TaxTMI 
TaxTMI 
2014 (1) TMI 1753
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....ith. 3. With the aforesaid preliminary introduction to the subject matter of the present appeal, we now proceed to take note of the facts which have led to the question of limitation that confronts us. 4. Respondent No. 1 viz. Himachal Pradesh State Industrial Development Corporation Limited (hereinafter to be referred as 'the Corporation') is a financial corporation under the State Development Corporation Act (hereinafter to be referred as the Act). It is a statutory body constituted for the purpose of carrying out the objectives of the Act. It is a company incorporated under the Companies Act, 1956, engaged in the business of providing financial aid to companies for setting up and commencing operations. Respondent No. 2 (hereinafter to be referred as the 'Company') is the industrial concern which defaulted in repayment of the loan disbursed by the Respondent No. 1. It is now under liquidation. Respondent No. 3 is the official liquidator, who was appointed by the High Court of Delhi for the purposes of winding up the Company. Respondent Nos. 4 & 5 were the Directors of the Company at the time of entering into the loan agreements with the Corporation. 5. The appe....
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....ich suit was filed 30,60,732 10. The Civil Suit No. 85 of 1995 was decreed in favour of the Corporation vide judgment and decree dated 6.6.2008 passed by the Single Judge of the High Court of Himachal Pradesh, granting a decree of Rs. 30,60,732/- (Rupees Thirty Lakhs Sixty Thousand Seven Hundred and Thirty Two only) along with interest at the rate of 12% from the date of filing of suit till the realization of the said amount. 11. Before the learned Single Judge of the High Court a plea was taken by the defendants, including the appellant herein, that the suit was time barred as it was filed beyond the period of 3 years from the date of commencement of limitation period. To appreciate this plea we recapitulate some relevant dates: Date Event 21.5.1990 Recall notice sent by the Corporation, recalling the outstanding amount. 10.7.1992 Mortgage/ hypothecated assets of the Company taken over by the Corporation. 31.3.1994 The Mortgage/ hypothecated assets of the Company sold by the Corporation. 21.5.1994 Notice issued to all ....
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....oration had sanctioned Rs. 5 lakhs in favour of a Company. The Respondents were directors of the said borrower company and stood sureties for the loan. When the company failed to repay the loan, a notice dated 8.3.1983 was issued calling upon the borrower to repay its due. On 25.10.1983, an application under Ss. 31 and 32 of the State Financial Corporations Act, 1951 was filed by the Corporation. On 11.6.1990 the attached properties of the borrower company were put to sale. There was a shortfall in the amount realised and hence notices dated 27.1.1991 were sent to respondent sureties claiming Rs. 16,79,033 together with interest at the rate of 14.5.% p.a. On 2.1.1992 the appellant Corporation filed an application under Section 31(1)(aa) of the Act for recovery of the said balance amount. The respondent took various objections including that of limitation, contending that Article 137 of the Limitation Act was applicable and not Article 136. According to the respondents, Article 137 of the Limitation Act was applicable and as per that provision such an application could be made within a period of three years. Article 137 applies in cases where no period of limitation is specifically ....
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....law laid down by this Court in Oriental Insurance Co. Ltd. vs. Smt. Raj Kumari and Ors.; 2007 (13) SCALE 113. In the said case, well known proposition, namely, it is ratio of a case which is applicable and not what logically flows therefrom is enunciated in a lucid manner. We would like to quote the following observations therefrom:- 10. Reliance on the decision without looking into the factual background of the case before it is clearly impermissible. A decision is a precedent on its own facts. Each case presents its own features. It is not everything said by a Judge while giving a judgment that constitutes a precedent. The only thing in a Judge's decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. According to the well-settled theory of precedents, every decision contains three basic postulates - (i) findings of material facts, direct and inferential. An inferential finding of facts is the inference which the Judge draws from the direct," or perceptible facts; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts....
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..... The aforesaid principle was reiterated in Government of Karnataka and Ors. vs. Smt. Gowramma and Ors. 2007 (14) SCALE 613, wherein, the Court observed as under:- "10. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid's theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes. In London Graving Dock Co. Ltd. vs. Horton 1951 AC 737, Lord Mac Dermot observed: The matter cannot, of course, be settled merely by treating the ipsissima vertra of Willes, J as though they were part of an Act of Parliament and appl....
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....ecover the balance from the partners of the industrial concern and the other properties owned by them though not included in this security." (emphasis supplied). 19. On the basis of the aforesaid clause the Court found fault with the approach of the High Court in as much as clause 7 specifically provided that the Corporation could filed recovery proceedings against the partners of the Industrial concern if the sale proceeds of the assets of the industrial concern were insufficient to satisfy the dues of the Corporation. 20. Mr. Dhruv Mehta, learned Senior Counsel appearing for the appellant tried to distinguish this judgment by vehemently arguing that the aforesaid case was based on interpretation of clause 7 of the mortgage deed which was executed between the parties and in the present case such a clause is conspicuously absent. Had the judgment of this Court rested solely on clause 7 of the mortgage deed, the aforesaid argument of Mr. Dhruv Mehta would have been of some credence. However, we find that the Court also specifically discussed the issue as to when right to sue on the indemnity would arise and specific answer given to this question was that it would be only after th....
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....ion Bench was in error in stating that the right to personally recover the balance terminates after the expiry of three years. It must be remembered that the question of recovery of balance will only arise after the remedy in respect of the mortgage deed has first been exhaustive. If a mortgage suit was to be filed, the period of limitation would be 12 years. Of course, in such a suit, a prayer can also be made for a personal decree on the sale proceeds being insufficient. Even though such prayer may be made, the suit remains a mortgage suit. Therefore, the period of limitation in such cases will remain 12 years". [Emphasis Supplied] 21. We thus, hold that when the Corporation takes steps for recovery of the amount by resorting to the provisions of Section 29 of the Act, the limitation period for recovery of the balance amount would start only after adjusting the proceeds from the sale of assets of the industrial concern. As the Corporation would be in a position to know as to whether there is a shortfall or there is excess amount realised, only after the sale of the mortgage/ hypothecated assets. This is clear from the language of sub-Section (1) of Section 29 which makes the pos....