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2008 (4) TMI 496 - SC - Companies LawWhat is the correct amount that is due to the Plaintiff? Whether the defendants are entitled to the benefit of the direction given by the Reserve Bank of India on sick units? What is the correct rate of interest? Held that - Appeal allowed. In the light of the issues decided by the Civil Court in the various litigations which were allowed to become final and as the decree had already been executed inasmuch that the mortgaged property has been sold, the directions issued by the High Court are clearly not warranted. We are also of the opinion that there can be no objection to the revival of the respondent s unit but that is a matter between the respondent and the Kerala Financial Corporation or other Governmental Agencies and cannot in any manner affect the legal rights that have accrued to the appellant as a consequence of a series of orders/judgments
Issues:
1. Recovery of loan amounts with interest. 2. Entitlement to benefits under Reserve Bank of India's scheme for sick units. 3. Correct rate of interest. 4. Relief and costs. Analysis: Issue 1: Recovery of loan amounts with interest The Syndicate Bank sanctioned credit limits to a company, including an overdraft and term loan, to revive a sick unit. When the company defaulted, the Bank filed a suit for recovery. The trial court decreed in favor of the Bank, and subsequent legal actions by the company, including injunction and damages claims, were dismissed. The High Court set aside the sale of mortgaged property and directed the Bank to return the sale amount. The Supreme Court held that the High Court overstepped its jurisdiction as the earlier judgments had attained finality. The Court allowed the Bank's appeal, emphasizing that the revival of the company's unit should not affect the Bank's legal rights. Issue 2: Entitlement to benefits under RBI's scheme The trial court found that the company was not entitled to benefits under the Reserve Bank of India's scheme for sick units. The High Court, however, set aside the sale of the property, citing collusion between financial institutions. The Supreme Court held that the High Court's decision was unwarranted as the earlier judgments had already been executed, and the company's revival was a separate matter with no impact on the Bank's legal rights. Issue 3: Correct rate of interest The trial court had decreed specific interest rates in the Bank's favor. The subsequent legal actions did not challenge this aspect. The High Court's decision to set aside the property sale did not address the interest rates. The Supreme Court did not alter the interest rates decreed by the trial court, focusing instead on the jurisdictional overreach by the High Court. Issue 4: Relief and costs The High Court directed the return of the sale amount and property possession to the company. The Supreme Court set aside this direction, emphasizing the finality of earlier judgments and the protection of the Bank's legal rights. No costs were awarded in the Supreme Court's decision. In conclusion, the Supreme Court's judgment clarified the legal rights and finality of earlier decisions in a loan recovery case, emphasizing the importance of upholding executed judgments and protecting the interests of the Bank despite the company's revival efforts.
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