JUDGMENT V.K. Sharma, J. The plaintiff, The Himachal Pradesh State Industrial Development Corporation Limited (formerly The Himachal Pradesh Mineral and Industrial Development Corporation Limited), a company incorporated under the Companies Act, 1956, has filed the present suit for recovery of ‘ 93,44,370/- ( Rupees Ninety Three Lacs Forty four Thousand Three Hundred and Seventy), alongwith interest @ 12.5% per annum with half early rests from 16.10.2002, against the contesting defendants No. 1 to 5. The H.P. Financial Corporation, being co-creditor has been impleaded as proforma defendant No.6. 2.It is averred that one of the various functions of the plaintiff-Corporation is to provide financial assistance in the form of Term Loans, equity and soft loans (under Seed Capital assistance scheme of IDBI). A term loan of ‘ 42.49, lacs (‘. 10.05 lacs on 13.5.1985 & ‘ 32.44 lacs on 6.7.1988) @ 15.5% interest per annum with half yearly rests with rebate of 3% for timely payment subject to minimum of 12.5%, was sanctioned in favour of defendant No.1-company, M/s Azeet International (P) Ltd., for construction of factory building, purchase of land and plant and machinery and other assets for setting up an industrial unit for manufacture of corrugated fibre board at Barotiwala, District Solan, in the State of Himachal Pradesh. As security for repayment of the loan and interest thereon, defendant No.1, through its Directors, defendants No. 2 and 3, executed the requisite loan documents, such as, promissory note, loan agreements and hypothecation agreements. In addition to this, equitable mortgage by deposit of title deeds of the properties of the industrial concern of defendant No.1 in favour of the plaintiff-Corporation was also made on 28.1.1987 and 16.7.1988 with proforma defendant No.6, who was co-financer with the plaintiff-corporation. 3.Defendants No. 2 to 5 stood guarantee for repayment of the loan and executed continuing deeds of guarantee. 4. The loan together with agreed interest was to be paid in half yearly installments commencing from 10.1.1990. The last installment was payable on or before 10.1.1997. However, the defendants failed to pay the installments in accordance with the re-payment schedule. 5. 3.Defendants No. 2 to 5 stood guarantee for repayment of the loan and executed continuing deeds of guarantee. 4. The loan together with agreed interest was to be paid in half yearly installments commencing from 10.1.1990. The last installment was payable on or before 10.1.1997. However, the defendants failed to pay the installments in accordance with the re-payment schedule. 5. In 1992, proforma defendant No.6, with the consent of the plaintiff-corporation initiated proceedings against defendant No.1-company under Section 29 of the State Financial Corporations Act, 1951, but the contesting defendants obtained stay orders from the Hon’ble High Court of Himachal Pradesh in C.W.P No. 145 of 1993, firstly on 3.2.1993 against take over of the Unit and then against sale of taken over assets on 2.8.1994. The C.W.P was finally decided on 18.6.2001. During the period, the plaintiff-Corporation filed a petition under Section 31 of State Financial Corporations Act, 1951, in the court of District Judge, Solan, in November, 1999. This petition was withdrawn by the plaintiff-corporation on 24.9.2002, as proforma defendant No.6 sold the hypothecated/mortgaged assets of defendant No.1- company on 2.1.2002, for a sum of Rs. 32.00 lacs and sale proceeds were received on 16.8.2002, from proforma defendant No.6, which were shared as under:- (a) HPSIDC Ltd. Rs.13,75,740-00 (b) H.P. Financial Corporation Rs. 18,24,260-00 Rs. 32,00,000.00 6. After adjustmentof sale proceeds between the plaintiff-corporation and proforma defendant No.6 in proportion to their term loans, a sum of ! 2,61,84,069/- was found due from the defendants to the plaintiff-corporation. However, it is stated that the plaintiff-corporation is waiving a sum of ! 1,68,39,699/- on account of interest and confining its claim to ! 93,44,370/- by calculating simple interest @ 12.5% per annum instead of with half yearly rests. The defendants were asked to pay the outstanding loan amount of ! 93,44,370/- alongwith future interest from 16.10.2002 till its final payment vide notice dated 17.1.2003, within one month from receipt of the notice. However, the notice period expired, but the defendants did not care to pay the same. The liability of the contesting defendants to pay the suit amount is joint and several. 