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1997 DIGILAW 709 (RAJ)

Jyoti Hotel v. Rajasthan Financial Corporation, Jaipur

1997-05-29

J.S.SIDHU, RAJENDRA SAXENA

body1997
JUDGMENT 1. :- In brief the facts giving rise to this special appeal are these. On 13.6.95 M/s. Jyoti Hotel, Bhilwara through Om Prakash filed writ petition No. 2476/95 under article 226 of the Constitution against Rajasthan Financial Corporation Jaipur through its Chairman and Managing Director and three other officials of the said Corporation (respondents 1 to 4) for issue of a direction to them to consider its (petitioner's) loan application favourably without giving weight to matters that were sub judice between Maheshwari Textiles and Maheshwari Textile Mills and M.Tech Processors Ltd on-one side and the respondents on the other. It was stated in the writ petition that the petitioner, sole proprietor of Jyoti Hotel Bhilwara, had applied to the Rajasthan Financial Corporation respondent in January 1995 for a loan of rupees thirty one lacs for expansion of the Hotel and having been assued by respondent no. 2 to 4 namely Manager City Branch Bhilwara, Manager (Loans) and General Manager (Loans), Jaipur of the respondent Rajasthan Financial Corporation whom he met in the month of January 1995 itself at Bhilwara and Jaipur that the loan would be sanctioned, acting on this promise he (petitioner) had made an investment of rupees twenty lacs by raising construction, purchase of plant and machinery, furniture, air conditioners etc. in the hope that he would pay for the same as soon as the loan was sanctioned by the respondent Rajasthan Financial Corporation. However the petitioner was dismayed to receive letter dated 4.2.95 annexure 1 from the Rajasthan Financial Corporation respondents informing him that his application for the loan has been rejected, necessitating the filing of the writ petition. The impugned rejection was without affording an opportunity of being heard, also Rajasthan Financial Corporation respondent could not go back on its promise to sanction the loan by operation of the doctrine of promissory estoppel. On enquiry the petitioner had come to know that the main reason for not sanctioning of the loan to him was that the other concerns namely Maheshwari Textiles and Maheshwari Textiles Mills in which the petitioner had one third share and M.Tech Processors Ltd. of which he is the Managing Director without a substantial investment owe dues to the Rajasthan Financial Corporation respondent which was not a valid reason to reject his loan application as that matter was sub judice between the parties. The petitioner had deposited rupees three lacs on 30.3.1995 as advised by the Branch Manager respondent No. 2 of the respondent Rajasthan Financial Corporation vide letter dated 2.3.95 annexure 4 to this petition & this taken with representation dated 15.4.95 annexure 2 addressed by him to the respondent Rajasthan Financial Corporation showed that promise had been made so the doctrine of promissory estoppel applies. 2. The respondents contested the writ petition. In their reply to the writ petition the respondents denied that they had held out a promise to the petitioner to sanction the loan or that the petitioner had on such promise having been held oat by them made investment as claimed by him. They (respondents) explained that the petitioner's application for further financial assistance to the tune of rupees thirty one lacs was processed and was, after due consideration, rejected and then the rejection was communicated to the petitioner vide letter dated 4.2.95 annexure R.I. The respondents further explained that mere submission of application for loan by the petitioner did not confer on him (petitioner) any legal right to have the loan sanctioned. According to the respondents there was no promissory estoppel. The respondents further explained that the petitioner had earlier been sanctioned a loan of rupees twenty three lacs thirty six thousand on 20.10.89 by the respondent Rajasthan Financial Corporation to construct Jyoti Hotel in repayment of which loan he (petitioner) had defaulted with the result that on 1.1.95 an amount of rupees seven lacs ninety three thousand was outstanding against the petitioner (M/s. Jyoti Hotel) and besides the petitioner was also a defaulter in other sister concerns in as much (likewise as on 1.1.95) a total of rupees twenty lacs fifty three thousand was due to the Rajasthan Financial Corporation respondent from sister concern M/s. Maheshwari Textiles & rupees eighteen lacs twenty nine thousand was due from sister concern Maheshwari Textile Mills Ltd. to the Rajasthan Financial Corporation respondent. As per the respondents the petitioner had not been found suitable for financial assistance for expansion, therefore, his application had been rightly rejected. He had no right to challenge the rejection of his loan application by means of the instant petition under article 226 of the Constitution. As per the respondents the petitioner had not been found suitable for financial assistance for expansion, therefore, his application had been rightly rejected. He had no right to challenge the rejection of his loan application by means of the instant petition under article 226 of the Constitution. The respondents further explained that before letter annexure 4 was written by the Branch Manager respondent No. 2 the loan application of the petitioner had already been rejected and this letter, therefore, could not be construed as holding out a promise for sanction of the loan. 3. After hearing the sides and a consideration of the matter the learned single Judge (Hon'ble Mr. Shiv Kumar Sharma, J.) by his order dated 10.9.96 dismissed the writ petition. Aggrieved with this order dated 10.9.96 the petitioner M/s Jyoti Hotel has resorted to the instant special appeal. 