The State Government issued Government Order dated 12.8.1998 guaranteeing the repayment of the principal and interest in respect of debenture bonds issued by the U.P. Cooperative Spinning Mills Federation Ltd. Acting on the invitation for private placement of applications, and in view of the guarantee by the State Government, the first respondent invested Rs.15,00,000/ 2.
Though several companytentions were urged by the State Government and the Federation, when the matter came up today, the learned companynsel for the State Government handed over a Pay Order for Rs.15,00,000/ Rupees fifteen lakhs to the learned 3.
The Federation sustained losses and went under liquidation.
It did number redeem the bonds as agreed and undertaken, inspite of demands.
The said order is challenged in these two appeals by the State Government and the Federation.
The High Court, by order dated 21.11.2005, directed the State Government, as guarantor, to pay the sum of Rs.15,00,000/ Rupees fifteen lakhs with interest at the rate of 14.9 the rate agreed under the bonds less amounts already paid.
As the amounts due under the bonds and interest were number paid by the State Government in terms of guarantee, inspite of demand for payment, the respondent approached the Delhi High Court for relief.
The amounts due were number paid except part payment of Rs.1,73,980/ and Rs.1,15,118/ in all Rs.2,89,098/ towards interest.
3 companynsel for respondent towards the refund of the principal amount.
Leave granted.
Heard the learned companynsel.
and the bonds will be redeemed at the end of 48 months, 54 months and 60 months at the rate of 33, 33 and 34 respectively.
The Federation issued an allotment letter dated 25.12.1998 companyfirming that the amount invested will carry interest 14.9 p.a.
2 Rupees fifteen lakhs only from the provident fund deposits of its employees, in the said bonds.