7. Besides the above, the contesting defendants are alsoliable to pay interest at the agreed rate of 12.5. % per annum on ‘ 93,47,370/- with half yearly rests and other miscellaneous expenses from 16.10.2002 till realization of the entire amount. The liability of the contesting defendants to pay the suit amount is joint and several. 7. Besides the above, the contesting defendants are alsoliable to pay interest at the agreed rate of 12.5. % per annum on ‘ 93,47,370/- with half yearly rests and other miscellaneous expenses from 16.10.2002 till realization of the entire amount. Since transaction between the plaintiff- corporation and the contesting defendants is of commercial nature, the plaintiff-corporation is entitled to pendente lite and future interest at the contractual rate of interest as per loan agreements. 8.The suit is contested by defendants No.1 to 4. Defendant No.5 and proforma defendant No.6 have been proceeded against ex parte. 9.A joint written statement has been filed on behalf of defendants No.1 to 3, wherein preliminary objections regarding the suit not having been instituted through a proper and competent person, locus standi, the plaint not having been properly verified and the affidavit in support thereof also not being in consonance with law, limitation, the plaint lacking in material particulars, suppression of material facts, lack of legally enforceable cause of action, mis-joinder of parties and causes of action, the suit being hit by principles of constructive res judicata and estoppel. 10. On merits, it is admitted that the plaintiff-corporation is a company. However, it is denied that Shri Pawan Kumar Bali is duly authorized to sign and verify the plaint and institute the suit on behalf of the plaintiff-corporation. The suit is liable to be dismissed on this short ground. It is alleged that “the application was made on 30th of March, 1983 by Defendant No.1 for grant of loan to the extent of Rs.10,05,000/-. The money was urgently needed by the Defendant No.1 for establishment of his project but for the reasons best known the said loan was not sanctioned for about more than 2 years. The application for loan was not made to the plaintiff; therefore, the said transaction cannot be made the basis for filing the present suit. The application for grant of loan was made on 20th October, 1987. However, the amount of loan which was sanctioned after 9 months. It was not the plaintiff who processed the application and sanctioned the loan; therefore, this transaction also cannot be made the basis of the suit to hold the replying defendants liable regarding the suit amount. The application for grant of loan was made on 20th October, 1987. However, the amount of loan which was sanctioned after 9 months. It was not the plaintiff who processed the application and sanctioned the loan; therefore, this transaction also cannot be made the basis of the suit to hold the replying defendants liable regarding the suit amount. There is no privity of contract between the plaintiff and replying defendants; therefore, the suit on this short ground deserves to be dismissed.” It is denied that defendant No.1 had agreed to repay the loan with interest @ 15.5% with half yearly rests. 11. Execution of loan documents is denied. It is stated that the suit has been filed by the plaintiff-corporation on false and fabricated documents. “There was no due, valid and legal execution of the alleged documents as referred to in this para (para 4) of the plaint by the replying defendants”. Creation of equitable mortgage by defendant No.1 is also denied. It is further alleged that signatures of the contesting defendants were obtained on numerous printed forms and blank papers, which seem to have been “misused, interpolated, manipulated and fabricated so as to give them colour of duly executed loan documents”. The documents on the basis of which the suit has been filed are not legally stamped and registered. 12. It is also denied that defendants No. 2 to 5 stood guarantee for repayment of the alleged loan amount. Execution of continuing guarantee deeds is also denied. It is stated that no legal and valid guarantee deeds were ever executed in favour of the plaintiff-corporation for repayment of the loan with interest. The guarantee deeds are also not properly stamped, registered or executed. It is also denied that liability of the contesting defendants is joint and several. The repayment schedule is also denied and instead it is alleged that the contesting defendants are not liable to pay any amount to the plaintiff-corporation. The suit even on the basis of the averments made in para 7 of the plaint is apparently barred by limitation. 