JUDGMENT K.C. Sood, J. - Plaintiff, the Himachal Pradesh State Industrial Development Corporation Ltd. (plaintiff Corporation for short) is a company, incorporated under the Companies Act, 1956, having its registered office in Shimla. Plaintiff corporation has filed the present suit for recovery of Rs. 1,02,90,191/- with future interest against the defendants. Defendant No. 1 M/s. Continental Spinners Ltd. (hereinafter referred as Company) is a Company, incorporated under the Companies Act. Defendants No. 2 to 5 are the guarantors to the Company. 2. Case of the plaintiff-Corporation is that the Company applied for term loan of Rs. 60,00,000/- (Six lacs) for construction of building, purchase of land, plant, machinery and other assets for setting up a Worsted Spinning Unit at Barotiwala, in District Solan in Himachal Pradesh. The loan was sanctioned to the defendant-Company on 11.10.1995. The defendants agreed to pay interest at the rate of 1.8.5% with half yearly rests on the loan amount. The interest was enhanced to 19.5% with half yearly rests, as IDBI refinance lending rate was enhanced from 15% to 16%. 3. To secure repayment of loan and interest amount, defendant Nq. 1, through its Directors defendants No. 2 and 3 executed a loan agreement Ex. PW-1/E on 20.11.1995 for term loan of Rs. 60 lacs. Hypothecation agreement (Ex. PW-1/F) in respect of the land, building, plant and machinery and other assets was also executed on the same day. Equitable mortgage by deposit of title deeds of the properties of the Industrial concern of the Company was created in favour of proforma defendant No. 6 Himachal Pradesh Financial Corporation, which also provided financial assistance of Rs. 60 lacs to the defendant-Company. Defendants No. 2 to 5 stood guarantee in respect of the amount of loan advanced to the defendant Company and executed deeds of guarantee on 20.11.1995 and 8.12.1995, guaranteeing payment of loan and interest. 4. It is the case of the plaintiff-Corporation that the guarantors are liable to pay the outstanding amount along with interest to the Corporation, as the liability was joint and several with defendant No. 1. The loan along with agreed interest was payable in half yearly installments, commencing from 10.11.1997 and the last installment was to be paid on-or before 10.5.2003. In respect of the loan amount of Rs. The loan along with agreed interest was payable in half yearly installments, commencing from 10.11.1997 and the last installment was to be paid on-or before 10.5.2003. In respect of the loan amount of Rs. 60 lacs, the defendants failed to repay the installments of principal amount and interest thereon in accordance with the repayment schedule, as stipulated in the loan documents and thus contravened the terms and conditions of the loan extended to the defendant Company. 5. A recall notice was issued to the defendant Company on 15.10.1998 for payment of outstanding amount of Rs. 67,86,157/-including interest up to 10.5.1998. Responding to the recall notice, defendants submitted a proposal for one time settlement (Ex. PW-1/N) of the dues to the plaintiff corporation. The proposal of one time settlement of the defendants was approved by the plaintiff corporation vide letter dated 21/22.12.1998 Ext. PW-1/0. However, the defendants once again defaulted and failed to liquidate their liability. This led to taking over of the possession of the hypothecated/mortgaged assets by the plaintiff corporation on 17.7.1998, under Section 29 of the State Financial Corporation Act, 1951. The outstanding amount against the defendants on 10.5.2000 was Rs. 1,02,90,191/-. Notice (Ex. PW-1/Q) was issued to the defendants on 24.5.2000, calling upon to them, to pay the outstanding amount. The amount in spite of the notice was not paid. 6. It is in this background that the plaintiff Corporation has laid the present suit. Plaintiff Corporation has also claimed interest at the rate of 19.5% per annum on the outstanding term loan of Rs. 1,02,90,191/-with half yearly rest and other expenses from 10.5.2000 till realization of the entire amount. 