2003 (2) TMI 345 - HC - Companies Law

Parties resolve loan dispute through statutory audit, agree on repayment terms.

The Court allowed the small scale industrial unit to repay the loan amount with interest by selling specific vacant lands to settle the dues of Bihar ... Rights of financial corporation in case of default Issues:1. Dispute over dues of Bihar State Financial Corporation against a small scale industrial unit.2. Quashing of notice of sale of mortgaged assets.3. Permission for sale of part of mortgaged lands.4. Payment of loan amount with interest by selling vacant lands.5. Supreme Court remittance for determining the amount due to the Corporation.6. Submission of Bank Guarantee and subsequent disputes.7. Appointment of Commissioner to determine the amount due.8. Discrepancies in claims between partners of the industrial unit.9. Issuance of 'No Dues' certificate by the Corporation.10. Agreement to abide by the result of statutory audit for settling the dispute.Analysis:1. The case involved a dispute regarding the dues of the Bihar State Financial Corporation against a small scale industrial unit. The petitioners sought to quash a notice of sale of mortgaged assets and requested permission to sell a portion of the mortgaged lands to settle the dues. The Court allowed the petitioners to repay the loan amount with interest by selling specific vacant lands, which was accepted by the Corporation. However, the matter was taken to the Supreme Court for final decision on the quantum of dues.2. Following the Supreme Court's remittance, subsequent events included the submission of a Bank Guarantee by the petitioners, appointment of a Commissioner to determine the amount due, and disputes regarding the re-filing of the Bank Guarantee. The Court directed the petitioners to deposit a specific amount in cash, which was not done, leading to further complications.3. The Supreme Court remitted the case to determine the amount due from the petitioners to the Corporation. The Corporation claimed that all dues had been paid by the industrial unit, leading to the issuance of a 'No Dues' certificate. However, the petitioners, specifically one of the partners, presented a different stance, indicating personal differences between partners.4. The conflicting claims between the partners led to a request for the appointment of a Chartered Accountant as a Commissioner to resolve the dispute. The Corporation contended that a higher amount was payable but had settled for a specific sum during the case before the Supreme Court. Both parties agreed to abide by the result of a statutory audit to settle the matter.5. Ultimately, the Court disposed of the writ petition with the consent of the parties, agreeing to settle the dispute based on the outcome of the statutory audit of the Corporation's accounts. Any discrepancies found during the audit would result in payments or refunds with applicable interest, to be completed within a specified timeframe.