2006 (8) TMI 630

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.... decided to expand the existing unit and procure some machinery therefor. The Respondent also placed orders for other and further equipments/machinery necessary for expansion of the said scheme. Allegedly, the Managing director of the Corporation visited the 1st respondent's factory on 29.1.1988 and having satisfied himself that there existed justification for expansion of the capacity utilization had agreed to sanction an additional term loan to the tune of ₹ 15 lakhs on terms and conditions mentioned therein, some of which are as under : "Clause 7 : The concern will have to submit the following papers before the execution of the legal documents :- (a) Income Tax Clearance Certificate under section 230(A) of the Income ....

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....overy of the loan granted to it. Mr. S.B. Sanyal, learned Senior counsel appearing on behalf of the respondent, on the other hand, contended : i) The Corporation could not have refused to fulfil its solemn promise to advance the additional subsidy of ₹ 15 lakhs. ii) The requirement of furnishing of D.G.T.D. Registration Certificate was not applicable in the case of a Small Scale Industry and in any event, the Corporation having registered the said documents, the order sanctioning the amount could not have been refused to be honoured. At the outset, we may notice that on a query made by this Court as to whether the respondent-Company would be in a position to start the factory and commence production of Absorbent Cotton if the a....

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....ms and conditions of the loan agreement in the matter of repaying of the installments in time, but was concerned with the question as to whether the Corporation being a statutory organization, could take a stand different from the one passed in its order. The High Court evidently proceeded on the basis that it could not have been done. The High Court may not be entirely correct in its approach as the transactions were governed by a statute and were essentially commercial in character. Unfortunately, however, the contentions, which have been raised before us, were not raised before the High Court. This Court in exercise of its jurisdiction under Article 136 of the Constitution of India, indisputably, can take note of the subsequent events.....