JUDGMENT G.D. Dubey, J. - This appeal has been preferred against the judgment and order of Civil Judge Aligarh allowing an application for temporary injunction. The defendant appellants had been directed by the learned Civil Judge to open the lock put in the factory and allowed it to run. 2. The facts of the case are not disputed. The plaintiff-respondent had applied for a loan of Rs. 4,93,976.00/-. The Defendant-appellants had sanctioned a loan of Rs. 4,93,000,00/-. The cost of the project computed by the plaintiff-respondent was Rs. 7,43,000,00/-. The plaintiff-respondent was paid Rs. 3,58,000,00/- on 29.12.1985. The plaintiff-appellant had, thereafter, signed the loan document. Rs. 45,100,000 were paid on 20.3.1986, Rs. 40,300,00/- was paid on 19.6.1986 and Rs. 48,000,00/- was paid on 4.7.1987. It has been alleged by the plaintiff-respondent that the amount was paid to the plaintiff respondent with a great difficulty. Even the amount was sanctioned on 8.4.1985 it was actually dibursed on 31.12.1985. It has been alleged that the defendant-appellants had to pay a sum of Rs. 4,06,000.000/- for the cost of the Die casting machine but the defendant-appellants had not paid this whole amount. The other amount which were required to be released were not released in time. It was urged that on account of delay of the defendant-appellants the plaintiff-respondent was unnecessarily burdened with interest. He could start his factory in November 1987. Instead of promoting the industry the defendant appellants issued a letter on 10.12.1987 demanding Rs. 4,91,400,00/- as principal and Rs. 1,01,723.49/- as interest. By this letter the plaintiff- respondent was asked to pay the amount within 10 days. Thereafter the defendant-appellants had put the luck on the plaintiff-respondent's factory on 9th March, 1988. The plaintiff-respondent has alleged that he does not dispute the receipt of the amount advanced and that he is liable to pay. He hat also alleged that he is intending to pay the amount according to the direction of the Court 3. The Annexure CA- 2 is copy of the written statement, where the defendant appellant denied that any delay was caused in the disbursement of the loan. The defendant appellant also urged that as the plaintiff-respondent had defaulted in payment of the amount, the officers had put lock over the factory.
The Annexure CA- 2 is copy of the written statement, where the defendant appellant denied that any delay was caused in the disbursement of the loan. The defendant appellant also urged that as the plaintiff-respondent had defaulted in payment of the amount, the officers had put lock over the factory. It was alleged in paragraph 31 of the written statement that there is a specific agreement in para 5 that interest shall be payable quarterly each year i.e. on 31st March, 30th June, 30th September and 31st day of December every year. The payment of first such amount had become due on 30.6.1985 but the same had not been paid. It has not been denied that the defendant- appellant's officers had put the lock of the Corporation on the door of the factory on 9th March, 1988. 4. The plaintiff-respondent had made a prayer for a temporary injunction for removal of the lock on the facts mentioned in the plaint and as narrated above. The defendant-appellant had contested this application and after hearing the parties the learned Civil Judge had passed the impugned order. 5. The affidavit and counter-affidavit have been exchanged between the parties. Hence with the consent of the parties we are disposing of this appeal at the admission stage. 6. Four fold arguments have been advanced by the learned counsel for the appellants. Firstly, it was contended that the plaintiff-respondent had filed a Writ petition before this Court challenging the provision of Section, 29 of the U.P. Financial Corporation Act (here in after referred to as Act). This Writ was later on withdrawn. The provision of Sectian 29 of the Act had not been challenged. Since the appellants were entitled to take possession of the factory on non-payment of dues under Section 29 of the Act the mandatory injunction could not be granted. Secondly, it was urged that the requirement of Rules 1 and 2 of Order 39 Civil Procedure Code were not complied. Under these circumstances the injunction could not granted. Thirdly, it was also urged that the relief claimed in the suit regarding opening of lock put by the appellants over the factory of the respondent. This very relief had been granted by the lower court by way of mandatory injunction. It was urged that it is settled law that mandatory injunction should be granted in a very rare cases.
