFA is filed under Section 96 read with Order XLI, Rule-1 of the Civil Procedure Code, 1908, against the Judgment and Decree dated:02.12.2013 passed in O.S.No.148/2012 on the file of the XXVII-Additional City Civil Judge, Bengaluru, dismissing the suit for recovery of money.)

1. Though this matter is listed for admission, at the request of learned counsel appearing for the parties, it is taken up for final disposal.

2. The unsuccessful plaintiff in O.S. No.148/2012 on the file of the XXVII Additional City Civil Judge, Bengaluru, has come up in this appeal impugning the judgment and decree dated 02.12.2013, wherein the suit filed by it for recovery of Rs.2,75,000/- together with current and future interest at 18% per annum and costs from the defendant, has been dismissed.

3. The brief facts leading to this appeal are as under:

3.1 The plaintiff - M/s. SRS Alloys Private Limited established an industrial unit at Hirehalli Industrial Area, an industrially backward area situate in Tumakuru. It is stated that the said industry was commenced by the plaintiff with the financial assistance from the defendant – M/s. Karnataka State Industrial Investment and Development Corporation Limited (for short, ‘KSIIDC’). The Government of Karnataka had also sanctioned an investment subsidy to the plaintiff in a sum of Rs.11,00,000/- for the purpose of setting up industry involved in manufacture of alloys and steel castings etc.

3.2 Since the plaintiff – Company had suffered huge financial loss, it had fallen in arrears with regard to payment of money due to the defendant – KSIIDC and hence, it requested for settlement of dues under the One Time Settlement (for short ‘OTS’) Scheme. The defendant vide its letter No.AGM(Z-II)/734/2006-07 dated 08.06.2006, approved the plaintiff’s request for settling the dues under the OTS scheme, which was formulated as per the OTS policy for the year 2004-05, subject to certain conditions stated therein. Under the said OTS scheme, the plaintiff paid Rs.84,00,000/- in full and final settlement of its dues to the defendant. According to the plaintiff, the said amount was inclusive of first two installments of subsidy, which the defendant received directly from the Government of Karnataka. In confirmation of the said settlement, the defendant issued ‘No Due Certificate’ bearing No.DGM(IDD)/4337/2006-07 dated 23.02.2007 to the plaintiff.

3.3 It is stated that after the plaintiff settled its dues under the OTS Scheme, the Government of Karnataka addressed a letter dated 05.02.2008 to the Managing Director, KSIIDC, intimating him about the release of the third installment of subsidy in a sum of Rs.2,75,000/- vide cheque No.796852 dated 29.01.2008 and instructing him to credit the said amount in favour of the plaintiff - Company. The plaintiff made repeated requests to the defendant for release of the said subsidy amount in its favour, however the defendant did not take any action in the matter. Meanwhile, the plaintiff addressed a letter to the Joint Director, District Industries Centre, Tumakuru, for release of the said amount. The Joint Director, in turn, issued a letter dated 04.11.2008 to the defendant – KSIIDC instructing them to release the said subsidy amount in favour of the plaintiff.

3.4 The records would indicate that the Deputy General Manager of the defendant vide his communication dated 01.01.2009, declined to release the subsidy amount of Rs.2,75,000/- in favour of the plaintiff - Company on the premise that the said amount had been appropriated towards sacrifice made by the defendant i.e., waiver of accrued interest to the tune of Rs.92,19,000/-, which was payable by the plaintiff, at the time of OTS approval. Thereafter, the plaintiff – Company got issued legal notice dated 21.12.2011 calling upon the defendant – KSIIDC to pay a sum of Rs.2,75,000/-, the third installment of subsidy released by the Government, along with interest at 18% per annum from the date of receipt of the said amount till the date of payment within seven days from the date of receipt of the said notice. Since the defendant – KSIIDC failed to pay the said amount, the plaintiff filed the suit before the Court below.

