Exhibit 'C' was a loan application, submitted by the Appellant to the WBIDC. There is no evidence that it was prepared together with the Respondent. The intent and purpose of a loan application is entirely different, relevant only for the purpose of the borrower vis-à-vis the lender. The most fundamental characteristic a prospective lender will want to examine in a loan application are assessment of the Credit History of the Borrower, Cash Flow History and Projections for the Business, Collateral that is Available to Secure the Loan and Character of the Borrower. The profitability projections in such an application are only broad estimates based on assumptions and presumptions of the borrower intended to convince the lender of the viability of its project, in absence of which the loan application itself may not be considered. The Appellant's projections in it of assumed estimated profitability for viability of the project also went completely awry from its own admission that there was no likelihood of profit in the next 5 to 6 years. Viability of the project for sanction of loan cannot lead to an automatic presumption of profits, in the facts of the case, especially when there is evidence that the Appellant did not even deploy manpower in accordance with the projections made by it in the loan application. It was not sanctioned on basis of the assumption of the Appellant for earning profits. The loan was sanctioned by the WBIDC on basis of the techno-economic feasibility report by WEBCON Exhibit 'F1'. The loan application, after consideration, lost its independent identity and got subsumed in Exhibit 'F1'. Annexure 'M' to the plaint containing the projected estimated profitability was only a reproduction of Exhibit 'C'. The primary document was Exhibit 'F1', which took into consideration Exhibit 'C' also. The former being inadmissible in evidence, as not having been proved in accordance with law, the Appellant cannot seek to prove indirectly what it has been unable to prove directly. The conclusion of the appellate court that Exhibit 'F-1' being the primary document, the claim for loss of anticipated profits on basis of Exhibit 'C' was unsustainable, cannot be faulted with.
IN THE SUPREME COURT OF INDIA
Civil Appeal No. 1168 of 2007
Decided On: 19.06.2017
Kanchan Udyog Limited Vs. United Spirits Limited
Hon'ble Judges/Coram:
Ranjan Gogoi and Navin Sinha, JJ.
Citation :(2017) 8 SCC 237
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