Thirdly, it was also urged that the relief claimed in the suit regarding opening of lock put by the appellants over the factory of the respondent. This very relief had been granted by the lower court by way of mandatory injunction. It was urged that it is settled law that mandatory injunction should be granted in a very rare cases. The instance case was not such a rare case. The last contention is that the interest of Corporation had not been secured by making certain direction to the plaintiff-respondent for payment of the amount due. 7. The learned counsel for the plaintiff-respondent urged that the Corporation has acted in hot haste. With a great difficulty the production could start in November, 1987, the The lock had been put on 9th March, 1988. The object of the loan was to the enable the plaintiff-respondent to set up a factory for manufacturing Auto parts. By corporation the very object of the loan was frustrated. It was urged that the plaintiff respondent had a prima facie case forgetting an injunction. Since the plaintiff-respondent had every intention to pay the dues of the Corporation there was no justification to take the help of Section 29 of the Act It was urged that there was no treed of filing a suit for possession. The plaintiff-respondent was actually in possession of the factory. The defendant-appellants had only put a lock on the gates and are not permitting the respondent and its employee to enter the premises of the factory. It was urged that this Court may impose any condition as it likes to safe-guard the interest of Corporation. Section 29 (1) of the Act reads as under :- (1) Where any industrial concern, which is under a liability to the Financial Corporation under an agreement, makes any default in repayment of any loan or advance or any instalment there of or in meeting its obligations in relation to any guarantee given by the Corporation or otherwise fails to comply with the terms of its agreement with the Financial Corporation, the Financial Corporation shall have the right to take over the management or possession or both of the industrial concern, as well as the right to transfer by way of lease or sale and realise the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation. 8.
8. It is not disputed that the plaintiff-respondent had set up their industrial concern and had started functioning. The plaintiff-respondent has filed photocopy of the letter dated 13.10.1987 as Annexure C.A.-1 to the counter affidavit. This letter shows that the Regional Manager of Financial Corporation had itself impressed upon the M/s. Plant and Machinery Engineers, Calcutta to give a trial run of their plant installed in the plaintiffs concern. The content of this letter has not been denied by the appellants in their rejoinder affidavit. This letter itself indicates that even the delivery of the plant was made by the aforesaid firm of Calcutta in December, 1985 the trial run of the plant had not been made. The plaintiff-respondent has himself stated in his plaint that his factory started running in November, 1987. In such a situation the action of the defendant-appellants in putting lock on the factory of the plaintiff-respondent on 9th March, 1988 was a very hasty action. The intention of the plaintiff as contained in the pleadings of the plaint are quite clear. They appear to have every intention to pay the dues of the defendant-appellants. The scheme of the State Financial Corporation Act, 1951 is to provide media for a long term credit which falls out side the normal activities of Commercial Bank. Section 24 of the Act enjoins that the Board in discharging its functions under this Act shall act on business principles, due regard being had by it to the interests of industry, commerce and the general public. The action taken by the Corporation in this particular case was not at all in consonance with the spirit of Section 24 of the Act. The Corporation had itself realised that on account of in action of the firm of Calcutta the factory could not start up to October, 1987. Somehow it could start functioning in November, 1987. Hence without giving a particular scope of flourishing, the Corporation has put his lock on 9th March, 1988. Thus, about a little more than 4 months period of functioning of the plaintiff- respondent industry was permitted. This can not be said to be in the interest of the industry. 9. The defendant-appellants can not use Section 29 of the Act as a measure of repression for the purpose of realising its dues from a debtor company.