7. Defendants resist the suit. The allegations are controverted. Defendants maintain that the suit has not been properly instituted, as approval to institute the suit has not been obtained by the plaintiff corporation from defendant No. 6 i.e., Himachal Pradesh Financial Corporation. Suit is also resisted on the ground that the plaintiff Corporation is estopped by its own acts, deeds, conduct and acquiescence to file and maintain the present suit. On merits, defendants pleaded that Vinayaka Kohal, who has laid the suit on behalf of the plaintiff Corporation had no authority to file the suit, sign and verify the pleadings and therefore, suit is not maintainable. It is the case of the defendants that the loan application was not processed promptly by the plaintiff Corporation. On merits, defendants pleaded that Vinayaka Kohal, who has laid the suit on behalf of the plaintiff Corporation had no authority to file the suit, sign and verify the pleadings and therefore, suit is not maintainable. It is the case of the defendants that the loan application was not processed promptly by the plaintiff Corporation. The loan was sanctioned after undue delay, which materially affected the affairs of the Unit of the defendants and the defendants suffered loss because of non- cooperative attitude of the officials of the plaintiff Corporation. Only if the plaintiff Corporation had processed the proposal of the defendants for sanction of the term loan in time, the defendants would have put the Unit in production and run the same smoothly but due to the impediments and hurdles created by the officials of the plaintiff Corporation, therefore, is liable to compensate the defendants for the same. 8. It is further case of the defendants that they are not liable to pay the compound interest, as claimed by the plaintiff Corporation. Documents, it is alleged, have been fabricated by the plaintiff. Proforms in the document(s) were filed in at later stage, on which signatures of the defendants were obtained by holding out false assurances by the plaintiff Corporation and its officials and, therefore, the plaintiff Corporation is estopped to file and maintain the present suit on account of the acts, deeds and acquiescence. It is the plea of the defendants that the plaintiff Corporation cannot be permitted to base the claim on forged and manipulated documents. Defendants deny that equitable mortgage was created by the defendants in favour of the plaintiff corporation. Title deeds, it is pleaded, were retained by the plaintiff corporation illegally by manipulating and forging the documents. Title deeds, plead defendants, were not given to the plaintiff Corporation to create equitable mortgage of all the properties and fixed assets of the defendants. 9. It is the case of the defendants that no personal guarantees were executed by defendants 2 to 5 either for themselves or on behalf of defendant No. 1 and, therefore, defendants 2 to 5 are not liable to discharge any liability of defendant No. 1 Company towards the plaintiff Corporation. 9. It is the case of the defendants that no personal guarantees were executed by defendants 2 to 5 either for themselves or on behalf of defendant No. 1 and, therefore, defendants 2 to 5 are not liable to discharge any liability of defendant No. 1 Company towards the plaintiff Corporation. Defendants 2 to 5, it is pleaded, are not individually liable towards the plaintiff Corporation and further there is no question of defendants 2 to 5 being jointly and severally liable along with defendant No. 1. 10. Defendants plead that there is no agreement to pay the interest at the rate claimed by the plaintiff Corporation. Claim of the plaintiff Corporation is exaggerated, based on fabricated documents which were obtained by the plaintiff Corporation by exercising fraud and misrepresentation of the documents, therefore, are void and do not bind the defendants. 11. It is admitted that proposal for one time settlement was made by the defendants but with the caveat that it was without prejudice to the rights/claim of the defendants for recover of damages from the plaintiff Corporation with respect to the loss sustained by the defendants on account of the acts of omission and commission by the plaintiff Corporation and its officials. 12. Defendants deny the authenticity of the accounts maintained by the plaintiff Corporation and plead that the defendants are not bound by the unilateral acts of the Plaintiff Corporation for the payments made by the Plaintiff Corporation in its own favour pertaining to the entries incorporated in the accounts. 13. On the pleadings of the parties, the following issues were settled:- 1. Whether suit of the plaintiff in the present form is not maintainable, as alleged ? OPD 2. Whether plaintiff has no legal and enforceable cause of action, as alleged ? OPD 3. Whether the suit is barred by the period of limitation, as alleged ? OPD 4. Whether the plaintiff is estopped from filing other present suit by its own acts, deeds, conduct and acquiescence, as alleged ? OPD 5. Whether Mr. Vinayaka Kahol is competent to file the present suit ? OPP 6. Whether plaintiff is entitled to the suit amount, if so, to what extent and from which of the defendants ? OPP 7. Whether the plaintiff is entitled to interest, if so, at what rate ?OPP 8. OPD 5. Whether Mr. Vinayaka Kahol is competent to file the present suit ? OPP 6. Whether plaintiff is entitled to the suit amount, if so, to what extent and from which of the defendants ? OPP 7. Whether the plaintiff is entitled to interest, if so, at what rate ?OPP 8. Whether defendants No. 2 to 5 were the guarantors of defendant No. 1 to repay the loan in terms of the agreement ? OPP 9. Whether the defendants are not liable to pay the suit amount 1 because of the delayed payment of the loan amount and also negligence on the part of the plaintiff ? OPD 10. Relief. 