9911796707
TMI Blog2000 (7) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... ale deed dated 25-1-1980. They have engaged in the manufacture of stainless steel household appliances. The respondent is a Nidhi within the meaning of section 620A of the Companies Act, 1956 ('the Act') and carrying on business in advancing loans on security of movable properties and jewels. The applicants approached the respondent for financial assistance to get a loan of Rs. 5 crores by the application dated 5-2-1996. The respondent agreed to advance a sum of Rs. 4 crores as loan in order to discharge the earlier loan to Peerless General Finance and Investment Company Limited, Calcutta amounting to Rs. 2 crores and the balance for the development of the land belonging to them situated at Mount Road, Chennai. The respondent sanctioned and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principal amount and the arrears. 3. The value of the property mortgaged is worth more than Rs. 8 crores. The respondent later failed to sanction a further loan of Rs. 2 crores. The petitioners disclosed that they should not be compelled to comply with the requirement of clause 6 of the mortgage deed. Since the respondent did not comply with the understanding of sanctioning further loan, they did not contribute to the recurring deposit. The provision in clause 6 of the mortgage deed is arbitrary and opposed to public policy. The other clause, viz,, clause 6(3) is also violative of section 23 of the Indian Contract Act, 1872 and opposed to public policy. Whenever amounts were paid, the respondent has been crediting it firstly towards t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent filed a detailed counter-affidavit, denying the various allegations. The third applicant submitted an application seeking a loan of Rs. 5 crores on 5-2-1996. Even in the application, it is stated that the suit property belonged to the first applicant and the same has been offered as a collateral security. The loan was needed to repay the existing dues to another company and also to complete the pending transaction of six grounds in Mount Road to be acquired by the first applicant. This respondent after complying with the formalities, sanctioned a loan of Rs. 1,80,00,000 and all the partners executed a simply mortgage deed on 4-7-1996. Clause 5 of the mortgage deed specifically mentioned about the distribution of the amount. Cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so furnished. During 1999, the applicants were trying to get a loan by way of second mortgage of the suit property from Indian Bank. This respondent has sent letters to the Indian Bank that the advance will not exceed Rs. 2,50,00,000. On the basis of the confirmation by this respondent, the applicants have created an equitable mortgage by deposit of certified copy of the title deeds of the same property in Indian Bank. There is no balance of convenience in favour of the applicants and they have not made out a prima facie case. If the order of injunction is granted in favour of the applicants, the respondent will be put to much loss and hardship. The respondent is in a predicament in the face of heavy demands from the depositors, who claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent from bringing the property for public auction under section 69 of the Transfer of Property Act. 7. The learned senior counsel for the applicants brought to the notice of the court clauses 6 and 7(z) of the mortgage deed and contended that these clauses are opposed to public policy and violative of section 23 of the Contract Act. The learned senior counsel further stated that according to one of the clauses, the applicants have to pay recurring deposit at the rate of Rs. 1,80,000 per month for a period of 60 months and if there is any default, for which also interest has to be calculated. Admittedly, the applicants have remitted only four instalments under the recurring deposit account and thereafter, committed default. The payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttempt to delay the payment of the dues, then virtually it will have a chain reaction and the unfortunate deposit holders in the company may not be able to realise either interest or principal and they will be put to much loss and hardship. In public interest also, the debtors should be directed to pay at least the principal amount and the other conflicting claims can be considered in the course of trial. It is clear from the affidavit that the applicants are not interested in payment of the principal amount also and the name of some of the clauses in the mortgage deed, the applicants are attempting to evade payment and thereby prevent the respondent from bringing the property to auction by invoking section 69 of the Transfer of Property Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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