13. It is stated that the averments made in para 8 of the plaint regarding stay orders are irrelevant for determination of the controversy involved in the present suit. The suit even on the basis of the averments made in para 7 of the plaint is apparently barred by limitation. 13. It is stated that the averments made in para 8 of the plaint regarding stay orders are irrelevant for determination of the controversy involved in the present suit. The proceedings before the court of the learned District Judge, Solan, which were initiated during the pendency of the writ petition in the Hon’ble High Court, were withdrawn without any reservation, therefore, the present suit for recovery of the amount as claimed by the plaintiff-corporation is not maintainable. The replying defendants were never associated or given any notice in accordance with law for selling the assets of the defendant No.1-company. The amount which is alleged to have been realized is ridiculously low and it seems that the plaintiff- corporation and proforma defendant No.6 have acted in a highly negligent, arbitrary and irrational manner not to realize the optimum amount of the assets of defendant No.1, thereby causing grave loss to defendant No.1. The plaintiff- corporation and proforma defendant No.6 in the year 1995 themselves acknowledged the cost of the project to be ! 127.65 Lacs. The market value of the assets of defendant No.1 even at that time was more than ! 200 Lacs. Thereafter there was tremendous escalation in the prices of land as well as assets, hence at the time of taking over of assets and putting them to sale, the market value of the assets was not less than ! 300 Lacs. 14.It is further alleged that “The replying defendants have reasonable belief that the plaintiff and the proforma defendant No.6 had connived together to cause harm and great financial loss to the Defendant No.1. The replying defendants, therefore, are entitled for the equitable set off for the amount of the loss sustained on account of the negligent acts of the plaintiff and the proforma defendant No.6 in selling the assets of the Defendant No.1, therefore, no amount is due from the replying defendants to the plaintiff and the suit on this score also is liable to be dismissed.” 15.It is further alleged that the plaintiff-corporation has taken illegal action by invoking Section 29 of the State Financial Corporation Act. After initiating such proceedings no liability of the defendants survives and as such the suit is not maintainable. After initiating such proceedings no liability of the defendants survives and as such the suit is not maintainable. In any case, without prejudice to the rights of the replying defendants, the plaintiff-corporation has claimed imaginary amount alongwith imaginary rate of interest to be realized from them. Authenticity, genuineness and correctness of the ledger accounts maintained by the plaintiff-corporation is disputed. It is stated that copy of the alleged ledger account has not been supplied to the contesting defendants. 16.In separate written statement defendant No.1 has raised legal objections regarding cause of action, limitation and maintainability. No consideration had passed under the loan documents set up by the plaintiff-corporation, which otherwise also are not legally enforceable. The plaintiff-corporation has not come to the court with clean hands and is guilty of suppression of material facts. 17.On merits, status of the plaintiff-corporation is admitted. It is denied that Shri Pawan Kumar Bali is competent to file the suit. It is denied that the replying defendant had agreed to repay the loan alongwith interest specified in para 3 of the plaint. It is denied that he is a Director of defendant No.1-company. According to him, he being an employee of sister concern of the plaintiff- corporation under the same management/Government, was not entitled to execute any deed of guarantee and the same is not enforceable against him. It is also denied that his liability is joint and several with defendant No.1 or other contesting defendants. It is alleged that the plaintiff- corporation had physically taken over possession of the mortgaged property of principal borrower (defendant No.1) on 10.5.1994. It being so, the loan ceased from that date. The outstanding amount of loan and interest thereon are also disputed. It is further stated that a major portion of prime security was lost in a major fire accident and due to inaction of the plaintiff-corporation insurance claim is yet sub judice and pending before National Commission for Redressal of Consumer Disputes, New Delhi. 