1995 (2) TMI 458

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....eds of loan agreement' and 'deeds of modification' were executed on different dates but the contents are identical. 2. The Writ Petition No. 7076/1993 M/ s. Gunjan Cement Pvt. Ltd. v. Rajasthan State Industrial Development & Investment Corporation Ltd. has been taken up as a leading case. 3. The petitioner is a Private Limited Company incorporated under the Companies Act, 1956. It sets up a mini cement plant at Industrial Area, Behror, District Alwar, Rajasthan. It carries on the business of manufacturing and selling cement. 4. For setting up the said unit, a term loan of Rs. 90,00 lacs as financial assistance was sought from the respondent-Rajasthan State Industrial Development & Investment Corporation Ltd. (RIICO). Th....

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.... at the rate arrived at after adding 7.5% to the Bank rate prevailing on the date of signing of the loan agreement but minimum of 16% per annum quarterly in each year on the 15th Jan., 15th April, 15th Aug., 15th Oct.  (ii) From the date of first disbursement of term loan till the date of repayment of the last instalment by the lender to the Industrial Development Bank of India in respect of amount of this loan, interest will be charged at a rate 3.5% above the Industrial Development Bank, of India's rate of interest on refinance but with a minimum of @ 12.5 p.a. quarterly. During implementation (construction) period as given in the appraisal documents or two years whichever is earlier from the date of signing of loan agreement ....

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....as according to the letter of intent, SIDBI refinance sanction and loan agreement referred to above, the rate of interest to be charged on the aforesaid loan was 12.5% per annum during implementation period and 13.5% for remaining period of loan/refinance. Whereas consequent upon upward revision of rate of interest for term loan, the lender has intimated us vide letter No. ID.DI (92) dated 15-11-1991 about applicability of 18.75% per annum rate of interest on the term loan of Rs. 90.00 lacs sanctioned to the borrower company by the lender instead of 12.5% per annum. Whereas the above change in rate of interest is to be incorporated in the Term Loan Agreement executed by the borrower company in favour of the lender on 12-3-1991." l6....

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....erstanding the contents thereof. The theory of coercion and duress submitted by the petitioner is not acceptable and the submission so made is hereby rejected. 15. The term loan agreement did not envisage a fixed rate of interest during the . entire period of the term loan. The rate of interest payable on the term loan was variable and depended on the rate of interest of the refinance provided by the Industrial Development Bank of India/Small Industries Development Bank of India to the Rajasthan State Industrial Development & Investment Corporation Ltd. subject to a minimum of 121/2% during the period of implementation and 13 1/2% subsequent thereto. 16. Parties are bound by the terms and conditions of the 'agreement for loan'....