14. Evidence of the plaintiff was concluded on 20.3.2003. Defendants were called upon to lead their evidence. Evidence was not produced by the defendants on 3.6.2003 on which date learned counsel representing the defendants submitted that only defendants are to be examined and no other evidence is to be led. One opportunity was prayed for, which was granted. When the matter again came up on 23.7.2003, neither the defendants nor their evidence was present. Learned counsel representing the defendants prayed for one more opportunity to examine the defendants. Request was allowed, subject to payment of Rs. 2500/- as costs. It was made clear, in the order that no further opportunity shall be granted to the defendants. Again, when the matter came up on 2.9.2003, for recording evidence of the defendants, neither the defendants nor any evidence was present. The costs were also not deposited. Evidence of the defendants in the circumstances, was closed. 15. Heard Mr. Balwant Kukreja, learned Counsel for the plaintiff corporation and Mr. Bhupender Gupta, learned Senior Advocate, instructed by Mr. Janesh Gupta, Advocate for the defendants. My findings on the various issues are :- Issues No. 1, 2 and 3 16. Defendants have not led any evidence in support of the issues. 17. Learned Counsel for the defendants did not press these issues, during, the course of arguments. There is nothing on record to show that suit of the plaintiff corporation is not maintainable in the present form or the Corporation has no legal and enforceable cause of action or its acts, deeds, conduct and acquiescence. 18. Issues are accordingly decided against the defendants. Issue No. 3 19. There is nothing on record to show that suit of the plaintiff corporation is not maintainable in the present form or the Corporation has no legal and enforceable cause of action or its acts, deeds, conduct and acquiescence. 18. Issues are accordingly decided against the defendants. Issue No. 3 19. So far question of limitation -is concerned, it stands finally decided by the Apex Court in H.P. Financial Corporation v. Smt. Pawna and others, Civil Appeal No. 1971 of 1998 with SLP Nos. 1760-1761 of 1998 decided on 18.12.2003. Their Lordships held : "the right to sue on the contract of indemnity arose only after the assets were sold off. It is only at that stage that the balance due became ascertained. It is at that stage only that a suit for recovery of the balance could have been filed. Merely because the Corporation acted under Section 29 of the Financial Corporation Act did not mean that the contract of indemnity came to an end. Section 29 merely enabled the Corporation to take possession and sell the assets for recovery of the dues under the main contract. It may be that on the Corporation taking action under Section 29 and on their taking possession they became deemed owners. The mortgage may have come to an end, but the contract of indemnity, which was an independent contract, did not. The right to claim for the balance arose, under the contract of indemnity, only when the sale proceeds were found to be insufficient." 20. In the present case, assets of the defendants-Company were taken over on 17.7.1999, as stated by PW-1 Pawan Kumar Bali, Manager of the plaintiff Corporation and subsequently sold on 3.1.2000 for Rs. 67 lacs. The suit was filed on 7.7.2000, which is clearly within the period of limitation. 21. Issue is accordingly decided. Issue No. 5 22. Case of the defendants is that the suit which has been laid by Mr. Vinayaka Kahol, Senior Manager (Project) of the Corporation is not competent, as he was not authorized to file the present suit. 23. Mr. Vinayaka Kahol, appearing as PW-2, states on oath that he was authorized to file the present suit against the defendants by the Resolution of the Board of Directors, copy of which is Ex. Vinayaka Kahol, Senior Manager (Project) of the Corporation is not competent, as he was not authorized to file the present suit. 23. Mr. Vinayaka Kahol, appearing as PW-2, states on oath that he was authorized to file the present suit against the defendants by the Resolution of the Board of Directors, copy of which is Ex. PW-2/A. He was also specifically authorized by the Managing Director of the plaintiff Corporation, on the file of the Corporation, to file the suit and sign the pleadings. The original minutes of the Resolution of the Board, brought to the court are signed by the Chairman and Managing Director of the Corporation. Resolution (Ex. PW-2/A) clearly shows that Financial Adviser/Senior Manager/Manager were authorized to file suits for recovery of dues, against Industrial units and its promoter Director, provided Managing Directors approval is obtained on the file. 24. In view of the evidence it is held that Mr. Vinayaka Kahol who duly authorized to file the suit on behalf of the plaintiff Corporation. 