18.By filing replications to the above written statements on behalf of the contesting defendants, the plaintiff- corporation has refuted their stands and has instead reiterated its own case as set up in the plaint. 19.On the pleadings on behalf of the parties, the following issues have been settled:- 1. Whether the Plaintiff Corporation is a Company incorporated under the Companies Act? 19.On the pleadings on behalf of the parties, the following issues have been settled:- 1. Whether the Plaintiff Corporation is a Company incorporated under the Companies Act? OPP 2.Whether Shri Pawan Kumar Bali is authorized and competent to file the present suit? OPP 3.Whether the Plaintiff is entitled to the suit amount and interest thereon as claimed by it. If so, to what extent? OPP 4. Whether the suit is barred by time? OPD 5.Whether the suit against the Defendants is not maintainable as alleged? OPD 6. Whether the Plaintiff has not come with clean hands and has suppressed facts from the Court and if so to what effect? OPD 7. Whether the Plaintiff has no locus standi to file the suit? OPD 8. Whether the plaint is not properly verified and if so to what effect? OPD 9. Whether the plaint lacks material particulars as alleged and if so to what effect? OPD 10. Whether the plaint does not disclose any enforceable legal cause of action against the defendants as alleged and if so to what effect? OPD 11. Whether the suit is bad for misjoinder of parties and causes of actions as alleged and if so to what effect ? OPD 12.Whether the suit is barred under the principles of constructive res judiata? OPD 13. Whether the plaintiff is estopped from filing the suit on account of its acts, deeds, conduct etc. as alleged? OPD 14.Relief. 20. The parties have led evidence. I have heard their learned counsel and gone through the record. Issue No.1 21.The plaintiff-corporation was incorporated as a company under the Companies Act, 1956, vide certificate Ex.P-1, proved in evidence by PW-1, Shri Pawan Kumar Bali, whose deposition in that regard remains totally un­challenged during cross examination. The contesting defendants have also failed to adduce any evidence to the contrary. Accordingly, it is held that the plaintiff- corporation is a company incorporated under the Companies Act, 1956. 22.The issue is decided accordingly. Issue No.2 23.The suit has been filed by Shri Pawan Kumar Bali (PW-1), the then Manager Project (Legal) of the plaintiff- corporation, who, as per noting Ex.P-4, was duly authorized in that regard by the Managing Director of the plaintiff- corporation, in terms of resolution No. 12, dated 18.6.1997, Ex.P-2 (read with Annexure ‘I’ thereto, Ex.P-3), passed by the Board of Directors of the plaintiff-corporation. The evidence to this effect comprising of the statement of PW-1, Shri Pawan Kumar Bali, has also gone totally un-challenged and un-rebutted. Thus, it is held that Shri Pawan Kumar Bali, is authorized and competent to file the present suit. 24.Accordingly, the issue is held in affirmative. Issue No. 3 25.PW-1 Shri Pawan Kumar Bali has deposed on oath that the plaintiff-corporation had advanced a sum of ! 42.49 Lacs to the contesting defendants in two installments of ! 10.05 Lacs and ! 32.44 Lacs. The first installment was sanctioned vide letter dated 13.5.1985, Ex.P-5 and the second vide letter dated 6.7.1988, Ex.P-6, terms and conditions whereof were accepted by the contesting defendants vide letter Ex.P7 alongwith resolution Ex.P-8 and letter Ex.P-9 alongwith resolution Ex.P-10. the project was jointly financed alongwith H.P. Financial Corporation vide letters Ex.P-11 and P-12. The contesting defendants executed the requisite loan documents, such as promissory notes Exts.P­13 and P-14, loan agreements Exts.P-15 and P-16, hypothecation agreements Exts.P-17 and P-18 and guarantee deeds Exts.P-19 and P-20. 26.It is further deposed by PW-1, Shri Pawan Kumar Bali that the loan was to be repaid during 10.1.90 to 10.1.97. Proforma defendant No.6, H.P. Financial Corporation, sent communication dated 5.5.1994, Ex.P-37 to the contesting defendants for taking over the unit. However, the defendants obtained stay from the High Court. The petition was disposed of by this court on 18.6.2001. Certified copies of the orders passed by the High Court are Ex.P-38 to Ex.P-40. The plaintiff-corporation also instituted a petition under Section 31 of the State Financial Corporations Act, 1951, in the District Court, Solan. However, later on, it was withdrawn vide order Ex.P-41 pursuant to sale of the hypothecated assets by proforma defendant No.6, H.P. Financial Corporation, for a sum of ! 