Sandeep K. Shinde JUDGMENT
Sandeep K. Shinde, J.
1. The Pune Municipal Corporation has preferred this First Appeal against the money decree in the sum of Rs. 7,08,50,000/- with interest dated 9th July, 2004 passed by the 4th Additional Judge, Small Causes Court, Pune in Special Civil Suit No. 453 of 2001.
2. Heard Learned Counsel for the appellant and Learned Counsel for the respondent.
3. The facts in brief are as under:
Plaintiffs became aware through a public notice that the Corporation was contemplating the water distribution and sewage treatment project and for the same were in the need of finance. The plaintiffs approached the Corporation and offered their services to procure finance for their project upon certain terms and conditions. Besides the other terms, the plaintiff agreed to render the services against the professional fees at the rate of 2% of the "sanctioned loan" amount (emphasis supplied). In response thereto, the Corporation through the Additional Commissioner forwarded the proposal dated 28th February, 2000 to the Standing Committee through Nagar Sachiv for its consideration. Proposal would contain that, plaintiffs have agreed to make finance available and sanction the term loan for 10-15 years at the rate of 6-8% against the bank guarantee, and, professional fees is payable upon "sanction of loan".
4. The proposal of the Corporation dated 28th February, 2000 was placed before the Standing Committee on 11th April, 2000 for its consideration and vide Resolution-98, the plaintiffs were appointed as Consultants to procure the loan for the said project with a rider that, Corporation would execute the required agreement with the plaintiffs.
5. That Corporation vide communication dated 28th April, 2000 informed the plaintiff that the Standing Committee in its meeting held on 11th April, 2000 passed Resolution-98 for assigning the work of procuring the required loan for its project, alongwith a copy of Resolution-98 and a mandate dated 28th April, 2000. Records and proceedings, however, shows that copy of the Resolution was not forwarded. Be that as it may, vide mandate dated 28th April, 2000, the Corporation irrevocably appointed the plaintiffs for the following purposes:
(i) to negotiate on behalf of the Corporation with the funding organisations in any country as may be deemed fit in their absolute discretion with the object of obtaining Rs. 250 crores (minimum) to Rs. 300 crores (maximum) repayable over a period of 20 years for the subject sewage project.
(ii) that the Corporation would not authorise any other individual company or organisation for the same object, without first obtaining NOC from the plaintiffs.
6. The plaintiffs in terms of the mandate, approached M/s. Daycorp Enterprises Limited, a foreign financer from USA (hereinafter referred to as 'the said Finance Company' for short). It appears, the said Finance Company addressed a letter of approval dated 1st July, 2000 to the plaintiffs whereby it agreed to sanction and disburse the loan in the sum of Rs. 354.2 crores approximately to the Corporation upon certain terms and conditions. The relevant terms were as under:
(i) the loan amount would be Rs. 354.2 crores approximately.
(ii) repayment period shall be 10 years.
(iii) the interest shall be payable at the rate of 8%.
(iv) one-time fees of 2% of the loan amount is payable at the time of loan disbursement.
(v) Corporation shall furnish, bank guarantee for US $120 million in a format attached of Barclays Bank or any other western European Global Bank of equal standing.
(vi) The Corporation shall organise all necessary approvals, permissions, sanctions etc. in India from the concerned authorities and forward the copie........