Thus, about a little more than 4 months period of functioning of the plaintiff- respondent industry was permitted. This can not be said to be in the interest of the industry. 9. The defendant-appellants can not use Section 29 of the Act as a measure of repression for the purpose of realising its dues from a debtor company. The authority given by Section 29 of the Act to takeover the management or possession or both of the industry is to be read with Section 24 of the Act. Under Section 29 of the Act the Corporation has to proceed in such a manner as to enable the industry to flourish and Corporation be able to realise its dues. The sequence of words "shall have right to take over management or possession or both of the industrial concern speaks that in the first instance the Financial Corporation should insist on inking over the management. The taking over of management and possession both should arise only when if the Corporation is not able to repay its dues by proper management of the industry by it. 10. The running of a industry are not a individual concern of the person establishing the industry. In its functioning its employees, its other concern having business relations with the industry and general public benefited by such industry are involved. The defendant-appellants have not stated in their affidavit or rejoinder affidavit that they have taken possession of the industry. They had simply put a lock over the main gate of the factory. It has been rightly pointed out by the learned counsel for the respondent that this does not mean the actual taking over of the possession of the factory. 11. From the above discussions it is quite clear that the plaintiff-respondent has a prima facie case in his favour. According to the spirit of the Act he has to utilise his loan for the purpose of effectively running the industry. The defendant-appellants have only a right under Section 29 of the act to take possession of industry. However, this right can not be exercised quite contrary to the spirit of the Act. We feel that the action of the defendant appellants was quite contrary to the spirit of the Act In this way the plaintiff-respondent has a prima facie case in his favour. 12.
However, this right can not be exercised quite contrary to the spirit of the Act. We feel that the action of the defendant appellants was quite contrary to the spirit of the Act In this way the plaintiff-respondent has a prima facie case in his favour. 12. The defendant-appellants are not going to loose anything rather they will be benefited by the running of the industry. Their interest on the advanced sum is already running against the plaintiff which they can realise in the manner provided under Section 29 of the Act. The balance of convenience lies in favour of the plaintiff-respondent. 13. The facts narrated above go to show that the plaintiff-respondent had already incurred expenditures in several lass in establishing the industry. If industry is locked out this machinery will be damaged and he may not be able to get a proper return. It is not in the interest of defendant-appellants also. They are not going to gain by keeping the industry closed. It is apparent that the ingredients for injunction are present in the matter. There is no force in the second contention of the appellants that the provision of Rules 1 and 2 of Order 39 Civil Procedure Code does not apply to the matter. Under rule 2 of order 39 of Civil Procedure Code injunction can be granted for other injury of any kind as contained in the said Rule 2. 14. The first contention is also not tenable. There was no necessity to challenge the validity of Section 29 of the Act when the plaintiff-respondent was admitting the claim of the defendant-appellants. No relief of possession was necessary. The Corporation can not, while acting under Section 29 of the Act, stand and say that as it has put its lock the plaintiff respondent must start a litigation for taking over possession. The learned counsel for the plaintiff-respondent has rightly argued that the act of putting a lock does not amount to possession. If the lock is removed the plaintiff should be free to run their industrial concern. 15. It has been argued that the injunction granted is in the same words as in the relief itself.
The learned counsel for the plaintiff-respondent has rightly argued that the act of putting a lock does not amount to possession. If the lock is removed the plaintiff should be free to run their industrial concern. 15. It has been argued that the injunction granted is in the same words as in the relief itself. There is no bar that if any interim mandatory injunction should be passed in order to avoid the immense loss to a party then the same can not be granted by way of interim relief even though it may have resemblance to the main relief. In this case the appellants are using the provisions of Section 29 of the Act in a very improper manner not conducive to the interest of industry. By their act not only the plaintiff-respondent but the persons benefited by the industry are affected. Hence in such a situation Courts will not hesitate to grant mandatory injunction even though otherwise they could be very slow in granting such relief. I find that in this case sufficient case has been made out for grant of a mandatory injunction. Thus, third contention of the learned counsel for the defendant-appellants has also, no force. 16. It is true that the lower court has not passed any order securing the payment of the dues of the defendant-appellants by the plaintiff-respondent. We may do so and modify the order of the lower court accordingly. 17. For the purpose mentioned above the appeal has no force and ought to be dismissed. 18. the appeal is dismissed. However, the order of the lower court is modified to this extent that the operation of the lower court's order shall take place only on payment of a sum of Rs. 50,000/- to the defendant-appellants which may be adjusted by them towards the dues against the plaintiff-respondent. The court below would be free to fix further terms and conditions regarding the payment of money keeping in view the terms of agreement between the parties. There shall be no order as to costs.