32 Lacs as per letter Ex.P-42, out of which a sum of ! 13,75,740-00 was received by the plaintiff-corporation on 16.8.2002. However, still there was a shortfall of ! 2,61,84,069-00. Accordingly, demand notice Ex.P­43 was served upon the contesting defendants. The plaintiff-corporation has waived a sum of ! 1,68,39,699/- on account of penal as well as compound interest and restricted its claim for a sum of ! 93,44,370/-. Interest @ 15.5% with half yearly rests with rebate @ 3% for timely payment was payable as per the loan documents. The property of the contesting defendants including machinery, plant etc. The plaintiff-corporation has waived a sum of ! 1,68,39,699/- on account of penal as well as compound interest and restricted its claim for a sum of ! 93,44,370/-. Interest @ 15.5% with half yearly rests with rebate @ 3% for timely payment was payable as per the loan documents. The property of the contesting defendants including machinery, plant etc. was mortgaged with proforma defendant No.6, H.P. Financial Corporation, as well as plaintiff-corporation. 27. PW-1 Shri Pawan Kumar Bali has admitted during cross examination that application for grant of loan of ! 10.05 Lacs was made by defendant No.1 to the plaintiff- corporation on 13.3.1983, for setting up a unit for manufacture of corrugated boxes. The second application was submitted on 20.10.1987. Both the loans were raised for acquiring fixed assets and not for raising working capital. Land, building and plant & machinery were hypothecated with the plaintiff-corporation as security. It is also admitted that land had been earlier mortgaged with proforma defendant No.6, H.P. Financial Corporation, as security for the loan raised by the contesting defendants from the said corporation. That very mortgage was also used as security for the present loans. 28. According to PW-1, Shri Pawan Kumari Bali, blank portions in loan agreement Ex.P-15 and agreement of hypothecation Ex.P-17 have been filled by him in his own hand and pen. However, the same have not been initialled. All the writings in pen in the exhibited documents are in his own pen, but are not initialled. However, it is denied that signatures of the contesting defendants were obtained on the loan documents when blank portions thereof were not filled. It is also denied that the blank spaces were filled in subsequently “to suit our interest and convenience”. The suggestion that there was no agreement for charging interest @ 15.5% with half yearly rests has also been denied. It is also denied that “the signatures of defendants No. 2 to 5, as guarantors, were obtained on blank papers and later on guarantee papers were typed on those blank signed papers.” 29. The witness further states that the defendants defaulted for the first time in paying the installment on 10.1.1990. However, he has denied that proceedings initiated by the contesting defendants in the High Court had nothing to do with recovery of the suit amount. The witness further states that the defendants defaulted for the first time in paying the installment on 10.1.1990. However, he has denied that proceedings initiated by the contesting defendants in the High Court had nothing to do with recovery of the suit amount. The petition filed by the plaintiff-corporation under Section 31 of the State Financial Corporation Act in November, 1999 was pursued upto September, 2002. The factory premises had been auctioned at the instance of proforma defendant No.6, H.P. Financial Corporation. However, the witness has volunteered to state that the plaintiff-corporation was also associated with the same. 30.It is admitted that in 1998 cost of the project of defendant No.1 was ! 1,27,65,000/-. However, he has denied that value of the assets of defendant No.1 rose to around ! three crores on account of inflation. According to him, auction took place in the year 2002. It is denied that the assets were sold at a throw-away price and instead it is voluntarily stated that the assets were got evaluated before auction and were found to be worth ! 