3.5 In the said suit, the defendant – KSIIDC after service of summons, entered appearance. The defence taken by the defendant was that at the time of OTS approval, it had collected only the principal amount of Rs.84,00,000/- from the plaintiff and considering the financial loss suffered by the plaintiff, it had waived off accrued interest to the tune of Rs.92.19 lakhs payable by the plaintiff. In that background, the defendant had appropriated the third installment of subsidy of Rs.2,75,000/- towards the sacrifice made by it at the time of approval of OTS scheme as per the terms of OTS policy for the year 2004-05. The defendant pointed out that though the plaintiff did not stick to the payment schedule under the OTS scheme, delay in payment of the principal amount was condoned with an intention to help the plaintiff to get over the financial crisis. The defendant contended that it was not liable to pay any interest much less 18% per annum as sought by the plaintiff and that the suit suffered from non-joinder of necessary party and mis-joinder of parties. Accordingly, it sought for dismissal of the suit with exemplary costs.

3.6 Based on the aforesaid pleadings of the parties, the Court below framed the following issues:

'1. Whether the plaintiff – Company proves that, the very appropriation of the subsidy by the defendant is illegal and is in violation of the conditions of one time settlement as alleged in the plaint ?

2. Whether plaintiff is entitled for the suit claims from the defendant as claimed?

3. Whether defendant proves that suit of the plaintiff is barred under the provisions of State Financial Corporation Act, 1951?

4. Whether defendant further proves that suit of the plaintiff is bad for non-joinder and mis-joinder of parties?

5. What order or decree?'

3.7 In support of the case of the plaintiff, one of its Directors was examined as PW.1 and he got marked documents as per Exs.P1 to P11. On behalf of the defendant – KSIIDC, its Assistant General Manager was examined as DW.1 and documents as per Exs.D1 to D5 were got marked.

3.8 The Court below after considering the contentions of the learned counsel for the parties and the evidence available on record, in its judgment dated 02.12.2013, has observed that the plaintiff – Company had accepted the terms and conditions of the OTS policy for the year 2004-05 vide Ex.D1, which provided for adjustment of the subsidy amount after closure of the account under the OTS scheme by the defendant towards the amount sacrificed by it at the time of OTS approval. The Court below has referred to the admission of PW.1 – Sri Renukananda to the effect that: the plaintiff was liable to pay more than Rs.2,06,00,000/- to the defendant; the defendant had waived off accrued interest to the tune of Rs.92,19,000/- payable by the plaintiff; the plaintiff had paid only Rs.78,50,000/- to the defendant and the balance amount of Rs.5,50,000/- was adjusted against the first installment of subsidy released by the Government to the defendant. PW.1 further admitted that the third installment of subsidy in a sum of Rs.2,75,000/- sanctioned by the Government to the defendant after closure of OTS was public money. In that view of the matter, the Court below while answering issue Nos.1 and 2 in the negative, held that the defendant – KSIIDC had rightly appropriated the subsidy amount of Rs.2,75,000/- released by the Government towards the loss suffered by it on account of waiver of interest to the tune of Rs.92,19,000/- at the time of approval of OTS.

3.9 With regard to issue No.3, the Court below relying upon the evidence of DW.1 – B. Rajendra and the terms of the OTS policy letter vide Ex.D1, held that the suit of the plaintiff was barred under the provisions of the Karnataka State Financial Corporations Act, 1951 and accordingly, answered the said issue in the affirmative.

3.10 Insofar as issue No.4 is concerned, the Court below has observed that since the State Government was not made as a party to the suit, it suffered from non-joinder and mis-joinder of necessary party and accordingly, answered the said issue in the affirmative. Consequently, the Court below dismissed the suit of the plaintiff by its judgment dated 02.12.2013. Being aggrieved by the same, the plaintiff is before this Court.

4. Heard the learned counsel for the appellant and the learned counsel for the respondent. Perused the material on record.

5. The grounds urged in this appeal are that the respondent had no right to appropriate the third installment of subsidy of Rs.2,75,000/- that it received from the Government of Karnataka, after closure of the account under the OTS scheme. The Court below has ignored the fact that the respondent – KSIIDC had not adhered to the terms and conditions stipulated in the OTS policy for the year 2004-05 vide Ex.D1 as clause 7.7 of the said policy confers right to the respondent to appropriate subsidy, insurance claim etc. received by it subsequent to the closure of the account under the OTS, if the said right had been reserved in the communication of approval of the OTS. According to the appellant, Ex.P2 dated 08.06.2006, which is the communication issued by the Assistant General Manager of the respondent to the appellant intimating about acceptance of the OTS did not include any such reservation of right and consequently, the respondent had no right to appropriate the subsidy amount of Rs.2,75,000/-.

