STATE OF U.P. vs HINDUSTAN UNILEVERS .

The Supreme Court upheld the Delhi High Court's order directing the U.P. Government to pay Rs. 15,00,000/- with interest at 14.9% per annum, as guaranteed for debenture bonds issued by the U.P. Cooperative Spinning Mills Federation Ltd. The Court emphasized that the State's guarantee was meant to ensure payment even in case of the Federation's financial difficulties, rejecting the State's contention to deny interest payments. The Court modified the interest rate to 14.9% for five years, thereafter reducing it to 9.5%, and granted three months for payment.