13.30 Lacs. Notice Ex.DA was signed by an officer of the plaintiff-corporation and was despatched to the defendants. However, the witness has feigned ignorance as to what rate of interest has been calculated in statements of account Ex.PW-2/A and Ex.PW-2/B. 31.PW-2, Shri Rajendra Prasad Jain, has stated that he was working as Senior Manager, Project and Finance, in the plaintiff-corporation and was looking after Loan Wing Accounts. He has proved statements of account Ex.PW-2/A and Ex.PW-2/B with the help of the original ledger. In cross examination he has feigned ignorance whether the original ledger was produced in the court at the time of institution of the suit. However, he has admitted that there is neither any seal or stamp or signature of any officer of the court on the same. It is also admitted that the accounts are in “loose leaves binder”, but duly paginated. There is no certificate in the ledger as to how many pages the same contains. However, he has denied that the ledger is fabricated. It is also denied that the contesting defendants do not owe the suit amount to the plaintiff-corporation. 32.From the side of the contesting defendants defendant No.2, Shri Arun Jain and defendant No.4, Shri A.P. Jain, have appeared as DW-1 and DW-2, respectively. However, he has denied that the ledger is fabricated. It is also denied that the contesting defendants do not owe the suit amount to the plaintiff-corporation. 32.From the side of the contesting defendants defendant No.2, Shri Arun Jain and defendant No.4, Shri A.P. Jain, have appeared as DW-1 and DW-2, respectively. 33.DW-1, Shri Arun Jain, has stated that he is Managing Director of defendant No.1-company. The company was manufacturing corrugated boxes at Barotiwala. He had applied for grant of a loan of ‘ 10,05,000/- to the plaintiff as well as proforma defendant No.6, H.P. Financial Corporation on 30.3.1993. The loan was never sanctioned by the plaintiff. “We had applied for the grant of loan again in the year 1987 to the plaintiff. The loan was not sanctioned by the plaintiff for about 9 months. The proforma defendant No.6, processed my application for grant of loan. The loan was processed by H.P. Financial Corporation i.e proforma defendant No.6. The loan amount was disbursed by proforma defendant No.6. We signed the documents regarding the sanction of loan with the H.P. Financial Corporation i.e defendant No.6. All the documents pertaining to the loan were printed with all blanks when those were got signed by proforma defendant No.6.” According to him, neither defendant No.1 nor he himself created any mortgage pertaining to the loan in favour of the plaintiff-corporation. Whereas defendant No.3, Shri Alok Jain, is his brother, defendant No.4, Shri A.P. Jain, is his father. Defendant No.5 is only the share holder in defendant No.1-company. It is further stated by him that “I had never requested defendants or advised to stand guarantee on behalf of defendant No.1 or myself. Defendants No. 2 to 5 never signed any documents in favour of the plaintiff’s guarantor for the repayment of loan amount.” 34. The crux of the testimony of DW-1, Shri Arun Jain, who has stated in the opening lines of his cross examination that he is M.Com, is that the relevant columns of the loan documents were blank when the same were signed by the contesting defendants. In further cross examination, he has admitted his signatures on Ex.P-7 to Ex.P-10, Ex.P-13 to Ex.P­20, Ex.P-31 and Ex.P-35. In further cross examination, he has admitted his signatures on Ex.P-7 to Ex.P-10, Ex.P-13 to Ex.P­20, Ex.P-31 and Ex.P-35. Though according to him he had made an oral complaint to the plaintiff and proforma defendant No.6 that he should be supplied copies of the documents, as the same were got signed from him as blank, yet he did not remember as to when he had made such oral complaint. According to him, he has never signed blank papers thereafter. 35.DW-2, Shri A.P. Jain, has stated that he never had any connection with defendant No.1-company and as such there was no occasion for him to have signed any documents including any deed of guarantee on behalf of the said company at any point of time. According to him, he had not made any correspondence with the plaintiff-corporation nor it had made any payment to him. In cross examination on behalf of defendants No. 1 to 3, he has stated that he has retired as Financial Advisor to Himachal Pradesh Horticulture Produce and Processing Corporation Limited (HPMC) about 22-23 years ago. In further cross examination on behalf of the plaintiff-corporation, he has stated that he is B.Com (Hons.) and Fellow Member of the Institute of Cost Accountants of India (FCMA). According to him, usually he does not put signatures on blank papers. At the same time, he has volunteered to state that in some cases he might have signed on blank papers. He has denied that he was holding General Power of Attorney on behalf of defendant No.5, Shri S.P. Jain. He has expressed his inability to state that deeds of guarantee Ex.P-19 and Ex.P-20 bear his signatures encircled in red and marked ‘X 2’ and ‘X 3’, respectively. It is in his further cross examination that he has not lodged any complaint against the plaintiff- corporation and proforma defendant No.6, H.P. Financial Corporation, with regard to obtaining his signatures on blank papers. He has denied in further cross examination that deeds of guarantee Ex.P-19 and Ex.P-20 have been executed by him. Receipt of notice Ex.P-43 is also denied. He has also denied that being guarantor he is jointly and severally liable to pay the suit amount to the plaintiff- corporation. 