6. A perusal of the said letter dated 08.06.2006 vide Ex.P2 discloses that the Board in its meeting held on 03.06.2006 had approved the appellant’s request for setting the dues under One Time Settlement Scheme subject to the following terms and conditions:

'1) The company shall pay entire principal amount of Rs.84 lacs under OTS to KSIIDC (including the initial amount paid).

2) OTS amount as above shall be paid as follows:

i) First 25% of the OTS amount within 30 days from the date of communication without interest (including the initial amount paid).

ii) Balance 75% of the OTS amount within next three months without interest.

3) Waiver of interest dues.

4) The company shall pay other debits, if any.

The Corporation has the right to withdraw the OTS package, if it comes to know subsequently that you have furnished false or misleading or incorrect or untrue information or any material information, having bearing on the OTS decision. The Corporation’s decision in this regard shall be final.'

7. It is pertinent to note that the appellant – Company did not stick to the payment schedule stipulated in the aforesaid letter dated 08.06.2006 (Ex.P2) and in that behalf, Director of the appellant – Company, by his letter dated 31.10.2006 vide Ex.D4, requested the Deputy General Manager of the respondent - KSIIDC to extend time till 31.03.2007 to make balance payment of Rs.43,00,000/-. The respondent considering the fact that the appellant had suffered huge financial loss, had extended time to enable it to make balance payment towards the loan account. Thereafter, the respondent after accepting a sum of Rs.84,00,000/- towards clearance of the loan account under the OTS scheme, issued No Due Certificate on 23.02.2007.

8. It is seen that even earlier to filing of the suit in O.S. No.148/2012, when the appellant requested the respondent to release the third installment of subsidy in a sum of Rs.2,75,000/- in its favour, the respondent – KSIIDC had refused to do so for the reason that under the OTS scheme, it had waived off interest accrued to the tune of Rs.92,19,000/-, which was payable by the appellant and thereby, it had suffered loss and as per the terms of the OTS policy of the respondent for the year 2004-05, it was entitled to appropriate the subsidy amount of Rs.2,75,000/- received by it from the Government against the sacrificed amount of Rs.92.19 lakhs. The relevant clause No.7.7 of the said policy reads as under:

'If State/Central Subsidy, interest subsidy, insurance claim etc., received by the Corporation subsequent to the account closure of OTS, the amount sacrificed by the Corporation at the time of OTS approval / other liabilities if any shall be recovered and only the balance amount be refunded to the loanee concerned. While communicating the OTS approval communication, this clause shall be included. However, this conditions does not apply in cases where specific reference is made and relaxation is provided at the time of considering OTS.'

9. The contention of the learned counsel for the appellant is that the said condition was not mentioned in the letter dated 08.06.2006 addressed by the Assistant General Manager of the respondent – KSIIDC to the appellant and concurrence of the appellant in that regard was not taken. There is nothing on record to substantiate the said contention. The OTS scheme has been framed by the respondent under the OTS policy for the year 2004-05. The appellant having availed the benefit of the said OTS Scheme, wherein interest amount of Rs.92,19,000/- was waived off by the respondent by taking into consideration the fina

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ncial loss suffered by the appellant, cannot now contend that it is not bound by clause No.7.7 of the OTS policy merely on the ground that the said clause was not mentioned in the communication dated 08.06.2006 vide Ex.P2. Moreover, PW.1- Renukananda, Director of the appellant – Company, has admitted in his cross-examination that the third installment of subsidy amount of Rs.2,75,000/- released by the Government in favour of the respondent was public money. 10. In that background, the respondent has rightly appropriated the sum of Rs.2,75,000/-, which it had received on behalf of the appellant from the State Government, towards the sacrifice made / loss suffered by it on account of waiver of interest of Rs.92,19,000/- at the time of approval of the OTS scheme. 11. It is needless to say that the respondent – KSIIDC is also a State run organization wholly funded by the State of Karnataka. Therefore, the amount of Rs.2,75,000/- that was given by the State in the form of subsidy was rightly appropriated by the respondent inasmuch as it had absorbed the loss of the plaintiff to the tune of Rs.92,19,000/-. 12. Therefore, in the fact situation, the Court below having rightly considered the pleadings, evidence available on record, has declined to decree the suit of the plaintiff, which appears to be just and proper. This Court find that no grounds are made out to interfere with the impugned judgment and award. 13. Accordingly, this appeal is dismissed.
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