4. Before us the arguments by the learned counsel for the appellant are that the rejection of the petitioner's loan application was without affording an opportunity of being heard, that the circumstance that the previous loan for setting up the Hotel had not been repaid with the result that a sum of rupees seven lacs ninety three thousand was still outstanding against the petitioner and the circumstance that sister concerns Maheshwari Textiles and Maheshwari Textile Mills Ltd. owned the amounts to the respondent Rajasthan Financial Corporation could not be a valid ground for rejection of the petitioner's loan application for a further loan of rupees thirty one lacs for expansion of the Hotel and that the documents annexures 2 & 4 showed that promise had been held out to the petitioner by the respondents, that the loan would be sanctioned acting on which promise the petitioner had made investment to the extent of rupees twenty lacs towards expansion of the Hotel, therefore, doctrine of promissory estoppel applied and the respondents could not have rejected the petitioner's loan application. Now it was hardly necessary for the respondents to afford an opportunity of hearing to the petitioner. Now it was hardly necessary for the respondents to afford an opportunity of hearing to the petitioner. They had processed petitioner's application for loan and after due consideration rejected the same no doubt as the petitioner had defaulted in the repayment of the earlier loan advanced to him by the respondent Rajasthan Financial Corporation for construction of the Hotel, being a defaulter to the tune as much as rupees seven Lacs ninety three thousand on 1.1.95 whereas on the same date he was a deafulter in the sister concerns as well in as much as sister concern Maheshwari Textiles owned a whopping amount of rupees twenty lacs fifty three thousand to Rajasthan Financial Corporation respondent and sister concern M/s. Maheshwari Textiles Mills Ltd. owned a whopping rupees eighteen lacs twenty nine thousands to the Rajasthan Financial Corporation respondent. Not a paisa out of those outstanding amounts had been repaid to the respondent Rajasthan Financial Corporation by the petitioner and therefore considering everything his application for a further loan of rupees thirty one lacs for expansion of the Hotel was rightly rejected by the Rajasthan Financial Corporation respondent and the rejection conveyed to him vide letter dated 4.2.95 arnexure 1. The petitioner's case in his writ petition was that he had met officials respondent Nos. 2 to 4 of the Rajasthan Financial Corporation respondent no. 1 in the month of January 1995 and they had held out a promise to him acting on which promise he had made investment to the extent of rupees twenty lacs towards expansion of the Hotel. The respondents in their reply to the writ petition have categorically denied that any such promise had been held out by them of him or that the petitioner had acting on such a promise made the investment. Letter annexure 4 was written by the Branch Manager respondent No. 2 of the respondent Rajasthan Financial Corporation on 2.3.95 while representation annexure 2 was addressed by the petitioner to the respondent Rajasthan Financial Corporation on 15.4.95. These were much after the rejection of the petitioner's loan application conveyed to him vide annexure I dated 4.2.95 and so these by no stretch of reasoning or imagination can be construed to show that promise had been held out by the respondent Rajasthan Financial Corporation to the petitioner so as to attract the doctrine of promissory estopped. These were much after the rejection of the petitioner's loan application conveyed to him vide annexure I dated 4.2.95 and so these by no stretch of reasoning or imagination can be construed to show that promise had been held out by the respondent Rajasthan Financial Corporation to the petitioner so as to attract the doctrine of promissory estopped. If the petitioner has deposited rupees three lacs on 30.3.95 this was towards repayment of the earlier loan so that too cannot be construed by any stretch of reasoning or imagination to show that a promise had been held out by the respondent Rajasthan Financial Corporation. In any event these are disputed questions of fact which, as rightly held by the learned single Judge in his order dated 10.9.96 dismissing the writ petition under challenge in this special appeal, cannot be decided in such a writ petition under article 226 of the Constitution and the course open to the petitioner is to avail the ordinary remedy of a civil suit. On consideration we find no fault with the order dated 10.9.96 of the learned single Judge dismissing the petitioner's writ petition. As such there is no merit whatsoever in this special appeal which, as a consequence, is dismissed in limine.SPL. Appeal dismissed in limine. *******