36. He has denied in further cross examination that deeds of guarantee Ex.P-19 and Ex.P-20 have been executed by him. Receipt of notice Ex.P-43 is also denied. He has also denied that being guarantor he is jointly and severally liable to pay the suit amount to the plaintiff- corporation. 36. On a complete and harmonious reading of the oral and documentary evidence led on behalf of the plaintiff- corporation on the one hand and the self serving oral statements of DW-1, Shri Arun Jain and DW-2, Shri A.P. Jain, on the other, the irresistible conclusion that emerges is that the version stated by the latter (DWs 1 and 2), who are well educated businessmen cannot be believed to be true on its face value and as such cannot be taken without a pinch of salt. The relevant loan documents have been duly proved in evidence by PW-1, Shri Pawan Kumar Bali, who has emphatically denied that the respective columns thereof were initially blank when contesting defendants No. 2 to 5 had signed the same and were filled in later on. On perusal of these documents it is evident that the cuttings therein are duly initialled. Other entries in the relevant columns, which have been filled in either by way of type-writing or are handwritten have not been initialed as there are no cuttings on the same. The defence raised by the contesting defendants and sought to be established from the statements of DW-1, Shri Arun Jain and DW-2, Shri A.P. Jain, appears to be simply in the nature of a make believe story, which is usually set up by debtors in a large number of such like cases and is as such liable to be out-rightly rejected. 37.In support of its claim to recover the suit amount from the contesting defendants, the plaintiff-corporation has adduced in evidence statements of account Ex.PW-2/A and Ex.PW-2/B, duly proved by PW-2, Shri Rajendra Prasad Jain. Though, he has been cross examined on behalf of defendants No.1 to 3 at quite some length, yet his testimony remains without any blemish. 38.The above discussion brings me to hold that the plaintiff-corporation is entitled to recover the suit amount of ! 93,44,370/- along with pendente lite interest from 16.10.2002 and future interest @ 12.5% per annum from the contesting defendants being the principal debtors/guarantors. 39.The issue is decided accordingly. Issue No.4 40. 38.The above discussion brings me to hold that the plaintiff-corporation is entitled to recover the suit amount of ! 93,44,370/- along with pendente lite interest from 16.10.2002 and future interest @ 12.5% per annum from the contesting defendants being the principal debtors/guarantors. 39.The issue is decided accordingly. Issue No.4 40. The question of limitation in a case of this nature is no more res integra. Agreements of hypothecation Ex.P-17 and Ex.P-18 contain an identical clause 16 as under:- “16. In default of payment of any instalment of the loan, interest, commitment charge or any other moneys due to the Corporation under this security the Corporation may at any time thereafter take possession of the machinery and equipment and the other assets hereby hypothecated or any of them or any part thereof and for that purpose enter into and upon the premises where they are or shall then be and the Corporation may sue for recovery and receive and give effectual receipt for a sale or resale by public auction or private contract or otherwise dispose or deal with the same or any of them or any part thereof with the power to by in at any sale by auction and to rescind or vary any contract for the sale without being answerable for any loss or diminution in price with power to give effectual receipts and discharge for the sale money and do all other acts and things for completing the sale or sales as the Corporation shall think proper and to apply the net proceeds of such sale or sale in or towards the liquidation of the money due to the Corporation hereunder and to pay the surplus if any to