25. Mr. Pawan Kumar Bali, Manager of the plaintiff Corporation, appeared as PW-1. It is his evidence that he is working as Managing with the plaintiff Corporation since 1997 and the defendant company applied for grant of loan by its application Ex. PW-1/A. On application of the Company, Rs. 60 lacs were sanctioned, as loan, by the plaintiff Corporation on 11.10.1995 by sanction letter Ex. PW-1/B. The defendant Company accepted the terms of the loan as well as the sanction of the same by its letter Ex. PW-1/C. The acceptance was conveyed to the plaintiff Corporation by the copy of the Resolution of the Board of the Company, which is Ex. PW-1/D. It is his evidence that the defendant Company executed by the loan agreement Ex. PW-1/E, hypothecation agreement Ex. PW-1/F and three guarantee deeds Ex. PW-1/G to Ex. PW-1/J. In addition to the loan granted by the plaintiff Company, defendants also obtained loan from Himachal Pradesh Financial Corporation. Defendant Company created equitable mortgage of its land and building with the Financial Corporation. Regarding this a letter, copy of which is Ex.PW-1/K, was sent to the Himachal Pradesh Financial Corporation. It is further evidence of the witness that the documents on behalf of the defendant Company were executed by Nandi Vardhan Jain and Harsh Vardhan Jain (defendants No. 2 and 3 respectively). Regarding this a letter, copy of which is Ex.PW-1/K, was sent to the Himachal Pradesh Financial Corporation. It is further evidence of the witness that the documents on behalf of the defendant Company were executed by Nandi Vardhan Jain and Harsh Vardhan Jain (defendants No. 2 and 3 respectively). The entire amount advanced, as loan, was utilized by the defendant Company. It is his evidence that agreed rate of interest between the parties was 19.5% per annum, with half yearly rests, as is apparent from the loan agreement (Ex. PW-1/E). It is the evidence of Mr. Bali (PW-1) that defendant Company paid some interest but no money was paid towards the loan amount. Recall notice was sent to the defendant Company, copy of which is Ex. PW-1/L, where after defendant Company submitted a proposal for one time settlement \o liquidate the loan amount, which was accepted by the plaintiff Corporation by its letter Ex. PW-1/0. In spite of one time settlement, defendant Company failed to discharge its liability or pay any amount in terms of one time settlement. Assets of the defendant Company were taken over on 17.7.1999 by letter Ex. PW-1/P and notice was issued to the guarantor(s) in May,, 2000, copy of which is Ex PW-1/Q. It is the evidence of this witness that outstanding amount due against the defendant Company, on the date of filing of the suit, was Rs. 1,02,90,191/-. The assets of the defendant Company, which were taken over by the plaintiff Company were sold for Rs. 67 lacs, which were shared between the plaintiff Company and Himachal Pradesh Financial Corporation equally and the defendant Company was given credit of Rs. 36,14,575/-. 27. In the cross-examination, Mr. Bali (PW-1) states that the entire loan amount was released to the defendant Company within six months. Suggestion that because of delayed release of the loan amount, liability of the Unit was adversely affected is decided. Suggestion that signatures of the defendants were obtained on the various documents, without filling the blank spaces and proformas is denied by the witness. Suggestion that interest payable by the defendants was simple and not on half yearly rests in denied. Suggestion that none of the defendants furnished personal guarantee towards the payment of Joan by the defendant Company is denied. Suggestion that equitable mortgage was not created by the defendant is denied. Suggestion that interest payable by the defendants was simple and not on half yearly rests in denied. Suggestion that none of the defendants furnished personal guarantee towards the payment of Joan by the defendant Company is denied. Suggestion that equitable mortgage was not created by the defendant is denied. According to this witness, the Unit was closed after it came in production. 