the Borrower AND upon any sale the purchaser shall not be bound to see or enquire whether any such default has been made as aforesaid AND the Borrower hereby agree to accept the account of such sales and realizations and to pay all short fall or deficiency shown therein PROVIDED ALWAYS that nothing therein contained shall be deemed to negative, disqualify or prejudice the right of Corporation to recover from the Borrower the balance for the time being remaing due from the Borrower in respect of the said loan or any other moneys under the security notwithstanding that all or any of the machinery and equipment and the other assets hereby hypothecated have not been realized.” (Emphasis supplied). 41. In a recent judgment dated 29.1.2014, rendered by the Hon’ble Supreme Court in Civil Appeal No. 1019 of 2014, titled Deepak Bhandari vs. H.P. State Industrial Development Corporation Ltd. and others, arising out of OSA No. 7 of 2008, decided by this court on 4.6.2010, in a like matter, it has been held as under:- “21. We xxx, hold that when the Corporation takes steps for recovery of the amount by resorting to the provisions of Section 29 of the Act, the limitation period for recovery of the balance amount would start only after adjusting the proceeds from the sale of assets of the industrial concern. As the Corporation would be in a position to know as to whether there is a shortfall or there is excess amount realised, only after the sale of the mortgage/ hypothecated assets. This is clear from the language of sub-Section (1) of Section 29 which makes the position abundantly clear and is quoted below: “Where nay 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 installment thereof 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.”22. It is thus clear that merely because the Corporation acted under Section 29 of the State 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 only 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. The right to sue on the contract of indemnity arose after the assets were sold. 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. The right to sue on the contract of indemnity arose after the assets were sold. The present case would fall under Article 55 of the Limitation Act, 1963 which corresponds to old Articles 115 and 116 of the old Limitation Act, 1908. The right to sue on a contract of indemnity/ guarantee would arise when the contract is broken. 23. Therefore, the period of limitation is to be counted from the date when the assets of the Company were sold and not when the recall notice was given. 24. The up-shot of the aforesaid discussion is to hold that he present appeal is bereft of any merits. Upholding the judgment of the High Court, we dismiss the instant appeal, with costs.” 42.To the similar effect is the law laid down by the Hon’ble Apex Court in Civil Appeal No.1971 of 1998, titled H.P. Financial Corporation vs. Smt. Pawana and others, decided on December 18, 2003. 43. In view of the above, article 55 of the Limitation Act, 1963, as extracted below, would apply in the facts and circumstances of this case:- 55. For compensation Three years When the contract is for the breach of broken or (where any contract, there are successive express or implied, breaches) when the not herein speciallybreach in respect of provided for. which the suit is instituted occurs or (where the breach is continuing) when it ceases. Thus, the limitation is liable to be reckoned in this case from 2.1.2002, when the offer submitted by the auction-purchaser was finally accepted by proforma defendant No.6, H.P. Financial Corporation and the plaintiff-corporation vide letter dated 2.7.2002, Ex.P-42, consequent upon which the shortfall was determined. The suit having been filed on 12.3.2003, would thus be well within time. Issue Nos. 5 to 13 44.Neither any evidence has been led nor any arguments advanced on behalf of the contesting defendants on these issues and the same are accordingly held in negative. The suit having been filed on 12.3.2003, would thus be well within time. Issue Nos. 5 to 13 44.Neither any evidence has been led nor any arguments advanced on behalf of the contesting defendants on these issues and the same are accordingly held in negative. Relief 45.As a result, the suit is decreed with costs and the plaintiff is held entitled to recover a sum of ‘ 93,44,370/- (Rupees Ninety Three Lacs Forty Four Thousand Three Hundred and Seventy) from the contesting defendants along with pendente lite interest from 16.10.2002 and future interest @ 12.5% per annum, jointly and severally.