28. PW-3 Rajinder Prashad Jain, Senior Manager (Project) of the plaintiff Corporation states that accounts of the defendant Company were maintained under his supervision. Witness brought the original ledger of the accounts of the defendant Company, in respect of the loan extended, copy of which is Ex. PW-3/A. 29. The authenticity of the accounts is not disputed in the cross-examination of this witness. The only suggestion put to the witness, which is admitted by the witness is that compound interest has been charged on the loan extended to the defendant Company. Copy of the ledger account Ex. PW-3/A clearly shows outstanding amount against the defendant Company to be Rs. 1,02,90,191/-. 30. In view of the testimony of Pawan Kumar Bali, Manager, HPSIDC and Rajinder Prashad Jain, Manager (Projects) HPSIDC, read with the ledger accounts, copy of which is Ex. PW-3/A, it is proved that the plaintiff Corporation is entitled to recover Rs. 1,02,90,191/- from the defendants. No evidence to contrary is led by the defendants. 31. Issue is accordingly decided. Issue No. 7 32. It is evidence of Mr. Pawan Kumar Bali (PW-1) that agreed rate of interest between the parties was 19.5% with half yearly rests and documents to that effect were executed by S/Sh. Nandi Vardhan Jain and Harsh Vardhan Jain, defendants No. 2 and 3 on behalf of the defendant Company. The loan agreement (Ex. PW-1/E) clearly stipulates that defendant Company shall be liable to pay 3/1/2% over and above the IDBI lending rate and additional 4% on the defaulted amount for the period of default if the interest and principal are not paid on due dates. Hypothecation agreement Ex. PW-1/F also stipulates payment of interest at the rate of 3/1/2% over and above the IDBI rates. Ledger accounts show that 19/1/2% rate of interest, has been charged with half yearly rests. At the relevant time IDBI rate was 16% and 3/1/2% has been charged over and above the IDBI interest. Hypothecation agreement Ex. PW-1/F also stipulates payment of interest at the rate of 3/1/2% over and above the IDBI rates. Ledger accounts show that 19/1/2% rate of interest, has been charged with half yearly rests. At the relevant time IDBI rate was 16% and 3/1/2% has been charged over and above the IDBI interest. No evidence has been held by the defendants to show that they are liable to pay interest at the lesser rate or are not liable to pay interest with half yearly rests. To conclude, it is held that defendants are liable to pay interest at the rate of 19.5% with half yearly rests, as claimed by the plaintiff Corporation. 33. Issue is accordingly decided. Issue No. 8 34. There is no scope for dispute that defendants No. 2 to 5 are guarantors of defendant Company to repay the loan amount along with interest in terms of the agreement. Mr. Pawan Kumar Bali (PW-1) states that guarantee deeds Ex. PW-1/G to Ex. PW-1/J were executed by the defendants. Ex. PW-1/G is the guarantee deed, executed by S/Sh. Harsh Vardhan Jain and Nandi Vardhan Jain, defendants No. 3 and 2 respectively. Ex. PW-1/H is the guarantee deed executed by Rajya Vardhan Jain defendant No. 4 and Ex. PW-1/J is the guarantee deed executed by Sh. Yash Vardhan Jain defendant No. 5. A plain reading of the guarantee deeds show that defendants No. 2 to 5 have guaranteed to pay the amount due to the plaintiff Corporation along with interest and other monies which may be due to the plaintiff Corporation. Guarantee deeds indemnify the plaintiff Corporation against all the losses of principal amount, interest and other moneys secured by the mortgage and all costs, charges and expenses, which the plaintiff Corporation may incur by reasons of any default or breach of any covenant on the part of the industrial concern or its successor or assigns. Issue is accordingly decided. Issue No. 9 35. Defendants have led no evidence to show that they are not liable to pay the suit amount. Otherwise also, according to the defendants, they suffered loss because of the delayed payment of loan amount and negligence on the part of the plaintiff Corporation but no counter claim has been set up nor any court fee paid on that. 36. Issue is held against the defendants. Relief. 37. Otherwise also, according to the defendants, they suffered loss because of the delayed payment of loan amount and negligence on the part of the plaintiff Corporation but no counter claim has been set up nor any court fee paid on that. 36. Issue is held against the defendants. Relief. 37. In result, suit of the plaintiff Corporation is decreed. A decree in the amount of Rs. 1,02,90,191/- is passed in favour of the plaintiff Corporation and against the defendants jointly and severally. The defendants shall also pay interest at the rate of 19.5% per annum, with half yearly rests, from the date of the institution of the suit till the realization of the decretal amount. 38. The defendants shall also pay costs of the suit.